**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-QSB**

(Mark One)

X__Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the
period ended March 31, 2001.

___Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from ______ to ______.

**T.Z.F.  INTERNATIONAL INVESTMENTS, INC.******

(Exact name of registrant as specified in its charter)

|Nevada                                         | 0-31353                  | 88-0404186                          
|---------------------------------------------- | ------------------------ | ------------------------------------
|(State or other jurisdiction of
incorporation) | (Commission File
Number) | (IRS Employer Identification
Number)

|Unit 1, 3071 No. 5 Road

Richmond, B.C., Canada | V6X 2T4   
|----------------------------------------------- | ----------
|(Address of principal executive offices)        | (Zip Code)

Registrant's telephone number, including area code:  (604) 718-2188

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ..X..  No ....

Applicable only to issuers involved in bankruptcy proceedings during the past five years.

Check whether the issuer has filed all documents and reports required to be filed by Section 12,
13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a
court.  Yes .....  No .....

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date:  At March 31, 2001, there were 35,897,309 shares outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes .....     No ..X..

PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS

(a)  The unaudited financial statements of registrant for the three  months ended March 31 2001,
follow.  The financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim period presented.

T.Z.F.  INTERNATIONAL INVESTMENTS, INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

Quarter Ended March 31, 2001

|INDEX TO FINANCIAL STATEMENTS:                                   | 
|---------------------------------------------------------------- | 
|                                                                 | 
|Independent Accountants' Review Report                           | 
|Condensed ConsolidatedBalance Sheets                             | 
|Condensed Consolidated Statements of Operations                  | 
|Condensed Consolidated Statements of Retained Earnings (Deficit) | 
|Condensed Consolidated Statements of Cash Flows                  | 
|Schedule of Fixed Assets/Intangible Assets                       | 
|Consolidated Statements of Changes in Stockholders' Equity       | 
|Notes to Consolidated Financial Statements                       | 



**MOEN AND COMPANY**

CHARTERED ACCOUNTANTS

|PO Box 10129            |            |              
|----------------------- | ---------- | -------------
|1400 IBM Tower          | Telephone: | (604)662-8899
|701 West Georgia Street | Fax:       | (604)662-8809
|Vancouver, BC   V7Y 1C6 |            |              



**INDEPENDENT ACCOUNTANTS' REVIEW REPORT**

To the Directors and Shareholders of

T.Z.F. International Investments, Inc. (formerly Sabai Sabai Enterprises, Corp.)

(A Nevada Corporation)

We have reviewed the accompanying Consolidated Balance Sheet of T.Z.F. International
Investments, Inc. (formerly Sabai Sabai Enterprises, Corp.) (A Nevada Corporation) as of March 31,
2001 and March 31, 2000, and the Consolidated Statements of Operations, Cash Flows and Changes
in Stockholders' Equity for the three month periods then ended.  These financial statements are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American Institute of
Certified Public Accountants.  A review of interim financial information consists principally of
applying analytical procedures to financial data and making inquiries of persons responsible for
financial and accounting matters.  It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is the expression of
an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such
an opinion.

Based on our review, we are not aware of any material modifications that should be made to the
accompanying financial statements for them to be in conformity with United States generally
accepted accounting principles (GAAP).

****

**"Moen and Company"**

Chartered Accountants

Vancouver, British Columbia, Canada

May 9, 2001



**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES, CORP)**

**(A Nevada Corporation)**

**Consolidated Balance Sheets**

**March 31, 2001 and 2000**

**(In U.S. Dollars)**

**(Unaudited)******

|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  | 2001       |  | 2000  
|----------------------------------------------------------- | ----------------------------------------------------------------------------- | ---------- | -------------------------------------------------------------- | ---------------- | ------- | ---------- | --------- | ---------- | --------- | --------- | ------------------------------------------------- | ------ | ------- |  |  | ---------- |  | ------
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           | ************Assets                                |        |         |  |  |            | 
|Current Assets                                              |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         | 
|                                                            | Cash and cash equivalents (note 3)                                            |            |                                                                |                  |         |            |           | $          | 866,922   | $         | 53,439                                           
|                                                            | Accounts receivable (note 4)                                                  |            |                                                                |                  |         |            |           |            |           | 5,617,569 |                                                   | --    
|                                                            | Prepaid expenses and deposits (note 5)                                        |            |                                                                |                  |         |            | 67,601    |            | --       
|                                                            | Subscriptions receivable (note 6)                                             |            |                                                                |                  |         |            |           |            |           | 406,434   |                                                   | --    
|                                                            | Short-term investment - secured (note 29)                                     |            |                                                                |                  |         |            | 1,354,293 |            | --       
|                                                            | Inventories, at lower cost or market (note 7)                                 |            |                                                                |                  |         |            | 1,566,665 |            | --       
|TOTAL CURRENT ASSETS                                        |                                                                               |            |                                                                |                  |         |            |           |            |           | 9,879,484 |                                                   | 53,439
|Investment in Guangdon Hongkang Medical Company (note 8)    |                                                                               |            |                                                                | 532,044          |         | --        
|Fixed Assets - Schedule A                                   |                                                                               |            |                                                                |                  |         |            |           |            |           |           | 6,215,551                                         |        | --     
|Intangible Assets - Schedule A                              |                                                                               |            |                                                                |                  |         |            |           |            | 4,139,817 |           | --                                               
|Goodwill, at cost less accumulated amortization - (note 12) |                                                                               |            |                                                                | 1,191,472        |         | --        
|TOTAL ASSETS (Subject to charges - Note 18)                 |                                                                               |            |                                                                |                  | $       | 21,958,368 | $         | 53,439    
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           | ********
**Liabilities and Stockholders' Equity** |        |         |  | 
|Current Liabilities                                         |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         | 
|                                                            | Bank loans - secured (note 18)                                                |            |                                                                |                  |         |            |           |            | $         | 1,579,202 | $                                                 | --    
|                                                            | Accounts payable and accrued (note 15)                                        |            |                                                                |                  |         |            | 2,615,196 |            | --       
|                                                            | Payable on acquisition of Shenzhen Tianzhifu Network Technology Ltd. (note 1) |            | 518,590                                                        |                  | --     
|                                                            | Management fees payable (note 16)                                             |            |                                                                |                  |         |            |           |            | 176,671   |           | --                                               
|                                                            | Due to related parties, unsecured, non interest                               |            |                                                                |                  |         |            |           |            |          
|                                                            | bearing,
with no specific terms of repayment (note 17(b))                     |            |                                                                |                  | 515,053 |            | --       
|TOTAL CURRENT LIABILITIES                                   |                                                                               |            |                                                                |                  |         |            |           |            | 5,404,712 |           |                                                  
|Long-term Liabilities                                       |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         | 
|                                                            | Long-term debt (note 19)                                                      |            |                                                                |                  |         |            |           |            |           |           | 295,399                                           |        | --     
|                                                            | Deferred liabilities - pensions (note 24)                                     |            |                                                                |                  |         |            | 212,562   |            | --       
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  | 507,961    |  | --    
|Stockholders' Equity                                        |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         | 
|                                                            | Capital stock (note 20)                                                       |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         | 
|                                                            |                                                                               | Authorized |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  |           
|                                                            |                                                                               |            | 100,000,000 common shares at $0.0001 par value                 |                  |         |            |           |            |          
|                                                            |                                                                               | Issued     |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  |           
|                                                            |                                                                               |            | 35,897,309 common shares (2000 - 1,600,000 shares) - par value |                  |         | 3,590      |           | 1,600     
|                                                            |                                                                               |            | Paid in capital in excess of par value of stock                |                  |         |            |           | 15,403,889 |           | 60,900   
|                                                            | Retained earnings (deficit)                                                   |            |                                                                |                  |         |            |           |            |           |           | 633,841                                           |        | (9,061)
|                                                            | Cumulative translation (note 2)                                               |            |                                                                |                  |         |            |           |            |           | 4,375     |                                                   | --    
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  | 16,045,695 |  | 53,439
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  |                                                                               |            | $                                                              | 21,958,368       | $       | 53,439    
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  |            |  |       
|Approved on behalf of the board:                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                  
|                                                            |                                                                               |            |                                                                | **"Xin Chen"     | **      | , Director |           |            |           |           |                                                   |        |         |  |  |           
|                                                            |                                                                               |            |                                                                |                  |         |            |           |            |           |           |                                                   |        |         |  |  |            |  |       
|                                                            |                                                                               |            |                                                                | *****"Chung Yu"* | **      | , Director |           |            |           |           |                                                   |        |         |  |  |           

See Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES, CORP)**

**(A Nevada Corporation)**

**Consolidated Statements of Operations**

**(In U.S. Dollars)**

**(Unaudited)**

|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | ****
****Cumulative From |     |               |               |          
|--------------------------------- | ------------------------ |  |  | ------- | ------- | ------- | ------- | - | ------- | ------ | --------- | ------ | --------- | ------------------------ | --- | ------------- | ------------- | ---------
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | ****Inception Date       |     |               |               |          
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | ****of Sep. 15, 1998     |     | Quarter Ended | Quarter Ended
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | ************to March 31, |     | March 31,     | March 31,    
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | 2001                     |     | 2001          |               | 2000     
|Revenue                           |                          |  |  |         |         |         |         |   |         |        |           |        |           |                         
|                                  | Sales                    |  |  |         |         |         |         |   |         | $      | 3,154,822 | $      | 1,286,546 | $                        | -- 
|                                  | Cost of sales            |  |  |         |         |         |         |   |         |        | 1,627,759 |        | 753,701   |                          | -- 
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | 1,527,063                |     | 532,845       |               | --       
|                                  | Other income             |  |  |         |         |         |         |   |         |        | 392,050   |        | 163,630   |                          | 615
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | 1,919,113                |     | 696,475       |               | 615      
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           |                          |     |               |               |          
|Selling expenses                  |                          |  |  |         |         |         |         |   |         | 76,319 |           | 76,319 |           | --                      
|Administration Costs              |                          |  |  |         |         |         |         |   | 849,300 |        | 296,622   |        | 1,046    
|Depreciation                      |                          |  |  |         |         |         |         |   |         | 55,574 |           | 41,983 |           | --                      
|Amortization of Goodwill          |                          |  |  |         |         |         | 15,082  |   | 15,082  |        | --       
|Stock-based compensation          |                          |  |  |         |         |         | 252,400 |   | --      |        | --       
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           |                          |     |               |               |          
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           | 1,248,675                |     | 430,006       |               | 1,046    
|Profit (loss) before income taxes |                          |  |  | 670,438 |         | 266,469 |         |  
|Income taxes                      |                          |  |  |         |         |         |         |   |         | 36,597 |           | 36,597 |           | --                      
|Net profit (loss) for the period  |                          |  |  | $       | 633,841 | $       | 229,872 | $ | (431)  
|                                  |                          |  |  |         |         |         |         |   |         |        |           |        |           |                          |     |               |               |          
|Basic profit per share            |                          |  |  |         |         |         |         |   | $       | 0.01   | $         | (0.00)
|Diluted profit per share          |                          |  |  |         |         |         |         |   | $       | 0.00   | $         | (0.00)
|Weighted average number of        |                          |  |  |         |         |         |         |   |         |       
|                                  | common shares used to    |  |  |         |         |         |         |   |         |        |           |       
|                                  | compute profit per share |  |  |         |         |         |         |   |         |        |           |       
|                                  |                          |  |  | Basic   |         |         |         |   |         |        |           |        |           |                          |     | 35,897,309    |               | 6,000,000
|                                  |                          |  |  | Diluted |         |         |         |   |         |        |           |        |           |                          |     | 39,665,620    |               | 6,000,000

See Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES CORP.)**

**(A Nevada Corporation)**

**Consolidated Statements of Retained Earnings (Deficit)**

**(In US Dollars)**

**March 31, 2001**

**(Unaudited)**

|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  | ************Cumulative From |  |               |               |     
|------------------------------------------------ | - | ------- | - | ------- | ------- | ------- | ------- |  | ----- |  |  |  |  | --------------------------- |  | ------------- | ------------- | ----
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  | ****
Inception Date         |  |               |               |     
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  | ****of Sep. 15, 1998        |  | Quarter Ended | Quarter Ended
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  | ************to March 31,    |  | March 31,     | March 31,     |     
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  | 2001                        |  | 2001          |               | 2000
|Retained earnings (deficit), beginning of period |   |         |   | 403,969 |         | (8,630) |        
|Net profit (loss) for the period                 |   |         |   |         | 633,841 |         | 229,872 |  | (431) | 
|Retained earnings (deficit), end of period       | $ | 633,841 | $ | 633,841 | $       | (9,061) |        
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  |                             |  |               |               |     
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  |                             |  |               |               |     
|                                                 |   |         |   |         |         |         |         |  |       |  |  |  |  |                             |  |               |               |     

See Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES CORP.)**

**(A Nevada Corporation)**

**Consolidated Statements of Cash Flows**

**(In US Dollars)**

**(Unaudited)**

|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | ****Cumulative From      |           |               |              
|-------------------------------- | -------------------- | -------------------------------- | ----------------------------- | ------- | - | --------- | --------- | ------- | ----------- | ----------- | --------- | ----------- | ----------- | ------------------------ | --------- | ------------- | -------------
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | ****
Inception Date      |           |               |              
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | ****of Sep. 15, 1998     |           | Quarter Ended | Quarter Ended
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | ************to March 31, |           | March 31,     | March 31,    
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | 2001                     |           | 2001          |              
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             |                          |           |               |              
|Cash derived from (used for)     |                      |                                  |                               |         |   |           |           |         |             |            
|                                 | Operating activities |                                  |                               |         |   |           |           |         |             |             |           |             |             |                         
|                                 |                      | Net profit (loss) for the period |                               |         | $ | 633,841   | $         | 229,872 | $           | (431)      
|                                 |                      | Items not requiring use of cash  |                               |         |   |           |           |         |             |            
|                                 |                      |                                  | Depreciation                  |         |   |           |           |         |             |             |           |             | 55,574      |                          | 41,983    |               | --           
|                                 |                      |                                  | Amortization of goodwill      |         |   |           |           |         | 15,082      |             | 15,082    |             | --         
|                                 |                      |                                  | Stock-based compensation      |         |   |           |           | 252,400 |             | --          |           | --         
|                                 |                      | Cumulative translation           |                               |         |   |           |           |         | 4,375       |             | (8)       |             | --         
|                                 |                      | Changes in non-cash              |                               |         |   |           |           |         |             |             |           |             |            
|                                 |                      |                                  | working capital items         |         |   |           |           |         |             |             |           |             |             |                         
|                                 |                      |                                  | Accounts receivable           |         |   |           |           |         |             | (5,617,569) |           | (412,592)   |             | --                      
|                                 |                      |                                  | Prepaid expenses and deposits |         |   |           | (67,601)  |         | (32,917)    |             | --       
|                                 |                      |                                  | Inventories                   |         |   |           |           |         |             |             |           |             | (1,566,665) |                          | (322,023) |               | --           
|                                 |                      |                                  | Subscriptions receivable      |         |   |           |           |         | (406,434)   |             |           |             | --         
|                                 |                      |                                  | Accounts payable and accrued  |         |   |           | 2,615,196 |         | (135,234)   |             | (500)    
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             |                          |           |               |              
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | (4,081,801)              |           | (615,837)     |              
|                                 | Financing activities |                                  |                               |         |   |           |           |         |             |             |           |             |             |                         
|                                 |                      | Issuance of shares for cash      |                               |         |   |           | 7,605,801 |         | --          |             | --       
|                                 |                      | Net gain on acquisition          |                               |         |   |           |           |         | 3,333,103   |             | --        |             | --         
|                                 |                      | Capital contributed              |                               |         |   |           |           |         |             |             | 177,946   |             | 177,946     |                          | --       
|                                 |                      | Management fees payable          |                               |         |   |           |           | 176,671 |             | 26,667      |           | --         
|                                 |                      | Payable on acquisitions          |                               |         |   |           |           |         | 518,590     |             | --        |             | --         
|                                 |                      | Bank loans                       |                               |         |   |           |           |         |             |             |           | 1,579,202   |             | --                       |           | --           
|                                 |                      | Long-term debt                   |                               |         |   |           |           |         |             |             |           | 295,399     |             | (10,739)                 |           | --           
|                                 |                      | Deferred libilities, pension     |                               |         |   |           |           | 212,562 |             |             |           | --         
|                                 |                      | Due to related parties           |                               |         |   |           |           |         | 515,053     |             | --        |             | --         
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | 14,414,327               |           | 193,874       |              
|                                 | Investing activities |                                  |                               |         |   |           |           |         |             |             |           |             |             |                         
|                                 |                      | Fixed assets acquired            |                               |         |   |           |           |         | (6,271,125) |             | (380,919) |             | --         
|                                 |                      | Intangible assets                |                               |         |   |           |           |         |             |             | (101,588) |             | 1,093       |                          | --       
|                                 |                      | Goodwill                         |                               |         |   |           |           |         |             |             |           | (1,206,554) |             | --                       |           | --           
|                                 |                      | Investment in Hongkang           |                               |         |   |           |           |         | (532,044)   |             | --        |             | --         
|                                 |                      | Short-term investment            |                               |         |   |           |           |         | (1,354,293) |             | --        |             | --         
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             |                          |           |               |              
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             | (9,465,604)              |           | (379,826)     |              
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             |                          |           |               |              
|Cash, increase during the period |                      |                                  |                               | 866,922 |   | (801,789) |           | (931)  
|Cash, beginning of period        |                      |                                  |                               |         |   |           |           |         | 1,668,711   |             | 54,370   
|Cash, end of period              |                      |                                  |                               |         |   |           |           | $       | 866,922     | $           | 866,922   | $           | 53,439     
|                                 |                      |                                  |                               |         |   |           |           |         |             |             |           |             |             |                          |           |               |              

See
Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES CORP.)**

**(A Nevada Corporation)**

**Schedule of Fixed Assets/Intangible Assets**

**As at March 31, 2001**

**(In US Dollars)**

**(Unaudited)**

|                  |              |                                     |                             |             |           |  |    |   |           |   |     |           |       |                         |   |           | 
|----------------- | ------------ | ----------------------------------- | --------------------------- | ----------- | --------- |  | -- | - | --------- | - | --- | --------- | ----- | ----------------------- | - | --------- | 
|                  |              |                                     |                             |             |           |  |    |   |           |   |     |           |       | ************Accumulated |   |           | 
|                  |              |                                     |                             |             |           |  |    |   |           |   |     | Cost      |       | Depreciation            |   | Net       | 
|                  | Fixed Assets |                                     |                             |             |           |  |    |   |           |   |     |           |       |                        
|                  |              | Deferred lease expense              |                             |             |           |  |    | $ | 3,556     | $ | 556 | $         | 3,000 |                        
|                  |              | Fixed assets of operating companies |                             |             |           |  |    |   |          
|                  |              |                                     |                             | - note 9    |           |  |    |   |           |   |     | 2,132,580 |       | 620,012                 |   | 1,512,568 | 
|                  |              |                                     |                             | - note 10   |           |  |    |   |           |   |     | 788,481   |       | --                      |   | 788,481   | 
|                  |              | Construction in progress - Note 11  |                             |             | 2,146,980 |  | -- |   | 2,146,980 |  
|                  |              | Rights of use of land               |                             |             |           |  |    |   |           |   |     |           |       |                        
|                  |              |                                     |                             | Tianan      |           |  |    |   |           |   |     | 370,508   |       | 1,986                   |   | 368,522   | 
|                  |              |                                     |                             | TZF
Jiangsu |           |  |    |   |           |   |     | 1,396,000 |       | --                      |   | 1,396,000 | 
|                  |              |                                     |                             |             |           |  |    |   |           |   | $   | 6,838,105 | $     | 622,554                 | $ | 6,215,551 | 
|                  |              |                                     |                             |             |           |  |    |   |           |   |     |           |       |                         |   |           | 
|Intangible Assets |              |                                     |                             |             |           |  |    |   |           |   |     |           |      
|                  |              |                                     | Technology rights - Note 14 |             |           |  |    |   |           |   | $   | 4,038,229 |      
|                  |              |                                     | Deferred costs - Note 13    |             |           |  |    |   |           |   |     | 101,588   |      
|                  |              |                                     |                             |             |           |  |    |   |           |   |     |           |       |                         | $ | 4,139,817 | 
|                  |              |                                     |                             |             |           |  |    |   |           |   |     |           |       |                         |   |           | 

See Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES CORP.)**

**(A Nevada Corporation)**

**Consolidated Statements of Changes in Stockholders' Equity**

**From Date of Inception on September 15, 1998 to March 31, 2001**

**(In US Dollars)**

**(Unaudited)**

|                               |                                                  |                                  |             |             |            |           |             |             |              
|------------------------------ | ------------------------------------------------ | -------------------------------- | ----------- | ----------- | ---------- | --------- | ----------- | ----------- | -------------
|                               |                                                  |                                  | Number of   |             | Additional | Total     | Retained    |             | Total        
|                               |                                                  |                                  | Common      | par         | Paid-in    | Capital   | Earnings    | Cumulative  | Stockholders'
|                               |                                                  |                                  | Shares      | Value       | Capital    | Stock     | (Deficit)   | Translation | Equity       
|                               |                                                  |                                  |             |             |            |           |             |             |              
|                               | 9/25/98 issuance of common                       |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 1,000,000   | $1,000      | $1,500     | $2,500    |             |             | $2,500       
|                               | Net loss for the year ended December 31, 1998    |                                  |             |             | (1,115)    |           | (1,115)    
|Balance, December 31, 1998     | 1,000,000                                        | 1,000                            | 1,500       | 2,500       | (1,115)    |           | 1,385      
|                               | 2/17/99 issuance of common                       |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 600,000     | 600         | 59,400     | 60,000    |             |             | 60,000       
|                               | Net loss for the year ended December 31, 1999    |                                  |             |             | (7,515)    |           | (7,515)    
|Balance, December 31, 1999     | 1,600,000                                        | 1,600                            | 60,900      | 62,500      | (8,630)    |           | 53,870     
|                               | 4/30/00 cancellation of                          |                                  |             |             |            |           |             |            
|                               |                                                  | common stock and                 |             |             |            |           |             |             |              
|                               |                                                  | transfer of par value to         |             |             |            |           |             |             |              
|                               |                                                  | paid-in capital (note 1)         | (1,000,000) | (1,000)     | 1,000      |           |             |             |              
|Balance, April 30, 2000        |                                                  |                                  |             |             |            |           |            
|                               | before forward split                             | 600,000                          | 600         | 61,900      | 62,500     | (8,630)   |             | 53,870     
|                               |                                                  |                                  |             |             |            |           |             |             |              
|05/15/00 10 to 1 forward split | 6,000,000                                        | 600                              | 61,900      | 62,500      | (8,630)    |           | 53,870     
|                               | 05/15/00 issuance of common                      |                                  |             |             |            |           |             |            
|                               |                                                  | stock for services               | 250,000     | 25          | 252,375    | 252,400   |             |             | 252,400      
|                               | 05/15/00 issuance of common                      |                                  |             |             |            |           |             |            
|                               |                                                  | stocks for the BC
Company        | 18,451,843  | 1,845       | 5,351,087  | 5,352,932 |             |             | 5,352,932    
|                               | 7/4/00 issuance of common                        |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 340,000     | 34          | 343,216    | 343,250   |             |             | 343,250      
|                               | 9/30/00 issuance of common                       |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 615,466     | 62          | 621,286    | 621,348   |             |             | 621,348      
|                               | 10/19/00 issuance of common                      |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 10,000      | 1           | 10,999     | 11,000    |             |             | 11,000       
|                               | 11/19/00 issuance of common                      |                                  |             |             |            |           |             |            
|                               |                                                  | stock for cash                   | 230,000     | 23          | 252,977    | 253,000   |             |             | 253,000      
|                               | 12/28/00 issuance of common                      |                                  |             |             |            |           |             |            
|                               |                                                  | stock for debt                   | 10,000,000  | 1,000       | 4,999,000  | 5,000,000 |             |             | 5,000,000    
|                               | Net profit for the year ended December 31, 2000  |                                  |             |             | 412,599    |           | 412,599    
|                               | Negative goodwill - gain on                      |                                  |             |             |            |           |             |            
|                               |                                                  | acquisition TZF Jiangsu
- note 1 |             |             | 3,333,103  | 3,333,103 |             |             | 3,333,103    
|                               | Cumulative translation                           |                                  |             |             |            |           | 4,383       | 4,383      
|Balance, December 31, 2000     | 35,897,309                                       | 3,590                            | 15,225,943  | 15,229,533  | 403,969    | 4,383     | 15,637,885 
|                               | 1/1/01 capital contributed                       |                                  |             | 177,946     | 177,946    |           |             | 177,946    
|                               | Net profit for three months ended March 31, 2001 |                                  |             |             | 229,872    |           | 229,872    
|                               | Cumulative translation                           |                                  |             |             |            |           | (8)         | (8)        
|Balance, March 31, 2001        | 35,897,309                                       | $3,590                           | $15,403,889 | $15,407,479 | $633,841   | $4,375    | $16,045,695
|                               |                                                  |                                  |             |             |            |           |             |             |              

See Accompanying Notes and Independent Accountants' Review Report

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(FORMERLY SABAI SABAI ENTERPRISES CORP.)**

**(A Nevada Corporation)**

**Notes to Consolidated Financial Statements**

**March 31, 2001**

**(In US Dollars)**

**(Unaudited)**

Note 1.	ORGANIZATION AND NATURE OF BUSINESS



The Company was incorporated under the laws of the State of Nevada on September 15, 1998, as
Sabai Sabai Enterprises, Corp., and on May 25, 2000, changed its name to T.Z.F. International
Investments, Inc.

Pursuant to a stock purchase agreement dated March 30, 2000, T.Z.F. International Herbs Investment
Inc., ("BC Company") purchased 1,000,000 shares of the issued and outstanding common stock of the
Company.  These shares were purchased in anticipation of the subsequent completion of a share
exchange transaction between the Company and the BC Company.  In conjunction with completion
of the share exchange transaction these shares were cancelled, effective April 30, 2000, and as a result,
the amount of the par value of $1,000 attributable to such shares was transferred to paid-in capital.



Pursuant to the terms of the share exchange which was effective as of April 30, 2000, the Company
acquired all of the issued and outstanding stock of the BC Company in exchange for the issuance of
18,451,843 shares of its authorized but previously unissued shares of common stock, which shares
were valued at $5,352,932 for purposes of the acquisition.  Assets and liabilities of the BC Company
at the date of acquisition on April 30, 2000, were as follows:



Assets

Cash and short term deposits	$	1,040,372

Accounts receivable		13,217

Capital stock subscriptions receivable		374,546

Prepaid expense and deposit		5,382

Inventories		206,532

Deferred lease expense, net of amortization		5,047

Fixed assets, net of accumulated depreciation		59,927

Intangible assets, technology rights	4,038,229

5,743,252

Liabilities

Accounts payable and accrued		114,917

Accrued payroll deductions payable		45,767

Management fees payable		168,205

Due to related parties	60,755

389,644

Net assets including cumulative translation 		5,353,608

Cumulative translation, included in above,

Booked in stockholders' equity of Sabai Sabai	(676	)

Net value in exchange for 18,451,843 common

Shares off Sabai Sabai and net equity on date of

acquisition of the BC Company	$	5,352,932



In May 2000, the Company completed a 10:1 forward split of its outstanding stock. This forward split
increased the number of issued and outstanding shares from 600,000 (1,600,000 previously
outstanding less the 1,000,000 shares which were cancelled) to 6,000,000.



Subsequent to completion of the share exchange on April 30, 2000, the BC Company (the Company's
wholly-owned subsidiary) received subscriptions for 340,000 additional shares.  The Company elected
to convert such shares to shares of its own common stock on the same terms as it completed the share
exchange.  Therefore, effective as of July 4, 2000 the Company issued 340,000 additional shares in
exchange for shares of the BC Company



In May 2000, following completion of the forward split, the Company authorized the issuance of
250,000 restricted shares as compensation for consulting services at a price of CAD$1.50 per share,
to the following:



Number of	Consideration		Equivalent

Name	Shares	Cad$	US$

Robert Gelfand		50,000	$	75,000	$	50,480

Fred Fisher	200,000	300,000	201,920

250,000	$	375,000	$	252,400



Accordingly, the amount of $252,400 was recorded as stock-based compensation in the financial
statements for the year ended December 31, 2000.

T.Z.F. International Herbs Investment Inc., which is now a wholly-owned subsidiary of the Company,
owns the formula and all distribution and intellectual property rights, including trademark, patent and
industry design rights, for Snow Lotus Tea products.



The Company and its wholly-owned subsidiary, the BC Company, are both based in Richmond, British
Columbia, Canada.



On December 21, 2000 the BC Company acquired 100% of issued and outstanding shares of Tianan
Investment Limited ("Tianan"), a British Virgin Islands company with an office in Hong Kong for the
total price of HK$21,500,000 (US$2,758,847),which was paid in cash in three installments. The BC
Company paid the first installment totaling HK $6,638,318.09 (approximately US $851,100) in two
parts, on July 7 and July 10, 2000. The second installment of HK $6,261,681.91 (approximately US
$802,800), and the final installment of HK$8,600,000.00 (approximately US $1,104,947), which were
paid on October 20, 2000 and December 20, 2000, respectively, were both paid by Xin Chen, one of
the principal shareholders.

The sole asset of Tianan is its 100% ownership of Tianan Pharmacy (Xiamen) Co., Ltd. ("Tianan
Pharmacy"), a manufacturer of Chinese biological and herbal medicine products. Tianan Pharmacy has
a plant which is located in the Torch High Tech Development Zone of Xiamen, China, where it
currently conducts research and development and produces herbal and biological medicines which it
distributes and sells in China.



As a result of the closing of this purchase transaction, Tianan became our wholly-owned subsidiary.



Assets and liabilities of Tianan  at the date of acquisition on December 21, 2000, were as follows:



Assets

Cash and cash equivalents	$	103,910

Accounts receivable, trade		198,910

Short-term loans		831,875

Prepaid expense and deposit		5,069

Inventories		449,147

Deferred expense, net of amortization		27,957

Fixed assets, net of accumulated depreciation		1,405,851

Rights of use of land - 50 years	370,508

3,393,227

Liabilities

Accounts payable, trade		9,921

Accounts payable, others		42,176

Taxes payable		33,222

Deferred liabilities, pension		212,562

Bank loan	483,676

781,557

Net assets		2,611,670

Goodwill on acquisition	147,177

Total cash payments on acquisition	$	2,758,847



On December 31, 2000, the BC Company completed the purchase of all of the shares of T.Z.F.
International Herbs (Jiangsu) Co. Ltd. ("TZF Jiangsu") (formerly Second Pharmacy Factory of
Yancheng City), ("Second Pharmacy"), a Chinese corporation. The assets were purchased from The
People's Government of JianWu County, JiangSu Province, the People's Republic of China. The
purchase was completed pursuant to the terms of an Acquisition and Investment Agreement dated
September 12, 2000.



In accordance with the Acquisition and Investment Agreement, the purchase price was a total of
RMB14,000,000.00 (US $1,786,591), which was paid in cash in two installments, plus assumption
of liabilities totaling approximately RMB400,000 (approximately US$48,000). The first cash
installment totaling RMB3,000,000.00 (approximately US $362,000) , was paid on September 18,
2000. The second cash installment of RMB11,000,000.00 (approximately US $1,376,591) was paid
in two parts, on November 22 and November 28, 2000.



The purchase price for the assets of TZF Jiangsu was determined through arms length negotiation with
the seller.



The cash purchase price for the assets of TZF Jiangsu was paid on our behalf by Xin Chen, one of the
principal shareholders. These payments were part of a total of US$5,000,000 which Mr. Chen paid or
advanced on behalf of the Company during the fiscal year ended December 31, 2000.



The assets of TZF Jiangsu consist primarily of an automated assembly line used for the production of
various pharmaceutical products. The Company will continue to use this equipment and factory for
the production of pharmaceutical products and will seek to expand and improve the operations.



In addition to payment of the initial purchase price of RMB14,000,000 for purchase of the existing
assets of TZF Jiangsu, the Acquisition and Investment Agreement contemplates that during the next
three years we will invest an additional sum of RMB14,000,000 in fixed assets, technological
improvements, research and development and marketing in order to improve and expand the
operations of TZF Jiangsu. In return for the Company's commitment to make this additional capital
investment, the seller, The People's Government of JianWu County, JiangSu Province, the People's
Republic of China has agreed to grant the Company various incentives, including rent free occupancy
of certain new plant space for 50 years, an agreement to refund certain Value Added Tax for 3 years,
a 100% exemption from income taxes for three years commencing in 2001, a 50% exemption from
income taxes for an additional 3 years thereafter, an exemption from the Industrial and Commercial
Administration Charge and other industry fees for one year, and an exemption from a variety of other
fees and surcharges during the period that the new plant space is under construction.



Assets and liabilities of TZF Jiangsu at the date of acquisition on December 31, 2000, were as follows:

Assets

Cash and cash equivalents	$	1,005,456

Accounts receivable, trade		1,675,847

Accounts receivable, others		701,927

Short-term loans		79,095

Inventories		861,460

Construction in progress		1,918,374

Fixed assets, net of accumulated depreciation		548,421

Fixed assets, other		239,261

Rights of use of land - 50 years	1,239,942

8,269,783

Liabilities

Accounts payable, trade		913,669

Accounts payable, others		350,001

Taxes payable		389,934

Payroll and payroll deductions payable		94,821

Long-term liabilities		306,138

Bank loans	1,095,526

3,150,089

Net assets		5,119,694

Gain - Negative goodwill on acquisition added to

paid-in capital in these financial statements	3,333,103

Total cash payments on acquisition	$	1,786,591



By an Acquisition and Investment Agreement dated December 31, 2000, the Company completed the
purchase of all of the shares of Shenzhen Tianzifu Network Technology Ltd., ("Shenzhen TZF Net")
(formerly Shenzhen Xinhaihu Industry Trading & Development Co., Ltd.), a Chinese corporation, and
including its subsidiary, Meixian County Hengkang Pharmaceutical Company.  The purchase price is
$3,000,000, of which, $2,481,410 was paid, and the balance of $518,590 is recorded as payable on
acquisition as a current liability in these financial statements.



The major businesses of Shenzhen TZF Net are in China and include pharmaceutical businesses,
material supply, computer network software and hardware development and related business
information consulting.



Shenzhen TZF Net.****owns and operates a major health food and medicine online sales network, as
outlined below through which Chinese products are marketed and brand products from North
America and the rest of the world will be distributed under licenses. It also serves as T.Z.F's China
headquarters, as it owns one subsidiary, directly, which is Meixian County Hengkang
Pharmaceutical Company, and will administer the operations of all current and future T.Z.F.
subsidiaries in China.

Shenzhen TZF Netoperates a Chinese-Language health food Web site. Its objective is to centralize
the management of the entire T.Z.F. network in China and to improve its efficiency and economic
scale, including that of the manufacturing, sales and marketing functions. It proposes to expand the
existing distribution network and channels of distribution of all current subsidiaries of T.Z.F. in
China with its competitive edge and unique resources.  It will carry out the T.Z.F. plan of building
200 chain counters and stores in the top 200 major department stores nationwide, and to open 50
licensed drug stores, 60 chain stores and 20 distribution centers in selected locations in China. After
Shenzhen TZF Net has completed building the sales network platform domestically in China, it will
then focus on attracting international suppliers of health food or related health care products that
wish to export their products to China,  and use this expanding international network to market
Chinese health food products and herbal medicines.  Shenzhen TZF Net proposes to be the flagship
operation of an effective, competitive China-North America manufacturing, sales and marketing
network.

Shenzhen TZF Net will apply the computer network and database technology that it has developed
and is currently using in-house to consolidate, standardize and specialize its management and
distribution systems in order to maximize operating efficiencies. It will implement a Retailer
Management System, an Electronic Ordering System and an Electronic Data Interchange. Network
Technology's head office will control the organization of the chain stores.  Its online network will
be able to present a virtual sales platform for the eventual B2B and B2C transaction.  Shenzhen TZF
Net proposes to have seven departments: marketing, merchandise, sales, information center,
distribution center, general management/administration and accounting.

Meixian County Hengkang Pharmaceutical Company, is a wholly owned subsidiary of Shenzhen
TZF Net. It was formed in 1995 and is located in Meixian County in Guangdong Province. It has
a staff of 60 and is one of only few pharmaceutical wholesalers/retailers (out of 990 wholesale
enterprises and 3,760 retailers) in Guangdong Province to meet the GSP requirements.  Hengkang
Pharmaceutical wholesales and retails chemical pharmaceutical preparation, antibiotic
pharmaceutical preparations, Chinese traditional medicine preparations, Chinese traditional
medicine tablets and health products throughout Southern China including Guanxi, Fujian and
Hunan provinces. Hengkang Pharmaceutical plans to expand its facilities and market share in order
to meet the growing demand for medicines and to become a major pharmaceutical distributor and
wholesaler in Southern China.

Assets and liabilities of Shenzhen TZF Net at the date of acquisition on December 31, 2000, were
as follows:

Assets

Cash and cash equivalents	$	416,994

Accounts receivable, trade		274,132

Short-term loans		517,487

Short-term investment		1,354,293

Inventories		12,033

Prepaid expenses		23,260

Fixed assets, net of accumulated depreciation		78,193

Investment in subsidiary,

Meixian Hengkang Pharmaceutical Company		532,044

Deferred Website development costs	74,724

3,283,160

Liabilities

Accounts payable, trade		6,829

Accounts payable, others		1,183,904

Taxes payable	151,804

1,342,537

Net assets		1,940,623

Goodwill on acquisition (note  )	1,059,377

Total payments required on acquisition	$	3,000,000

Amounts paid by December 31, 2000	2,481,410

Amount unpaid at December 31, 2000, recorded

as a current liability in these financial statements	$	518,590

The amount of $518,590 unpaid, bears no interest, is unsecured and has no specific due date.

Note 2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

**Principles of consolidation**

The accompanying consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, T.Z.F. International Herbs Investment Inc., Tianan Investment
Limited (and its wholly-owned subsidiary Tianan Pharmacy (Xiamen) Co. Ltd.), TZF
International Herbs (Jiangsu) Co. Ltd. and Shenzhen Tianzhifu Network Technology Ltd.  All
intercompany transactions and balances have been eliminated.

**Basis of presentation**

These consolidated financial statements have been prepared in accordance with Accounting
Principles Generally Accepted in the United States ("USGAAP).  In the opinion of management,
these unaudited consolidated financial statements affect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation for each of the periods presented.  The
results of operations for interim periods are not necessarily indicative of results to be achieved
for full fiscal years.

**Development stage company**

The accompanying consolidated financial statements have been prepared in accordance with the
provisions of Statement of Financial Accounting Standard No. 7, "Accounting and Reporting by
Development Stage Enterprises", which include cumulative figures for the statement of
operations and cash flows from the date of inception on September 15, 1998 to March 31, 2001.

**Business Combinations**

The Company uses the Purchase Method in accounting for its acquisitions and amortizes
goodwill over a twenty year period.

Goodwill will be subject to review for impairment.  This review would be at the lowest
reporting level or levels that include the acquired business (i.e., the reporting unit).  Goodwill
would be considered impaired and subject to write-down if the fair value of the reporting unit's
goodwill is less than its carrying amount.  The fair value of goodwill would be determined by
subtracting the fair value of the recognized net assets of the reporting unit (excluding goodwill)
from the fair value of the reporting unit.  The amount of the impairment would be the difference
between the carrying amount and the fair value of the goodwill.

**Use of estimates**

The preparation of financial statements in conformity with USGAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods.  Actual results could
differ from those estimates.

**Cash and cash equivalents**

Cash and cash equivalents consists of cash on deposit and highly liquid short-term interest bearing
securities with a maturity at the date of purchase of three months or less.

******Income Taxes**

Provisions for income taxes are based on taxes payable or refundable for the current year and
deferred taxes on temporary differences between the amount of taxable income and pretax financial
income and between the tax bases of assets and liabilities and their reported amounts in the financial
statements.  Deferred tax assets and liabilities are included in the financial statement at currently
enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are
expected to be realized or settled as prescribed in FASB Statement No. 109, Accounting for Income
Taxes.  As changes in tax laws or rate are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.

**Compensated absences**

Employees of the corporation are entitled to paid vacations, sick days and other time off depending
on job classification, length of service and other factors.  It is impractical to estimate the amount
of compensation for future absences, and accordingly, no liability has been recorded in the
accompanying financial statements.  The corporation's policy is to recognize the costs of
compensated absences when paid to employees.

**Net earnings per share**

The Company adopted Statement of Financial Accounting Standards No. 128 that requires the
reporting of both basic and diluted earnings per share.  Basic earnings per share is computed by
dividing net income available to common shareowners by the weighted average number of common
shares outstanding for the period.  Diluted earnings per share reflects the potential dilution that
could occur if securities or other contacts to issue common stock were exercised or converted into
common stock.  In accordance with FASB 128, any anti-dilution effects on net loss per share are
excluded.

**Disclosure about fair value of financial instruments**

The Company has financial instruments, none of which are held for trading purposes. The Company
estimates that the fair value of all financial instruments at March 31, 2001 as defined in FASB 107,
does not differ materially from the aggregate carrying values of its financial instruments recorded
in the accompanying balance sheet.  The estimated fair value amounts have been determined by the
Company using available market information and appropriate valuation methodologies.
Considerable judgment is required in interpreting market data to develop the estimates of fair value,
and accordingly, the estimates are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.

**Fixed assets**

Fixed assets are stated at cost less accumulated depreciation.  Depreciation is recorded on the
following rates, based upon the useful life of the assets.

Office equipment	- 20% per annum on the declining balance basis

Leasehold improvement 	- allocated on a straight-line basis over the term of lease

Vehicles	- 30% per annum on the declining balance basis

Computer equipment	- 30% per annum on the declining balance basis

Buildings	- 4.75% per annum on the straight-line basis

Mechanical devices	- 19% per annum on the straight-line basis

Electric devices	- 19% per annum on the straight-line basis

Shipping devices	- 19% per annum on the straight-line basis

Other devices	- 19% per annum on the straight-line basis

**Long-lived assets**

Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of the asset in question may not be recoverable.  This standard did not have a material effect
on the Company's results of operations, cash flows or financial position.

**Foreign currency translation**

The functional currency of the parent Company T.Z.F. International Investments, Inc. is the United
States Dollar and of T.Z.F. International Herbs Investment Inc. is the Canadian Dollar and the
reporting currency on a consolidated basis is the United States Dollar.

The assets, liabilities, and operations of the Company are expressed in the functional currency of
the Company in United States Dollars.  Operations of the subsidiary, T.Z.F. International Herbs
Investment Inc. are in Canadian Dollars and in conformity with US GAAP they are translated into
the reporting currency, the United States Dollar.

Monetary assets and liabilities are translated at the current rate of exchange.

The weighted average exchange rate for the period is used to translate revenue, expenses, and gains
or losses from the functional currency to the reporting currency.

The gain or loss on translation is reported as a separate component of stockholders' equity and not
recognized in net income.  Gains or losses on remeasurement are recognized in current net income.

Gains or losses from foreign currency transactions are recognized in current net income.

Fixed assets are measured at historical exchange rates that existed at the time of the transaction.

Depreciation is remeasured at historical exchange rates that existed at the time the underlying
related asset was acquired.

An analysis of the changes in the cumulative translation adjustment as disclosed as part of
stockholders' equity, is as follows:

|                         | Three Months Ended March 31, 2001 | Three Months Ended March 31, 2000
|------------------------ | --------------------------------- | ---------------------------------
|Beginning balance        | $ 4,383                           | $         -                      
|Change during the period | (8)                               | --                               
|Ending balance           | $ 4,375                           | $      --                        

The effect of exchange rate changes on cash balances is reported in the statement of cash flows as
a separate part of the reconciliation of change in cash and cash equivalents during the period.

**Concentration of credit risk**

Financial instruments that potentially subject the Company to a significant concentration of credit
risk consist primarily of cash and cash equivalents which are not collateralized.  The Company
limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality
financial institutions.

**Inventories**

The inventories are recorded at the lower of cost or market. As at March 31, 2001 the inventories
total $1,566,665 (see notes 7)

**Revenue Recognition**

The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101,
Revenue Recognition in Financial Statements, in December 1999.  The SAB summarizes certain
of the SEC staff's views in applying generally accepted accounting principles to revenue recognition
in financial statements.  During the current year, the Company performed a review of its revenue
recognition policies and determined that it is in compliance with SAB 101.

**Web Site Development Expenses**

Web site development expenses relate to the development of new online services and consist
principally of employee compensation, as well as costs for content, facilities and equipment.  The
consensus in the Financial Accounting Standards Board Emerging Issues Task Force (EITF) Issue
No. 00-2, Accounting for Web Site Development Costs, requires that certain costs to develop Web
sites be capitalized or expensed, depending on the nature of the costs.  Development expenses of
$101,588 have been capitalized and will be either expensed in 2001 or amortized over a period of
30 months after completion the Web Site (note 13)

**Shipping and Handing Fees and Costs**

In September 2000, the Financial Accounting Standards Board Emerging Issues Task Force (EITF)
reached a final consensus on EITF Issue No. 00-10, Accounting for Shipping and Handling Fees
and Costs.  This consensus requires that all amounts billed to a customer in a sale transaction related
to shipping and handling, be classified as revenue.  The Company historically has netted shipping
charges to customers with shipping and handling costs which are included in operating expenses
in the Statements of Operations.  With respect to the classification of costs related to shipping and
handling incurred by the seller, the EITF determined that the classification of such costs is an
accounting policy decision that should be disclosed.  The Company will adopt the consensus in the
Issue in fiscal 2001.

Note 3.  CASH AND CASH EQUIVALENTS - $866,922

The total for cash and equivalents as at March 31, 2001, is made up as follows:

|                    | TZF US
Company | The BC
Company | Tian'an  | TZF Jiangsu | Shenzhen TZF
Net | Total     
|------------------- | -------------- | -------------- | -------- | ----------- | ---------------- | ----------
|Petty cash          | $              | $       0      | $   721  | $ 9,025     | $     290        | $   10,036
|Cash in trust       |                |                | 435      |             |                  | 435       
|Cash in bank        | 14,439         | 47,782         | 91,024   | 620,865     | 41,626           | 815,736   
|Short-term
deposits |                | 20,039         |          | 20,676      |                  | 40,715    
|Total               | $ 14,439       | $ 68,256       | $ 91,745 | $650,566    | $ 41,916         | $866,922  



Note 4.  ACCOUNTS RECEIVABLE - $5,617,569 (see note 30 re past operations of subsidiaries)

This balance represents the following:

|                                  | TZF US
Company | The BC
Company | Tian'an    | TZF Jiangsu | Shenzhen TZF
Net | Total     
|--------------------------------- | -------------- | -------------- | ---------- | ----------- | ---------------- | ----------
|Accounts receivable, trade        | $97,254        | $ 578,432      | $ 421,411  | $1,458,151  | $ 529,253        | $3,084,491
|Accounts receivable,
Canadian GST |                | $18,541        |            |             |                  | $ 18,541  
|Short-term loans                  |                |                | 796,590    | 6,046       | 817,163          | 1,619,799 
|Accounts receivable, others       |                | 15,249         |            | 879,489     |                  | 894,738   
|Total                             | $ 97,254       | $612,222       | $1,218,001 | $2,343,676  | $ 1,346,416      | $5,617,569

Note 5.  PREPAID EXPENSES AND DEPOSITS - $67,601

The balance of prepaid expense and deposit as at March 31, 2001, are as follows:

|                     | The BC Company | Tian'an | Shenzhen TZF Net | Total   
|-------------------- | -------------- | ------- | ---------------- | --------
|Rental deposits      | $ 5,384        | $       | $                | $  5,384
|Deposit for supplies | 970            | (59)    | 61,306           | 62,217  
|Total                | $6,354         | (59)    | $ 61,306         | $ 67,601



Note 6.  SUBSCRIPTIONS RECEIVABLE - $406,434

As at September 11, 2000, Mr. Chung Yiu Chung signed a subscription agreement with the
Company, whereby he subscribed for 561,798 common share of the Company at a price of
CAD$1.50 per share, of which, 162,994 common shares were issued and paid.  The balance of
$406,434 is unpaid and is disclosed as a current asset in these financial statements.

Note 7.  INVENTORIES - $1,566,665

The inventories as at March 31, 2001, are made up as follows:

|                    | The BC
Company | Tian'an     | TZF Jiangsu | Shenzhen TZF
Net | Total     
|------------------- | -------------- | ----------- | ----------- | ---------------- | ----------
|Raw materials       | $              | $    51,001 | $   86,422  | $                | $137,423  
|Packaging materials | 22,947         | 16,362      | 481,738     |                  | 521,047   
|Finished products   |                | 515,558     | 147,981     |                  | 663,539   
|Other               |                |             | 202,217     | 43,439           | 244,656   
|Total               | $    22,947    | $582,921    | $917,358    | $   43,439       | $1,566,665

Note 8.  INVESTMENT IN GUANGDONG HONGKANG MEDICAL COMPANY

As at March 31, 2001, Shenzhen TZF Net had advanced $532,044 to Guangdon Hongkang Medical
Company for that company to establish a new marketing network.  It is proposed that the
aforementioned company will acquire the operations of and ownership of Meixian Hengkang
Pharmaceutical Company in 2001.

Note 9.  FIXED ASSETS

The totals for fixed assets and accumulated depreciation as at March 31, 2001, are made up as
follows:

|**Cost**                     | The BC
Company | Tian'an    | TZF Jiangsu | Shenzhen TZF
Net | Total     
|---------------------------- | -------------- | ---------- | ----------- | ---------------- | ----------
|Computer equipment           | $   14,364     | $          | $           | $                | $ 14,364  
|Office equipment             | 14,286         |            |             |                  | 14,286    
|Vehicles                     | 19,025         |            |             |                  | 19,025    
|Buildings and improvement    | 38,426         | 1,312,794  |             |                  | 1,351,220 
|Mechanic devices             |                | 321,187    |             |                  | 321,187   
|Shipping devices             |                | 21,685     |             |                  | 21,685    
|Electronic devices           |                |            |             | 75,491           | 75,491    
|Other                        |                | 313,980    | 1,342       |                  | 315,322   
|Total                        | 86,101         | 1,969,646  | 1,342       | 75,491           | 2,132,580 
|**Accumulated Depreciation** |                |            |             |                  |           
|Computer equipment           | 2,590          |            |             |                  | 2,590     
|Office equipment             | 3,172          |            |             |                  | 3,172     
|Vehicles                     | 3,168          |            |             |                  | 3,168     
|Buildings and improvement    | 8,408          | 260,935    |             |                  | 269,343   
|Mechanic Devices             |                | 121,175    |             |                  | 121,175   
|Shipping Devices             |                | 19,517     |             |                  | 19,517    
|Electronic Devices           |                |            |             | 3,872            | 3,872     
|Other                        |                | 197,175    |             |                  | 197,175   
|Total                        | 17,338         | 598,802    | 0           | 3,872            | 620,012   
|**Net Book Value**           |                |            |             |                  |           
|Computer equipment           | 11,774         |            |             |                  | 11,774    
|Office equipment             | 11,114         |            |             |                  | 11,114    
|Vehicles                     | 15,857         |            |             |                  | 15,857    
|Buildings                    | 30,018         | 1,051,859  | 0           | 0                | 1,081,877 
|Mechanic Devices             |                | 200,012    | 0           | 0                | 200,012   
|Shipping Devices             |                | 2,168      | 0           | 0                | 2,168     
|Electronic Devices           |                | 0          | 0           | 71,619           | 71,619    
|Other                        |                | 116,805    | 1,342       | 0                | 118,147   
|Total (to Schedule A)        | $ 68,763       | $1,370,844 | $   1,342   | $ 71,619         | $1,512,568

Note 10. FIXED ASSETS - OTHERS

As at March 31, 2001, other fixed assets of $788,481 represents the residual value of fixed assets
located at TZF Jiangsu.

Note 11. FIXED ASSETS - CONSTRUCTION IN PROGRESS

The construction in progress of $2,146,980 as at March 31, 2001, applies to new buildings and
related equipment located at TZF Jiangsu and will not be depreciated until the building has been
completed and the equipment put into use during 2001.  The additional cost to complete is
approximately $2,424,598 , see note 27, contractual commitments.

Note 12. GOODWILL

As at March 31, 2000, goodwill of $1,206,554 is made up as follows:

|                        | Tian'an  | TZF Jiangsu | Shenzhen TZF Net | Total     
|----------------------- | -------- | ----------- | ---------------- | ----------
|Goodwill on acquisition | $147,177 | $           | $1,059,377       | $1,206,554

The goodwill will be amortized over a twenty year period and will be evaluated on an annual
basis as to any possible impairment, and, accordingly amortization of $15,082 is recorded in the
quarter ended March 31, 2001.

Note 13. INTANGIBLE ASSETS - DEFERRED COSTS

As at March 31, 2001, deferred costs of $101,588 are made up as follows:

|                                                                                 | Tian'an  | Shenzhen TZF Net | Total   
|-------------------------------------------------------------------------------- | -------- | ---------------- | --------
|Website development - to be amortized over 30 months
after completion of website | $        | $70,987          | $70,987 
|New product development costs - to be expensed in 201                            | 30,601   |                  | 30,601  
|Total                                                                            | $ 30,601 | $70,987          | $101,588

Note 14.  INTANGIBLE ASSETS - TECHNOLOGY RIGHTS

By agreement dated December 15, 1999, Shenzhen Hengyunda Enterprises Co. Ltd. of P.R. China
agreed to sell and assign certain information and rights relating to a series of products known as the
Snow Lotus Tea series products to the BC Company.

The BC Company agreed to pay consideration of $4,038,229 for acquisition of these assets, through
the issuance of 6,000,000 shares of its Class B common stock, which were valued for purposes of
the acquisition at a price of CAD$1.00 per share, for total consideration of CAD$6,000,000
(US$4,038,229).

Shenzhen Hengyunda Enterprises Co. Ltd. has warranted that there are no charges or encumbrances
against the rights being acquired.

This agreement includes the sale, assignment and transfer of all the right, title and interest in and
to the Product Information and all the rights to use, exploit, develop or otherwise deal with the
Product Information or the Project, including the right to register any Intellectual Property in
connection with the Product, the same to be held and enjoyed by the BC Company and its
successors and assigns as fully and effectively as the same would have been held and enjoyed by
Shenzhen Hengyunda Enterprises Co. Ltd. had this transfer and assignment not been made.

Shenzhen Hengyunda Enterprises Co. Ltd. further agrees to execute and deliver all such documents
and further assurances as may be necessary or desirable to give effect to the sale and assignment.

Amortization of the cost of the technology will commence when the products relating to the
technologies are available to be marketed; which is expected to be effective in 2001.  The
amortization period is for ten years on a straight-line basis.  No amortization of these technology
rights is included in these financial statements for the quarter ended March 31, 2001.

Note 15.  ACCOUNTS PAYABLE AND ACCRUED

Details of the total of accounts payable and accrued as at March 31, 2001, are as follows:

|                      | TZF US
Company | The BC
Company | Tian'an  | Second
Pharmacy | Shenzhen TZF
Net | Total     
|--------------------- | -------------- | -------------- | -------- | --------------- | ---------------- | ----------
|A/R Trade             | $              | $ 60,819       | $132,640 | $765,411        | $135,628         | $1,094,498
|Accrued payroll taxes |                | 59,228         | 0        | 55,885          |                  | 115,113   
|Taxes payable         |                |                | 18,528   | 273,130         | 133,072          | 424,730   
|Other payables        | 2,118          | 51,153         | 35,203   | 334,834         | 557,547          | 980,855   
|Total                 | $ 2,118        | $171,200       | $186,371 | $1,429,260      | $826,247         | $2,615,196



Note 16.  MANAGEMENT FEES PAYABLE - $176,671

Detail of the total of management fees payable as at March 31, 2001, are as follows:

Mr. Xin Chen	$	87,195

Mr. Chung Yu		59,365

Mr. Eric Liu	30,111

Total	$	176,671



Note 17.  RELATED PARTY TRANSACTIONS

a)	By Director Resolution, each of Mr. Eric Liu, Director and Vice-president of the
Company, Mr. Chung Yu, Director and CEO of the Company and Mr. Xin Chen,
Director and Chairman of the Company, respectively, will be paid CAD$8,000 per
month as remuneration  effective December 1, 1998.  Payment of such director's
fees may be deferred until such time as the Company has had an Initial Public
Offering (IPO), or as the Board of Directors may otherwise decide in view of the
financial situation of the Company at that time.

As at March 31, 2001, management fees payable for which payment was deferred total $176,671
(see note 16).

b)	The amount of $515,053 is due to related parties as at March 31, 2001, is unsecured,
non interest bearing, with no specific terms of repayment, and due to the following:

Mr. Xin Chen	$499,776

Mr. Chung Yu	15,277

Total	$	515,053



c)	The principal shareholders offered to all warrant holders to exchange their warrants for
shares held by the principal shareholders pursuant to such ratio so that, with the
completion of the warrant/share exchange, the per share cost of the share/warrant held
by the minority shareholder effectively stands at CAD$0.75 per share.  The
share/warrant change became effective as of December 17, 2000.



d)	During the fiscal year ended December 31, 2000, Mr. Xin Chen, Director and Chairman
of Board of Directors of the Company, advanced a total of approximately $5,500,000
on behalf of the Company. These funds were used in part for purchase of the assets of
TZF Jiangsu, and in part for purchase of all of the issued and outstanding stock of
Tian'an Investments Limited, a British Virgin Islands Corporation (which was completed
on December 21, 2000) and part of the payment on the acquisition of 100% issued and
outstanding shares of Shenzhen T.Z.F. Network Technologies Co., Ltd.

On December 28, 2000, the Company signed a Debt Settlement Agreement with Mr. Xin Chen.  Mr.
Chen agreed to take 10,000,000 common shares of the Company at a price of CAD$0.75 (US$0.50)
per share to repay $5,000,000 of his loan.  These shares have warrants attached entitling the holder
to purchase additional 10,000,000 common shares of the Company at a price of CAD$1.50 per share
until December 28, 2001, and thereafter, at a price of CAD$2.50 per share until December 28, 2002.

Note 18.  BANK LOANS

Details of bank loans as at March 31, 2001, are as follows:

a)	Tianan

As at October 20, 2000, Tianan obtained a one year term loan of RMB4,000,000
(equivalent to US$483,676) from Bank of China Xiamen Branch at an interest rate
of 6.435% per annum payment monthly.  This loan is secured by the assets of
Tianan.

b)	TZF Jiangsu

As at March 31, 2001, TZF Jiangsu has bank loans, as follows, secured by its assets:

|                                         | Period of Loan   | Principal

Chinese
RMB | Principal

Equivalent to US$ | Interest
Rate/Monthly
|---------------------------------------- | ---------------- | ---------------------- | ---------------------------- | ---------------------
|Industries and Commerce of Jianhu, China | 3/5/01-9/5/01    | 800,000                | 96,736                       | 0.63315%             
|                                         | 7/25/00-5/5/01   | 2,528,000              | 305,683                      | 0.63315%             
|                                         | 8/28/00-6/5/01   | 1,750,000              | 211,608                      | 0.63315%             
|                                         | 9/5/00-7/5/01    | 1,600,000              | 193,470                      | 0.63315%             
|                                         | 11/25/00-9/5/01  | 1,882,000              | 227,570                      | 0.63315%             
|Chief Construction Bank                  | 12/29/00-7/17/01 | 500,000                | 60,459                       | 0.685%               
|Total                                    |                  | 9,060,000              | 1,095,526                    |                      

c)	Summary of Bank loans

|                                       | Tian'an  | TZF Jiangsu | Total     
|-------------------------------------- | -------- | ----------- | ----------
|Bank of China Xiamen Branch            | $483,676 | $           | $483,676  
|Industries and Commerce Bank of Jianhu |          | 1,035,067   | 1,035,067 
|China Construction Bank                |          | 60,459      | 60,459    
|Total                                  | $483,676 | $1,095,526  | $1,579,202



Note 19.  LONG-TERM LIABILITIES

a)	The long-term debt of $295,399 represents long-term accounts payable owing by
Second Pharmacy

b)	The deferred liabilities for pensions applies to Tianan.  This is a provision for
pension liabilities.

Note 20.  CAPITAL STOCK

a)	Authorized:  100,000,000 common shares with a par value of $0.0001 each per
share.

b)	Issued and outstanding common shares as at March 31, 2001 are as follows:

|                                  | Issued Date | Number of
Shares | Par Value | Additional Paid-in Capital | Total      
|--------------------------------- | ----------- | ---------------- | --------- | -------------------------- | -----------
|private placement                 | 9/25/98     | 1,000,000        | $   1,000 | $ 1,500                    | $ 2,500    
|**Balance**                       | 12/31/98    | 1,000,000        | 1,000     | 1,500                      | 2,500      
|private placement                 | 2/17/99     | 600,000          | 600       | 59,400                     | 60,000     
|**Balance**                       | 12/31/99    | 1,600,000        | 1,600     | 60,900                     | 62,500     
|cancellation of common stock      | 4/30/00     | (1,000,000)      | (1,00)    | 1,000                      |            
|**Balance, before forward split** | 4/30/00     | 600,000          | $ 600     | $ 61,900                   | $ 62,500   
|10:1 forward split                | 5/15/00     | 6,000,000        | 600       | 61,900                     | 62,500     
|issuance of stock for services    | 5/15/00     | 250,000          | 25        | 252,375                    | 252,400    
|acquisition of the BC Company     | 5/15/00     | 18,451,843       | 1,845     | 5,351,087                  | 5,352,932  
|issuance for cash                 | 7/4/00      | 340,000          | 34        | 343,216                    | 343,250    
|issuance for cash                 | 9/30/00     | 615,466          | 62        | 621,286                    | 621,348    
|issuance for cash                 | 10/19/00    | 10,000           | 1         | 10,999                     | 11,000     
|                                  |             |                  |           |                            |            
|issuance for cash                 | 11/19/00    | 230,000          | 23        | 252,977                    | 253,000    
|issuance for debt                 | 12/28/00    | 10,000,000       | 1,000     | 4,999,000                  | 5,000,000  
|negative goodwill                 | 12/31/00    |                  |           | 3,333,103                  | 3,333,103  
|Capital contributed               | 1/1/01      |                  |           | 177,946                    | 177,946    
|**Balance**                       | 3/31/01     | 35,897,309       | $ 3,590   | $15,403,889                | $15,407,479

c)	Outstanding Warrants at March 31, 2001

537,000 warrants to purchase 537,000 common shares exercisable at CAD$1.50 per
share until December 17, 2001

2,231,311 warrants to purchase 2,231,311 common shares exercisable at CAD$2.50
per share until December 17, 2001

10,000,000 warrants to purchase 10,000,000 common shares exercisable at
CAD$1.50 per shares until December 28, 2001, and thereafter exercisable at
CAD$2.50 per share until December 28,2002 (see note 17(d))

12,768,311

Note 21.  INCOME TAXES

a)	The most recent Federal Income Tax filing for the Company for the US was for the year
ended December 31, 1999, disclosing no income taxes payable to the US Internal
Revenue Service.

b)	The BC Company has not filed any Federal Income Tax Returns since its incorporation
on May 15, 1998 and will be filing 1999 and 2000 Income Tax Returns in the second
quarter of 2001.  To December 31, 1999, the BC Company had a total loss of
CAD$482,634 (equivalent to US$321,756).  No provision for Canadian Income Taxes
is provided for in these consolidated financial statements as the profit is reduced by
other costs of the Company.

Note 22.  FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents, accounts receivable,
prepaid expenses and deposits, subscriptions receivable, short-term investment, inventories,
accounts payable and accrued, management fees payable, balances due to related parties, the amount
payable on an acquisition and long-term liabilities.  It is management's opinion that the Company
is not exposed to significant interest, currency or credit risks arising from these financial
instruments.  The fair value of these financial statements approximates their carrying values.

Note 23.  LEASE OBLIGATIONS

Canon Copier (NP-3825) Lease

On October 1, 1999, the Company entered into a 48 month lease with Dominion Technologies for
a Canon Copier to be used by the Company.  Lease payments are expensed as they are incurred.
Lease obligations are as follows:

2001	CAD$	1,327

2002	CAD$	1,327

2003	CAD$	995

Computer Lease

On October 1, 1999, the Company entered into a 36 month lease with Dominion Technologies for
computer equipment to be used by the Company.  Lease payments are expensed as they are incurred.
Lease obligations are as follows:

2001	CAD$	2,947

2002	CAD$	2,210

- Vehicle Leases

On July 29, 1999, the Company entered into a 36 month lease with Mercedes-Benz
Credit of Canada Inc. for two vehicles to be used by the Company.  Lease payments are
expensed as they are incurred.  Lease obligations are as follows:

2001	CAD$	20,927

2002	CAD$	12,207

d)	Lease of Premises

The Company entered into a lease for offices on April 26, 1999 with Omnia Overseas
Trading Ltd. for three years for monthly rent and costs of CAD$3,133.51, that
commenced on July 1, 1999.

The first and the last months rent of  CAD$6,631.15 is due at the time of signing.  This
amount has been paid and is recorded as prepaid expense and deposit as at December
31, 2000.

Summary of lease obligations

|Year | CND$    | Equivalent US$
|---- | ------- | --------------
|2001 | $62,803 | $42,269       
|2002 | 34,545  | 23,250        
|2003 | 995     | 670           
|     | $98,343 | $66,189       

These lease payments are not capitalized, but are expensed as they are incurred.

Note 24.  PENSION AND EMPLOYMENT LIABILITIES

The Company has liabilities which are deferred as at March 31, 2001, for pension, post-employment
benefits or post-retirement benefits in Tianan in the amount of $390,508.  The parent company and
other subsidiary companies, (except for Tianan) do not have any liabilities for pensions and related
costs.

Note 25.  DISTRIBUTORSHIP AGREEMENTS

The Company enters into various distributorship agreements with independent third parties to
market products of the Company and its subsidiaries.

Note 26.  LAWSUITS

Expediter Sales Ltd. ("Expediter") v. the BC Company

There is a claim filed against the BC Company by Expediter alleging a breach of contract and
misrepresentation.  Expediter is seeking damages for alleged loss of profits, loss of business and
goodwill, misrepresentation, set-up expenses and the alleged wrongful use of Expediter's name, and
an injunction to prevent the BC Company from selling and herbal tea in Canada.  The BC Company
terminated the contract of Expediter for non-performance and has, accordingly, counterclaimed
against Expediter for outstanding debts unpaid by Expediter.  No provision has been made in these
financial statements for any potential costs or contingent assets relating to this matter as the results
of the claim and counterclaim are not determinable at this time.

Note 27.  CONTRACTUAL COMMITMENTS

A subsidiary, TZF Jiangsu has contractual obligations totalling $2,424,598, at March 31, 2001, to
builders, suppliers and subtrades relating to construction in progress of buildings and for purchase
of equipment.

Note 28.  SALES IN CANADA

The Company maintains a products analysis and quality control system in Canada, for its products
to be distributed, in order to ensure that its products conform to relevant regulatory and health
requirements.  Where any products are found not to meet the regulatory requirements, the Company
will immediately take such measures as necessary, or cause such measures to be taken, so that the
said regulatory requirements are complied with.

Note 29.	SHORT-TERM INVESTMENT

As at March 31, 2001, Shenzhen TZF Net invested $1,354,293 in Shenzhen Shenqqi Investments
Ltd. for a one year term (October 12, 2000 to October 12, 2001.) This investment is secured by the
assets of Shenzhen Shengqi Investments Ltd. and guaranteed at least 12% return per annum.

Note 30.	REVENUES OF ACQUISITIONS

The Company has acquired four subsidiary companies and they are recorded as a purchase.
Operating figures of these acquisitions are disclosed from the date of acquisition.  Details of the
operating figures for the Company and four subsidiary companies for the three month period ended
March 31, 2001, extracted from the applicable financial statements of those companies, are as
follows:

|                         | TZF US
Company | The BC
Company | Tian'an   | Second
Pharmacy | Shenzhen TZF
Net | Total     
|------------------------ | -------------- | -------------- | --------- | --------------- | ---------------- | ----------
|Revenue                  |                |                |           |                 |                  |           
|Sales                    | $146,234       | $   210        | $ 246,175 | $ 240,972       | $652,955         | $1,286,546
|Cost of sales            | 38,056         | 0              | 91,293    | 129,513         | 494,839          | 753,701   
|Gross profit             | 108,178        | 210            | 154,882   | 111,459         | 158,116          | 532,845   
|Selling expenses         |                | 16,510         | 15,820    | 38,137          | 5,852            | 76,319    
|                         | 108,178        | (16,300)       | 139,062   | 73,322          | 152,264          | 456,526   
|Other income             | 42             | 2,148          | 3,821     | 121,343         | 36,276           | 163,630   
|                         | 108,220        | (14,152)       | 142,883   | 194,665         | 188,540          | 620,156   
|Administrative costs     | 33,590         | 145,184        | 33,251    | 68,088          | 16,509           | 296,622   
|Amortization of goodwill |                |                | 1,840     |                 | 13,242           | 15,082    
|Depreciation             |                | 4,303          | 37,482    |                 | 198              | 41,983    
|                         | 33,590         | 149,487        | 72,573    | 68,088          | 29,949           | 353,687   
|Profit (loss) before     | 74,630         | (163,639)      | 70,310    | 126,577         | 158,591          | 266,469   
|Income taxes             |                |                | 10,822    | 0               | 25,775           | 36,597    
|**Net Profit (loss)**    | $ 74,630       | $(169,639)     | $ 59,488  | $126,577        | $132,816         | $229,872  



Note 31  DISTRIBUTION AGREEMENT

By agreement dated December 15, 2000, effective January 1, 2001, Trophic Canada Ltd. ("the
Supplier"), granted TZF International Investments, Inc. (TZF) the exclusive right to promote,
distribute, and sell the supplier's products within the "Territory" of China, which includes Hong
Kong, SAR, for a period of five years.  Continuation of this exclusive right is continent upon
meeting or exceeding the purchase of products for a minimum of CAD$50,000 within the first
distribution year, a minimum of CAD$200,000 within the second distribution year, and increases
of approximately 20% in each of the subsequent distribution years.

The supplier may terminate the distribution agreement if TZF breaches any terms of the agreement,
including but not restricted to the annual sales requirements, if any breaches are not remedied within
three months after written notice.

TZF cannot assign the agreement or subcontract its obligations under the agreement without the
consent in writing of the supplier. The supplier is an arms length party unrelated to TZF.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements.	 Certain statements contained in this report, including
statements in the following discussion which are not statements of historical fact, are what are
known as "forward looking statements," which are basically statements about the future, and which
for that reason, involve risk and uncertainty, since no one can accurately predict the future. Words
such as "plans," "intends," "will," "hopes," "seeks," "anticipates," "expects," "goal" and "objective"
often identify such forward looking statements, but are not the only indication that a statement is
a forward looking statement. Such forward looking statements include statements of our plans and
objectives with respect to the  present and future operations of the Company,  and statements which
express or imply that such present and future operations will or may produce revenues, income or
profits. Numerous factors and future events could cause the Company to change such plans and
objectives, or fail to successfully implement such plans or achieve such objectives, or cause such
present and future operations to fail to produce revenues, income or profits.  Therefore, the reader
is advised that the following discussion should be considered in light of the discussion of risks and
other factors contained in this Form 10QSB and in the Company's other filings with the Securities
and Exchange Commission, and that no statements contained in the following discussion or in this
Form 10QSB should be construed as a guarantee or assurance of future performance or future
results.

Background.	The Company's business plan is to build a vertically and horizontally
integrated network of health food distribution centers and retail counters in China that will sell
products both under the T.Z.F. brand name and under other Chinese and Western brand names.  The
Company also intends to introduce several of its Chinese health food products to the North
American market.

During the fiscal year ended December 31, 2000, the Company completed several
acquisitions.   However, the acquisitions which were the most significant were all completed in
December, 2000, at the end of the fiscal year.  Therefore,  the first quarter of the current fiscal year
is the first period for which the Company was involved in management of the operations of  these
subsidiaries.  As a result, during the first quarter the Company focused its efforts on integrating and
consolidating the operations of its newly acquired subsidiaries and on preparing  them for
development and expansion of their operations.

Specific activities by the Company during the quarter ended March 31, 2001, included
establishing its China headquarters in Shenzhen, creating an organizational structure for its various
subsidiaries by assigning management responsibilities and duties to Company personnel, and taking
initial steps directed toward development of its distribution network in China.  One  example of the
Company's efforts to expand its distribution network is the fact that during the first quarter, its
subsidiary, Shenzhen Tianzifu Network Technology, Ltd.,  opened 5 health food counters in
department stores in Sichuan province and executed agreements to open health food counters in 16
additional department stores.

Financial Condition and Results of Operations.	There have been no materials changes
in the Company's financial condition and results of operation since the end of the last fiscal year.
However, as a result of the acquisition of its subsidiaries, the Company's financial condition and
results of operation for the period ended March 31, 2001 are so significantly different than its
financial condition and results of operation for the period ended March 31, 2000 that no meaningful
comparison is possible.

For example, the Company's total assets as of March 31, 2001 are $21,958,368, as
compared to total assets of $21,669,864 as of December 31, 2000 and total assets of $53,439 as of
March 31, 2000.  Total current liabilities as of March 31, 2001 were $5,404,712 as of March 31,
2001, as compared to total current liabilities of $5,513,279 as of December 31, 2000 and 0 current
liabilities as of March 31, 2000.  Sales revenue and net profit for the quarter ended March 31, 2001
were $1,286,546 and $229,872, respectively, as compared to 0 sales revenue and a net loss of $431
for the quarter ended March 31, 2000.

Need for Additional Capital.	The Company plans to invest a total of up to US $68
million into its subsidiaries by the end of 2001.  These funds are expected to be raised through
private placement or public sale of its of securities, or through loans or additional investments from
existing shareholders.  However, the Company does not currently have any commitments to provide
any additional capital, andthere is no assurance that the Company will be able to raise all, or any
substantial portion, of the funds required to carry out its plan of operations for fiscal 2001.  In the
event the Company is not able to raise all, or a substantial portion of the funds, it will be required
to limit its expansion plans, and to substantially modify its plan of operations.

PART II

ITEM 1.   LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the security holders of the Company during the first quarter
ending March 31, 2001.

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K.

The following reports on Form 8-K were filed during the quarter for which this report is filed:

- Report on Form 8-K dated December 21, 2000, to report the acquisition of all of the
issued and outstanding capital stock of Tian'an Investments Limited.  The report did
not contain any financial statements.
- Report on Form 8-K dated December 31, 2000, to report the purchase of the assets of
Second Pharmacy Factory of Yancheng City, a Chinese corporation, and to report an
agreement with Mr. Xin Chen to convert his $5,000,000 loan to an equity investment.
The report did not contain any financial statements.

- Report on Form 8K/A dated December 21, 2000, to report the acquisition of all of the
issued and outstanding capital stock of Tian'an Investments Limited.  The report
included audited financial statements of Tian'an Investments Limited as of December
31, 2000 and December 31, 1999.

- Report on Form 8K/A dated December 31, 2000 to report the purchase of the assets of
Second Pharmacy Factory of Yancheng City, a Chinese corporation, and to report an
agreement with Mr. Xin Chen to convert his $5,000,000 loan to an equity investment.
The report included reviewed financial statements of Second Pharmacy Factory as of
December 31, 2000 and unaudited pro forma consolidated financial statements as of
December 31, 1999, and as of September 30, 2000.

- Report on Form 8K dated December 31, 2000, to report acquisition of all the issued
and outstanding common stock of Shenzhen Tianzifu Network Technology, Ltd., a
Chinese corporation.  The report included reviewed financial statements of Shenzhen
Tianzifu as of December 31, 2000, and unaudited pro forma consolidated financial
information as of December 31, 1999, and as of September 30, 2000.



**SIGNATURES**

In accordance with the requirements of the Exchange Act, the registrant caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly authorized.

******T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

By:/S/ CHUNG YU

Chung Yu, President, Chief Executive Officer, and a Director

By: /S/ XIN CHEN

Xin Chen, Chairman of the Board

By: /S/ HONG LI

Hong Li, a Director

By: /S/ ROBERT S. HALLAM

Robert S. Hallam, a Director

By: /S/ CHUN SHENG GUO

Chun Sheng Guo, a Director

By: /S/ QING LIU

Qing Liu, Vice President and a Director

Date:	May 17, 2001