**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10-Q**


o QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR
      THE QUARTERLY PERIOD ENDED ***SEPTEMBER 30,
      2008***


o TRANSITION
      REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR
      THE
      TRANSITION PERIOD FROM __________ TO __________


COMMISSION
      FILE NUMBER: **333-119034**





**China
      Holdings, Inc.**


(Name
      of
      Small Business Issuer in Its Charter)




**Nevada**
            **98-0432681**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer identification No.)





**Julianna
      Lu, BSc. MSc.**


**Chief
      Executive Officer**


**101
      Convention Center Drive, Suite 700, Las Vegas, NV
      89109-2001**


(Address
      of principal executive offices) (Zip Code)


Issuer’s
      telephone Number: **86-10-6586-4790**




**Mailing
      Address**


**8E-C2,
      Global Trade Mansion, No.9A, GuangHua Rod,**


**Chaovan
      District, Beijing PR China 100020**


Issuer’s
      telephone Number: **86-10-6586-4770** and
      Facsimile **:
      86-10-6586-4790**





(Former
      name, former address and former fiscal year, if changed since last
      report)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the 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 o No




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o No x





As
      of November 10th , 2008, the issuer had a total of 186,600,000 outstanding
      shares of Common Stock , and 1,250,000 shares of Series “A” Preferred Stock, and
      77,173,669 outstanding and issued of Common Stock Option, and 69,900,000
      outstanding and issued of Common Stock Warrants.





Transitional
      Small Business Disclosure Format (check one): Yes o No x












**CHINA
      HOLDINGS, INC.**


**INDEX
      TO FORM 10-Q FILING**


**FOR
      THE THREE MONTHS ENDED SEPTEMBER 30, 2008**





**TABLE
      OF CONTENTS**





**PART
      I**


**FINANCIAL
      INFORMATIONPAGE**


**Page**
              **Numbers****P
                PART I - FINANCIAL INFORMATION**Item 1.
            
            Condensed
                Financial StatementsCondensed
                Balance Sheets
            
            F-1Condensed
                Statements of Operations
            
            F-2Condensed
                Statements of Cash Flows
            
            F-3Notes
                to Condensed Financial Statements
            
            F-4
                to F-7Item
                2.
            
            Management
                Discussion & Analysis of Financial Condition and Results of
                Operations
            
            2Item 3.
            
            Controls
                and Procedures
            
            32**P
                PART II - OTHER INFORMATION**Item 1.
            
            Legal
                Proceedings
            
            32Item
                1A
            
            Risk
                FactorsItem 2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            32Item
                3.
            
            Defaults
                Upon Senior Securities
            
            33Item 4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            33Item 5
            
            Other
                information
            
            33Item
                6.
            
            Exhibits
            
            33**CERTIFICATIONS**Exhibit
                31 - Management certificationExhibit
                32 - Sarbanes-Oxley Act









**CHINA
      HOLDINGS, INC.**




**INDEX
      TO FINANCIAL STATEMENTS**





**Page**Consolidated
                Balance Sheets as of September 30, 2008 (unaudited) and December
                31, 2007
                (audited)
            
            
            F-1Consolidated
                Statements of Operations for the three and six months ended
                September 30, 2008 and 2007 (unaudited)and
                the period from April 3, 2002  (inception of the development stage)
                to September 30, 2008 (unaudited)
            
            
            F-2Consolidated
                Statements of Cash Flows for the six months ended September 30,
                2008  and 2007 (unaudited)and
                the period from April 3, 2002 (inception of the development stage) to
                September 30, 2008 (unaudited)
            
            
            F-3Notes
                to Consolidated Financial Statements
            
            
            F-4
                to F-7









**CHINA
      HOLDINGS INC.**


**(a
      development stage company)**


**CONSOLIDATED
      BALANCE SHEETS**





September
                  30,
              
              December
                  31,2008
              
              2007(unaudited)
              
              (audited)ASSETSCURRENT
                  ASSETSCash
              
              $
              1,525
              
              $
              9,958Prepaid
                  expenses and other current assets
              
              
              26,542
              
              
              6,723Total
                  current assets
              
              
              28,067
              
              
              16,681Property
                  and equipment, net
              
              
              9,007
              
              
              11,622Intangible
                  assets
              
              
              3
              
              
              3TOTAL
                  ASSETS
              
              $
              37,077
              
              $
              28,306LIABILITIES
                  AND STOCKHOLDERS’ DEFICITCURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              54,973
              
              $
              72,110Due
                  to shareholders
              
              
              1,905,773
              
              
              1,271,932Total
                  current liabilities
              
              
              1,960,746
              
              
              1,344,042Commitments
                  and ContingenciesStockholders'
                  Deficit:Preferred
                  stock, $0.001 par value, 20,000,000 shares authorized,1,250,000
                  shares issued and outstanding at June 30, 2008 and December 31,
                  20071,250
              
              
              1,250Common
                  stock, $0.001 par value, 2,000,000,000 shares authorized185,882,060
                  and 180,607,060 shares issued and outstanding at June 30, 2008
                  and
                  December 31, 2007186,600
              
              
              180,607Additional
                  paid-in capital
              
              
              16,804,348
              
              
              15,363,037Deficit
                  accumulated during the development stage
              
              
              (18,852,686
              )
              
              (16,797,449
              )Accumulated
                  other comprehensive loss
              
              
              (63,181
              )
              
              (63,181
              )Total
                  Stockholders’ Deficit
              
              
              (1,923,670
              )
              
              (1,315,736
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
              $
              37,077
              
              $
              28,306


See
                Notes to Consolidated Financial
                Statements.





F-1




**CHINA
      HOLDINGS INC.**


**(a
      development stage company)**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**




Three
                  Months
                Ended
                September
                  30
                2008
              
              Three
                  Months
                Ended
                September
                  30
                2007
              
              Nine
                  Months
                Ended
                September
                  30
                2008
              
              Nine
                  Months
                Ended
                September
                  30
                2007
              
              Cumulative
                  results of
                operations
                  from
                April
                  3, 2002 (Inception)
                to
                  September 30, 2008unaudited
              
              audited
              
              unaudited
              
              audited
              
              unauditedSales
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              8,976Cost
                  of goods sold
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              245Gross
                  profit
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              8,731Expenses:Advertising
                  and promotion
              
              
              2,258
              
              
              13,190
              
              
              21,519
              
              
              31,830
              
              
              188,850Amortization
                  of intangible assets
              
              
              -
              
              
              -
              
              
              -
              
              
              3
              
              
              7,125Consulting
                  fees
              
              
              17,380
              
              
              283,503
              
              
              59,732
              
              
              1,369,179
              
              
              4,213,032Stock
                  issued for failed acquisition
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,415,000Depreciation
              
              
              872
              
              
              1,739
              
              
              2,615
              
              
              3,986
              
              
              15,231Interest
                  and bank charges
              
              
              45,581
              
              
              26,442
              
              
              122,023
              
              
              374,702
              
              
              412,422Investor
                  relations
              
              
              3,390
              
              
              31,426
              
              
              176,488
              
              
              (164,977
              )
              
              470,161Management
                  fees
              
              
              120,000
              
              
              267,735
              
              
              383,079
              
              
              567,120
              
              
              3,747,711Office
              
              
              1,849
              
              
              2,845
              
              
              8,375
              
              
              13,290
              
              
              109,324Professional
                  fees
              
              
              5,380
              
              
              35,592
              
              
              42,509
              
              
              120,316
              
              
              1,088,373Rent
              
              
              4,758
              
              
              6,051
              
              
              15,404
              
              
              24,092
              
              
              118,610Research
                  and development
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,743,593Stock
                  based compensation
              
              
              398,132
              
              
              245,360
              
              
              1,215,729
              
              
              2,223,616
              
              
              5,193,051Travel
              
              
              72
              
              
              2,667
              
              
              4,721
              
              
              11,518
              
              
              57,433Vehicle
              
              
              -
              
              
              -
              
              
              -
              
              
              5,257
              
              
              31,049Total
                  expenses
              
              
              599,672
              
              
              916,550
              
              
              2,052,196
              
              
              4,579,929
              
              
              18,810,967Net
                  loss from operations
              
              
              (599,672
              )
              
              (916,550
              )
              
              (2,052,196
              )
              
              (4,579,929
              )
              
              (18,802,236
              )Other
                  income (expenses)Foreign
                  exchange gain or loss
              
              
              -
              
              
              -
              
              
              (3,041
              )
              
              5,829
              
              
              36,000Impairment
                  loss-licensing rights
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (182,874
              )Debt
                  forgiveness income
              
              
              -
              
              
              -
              
              
              -
              
              
              16,728
              
              
              96,423Total
                  other income (expenses)
              
              
              -
              
              
              -
              
              
              (3,041
              )
              
              22,557
              
              
              (50,451
              )Net
                  loss
              
              $
              (599,672
              )
              $
              (916,550
              )
              $
              (2,055,237
              )
              $
              (4,557,372
              )
              $
              (18,852,686
              )Basic
                  net loss per share
              
              $
              (0.00
              )
              $
              (0.01
              )
              $
              (0.01
              )
              
              (0.04
              )Weighted
                  average number of commonbasic
                  and diluted shares outstanding
              
              
              181,768,832
              
              
              128,799,033
              
              
              181,768,832
              
              
              128,799,033The
                  components of other comprehensive lossNet
                  loss
              
              $
              (599,672
              )
              $
              (916,550
              )
              $
              (2,055,237
              )
              
              (4,557,372
              )Foreign
                  currency translation adjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,262
              )Comprehensive
                  loss
              
              $
              (599,672
              )
              $
              (916,550
              )
              $
              (2,055,237
              )
              
              (4,560,634
              )





See
                Notes to Consolidated Financial
                Statements.




F-2




**CHINA
      HOLDINGS INC.**


**(a
      development stage company)**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




Nine
                  Months
                Ended
                September
                  30
                2008
              
              Nine
                  Months
                Ended
                September
                  30
                2007
              
              Cumulative
                  results of
                operations
                  from
                April
                  3, 2002 (Inception)
                to
                  September 30, 2008unaudited
              
              audited
              
              unauditedOPERATING
                  ACTIVITIESNet
                  loss
              
              $
              (2,055,237
              )
              $
              (4,557,372
              )
              $
              (18,852,686
              )Adjustments
                  to reconcile net loss to cash used
              
              
              -
              
              
              -
              
              
              -in
                  operating activities:
              
              
              -
              
              
              -
              
              
              -Accrued
                  interest
              
              
              -
              
              
              79,218
              
              
              181,570Amortization
                  of intangible assets
              
              
              -
              
              
              -
              
              
              7,125Amortization
                  of deferred compensation
              
              
              -
              
              
              29,482
              
              
              153,942Stock
                  options expense
              
              
              1,268,263
              
              
              -
              
              
              2,169,053Depreciation
              
              
              2,615
              
              
              3,986
              
              
              15,231Impairment
                  loss-licensing rights
              
              
              -
              
              
              -
              
              
              182,874License
                  rights
              
              
              -
              
              
              -
              
              
              1,359,999(Gain)
                  loss on settlement of debt and issuance of shares
              
              
              -
              
              
              (16,728
              )
              
              (104,924
              )Issuance
                  of shares to settle debt and cover financing
              
              
              -
              
              
              -
              
              
              -Non
                  cash expenses paid with shares
              
              
              179,041
              
              
              1,325,580
              
              
              3,382,631Non
                  cash interest paid with shares
              
              
              -
              
              
              -
              
              
              326,360Stock-based
                  compensation
              
              
              -
              
              
              462,695
              
              
              3,319,191Warrant
                  issued for Compensation
              
              
              -
              
              
              2,066,279
              
              
              3,639,142Stock
                  issued for failed acquisition
              
              
              -
              
              
              -
              
              
              1,415,000Changes
                  in operating assets and liabilities
              
              
              -
              
              
              -
              
              
              -Prepaid
                  expenses and other current assets
              
              
              (19,820
              )
              
              88,874
              
              
              124,591Accounts
                  payable and accrued liabilities
              
              
              (17,137
              )
              
              (938
              )
              
              63,353Net
                  cash used in operating activities
              
              
              (642,274
              )
              
              (518,924
              )
              
              (2,617,549
              )INVESTING
                  ACTIVITIESPurchase
                  of equipment
              
              
              -
              
              
              -
              
              
              (4,701
              )Purchase
                  deposit for acquisition of companies
              
              
              -
              
              
              -
              
              
              (19,536
              )Net
                  cash used in investing activities
              
              
              -
              
              
              -
              
              
              (24,237
              )FINANCING
                  ACTIVITIESProceeds
                  from issuance of common stock
              
              
              -
              
              
              -
              
              
              50,000Net
                  advances from shareholders
              
              
              633,842
              
              
              527,023
              
              
              2,656,491Net
                  cash provided by financing activities
              
              
              633,842
              
              
              527,023
              
              
              2,706,491EFFECT
                  OF EXCHANGE RATE CHANGES
              
              
              -
              
              
              (3,262
              )
              
              (63,180
              )NET
                  (DECREASE) INCREASE IN CASH
              
              
              (8,433
              )
              
              4,837
              
              
              1,525CASH,
                  BEGINNING OF PERIOD
              
              
              9,958
              
              
              -
              
              
              -CASH,
                  END OF PERIOD
              
              $
              1,525
              
              $
              4,837
              
              $
              1,525Supplemental
                  disclosures of cash flows information:Interest
                  paid
              
              $
              -
              
              $
              -Taxes
                  paid
              
              $
              -
              
              $
              -Non-cash
                  financing activities:Settlement
                  of debt in common stock
              
              $
              -
              
              $
              -$
              -
              
              $
              -


See
                Notes to Consolidated Financial
                Statements.





F-3


**CHINA
      HOLDINGS INC.**


**(a
      development stage company)**


NOTES
      TO
      CONSOLIDATED AUDITED FINANCIAL STATEMENTS


FOR
      THE
      NINE MONTHS ENDED SEPTEMBER 30, 2008





**1.**
            **NATURE
                OF OPERATIONS**




China
      Holdings Inc. (the "Company") was incorporated in the state of
      Nevada in the United States of America on April 3, 2002 as AE&E
      Pharma Corporation. The Company changed its name on May 25, 2004, to China
      Health Holding, Inc. On May 1, 2007, the Company changed its name to China
      Holdings, Inc. The Company's common stock trades on the US
      over-the-counter bulletin board under the symbol "CHHL". On April 18, 2005,
      our common stock was approved for quotation on the OTC Bulletin Board under
      the
      symbol "CHHH."  The Company's web site is www.chinaholding.net .





The
      Company has three wholly-owned subsidiaries: (i) China Power, Inc., (ii) China
      Minerals Holdings, Inc., and (iii) China Health Holdings, Inc.





On
      May 1,
      2007, the Company’s wholly owned subsidiary, China Health World Pharmaceutical
      Corporation, amended its Articles of Incorporation to change its name to China
      Health Holdings, Inc.


On
      May 9,
      2007, the Company’s wholly owned subsidiary China Health World Trade Corporation
      amended its Articles of Incorporation to change its name to China Power, Inc.
      On
      January 7 th ,
      2008,
      the Company incorporated its third subsidiary as China Minerals
      Holdings, Inc., a Nevada corporation.





The
      Company’s initial business plan was to engage in the manufacturing, marketing
      and distribution of proprietary natural medicinal products. The Company has
      since revised its business plan to not only focus on becoming a
      manufacturing, marketer and distributor of natural medicinal products, and
      to
      focus on becoming a diversified global assets holding company. The Company
      has had nominal revenues since its inception.





The
      Company and its subsidiaries intend to engage in multiple China-focused
      business activities including, energy, renewable energy, resources, utilities
      finance, real estate, and pharmaceutical ventures. Their objective is to
      achieve long-term capital appreciation through investment in companies and
      other
      entities with significant assets, investments, production activities, trading
      or
      other business interests in China or worldwide.




***CONTROL
      BY PRINCIPAL STOCKHOLDERS***





The
      Chairman /Founder/Chief Executive Officer owns beneficially and in the
      aggregate, the majority of the voting power of the outstanding shares of the
      common stock of the Company. Accordingly, the chief executive officer, has
      the
      ability to control the approval of most corporate actions, including increasing
      the authorized capital stock of the Company and the dissolution, merger or
      sale
      of the Company's assets or business.




F-4


***Basis
      of presentation***





These
      condensed interim consolidated financial statements have been prepared in
      accordance with generally accepted accounting principles in the United States
      of
      America (“US GAAP”).





The
      interim results of operations are not necessarily indicative of the results
      to
      be expected for the fiscal year ending December 31, 2008. The Company’s
      financial statements contained herein are unaudited and, in the opinion of
      management, contain all adjustments (consisting only of normal recurring
      accruals) necessary for a fair presentation of financial position, results
      of
      operations and cash flows for the periods presented. The Company’s accounting
      policies and certain other disclosures are set forth in the notes to the
      consolidated annual financial statements contained in the Company’s Annual
      Report on Form 10-KSB and 10KSB/A for the year ending December 31, 2007 filed
      on
      April 18, 2008. These financial statements should be read in conjunction with
      the Company’s audited consolidated financial statements and notes thereto. The
      preparation of financial statements in conformity with US GAAP requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosures of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from those
      estimates.




The
      financial statements have been prepared on the basis of a going concern which
      contemplates the realization of assets and the satisfaction of liabilities
      in
      the normal course of business. The Company has a working capital deficiency
      of
      $1,932,679n accumulated deficit of $18,852,686 and a stockholders’ deficit
      of $1,923,670 as September 30, 2008 and has incurred significant losses
      since inception. Further losses are anticipated in the development of its
      intended business plan. If the Company is unable to obtain financing in the
      amounts and on terms deemed acceptable, the business and future success may
      be
      adversely affected. Given the Company's limited operating history, lack of
      sales, and its operating losses, there can be no assurance that it will be
      able
      to achieve or maintain profitability. Accordingly, these factors raise
      substantial doubt about the Company’s ability to continue as a going
      concern.




China
      Holdings is a development stage company as described by Statements of the
      Financial Accounting Standards Board No. 7 (“SFAS 7.”) SFAS 7 states that a
      business is considered to be in the development stage if it is devoting
      substantially all of its efforts to establishing a new business and either
      of
      the following conditions exists:





1.
            Planned
                principal operations have not commenced.2.
            Planned
                operations have commenced, but there has been no significant revenue
                therefrom.




The
      Company’s management believes the Company is a development stage entity as it is
      in the process of attempting to acquire assets, namely that of potential both
      identified and currently unidentified merger candidates, and is also exploring
      various forms of financing and capital structures in order to facilitate future
      acquisitions. The Company has considered SFAS 7 and has determined April 3,
      2002, the inception date, to be the inception date of the development
      stage.




The
      Company will depend almost exclusively on outside capital to complete the
      development of its intellectual property, completion of its proposed projects
      and marketing of its products. Such outside capital will include advances from
      the majority shareholder, proceeds from the sale of the company's common stock
      or preferred stock and may include borrowing from banks. There can be no
      assurance that capital will be available as necessary to meet these development
      costs or, if the capital is available, that it will be on terms acceptable
      to
      the Company.





The
      issuances of additional equity securities by the Company may result in a
      significant dilution in the equity interests of its current stockholders.
      Obtaining bank loans, assuming those loans would be available, will
      increase the Company's liabilities and future cash commitments.




***Consolidation***




The
      condensed consolidated financial statements include the accounts of the Company
      and its three (3) wholly-owned subsidiaries, China Power, Inc., China Minerals
      Holdings, Inc. and China Health Holdings, Inc. Those subsidiaries have not
      yet
      commenced operations and have no significant assets, liabilities, revenues
      or
      expenses. All intercompany accounts have been eliminated in
      consolidation.





F-5


***Reclassifications***





Certain
      reclassifications to the Company’s balance sheet and income statement have been
      made in 2007, in order for the 2008 financial statements to conform to the
      presentation of these financial statements.  These reclassifications did
      not impact the Company’s total assets, total liabilities, net loss or
      stockholders deficit for the six months ended June 30, 2008 and 2007,
      respectively.




**2.**
            **INTANGIBLE
                ASSETS**





a)
            Asset
                purchase agreement





Pursuant
      to an asset purchase agreement dated May 1, 2004, the Company acquired from
      the
      Company’s President, who is a majority shareholder, proprietary rights
      and formulas to the 26 natural herbal medicinal products that comprise the
      King
      of Herbs and Taoist Medicine product lines. The Company recorded the cost of
      the
      proprietary rights and formulas as intangible assets at the historical cost
      basis of $1. The excess of the purchase price over the historical cost basis
      of
      the intangible assets of $366,306 was expensed as research and development
      costs during the year ended December 31, 2004.




b)
            Licensing
                rights agreement




During
      the fiscal year 2004, the Company entered into various agreements with Hotway
      Nutraceuticals Canada Co., Ltd. (“Hotway”), a British Columbia company. The
      intangible assets acquired from Hotway were written down to $1 during
      2004.




**Asset
      purchase agreement**





Pursuant
      to an asset purchase agreement dated March 22, 2005, the Company acquired from
      the Company’s shareholders intellectual property rights to 108 “100%
      Natural Taoist Herbal Medicinal Products”. The Company has recorded the cost
      basis of these property rights at the historical cost basis of the shareholders
      of $1. The excess of the purchase price over the carrying value of the
      intangible assets totaling $1,359,999 was expensed as research and development
      costs during 2005.




**3.**
            **PROPERTY
                AND EQUIPMENT**




September
                  30,
              
              December
                  31,2008
              
              2007Computer
                  Equipment
              
              $
              20,846
              
              $
              20,846Furniture
                  & Fixtures
              
              
              3,392
              
              
              3,392Less:
                  accumulated depreciation
              
              
              (15,231
              )
              
              (12,616$
              9,007
              
              $
              11,622




Depreciation
      expense amounted to $872 and $2,615 and $1,739 and $3,986 for the three and
      nine months ended September 30, 2008 and 2007, respectively.




**4.**
            **DUE
                TO SHAREHOLDERS**





The
      Company has received advances from two shareholders which bear interest at
      10%
      per annum with no specific repayment terms. The tables below detail transactions
      during the nine months ended September 30, 2008.




The
      table below details transactions related to the loan payable to the Company's
      Chairman /Founter/Chief Executive Officer during the nine months ended September
      30, 2008:




Beginning
                  balance payable, December 31, 2007
              
              $
              974,448Accrued
                  management fees
              
              
              270,000Accrued
                  interest
              
              
              94,790Advances
                  from Chief Executive Officer
              
              
              152,371Ending
                  balance payable, September 30, 2008
              
              $
              1,491,609


The
      table
      below details transactions related to the loan payable to the Company's Vice
      Chairman/Director during the nine months ended September 30, 2008:




Beginning
                  balance payable, December 31, 2007
              
              $
              297,484Accrued
                  management fees
              
              
              90,000Accrued
                  interest
              
              
              26,680Advances
                  from Vice Chairman
              
              
              -Ending
                  balance payable, September 30, 2008
              
              $
              414,164




F-6


**6.**
            **CAPITAL
                STOCK**





The
      authorized capital of the Company consists of 2,000,000,000 voting common shares
      with a $0.001 par value and 20,000,000 preferred shares with a $0.001
      par value. On March 28, 2005, the Company increased the authorized common shares
      from 55,000,000 shares to 300,000,000 shares. On February 22, 2008, the Company
      increased the authorized common shares from 300,000,000 shares to 2,000,000,000
      shares.





On
      February 21, 2006, the Company filed a Certificate of Designation, Powers
      Preferences and Rights of Series A preferred stock which authorized the Company
      to issue up to 1,000,000 shares of Series A preferred stock with a par value
      of
      $0.001 per share. The Series A preferred stock has a stated value of $0.15
      per
      share and a liquidation preference over the Company’s common stock. Holders of
      Series A preferred stock are entitled to two votes for each share of Series
      A
      preferred stock owned. Each share of Series A preferred stock is convertible,
      at
      the option of the holder, into two shares of common stock, commencing two years
      after the date of issuance, provided the market price of the common stock is
      not
      below $1.00 per share. Additionally, if prior to two years from the date of
      issue, there is a sale or other disposition of all or substantially all of
      the
      Company’s assets, a transaction or series of related transactions in which more
      than 50% of the voting power of the Company is disposed of, or upon a
      consolidation, merger or other business combination where the Company is not
      the
      survivor, then immediately prior to such event each holder of Series A preferred
      stock may convert any or all of such holder's shares of Series A preferred
      stock
      into common stock. On September 16, 2006 the Company approved an increase in
      the
      number of authorized Series A Preferred stock to 2,500,000.





As
      of September 30, 2008, the Company had a total of 186,600,000 outstanding
      shares of Common Stock , and 1,250,000 shares of Series “A” Preferred Stock, and
      77,173,669 outstanding and issued of Common Stock Option, and 69,900,000
      outstanding and issued of Common Stock Warrants.




Quarter
      Ended September 30, 2008





·
            During
                the quarter during the year ended September 30, 2008, the Company
                issued
                717,940 shares of common stock for the company’s office rent rendered at
                an aggregate market value of $0.0112 per share for a total value
                of
                $8,041.






**7.**
            **STOCK
                OPTIONS AND STOCK WARRANTS**





The
      Company did not grant any warrants during the six months ended
      September 30, 2008.





***Options:***During the three months endedSeptember30, 2008: the Company granted stock options to various consultants and
      management, to purchase an aggregate of 36,322,247  shares of the Company’s
      common stock at an weighted average exercise price of $0.03 rendered.
      These stock options were valued at aggregate of $$398,132  using a
      Black-Scholes model with the following weighted average assumptions: dividend
      yield of 0 %; expected volatility of 284 %; risk-free interest rate of 4.85
      %;
      an expected life of 8 years; stock trading price of $0.0112  on the date of
      grant. All of these stock options were vested immediately upon grant, and
      accordingly were expensed immediately for a total expense of
      $398,132.




The
      following table summarizes all stock warrants and stock options granted,
      exercised and expired in the nine months ended September 30,
      2008:




Stock
                  Warrants
              
              Stock
                  OptionsShares
                  underlying
                warrants
              
              Weighted
                  average
                Exercise
                  Price
              
              Shares
                  underlying
                Options
              
              Weighted
                  average
                Exercise
                  PriceOutstanding
                  as of December 31, 2007
              
              
              74,650,000
              
              $
              0.19
              
              
              10,351,422
              
              $
              0.16Granted
              
              
              
              
              
              
              
              
              70,322,247
              
              
              0.06Exercised
              
              
              
              
              
              
              
              
              -
              
              
              -Expired
                  or cancelled
              
              
              (4,750,000
              )
              $
              0.17
              
              
              (3,500,000
              )
              $
              0.05Outstanding
                  as of September 30, 2008
              
              
              69,900,000
              
              $
              0.19
              
              
              77,173,669
              
              $
              0.07


**8.**
              **RELATED
                  PARTY TRANSACTIONS**
  The
        Company has entered into the following related party transactions for the
        six
        months ended as September 30, 2008.
  a)
              Recorded
                  management fees for the Chief Executive Officer and Chairman for
                  the three
                  months ended September 30, 2008 and 2007 of $120,000 and $81,000
                  respectively.
  b)
              Julianna
                  Lu/The Chairman/Founder/Chief Executive Officer, routinely advanced
                  funds which totaled $152,371 during the six months ended September
                  30,
                  2008. These advances are unsecured and repayment terms are unscheduled.
                  The Company accrues interest at 10% per annum on the
                  advances.


**9.**
            **COMMITMENTS
                AND EMPLOYMENT
                AGREEMENTS/CONSULTANTS**




Pursuant
      to various management and consulting contracts the Company has committed to
      pay
      (i) a monthly management fee of $30,000 to the Chairman/Chief Executive Officer/
      Chief Financial Officer/ Chief Operation Officer on January 1, 2008 (ii) a
      monthly management fee of $10,000 to the Vice Chairman/President. The
      management fees have not been paid by the Company and are
      included in shareholder loans on the balance sheet. Payment terms are
      unscheduled.





**10.**
            **ACQUISITIONS**




As
      of
      December 31, 2007 and through September 30, 2008, the Company has considered
      and
      negotiated numerous acquisition agreements, and business cooperation agreements,
      with many business entities and governmental entities in the People's Republic
      of China. As of December 31, 2007 and through September 30, 2008, the Company
      has not completed and finalized any of these acquisition and business
      cooperation agreements. The management of the Company believes that they do
      not
      have any liability with regards to these acquisition and business cooperation
      agreements unless they are completed and finalized. In addition, to the extent
      that the acquisition and business cooperation agreements require cash for them
      to be consummated, or commenced upon, the Company may not have adequate cash
      and/or financing resources, and the Company may not have the ability to obtain
      adequate cash and/or financing resources.




F-7


**Forward
      Looking Statement  -**




This quarterly
      report contains certain forward-looking statements within the meaning of Section
      27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended. These include statements about our
      expectations, beliefs, intentions or strategies for the future, which we
      indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
      "will," "we believe," "our company believes," "management believes" and similar
      language. These forward-looking statements are based on our current expectations
      and are subject to certain risks, uncertainties and assumptions, including
      those
      set forth under the heading "Risk Factors". Our actual results may differ
      materially from results anticipated in these forward-looking statements. We
      base
      our forward-looking statements on information currently available to us, and
      we
      assume no obligation to update them. In addition, our historical financial
      performance is not necessarily indicative of the results that may be expected
      in
      the future and we believe that such comparisons cannot be relied upon as
      indicators of future performance.





To
      the
      extent that statements in the quarterly report are not strictly
      historical, including statements as to revenue projections, business strategy,
      outlook, objectives, future milestones, plans, intentions, goals, future
      financial conditions, future collaboration agreements, the success of the
      Company's development, events conditioned on stockholder or other approval,
      or
      otherwise as to future events, such statements are forward-looking, All
      forward-looking statements, whether written or oral, and whether made by or
      on
      behalf of the company, are expressly qualified by the cautionary statements
      and
      any other cautionary statements which may accompany the forward-looking
      statements, and are made pursuant to the safe harbor provisions of the Private
      Securities Litigation Reform Act of 1995. The forward-looking statements
      contained in this annual report are subject to certain risks and uncertainties
      that could cause actual results to differ materially from the statements made.
      Other important factors that could cause actual results to differ materially
      include the following: business conditions and the amount of growth in the
      Company's industry and general economy; competitive factors; ability to attract
      and retain personnel; the price of the Company's stock; and the risk factors
      set
      forth from time to time in the Company's SEC reports, including but not limited
      to its annual report on Form 10-KSB; its quarterly reports on Forms 10-Q; and
      any reports on Form 8-K. In addition, the Company disclaims any obligation
      to
      update or correct any forward-looking statements in all the Company’s annual
      reports and SEC filings to reflect events or circumstances after the date
      hereof.





*As
      used in this Annual Report, unless otherwise indicated, the terms “we,” “us,”
“our” and “the Company” refer to China Holdings, Inc. and its
      subsidiaries.*




1


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




**Background**




We
      are a
      development stage company, founded by our Chairman/Founder and Chief Executive
      Officer, Julianna Lu, in 2002 with the goal of becoming a leading manufacturer,
      marketer and distributor in the global natural medical and pharmaceutical
      industry. On April 3, 2002, we were incorporated under the laws of the State
      of
      Nevada under the name A E&E Pharma Corporation and changed our name on May
      25, 2004, to China Health Holding, Inc. On May 1, 2007, we changed our name
      to
      China Holdings, Inc. Effective May 11, 2007, our stock has traded under the
      symbol CHHL on the OTC Bulletin Board. The Company maintains a website at www.chinaholding.net .
      However, information found on the Company’s website is not incorporated by
      reference into this report. We have had nominal revenues since our
      inception.





We
      have
      three wholly-owned subsidiaries: (i) China Power, Inc. (ii)China Minerals
      Holdings Inc. and (iii) China Health Holdings, Inc.





On
      May 1,
      2007, our wholly owned subsidiary, China Health World Pharmaceutical
      Corporation, amended its Articles of Incorporation to change its name to China
      Health Holdings, Inc.




On
      May 9,
      2007, our wholly owned subsidiary China Health World Trade Corporation amended
      its Articles of Incorporation to change its name to China Power, Inc. On January
      7, 2008, the Company incorporated its 3rd subsidiary, China Minerals
      Holdings, Inc. under Nevada State Laws.




2


Our
      initial business plan was to engage in the manufacturing, marketing and
      distribution of proprietary natural medicinal products. We have since revised
      our business plan to not only focus on the manufacture, marketing and
      distribution of natural medicinal products but to also focus on becoming a
      diversified global assets holding company. We and our subsidiaries intend to
      engage in multiple China-focused business activities including, energy,
      renewable energy resources, finance, real estate, utilities and
      pharmaceutical. Our objective is to achieve long-term capital appreciation
      through investment in companies and other entities with significant assets,
      investments, production activities, trading or other business interests in
      China, and/or worldwide, and/or which derive a significant part of their revenue
      from China, and/or worldwide.





***Subsidiary
      Operations Plans***




***China
      Power, Inc.*** **





**China
      Power, Inc.** intends
      to capture China's growing energy, renewable energy, and environment protection
      projects domestically and worldwide. China Power intends to engage in business
      activities and investments in hydropower plants, biomass energy projects and
      companies in China and throughout the world primarily through mergers and
      acquisitions, joint-venture partnerships with hydro-power plants, biomass energy
      projects and companies in China and throughout the world. China Power’s advanced
      hydro-power renewable energy strategy and plan is expected to improve the
      technical, societal, and environmental benefits of hydropower, biomass energy
      and to exploit investment and business opportunities in the cost-competitive
      hydropower and biomass energy industries in China and throughout the world,
      with
      a focus towards building long-term shareholder value. China Power intends to
      seek financing to fund its hydropower and biomass energy
      projects.  Financing transactions may include the issuance of equity
      or debt securities, obtaining credit facilities, or other financing mechanisms.
      There can be no assurance that we will be successful in obtaining
      financing.





***China
      Minerals Holdings, Inc.***




**China
      Minerals Holdings, Inc.** is
      a
      exploration stage company, aiming to establish, expand, and diversify its
      presence in the mining resource industry in China and throughout the world.
      China Minerals Holdings intends to focus on precious and rare metals resources,
      properties with mining licenses in production and joint venture
      opportunities. Furthermore, China Mineral Holdings’ mining projects and
      prospects will be based on rigorous economic evaluation, independent advancement
      and joint-ventures.





***China
      Health Holdings, Inc.***





**China
      Health Holdings, Inc.** is a
      development stage company with the goal of becoming a leading developer,
      manufacturer, marketer and distributor of pharmaceutical drugs and dietary
      supplements in China and throughout the world. Its main objective is to partner
      with CHINA -SFDA approved drug producers, GMP certified manufacturing
      facilities, research and development centers and universities in China. China
      Health’s goals include mergers and acquisitions with leading pharmaceutical
      companies in China. China Health’s strategy is to leverage synergies, integrate
      drug pipelines and distribution channels, and management expertise between
      pending pharmaceutical acquisitions. China Health intends to develop a Taoist
      Medicine product line and a Vitamins and Supplements product line. All of the
      products for these product lines are fully developed and China Health expects
      to
      launch the Taoist Medicine and Vitamins and Supplements product lines. All
      of
      China Health’s manufacturing will be outsourced to third parties. China Health
      plans to generate revenues by sales of its herbal supplement products (1)
      through a website that is currently under construction, (2) through retail
      and
      wholesale distributors, and (3) through the establishment of retail stores
      in
      major cities in North America. While in the past China Health’s current
      operations and sales were in Canada, China Health anticipates expanding its
      sales into the U.S. over the next six to twelve months and, thereafter, into
      regions of Europe and Asia.




3





***RECENT
      DEVELOPMENTS***





The
      Company, via its wholly owned subsidiary China Power,  has entered a total
      of  five (5) development, investment and construction agreements with
      the local China Government in Hebei, Hunan, AnHui and Inner Mongolia Provinces,
      PR China to develop, invest and construct a total of  five (5) biomass
      energy power generation plants/projects with a total potential power capacity
      for 50MW x 5 = 250 MW in pipeline. The development and construction of the
      facilities will require approximately $78,000,000 for each 50MW biomass
      plant/project. The development and construction of the facilities are subject
      to
      the Company completing certain due diligence requirements and obtaining
      financing from third parties. In addition to the foregoing, according to the
      China Central Government’s current alternative energy laws related to Biomass
      Energy Projects, under the All Construction Agreements, guaranteed (i) the
      financing for up to 65% of the 580 million Yuan China Power has committed to
      the
      development of all the power plants through local banks at a preferred interest
      rate, (ii) that 100% of the power generated by the Biomass Energy plants shall
      be purchased by the China State Grid at a purchase price of between 0.60 and
      0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt, (iii) All Biomass
      Energy Power Generation Plant/project (50MW) has designated with a total
      potential of 400 million KW/hr power generation capacity approximately annually,
      (iv) China Power’s rights under the Construction Agreements are all exclusive.
      The construction of the plant is estimated to take approximately two
      to three years.


***THE
        INNER MONGOLIA 2*** ***ND*** ***ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS ( 298.8 - 996 Mega
        Watts)***





On
      September 16, 2008, China Power, Inc., China Holdings, Inc.’s controlled
      subsidiary (“China Power”), entered into a 2nd agreement of a
      Four (4) Years Development and Construction Agreement (the “Construction
      Agreement”) with Ontniute Government (“Ontniute”), Inner Mongolia, People’s
      Republic of China, pursuant to which China Power was granted the exclusive
      right
      to develop and construct  THE INNER MONGOLIA 2nd ONTINUTE WIND
      ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8
      megawatt), and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy power
      capacity . Specifically, under the Construction Agreement, Ontniute has agreed
      to provide China Power with :1). Exclusive and First Refusal Rights with
      non-competition and non-solicit terms, 2). The land rights for up to a
      2nd of 200 square KM (Kilo meters) of land in a 2nd
      defined areas , to develop THE INNER MONGOLIA 2nd ONTINUTE WIND
      ENERGY POWER PLANTS/PROJECTS with power capacity of 298.8 megawatt ( 6 x 49.8
      megawatt), and a potential up to 996 megawatt ( 20 x 49.8MW) wind energy power
      capacity . Conversely, China Power has committed to invest up to 2700 million
      Yuan ( with 35% in cash equity investment and 65% bank loans) towards the
      development and construction of the power plants.




In
      addition to the foregoing, according to the China Central Government’s currently
      alternative energy laws related to Wind Energy Projects, under the Construction
      Agreement, Chinese Government has guaranteed (i) the financing for up to 65%
      of
      the total 2700 million Yuan through a local bank at a preferred interest rate
      to
      China Power committed to the development of the power plants, ii) that 100%
      of
      the electricity power generated by the Wind Energy plants shall be purchased
      by
      the China State Grid at a purchase price of between 0.50 and 0.55 Yuan, per
      kilowatt, (iii) THE INNER MONGOLIA 2nd ONTINUTE WIND ENERGY POWER
      PLANTS/PROJECTS have the designated 298.8 megawatt ( 6 x 49.8 MW) wind energy
      power capacity, and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy
      power capacity (iv) China Power’s rights under the Construction Agreement are
      exclusive.




The
      Construction Agreement also provides that Ontinute  shall be
      responsible for securing all necessary government approvals and ensuring the
      supply of all required utilities, such as electricity, water, communications
      and
      roadways, and China Power shall be responsible for obtaining all required
      financing for the plants and operating the plants with the most advanced
      technology available. The development and construction of the plants are
      estimated to take approximately three (3) years.




Additionally,
      China Holdings, Inc. and its controlled subsidiary : China Power, Inc. have
      doubled the commitments for further development, construction and contributions
      to The Clean Energy Power Plants/Industry in China, or/and worldwide , include
      Wind Energy, Biomass Clean Energy and Hydropower Plants. The Company will speed
      up its substantial corporate financings development, and partnerships with
      global private equity funds, and structure investments to optimize returns
      of
      the Company’s global investors, stockholders and investments. The company has
      increased its commitment to develop and maximize all the stockholders’ value on
      a long-terms basis.




4


***THE
      INNER MONGOLIA
      1******ST******ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS ( 298.8 - 996 Mega
      Watts)***





On
      September 3, 2008, China Power, Inc., China Holdings, Inc.’s controlled
      subsidiary (“ China
      Power ”),
      entered into a Three (3) Years Development and Construction Agreement (the
      “ Construction
      Agreement ”)
      with
      Ontniute Government (“Ontniute”), Inner Mongolia, People’s Republic of China,
      pursuant to which China Power was granted the exclusive right to develop and
      construct  THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS
      with power capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential
      up
      to 996 megawatt ( 20 x 49.8MW) wind energy power capacity . Specifically, under
      the Construction Agreement, Ontniute has agreed to provide China Power with
      :1).
      Exclusive and First Refusal Rights with non-competition and non-solicit terms,
      2). The land rights for up to 200 square KM (Kilo meters) of land, to develop
      THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS with power
      capacity of 298.8 megawatt ( 6 x 49.8 megawatt), and a potential up to 996
      megawatt ( 20 x 49.8MW) wind energy power capacity . Conversely, China Power
      has
      committed to invest up to 2700 million Yuan ( with 35% in cash equity investment
      and 65% bank loans) towards the development and construction of the power
      plants.




In
      addition to the foregoing, according to the China Central Government’s currently
      alternative energy laws related to Wind Energy Projects, under the Construction
      Agreement, Chinese Government has guaranteed (i) the financing for up to 65%
      of
      the total 2700 million Yuan through a local bank at a preferred interest rate
      to
      China Power committed to the development of the power plants, ii) that 100%
      of
      the electricity power generated by the Wind Energy plants shall be purchased
      by
      the China State Grid at a purchase price of between 0.50 and 0.55 Yuan, per
      kilowatt, (iii) THE INNER MONGOLIA ONTINUTE WIND ENERGY POWER PLANTS/PROJECTS
      have the designated 298.8 megawatt ( 6 x 49.8 MW) wind energy power capacity,
      and a potential up to 996 megawatt ( 20 x 49.8 MW) wind energy power capacity
      (iv) China Power’s rights under the Construction Agreement are
      exclusive.


The
      Construction Agreement also provides that Ontinute  shall be
      responsible for securing all necessary government approvals and ensuring the
      supply of all required utilities, such as electricity, water, communications
      and
      roadways, and China Power shall be responsible for obtaining all required
      financing for the plants and operating the plants with the most advanced
      technology available. The development and construction of the plants are
      estimated to take approximately three (3) years.




Additionally,
      China Holdings, Inc. and its controlled subsidiary : China Power, Inc. have
      doubled the commitments for further development, construction and contributions
      to The Clean Energy Power Plants/Industry in China, or/and worldwide , include
      Wind Energy, Biomass Clean Energy and Hydropower Plants. The Company will speed
      up its substantial corporate financings development, and partnerships with
      global private equity funds, and structure investments to optimize returns
      of
      the Company’s global investors, stockholders and investments. The company has
      increased its commitment to develop and maximize all the stockholders’ value on
      a long-terms basis.





***TaiHu
      Biomass Energy Power/Plant (50MW) Investment Construction
      Agreement***





On
      October 28, 2007, China Power entered into a Development and Construction
      Agreement (the “ Construction
      Agreement ”)
      with
      TaiHu County Government (“TaiHu”), AnHui Province, People’s Republic of China,
      pursuant to which China Power was granted the exclusive right to develop and
      construct a 50 megawatt biomass energy power plant. Specifically, under the
      Construction Agreement, TaiHu has agreed to provide China Power with the land
      rights for up to 200 MU, or 133,400 square meters of land, to develop a biomass
      energy power plant. China Power has committed to invest up to 580 million Yuan,
      or approximately $81,586,000 towards the development of the power
      plant.





In
      addition to the foregoing, according to the China Central Government’s currently
      alternative energy laws related to Biomass Energy Projects, under the
      Construction Agreement, TaiHu has guaranteed (i) the financing for up to 65%
      of
      the 580 million Yuan China Power has committed to the development of the power
      plant through a local bank at a preferred interest rate, (ii) that 100% of
      the
      power generated by the Biomass Energy plant shall be purchased by the China
      State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately
      $0.09 and $0.08, per kilowatt, (iii) this TaiHu Biomass Energy Power Generation
      Plant/project has designated with a total potential of 400 million KW/hr power
      generation capacity approximately annually, (iv) China Power’s rights under the
      Construction Agreement are exclusive.





The
      Construction Agreement also provides that TaiHu shall be responsible for
      securing all necessary government approvals and ensuring the supply of all
      required utilities, such as electricity, water, communications and roadways,
      and
      China Power shall be responsible for obtaining all required financing for the
      plant and operating the plant with the most advanced technology available.
      The
      construction of the plant is estimated to take approximately two
      years.





Development
      of the plant shall be done through America-China (TaiHu) Energy Co. Ltd.,
      incorporated under PRC laws by our subsidiary China Power. China Power will
      complete for the biomass fuel analysis report and the technical feasibilities
      for further development of the construction for TaiHu Biomass Energy Power/Plant
      ( 50MW) shortly. Management believes that they have no liabilities with regards
      to these transactions if the transactions can not be completed.





China
      Power completed the Fuel Analysis on TaiHu Biomass Energy Power/Plant (
      50MW).




China
      Power has completed THE FEASIBILITIES STUDY TaiHu Biomass Energy Power/Plant
      (
      50MW).




China
      Power has also completed THE FEASIBILITIES STUDY on TaiHu Biomass Energy
      Power/Plant ( 50MW) as legally approved,contracted and conducted by CHINA
      ELECTRIC DESIGN AND RESEARCH INSTITUTION, the PRC licensed AAA+ power engneering
      firm.





The
      Comnpany is working on “EPC” - engineering, procurement and construction
      expertise /contracts now with China -State National AAA+ Engineering Firm to
      construct and build The Company’s TaiHu Biomass Energy Power/Plant ( 50MW) on a
      turnkey basis/solution, and with upset price guarantees and fixed construction
      completion timetables.





5


The
      Company is also finalizing for the long-term contract with China State-Grid
      for
      Electricity Power Sales Contracts with China-State Alternative Energy Policies
      Gurrantee for Biomass Energy for 100% Power Purchase by State-Grid and Gurrantee
      for Prices Selling at 0.61 -0.65/KWh.





***Ongniute
      Biomass Energy Power/Plant ( 50MW) Investment Construction
      Agreement***





On
      March
      3, 2008, China Power entered into a Development and Construction Agreement
      (the
“Construction Agreement”) with Ongniute County Government (“Ongniute”), Inner
      Mongolia Province, People’s Republic of China, pursuant to which China Power was
      granted the exclusive right to develop and construct a 50 megawatt biomass
      energy power plant. Specifically, under the Construction Agreement, Ongniute
      agreed to provide China Power with the land rights for up to 200 MU, or 133,400
      square meters of land, to develop a biomass energy power plant, together with
      an
      additional 500,000 MU, or 333,500,000 square meters of land, rich in straw
      resources to support the power plant. Conversely, China Power has committed
      to
      invest up to 580 million Yuan, or approximately $81,586,000, towards the
      development of the power plant, including the payment to Ongniute
      of 56,000 Yuan, or approximately $7,877, for every 667 square meters of
      land provided by Ongniute.





In
      addition to the foregoing, under the Construction Agreement, Ongniute has
      guaranteed (i) the financing for up to 65% of the 580 million Yuan China Power
      has committed to the development of the power plant through a local bank at
      a
      preferred interest rate, (ii) that 100% of the power generated by the biomass
      energy plant shall be purchased by the China State Grid at a purchase price
      of
      between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt
      and
      (iii) the payment of 13.2 million Yuan, or approximately $1,856,797, to China
      Power once construction of the power plant is completed.





The
      Construction Agreement also provides that Ongniute shall be responsible for
      securing all necessary government approvals and ensuring the supply of all
      required utilities, such as electricity, water, communications and roadways,
      and
      China Power shall be responsible for obtaining all required financing for the
      plant and operating the plant with the most advanced technology available.
      The
      construction of the plant is estimated to take approximately two
      years.





China
      Power’s rights under the Construction Agreement are exclusive, such that
      Ongniute may not allow the development of any other biomass energy power plants
      in Ongniute County for three years. In addition, Ongniute has agreed to ensure
      that the plant is not subject to income taxes for its first three years of
      operation and then subject to a tax rate of no more than 12.5% for the following
      three years.





Development
      of the plant shall be done through Ongniute America-China Green Energy Co.
      Ltd.,
      which incorporated under PRC laws which is wholly owned by our subsidiary of
      China Power. China Power, Inc. will complete for the biomass fuel analysis
      report and the technical feasibilities for further development of the
      construction for Ongniute Biomass Energy Power/Plant ( 50MW) shortly. Management
      believes that they have no liabilities with regards to these transactions if
      the
      transactions can not be completed.




China
      Power completed the Fuel Analysis Report on Ongniute Biomass Energy Power/Plant
      ( 50MW) 。




CHINA
      ELECTRIC DESIGN AND RESEARCH INSTITUTION is working on FEASIBILITIES STUDY
      on
      Ongniute Biomass Energy Power/Plant ( 50MW)ò The Comnpany is working on “EPC” -
      engineering, procurement and construction expertise /contracts now with China
      -State National AAA+ Engineering Firm to construct and build The Company’s
      Ontniute Biomass Energy Power/Plant ( 50MW) on a turnkey basis/solution, and
      with upset price guarantees and fixed construction completion timetables.





The
      Company is also finalizing for the long-term contract with China State-Grid
      for
      Electricity Power Sales Contracts with China-State Alternative Energy Policies
      Gurrantee for Biomass Energy for 100% Power Purchase by State-Grid and Gurrantee
      for Prices Selling at 0.61 -0.65/KWh.




***Huaxian
      Biomass Energy Power/Plant ( 50MW) Investment Construction
      Agreement***





On
      March
      19, 2008, China Powerentered into a Development and Construction Agreement
      (the
“ Construction
      Agreement ”)
      with
      Huaxian County Government (“Huaxian”), Hunan Province, People’s Republic of
      China, pursuant to which China Power was granted the exclusive right to develop
      and construct a 50 megawatt biomass energy power plant. Specifically, under
      the Construction Agreement, Huaxian has agreed to provide China Power with
      the
      land rights for up to 200 MU, or 133,400 square meters of land, to develop
      a
      biomass energy power plant. Conversely, China Power has committed to invest
      up
      to 580 million Yuan, or approximately $81,586,000 towards the development of
      the
      power plant.





In
      addition to the foregoing, according to the China Central Government’s currently
      alternative energy laws related to Biomass Energy Projects, under the
      Construction Agreement, Huaxian has guaranteed (i) the financing for up to
      65%
      of the 580 million Yuan China Power has committed to the development of the
      power plant through a local bank at a preferred interest rate, (ii) that 100%
      of
      the power generated by the Biomass Energy plant shall be purchased by the China
      State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately
      $0.09 and $0.08, per kilowatt, (iii) this Huaxian Biomass Energy Power
      Generation Plant/project has designated with a total potential of 400 million
      KW/hr power generation capacity approximately annually, (iv) China Power’s
      rights under the Construction Agreement are exclusive.




The
      Construction Agreement also provides that Huaxian  shall be
      responsible for securing all necessary government approvals and ensuring the
      supply of all required utilities, such as electricity, water, communications
      and
      roadways, and China Power shall be responsible for obtaining all required
      financing for the plant and operating the plant with the most advanced
      technology available. The construction of the plant is estimated to take
      approximately two years. Management believes that they have no liabilities
      with
      regards to these transactions if the acquisitions can not be
      completed.




6


***LongHua
      Biomass Energy Power Plant/ Project(50MW) Investment and Construction
      Agreement***





On
      October 10, 2007, China Power entered into an agreement with LongHua Government
      and BeiJing JinRenTaiHe Trade Ltd.  Government to develop and
      construct a biomass energy power generation plant with a power capacity of
      50MW.
      The parties estimate that it will take 2 years to complete the construction
      of
      the biomass energy generation plant at a cost of  RMB $580million
      (approximately USD$78 million) comprising of a cash investment of 35% and bank
      loans of 65%. The biomass energy power plant will be located at LongHua county
      in the town of TangTouGou village of LuoYing on a total of 200 MU lands. The
      Agreement provides that the LonHua Government will pay for the cost of the
      land
      and shall grant China Power the right to use the land for a term of 50 years
      in
      accordance with the State’s land use policy.





Pursuant
      to the terms of the agreement, the LongHua government will be responsible for
      (A) the coordination with the state, provincial and city governments; (B)
      registration of the project with the required governmental bodies; (C) providing
      tax incentives to China Power upon completion of the project; (D) assisting
      the
      Company with obtaining an additional 10-15 MU lands for the cultivation of
      the
      necessary biomass resources; and (E) allowing the Company to construct a well
      to
      provide water for construction of the plant.





The
      Company agreed to provide the LongHua government with RMB$1.65 million
      (approximately USD$222,000) in connection with the documentation and approval
      process necessary for the construction permits for the biomass
      plant.  The LongHua government has agreed to provide the Company will
      legal exclusive rights for the construction and operation of the plant and
      agreed not to engage in the construction of a similar biomass
      plant.




On
      January 23 2008, China Power executed an Amended Agreement with BeiJing
      JinRenTaiHe Trade Ltd. and Long-Hua Local Government that the 100% development
      rights of LongHua County Biomass Energy Power Plant/ Project (50MW) for further
      Investment and Construction Agreement will be fully legally 100% Development
      Rights transfer to China Power.





China
      Power will complete the biomass fuel analysis report and the technical
      feasibilities for further development of the construction for Long-Hua Biomass
      Energy Power/Plant ( 50MW) shortly. Management believes that they have no
      liabilities with regards to these transactions if the transactions can not
      be
      completed.




***Con
      Yang Biomass Energy Power Plant/ Project(50MW) Investment and Construction
      Agreement***





On
      October 29, 2007, China Power entered into an agreement to cooperate with the
      Con Yang Government. Pursuant to the agreement the Con Yang Government agreed
      to
      provide the Company with 200 MU lands in the Con Yang economic industry zone
      to
      develop and construct a biomass energy generation plant. The agreement
      contemplates the entry into a Lands Rights Agreement with the Con Yang
      Government Land & Resources Department for a term of 50 years. The parties
      anticipate that the total cost of the project to be RMB $580 million
      (approximately USD$78 million) comprising of a cash investment of 35% and bank
      loans of 65% and anticipate completion in 2010. The Agreement provides that
      the
      Con Yang Government will provide the Company will the lands for the cultivation
      of the straw and raw materials necessary for the project for a term of 50 years.
      In addition, the Agreement provides that it will be effective in 6 months until
      China provides a biomass projects feasibility study and contemplates the entry
      into a further agreement for execution of the biomass energy
      projects.





Management
      believes that they have no liabilities with regards to this transaction if
      the
      transaction can not be completed.





***Acquisition
      Agreement with Hunan Zhangjiajie Chalinhe Electric Power Co., Ltd to Acquiring
      100% Interest of Chalinhe Hydropower Station (54
      MW-72MW)***





On
      July
      27 2007, China Power, Inc. entered into an acquisition definitive agreement
      for
      the acquisition of Hunan Zhangjiajie Chalinhe Electric Power Co., Ltd and
      its Chalinhe Hydropower Station (54 MW-72MW). The purchase price
      for the assets shall consist of (i) a cash payment in the amount of 380 million
      RMB (approximately USD$50 million), and (ii) the assumption of a bank loan
      in
      the amount of 300 million RMB ($USD40 million).The
      Chalinhe Hydropower Station comprises a reservoir with a dam 95 meters
      high and a total land position of 90,064 square meters. Specifications for
      the
      dam consist of a dead water level of 77 meters, design flood level of 88.31
      meters, check flood level of 92.81 meters and a total power generation capacity
      of 72,000 kW (4×18,000 kW).





Upon
      completion of the first stage of the power station, Chalinhe Electric Power
      Co.
      anticipates the total installed power production capacity will be approximately
      54,000 kW. However, implementation of the first stage of the project is
      dependent on Hunan Zhangjiajie Chalinhe Electric Power raising sufficient funds.
      Hunan Zhangjiajie Chalinhe Electric Power does not currently have any financing
      commitments and there is no guarantee that they will be able to raise any funds
      to implement their plans.





The
      electricity sale price is expected to be RMB 0.316 Yuan/kWh (or approximately
      USD $0.042/kWh) pursuant to an existing contract with the China State Grid.
      In
      addition, the Chalinhe Hydropower Station has full legal approved rights to
      CDM
      (Clean Development Mechanism) projects and full legal rights for development
      of
      an additional 18,000 kW capacity to bring the total power generation capacity
      to
      72,000 kW.





The
      Agreement contemplates that the transaction will be completed at a closing
      to be
      held on the first business day after the closing conditions are met or waived,
      or on a date agreed upon by the parties. The closing conditions include, but
      are
      not limited to: (i) the satisfactory completion by each party of a review of
      the
      business operations, finances, assets and liabilities of the other party, (ii)
      delivery of such certificates and closing documents as each party's counsel
      may
      request, and (iii) the approval of all of the shareholders of Hunan Zhangjiajie
      Chalinhe Electric Power Co., Ltd.




The
      acquisition is subject to the Company completing certain due diligence
      requirements and obtaining financing from third parties. As of June 30
      2008, the transaction has not closed. Management has not determined if it can
      complete this transaction. Management believes that they have no liabilities
      with regards to this transaction if the acquisition can not be
      completed.





7


***Acquisition
      Transaction Agreement with Tong Ren KaiYu Minerals Co.
      Ltd.***





On
      November 30, 2007, the Company entered in a transaction agreement which provides
      for the acquisition by the Company of 100% of the issued and outstanding shares
      of Tong Ren KaiYu Minerals Co. Ltd. This agreement provides the comprehensive
      terms of the acquisition and expands on the parties’ agreement dated October 27,
      2007.





In
      consideration for the shares, the Company agreed to pay (A) RMB $100 million
      (approximately USD $13,500,000) in cash; (B) RMB $50 million (approximately
      USD
      $6,750,000) in shares of common stock valued at a price of $0.05 per shares;
      (C)
      RMB $150 million (approximately USD $20 million) in shares of common stock
      valued at the average of closing price of the Company’s common stock in the 5
      day period prior to closing and the 5 day period after the closing.





The
      agreement provides for a closing when all of the conditions set forth in the
      agreement have been fulfilled. Ton Ren KaiYu owns three mineral exploration
      licenses and two **** mining **** exploration
      licenses. ****





Tong
      Ren
      KaiYu has agreed to provide the Company with legal exclusive/first refusal
      rights for this acquisition. The parties have agreed to provide each other
      with
      all documentation necessary to complete their due diligence investigation of
      each company’s business.





The
      Company has issued 7,000,000 shares of its common stock as a security deposit
      to
“Tong Ren Kai Yu” and its beneficiary nominee already. The parties agreed that
      if Tong Ren KaiYu meets its obligation under the financials and the Company
      does
      not consummate the transaction, then, Tong Ren KaiYu shall have the right to
      retain the shares. However, if Tong Ren KaiYu does not complete its obligations
      under this agreement the Company will be permitted to place stop transfer
      restrictions on the shares.




The
      Company intends to form a subsidiary in China or Hong Kong to complete the
      acquisition withg Ton Ren KaiYu.





The
      acquisition is subject to the Company completing certain duel diligence
      requirements and obtaining financing from third parties. As of June 30 2008,
      the
      transaction has not closed. Management has not determined if it can complete
      this transaction. Management believes that they have no liabilities with regards
      to this transaction if the acquisition can not be completed.




***Future
      Development***





We
      are in
      the process of identifying merger and/or acquisitions candidates in the Peoples
      Republic of China and worldwide as part of our growth plan to secure a strong
      future. Our acquisition strategy highlights our updated growth strategy to
      accrete value to our shareholders through the strategic combination of assets
      of
      energy and renewable energy projects (such as hydropower plant and biomass
      energy projects, etc), mineral resources and natural medicinal
      products  in China and throughout the world. Growth by acquisition is
      an important component of our updated business model. As the Chinese government
      policy continues to change and move towards privatization of businesses, our
      focus on the emerging opportunities in China will primarily focus on small
      and
      medium-sized enterprises. Management believes that our growth strategy will
      enable the company to secure a strong future and a powerful position in the
      global assets holding company.




If
      we are
      successful in raising $150 million of financing in order to expand our business
      and fund future development, we anticipate the following expenses over the
      next
      twelve months: (a) $150,000 to develop our Internet website and e-commerce
      system in multi-languages; (b) $200,000 for media advertising to promote our
      brand name; (c) $200,000 for our research and development program; (d) $400,000
      for an investor relations program; (f) $500,000 for professional and consultant
      fees; (g) $1,800,000 for general working capital, including product development,
      inventory, and general and administrative expenses; and (h) $146,750,000 for
      merger and acquisitions and joint-ventures.




If
      the
      Company is only successful in raising $3 million of financing to sustain its
      current level of business operations, we anticipate the following expenses
      over
      the next twelve months: (a) $150,000 to develop its Internet website and
      e-commerce system in multi-languages; (b) $200,000 for media advertising to
      promote our brand name; (c) $200,000 for its research and development program;
      (d) $400,000 for an investor relations program; (f) $500,000 for professional
      and consultant fees; and (g) $1,800,000 for general working capital, including
      product development, inventory, and general and administrative
      expenses.




8




**RESULTS
      OF OPERATIONS**


**Quarter
        Ended September 30, 2008 Compared to Quarter Ended September 30,
        2007**
 
 We
        had a
        net loss of $599,672 for the three months ended **September** 30, 2008
        as compared to a net loss of $916,550 for the three months ended **September** 30,
        2007. The decrease in net loss for the three months ended **September** 30, 2008
        was the result of decreased consulting fees, from $283,503for the three months
        ended **September** 30,
        2007
        as compared to $17,380 for the three months ended **September** 30,
        2008.
        and  decreased
        Investor Relations from $31,426 for the three months ended **September** 30, 2007
        as compared to $3,390 in the comparable period in 2008, and decreased management
        fees from $267,735 for the three months ended **September** 30, 2007
        as compared to $120,000 in the comparable period in 2008
 
 Other
        Income (Expenses) was $0 for the three months ended **September** 30, 2008
        as compared to $0 for the three months ended **September** 30,
        2007.
 
 The
        company intends on keeping it's expenses low as it seeks out it's acquisition
        targets. The company will likely use stock as a means of compensation for
        certain expenses such as consulting, investor relations and other services
        management has determined it has to incur.
  **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 As
        of **September** 30,
        2008, we had cash of $1,525. Our current liabilities as of **September** 30, 2008
        aggregated $1,960,746. As of **September** 30,
        2008, we had a working capital deficiency of 1,932,679and an accumulated
        deficit
        of $18,852,686. To date, our operations have been funded through loans advanced
        from our Chief Executive Officer, Julianna Lu, and our Vice Chairman, XiaoFei
        Yu, and through issuances of shares of our common stock.
 
 As
        of **September** 30,
        2008, Julianna Lu/The Chairman/Founder/Chief Executive Officer and Xiaofei
        Yu/Vice Chairman routinely advanced funds as loans to the Company for a total
        of
        $1,491,609, and $414,164 respectively. These funds /loans are unsecured and
        so
        not have a due date of return. The Company accrues interest at 10% per annum
        on
        all these advances.
 
 As
        of **September** 30,
        2007, Julianna Lu/CEO/Chairman/CFO has loaned a total of $894,121, to the
        Companyôand XiaoFei Yu/Vice Chairman, has loaned a total of $266,390 to the
        Company. These amounts increased as the result of  Ms. Lu's and Mr. Yu's
        cash loans to the company as well as accrued compensation and interest charged
        on the loans. There are no formal agreements for when repayment of the loans
        must be made. The loans accrue interest at the rate of 10% per
        annum





The
      company intends on keeping it's expenses low as it seeks out it's acquisition
      targets. The company will likely use stock and stocks options as a means of
      compensation for certain expenses such as consulting, investor relations and
      other services management has determined it has to incur.





9


While
      we
      have raised capital to meet our working capital and financing needs in the
      past,
      additional financing is required within the next 12 months in order to meet
      our
      current and projected cash flow deficits from operations and development. We
      have sufficient funds to conduct our operations for several months, but not
      for
      12 months or more. Further, in order to expand our business, fund future
      development and begin marketing and selling our three product lines and pursue
      our acquisition strategy, we will need to raise at least $25 million over the
      next twelve to twenty-four months. There can be no assurance that financing
      will
      be available in amounts or on terms acceptable to us, if at all.





By
      adjusting our operations and development to the level of capitalization, we
      believe we have sufficient capital resources to meet projected cash flow
      deficits. However, if we are not successful in generating sufficient liquidity
      from operations or in raising sufficient capital resources, on terms acceptable
      to us, this could have a material adverse effect on our business, results of
      operations liquidity and financial condition.




Our
      registered independent certified public accountants have stated in their report
      that we have incurred operating losses in the last two years, and that we are
      dependent upon management's ability to develop profitable operations. These
      factors among others may raise substantial doubt about our ability to continue
      as a going concern.





We
      presently do not have any available credit, bank financing or other external
      sources of liquidity. Due to our brief history and historical operating losses,
      our operations have not been a source of liquidity. We will need to obtain
      additional capital in order to expand operations and become profitable. We
      intend to pursue the building of a re-seller network outside the United States,
      and if successful, the re-seller agreements would constitute a source of
      liquidity and capital over time. In order to obtain capital, we may need to
      sell
      additional shares of our common stock or borrow funds from private lenders.
      There can be no assurance that we will be successful in obtaining additional
      funding and execution of re-seller agreements outside the Unites
      States.





We
      will
      still need additional investments in order to continue operations to cash flow
      break even. Additional investments are being sought, but we cannot guarantee
      that we will be able to obtain such investments. Financing transactions may
      include the issuance of equity or debt securities, obtaining credit facilities,
      or other financing mechanisms. However, the trading price of our common stock
      and the downturn in the U.S. stock and debt markets could make it more difficult
      to obtain financing through the issuance of equity or debt securities. Even
      if
      we are able to raise the funds required, it is possible that we could incur
      unexpected costs and expenses, fail to collect significant amounts owed to
      us,
      or experience unexpected cash requirements that would force us to seek
      alternative financing. Further, if we issue additional equity or debt
      securities, stockholders may experience additional dilution or the new equity
      securities may have rights, preferences or privileges senior to those of
      existing holders of our common stock. If additional financing is not available
      or is not available on acceptable terms, we will have to curtail our
      operations.





These
      conditions raise substantial doubt about our ability to continue as a going
      concern.





10


**Critical
      Accounting Policies and Estimates**





We
      have
      identified one policy area as critical to the understanding of our consolidated
      financial statements. The preparation of our consolidated financial statements
      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 date of the consolidated financial statements. In particular,
      management makes estimates concerning the valuation of stock based transactions.
      Stock based transactions include issuance of stock for services and for
      intangible assets such as technologies or licenses. Stock based transactions
      also include issuance of stock options and warrants for services and
      intangibles.




We
      suggest that our significant accounting policies, as described in our Form
      10-KSB/ Form 10-KSB/A filed for the year ended December 31, 2007 on April 18,
      2008, be read in conjunction with this Management's discussion and Analysis
      of
      Financial Condition and Results of Operations.




**Inflation**





It
      is our
      opinion that inflation has not had a material effect on our operations and
      we do
      not anticipate it will in the future.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements.





11


**ITEM
                1A**
            **RISK
                FACTORS.**





***Risks
      Related to our Company***




***We
      have limited history of operations and we cannot assure you that our business
      model will be successful in the future or that our operations will be
      profitable.***





We
      began
      operations in 2002 and commenced trading as a public company on the OTC Bulletin
      Board in the middle of 2005. Our operating results for future periods will
      include significant expenses, including mergers and acquisition, marketing
      costs, and administrative and general overhead expenses as we implement our
      business model to expand our operations. As a result, we are unable to predict
      whether we will report profitable operations in the future. There can be no
      assurances whatsoever that we will be able to successfully implement our
      business model, identify and close acquisitions of operating companies,
      penetrate our target markets or attain a wide following for our services. We
      are
      subject to all the risks inherent in an early stage enterprise which has
      experienced rapid growth through acquisitions and our prospects must be
      considered in light of the numerous risks, expenses, delays, problems and
      difficulties frequently encountered in those businesses.




***The
      success of our business model is dependent upon our ability to identify and
      close acquisitions of operating companies in China. The acquisition of new
      businesses is costly and such acquisitions may not enhance our financial
      condition.***





Our
      primary business strategy is to acquire companies and identify and acquire
      assets and technologies from businesses in China that have services, products,
      technologies, industry specializations or geographic coverage that extend or
      complement our existing business. The process to undertake a potential
      acquisition is time-consuming and costly. We expect to expend significant
      resources to undertake business, financial and legal due diligence on our
      potential acquisition targets, and there is no guarantee that we will acquire
      the company after completing due diligence. The process of identifying and
      consummating an acquisition could result in the use of substantial amounts
      of
      cash, potentially dilutive issuances of equity securities and exposure to
      undisclosed or potential liabilities of acquired companies. We have not
      consummated any acquisitions at this time and there can be no assurance that
      the
      addition of targeted businesses will enhance shareholder value.




***Acquisition
      efforts in future periods may be dilutive to our then current
      stockholders.***





Our
      business model depends upon the issuance of our securities to consummate
      acquisitions in the future. As a result, the percentage ownership of our company
      held by existing stockholders will be reduced and those stockholders may
      experience significant dilution. In addition, new securities may contain certain
      rights, preferences or privileges that are senior to those of our common stock.
      As we will generally not be required to obtain the consent of our stockholders
      before entering into acquisition transactions, stockholders are dependent upon
      the judgment of our management in determining the number of, and characteristics
      of stock issued as consideration in an acquisition.




12


***We
      will need additional financing which we may not be able to obtain on acceptable
      terms. Additional capital raising efforts in future periods may be dilutive
      to
      our then current stockholders or result in increased interest expense in future
      periods.***





We
      will
      need to raise additional working capital to continue to implement our business
      model. While our business model contemplates the potential for the issuance
      of
      equity securities for the stock of acquired companies, capital may be needed
      for
      the acquisition of these companies. Capital will also be needed for the
      effective integration, operation and expansion of these businesses. Our future
      capital requirements, however, depend on a number of factors, including our
      operations, the financial condition of an acquisition target and its needs
      for
      capital, our ability to grow revenues from other sources, our ability to manage
      the growth of our business and our ability to control our expenses. If we raise
      additional capital through the issuance of debt, this will result in increased
      interest expense. If we raise additional funds through the issuance of equity
      or
      convertible debt securities, the percentage ownership of our company held by
      existing stockholders will be reduced and those stockholders may experience
      significant dilution. In addition, new securities may contain certain rights,
      preferences or privileges that are senior to those of our common stock. We
      cannot assure you that we will be able to raise the working capital as needed
      in
      the future on terms acceptable to us, if at all. If we do not raise funds as
      needed, we will be unable to fully implement our business model, fund our
      ongoing operations or grow our company.




***Our
      financial status creates doubt whether we will continue as a going
      concern.***





The
      Company has a working capital deficiency of $1,932,679n accumulated deficit
      of
      $18,852,686 and a stockholders’ deficit of $1,923,670 as of September 30,
      2008 and has incurred significant losses since inception. With our current
      resources, such as shareholder loans, we expect to be able to satisfy our cash
      requirements through **June
      30** ,
      2009.There are no assurances that we will be able to achieve a level of revenues
      adequate to generate sufficient cash flow from operations or obtain additional
      financing through private placements, public offerings and/or bank financing
      necessary to support our working capital requirements. To the extent that funds
      generated from any private placements, public offerings and/or bank financing
      are insufficient, we will have to raise additional working capital. No assurance
      can be given that additional financing will be available, or if available,
      will
      be on acceptable terms. These conditions raise substantial doubt about our
      ability to continue as a going concern. If adequate working capital is not
      available we may be forced to discontinue operations, which would cause
      investors to lose the entire amount of their investment.




***We
      need significant infusions of additional capital, which may result in dilution
      to our shareholders' ownership and voting rights in our
      company.***





Based
      upon our current cash reserves and forecasted operations, we believe that we
      will need to obtain at least $50 million of outside funding in order to sustain
      our current business operations over the next twelve months, and at least $150
      million of outside funding in order to expand our business, fund future
      development and complete our acquisition projects. We have not in the past
      raised any funds and our operations have been funded primarily through loans
      from our officers and the issuance of shares of our common stock. Our need
      for
      capital to finance our business strategy, operations, and growth will be greater
      should, among other things, revenue or expense estimates prove to be incorrect.
      If we fail to arrange for sufficient capital in the future, we may be required
      to reduce the scope of our business activities, terminate our acquisition
      agreements and curtail plans to construct the biomass plants. In addition,
      we
      may not be able to obtain additional financing in sufficient amounts or on
      acceptable terms when needed, which could adversely affect our operating results
      and prospects. Debt financing must be repaid regardless of whether or not we
      generate profits or cash flows from our business activities. Equity financing
      may result in dilution to existing shareholders and may involve securities
      that
      have rights, preferences, or privileges that are senior to our common
      stock.




13


***Our
      management may be unable to effectively integrate our acquisitions and to manage
      our growth and we may be unable to fully realize any anticipated benefits of
      these acquisitions.***





We
      are
      subject to various risks associated with our growth strategy, including the
      risk
      that we will be unable to identify and recruit suitable acquisition candidates
      in the future or to integrate and manage the acquired companies. We face
      particular challenges in that our acquisition strategy is based on companies
      located in and operating within China. Acquired companies' histories, the
      geographical  location, business models and business cultures will be
      different from ours in many respects. Even if we are successful in identifying
      and closing acquisitions of companies, our directors and senior management
      will
      face significant challenges in their efforts to integrate the business of the
      acquired companies or assets and to effectively manage our continued growth.
      Any
      future acquisitions will be subject to a number of challenges,
      including:




·
              the
                    diversion of management time and resources and the potential
                    disruption of
                    our ongoing business;


·
            difficulties
                in maintaining uniform standards, controls, procedures and
                policies;




·
            potential
                unknown liabilities associated with acquired
                businesses;




·
            the
                difficulty of retaining key alliances on attractive terms with partners
                and suppliers; and




·
            the
                difficulty of retaining and recruiting key personnel and maintaining
                employee morale.




14


There
      can
      be no assurance that our efforts to integrate the operations of any acquired
      assets or companies will be successful, that we can manage our growth or that
      the anticipated benefits of these proposed acquisitions will be fully
      realized.




***We
      are dependent upon our management and our ability to hire key
      personnel.***




The
      success of our company is largely dependent on the personal efforts of Julianna
      LuñThe Chairman /Founder/Chief Executive Officer and Xiaofei Yu. Although we
      have employment agreements with these officers, the loss of the services of
      either of them would have a material adverse effect on our business and
      prospects. In addition, in order for us to undertake our operations as
      contemplated, it will be necessary for us to locate and hire experienced
      personnel who are bilingual and knowledgeable in the U.S. capital markets,
      China
      and generally accepted accounting principles applicable to U.S. companies.
      Our
      failure to attract and retain such experienced personnel on acceptable terms
      will have a material adverse impact on our ability to grow our
      business.




***Certain
      agreements to which we are a party and which are material to our operations
      lack
      various legal protections which are customarily contained in similar contracts
      prepared in the United States.***





Much
      of
      our business and operations are located in China. In addition, we are a party
      to
      certain contracts related to our operations. While these contracts contain
      the
      basic business terms of the agreements between the parties, these contracts
      do
      not contain certain provisions which are customarily contained in similar
      contracts prepared in the U.S., such as representations and warranties of the
      parties, confidentiality and non-compete clauses, provisions outlining events
      of
      defaults, and termination and jurisdictional clauses. Because these contracts
      omit these types of clauses, notwithstanding the differences in Chinese and
      U.S.
      laws, we may not have the same legal protections as we would if the contracts
      contained these additional provisions. We anticipate that our Chinese
      subsidiaries will likely enter into contracts in the future which will likewise
      omit these types of legal protections. While we have not been subject to any
      adverse consequences as a result of the omission of these types of clauses,
      and
      we consider the contracts to which we are a party to contain all the material
      terms of our business arrangements with the other party, future events may
      occur
      which lead to a dispute under agreements which could have been avoided if the
      contracts were prepared in conformity with U.S. standards. Contractual disputes
      which may arise from this lack of legal protection will divert management’s time
      from the operation of our business and require us to expend funds attempting
      to
      settle a possible dispute. This possible diversion of management time will
      limit
      the time our management would otherwise devote to the operation of our business,
      and the diversion of capital could limit the funds we have available to pay
      our
      ongoing operating expenses.





15


***Intensive
      competition for our subsidiaries will substantially affect our operating
      performance.***





Each
      of
      our subsidiaries are development stage businesses. As such, the operations
      are
      subject to all the risks inherent in launching a new business enterprise, in
      developing and marketing a new product or service, and in establishing a name
      and a business reputation. The likelihood of our success must be considered
      in
      light of problems, expenses, difficulties and delays frequently encountered
      in
      converting prototype designs into viable production designs, and in achieving
      market acceptance with a new type of product or service. Each of the newly
      formed entities have had no product revenues to date, have operated at a loss
      since inception, and will likely sustain operating losses for an indeterminate
      time period. There can be no assurance that we will ever generate material
      revenues or that we will ever be profitable.




***Because
      of the speculative nature of exploration of mineral properties, there is a
      substantial risk that our business will fail.***





The
      search for valuable minerals as a business is extremely risky. Exploration
      for
      minerals is a speculative venture necessarily involving substantial risk. The
      expenditures to be made by us in the exploration of the optioned mineral
      properties may not result in the discovery of commercial quantities of minerals.
      Problems such as unusual or unexpected formations and other conditions are
      involved in mineral exploration and often result in unsuccessful exploration
      efforts. In such a case, we would be unable to complete our business
      plan.





***Because
      of the inherent dangers involved in mineral exploration, there is a risk that
      we
      may incur liability or damages as we conduct our
      business.***





The
      search for valuable minerals involves numerous hazards. As a result, we may
      become subject to liabilities for such hazards, including pollution, cave-ins
      and other hazards against which we cannot insure or against which we may elect
      not to insure. The payment of such liabilities may have a material adverse
      effect on our financial position.




16


***Our
      targeted industries are heavily regulated and we may not be able to remain
      in
      compliance with all such regulations and we may be required to incur substantial
      costs in complying with such regulation.***





Our
      business of acquiring mining projects, properties and companies in China is
      subject to extensive regulation by China's Mining Ministry, and by other
      provincial, county and local authorities in jurisdictions in which products
      are
      processed or sold, regarding the processing, storage, and distribution of
      mineral products. In addition, processing facilities are subject to periodic
      inspections by government agencies. We may not be able to comply with current
      laws and regulations, or any future laws and regulations. To the extent that
      new
      regulations are adopted, we will be required to conform our activities in order
      to comply with such regulations. We may be required to incur substantial costs
      in order to comply. Our failure to comply with applicable laws and regulations
      could subject us to civil remedies, including fines, injunctions, recalls or
      seizures, as well as potential criminal sanctions which could have a material
      and adverse effect on our business operations and finances. Changes in
      applicable laws and regulations may also have a negative impact on our
      sales.





Our
      business of acquiring China based pharmaceutical companies is also subject
      to
      extensive regulation by China's Health Ministry, and by other provincial, county
      and local authorities in jurisdictions in which pharmaceutical drugs/products
      are processed or sold, regarding the processing, storage, and distribution
      of
      such products. In addition, processing facilities are subject to periodic
      inspection by government agencies. We may not be able to comply with current
      laws and regulations, or any future laws and regulations. To the extent that
      new
      regulations are adopted, we will be required to conform our activities in order
      to comply with such regulations. We may be required to incur substantial costs
      in order to comply. Our failure to comply with applicable laws and regulations
      could subject us to civil remedies, including fines, injunctions, recalls or
      seizures, as well as potential criminal sanctions which could have a material
      and adverse effect on our business operations and finances. Changes in
      applicable laws and regulations may also have a negative impact on our
      sales.





***Compliance
      with governmental regulations may impose additional costs, which may adversely
      affect our financial condition and results of
      operations.***





The
      processing, formulation, manufacturing, packaging, labeling, advertising and
      distribution of China Health’s products are subject to regulation by one or more
      federal agencies, including the Health Protectorate Branch in Canada, the FDA,
      the Federal Trade Commission ("FTC"), the Consumer Product Safety Commission,
      the United States Department of Agriculture, the United States Customs and
      Border Protection and the Environmental Protection Agency. These activities
      are
      also regulated by various agencies of the states and localities in which our
      products are sold.





17


The
      FDA
      may attempt to regulate any of China Health’s products that fall within its
      jurisdiction, and the FTC has jurisdiction to regulate the advertising of our
      products that fall within its jurisdiction. The FDA may not accept the evidence
      of safety for any new ingredients that we may want to market, may determine
      that
      a particular product or product’s ingredient present an unacceptable health
      risk, may determine that a particular statement of nutritional support that
      we
      want to use is an unacceptable drug claim or an unauthorized version of a food
      "health claim," may determine that a particular product is an unapproved new
      drug, or the FDA or the FTC may determine that particular claims are not
      adequately supported by available scientific evidence. Such a determination
      would prevent us from marketing particular products or using certain statements
      of nutritional support on our potential products. One of the key areas of our
      development focus is the specialty supplements category, which includes products
      that are directed at particular nutritional concerns. The FDA may not agree
      with
      China Health’s statements of nutritional support as to a particular specialty
      supplement or permit China Health to promote its specialty supplements directed
      at particular nutritional concerns. China Health also may be unable to
      disseminate third-party literature in connection with its potential products
      if
      the third-party literature fails to satisfy certain requirements. In addition,
      the FDA could require China Health to remove a particular product from the
      market. Any future recall or removal would result in additional costs to us,
      including lost revenues from any potential products that China Health is
      required to remove from the market, any of which could be material. Any such
      product recalls or removals could lead to liability, substantial costs and
      reduced growth prospects.





Although
      the regulation of dietary supplements is less restrictive than the regulation
      of
      drugs, dietary supplements may not continue to be subject to less restrictive
      regulation. Many of China Health’s dietary supplements contain traditional
      Chinese herbs which may or may not have been previously evaluated by the FDA.
      All herbs marketed in dietary supplements in the United States must be Generally
      Recognized as Safe (GRAS). The FDA maintains a list of problems herbs. If any
      of
      the herbs in China Health’s products appeared on the FDA's list, or if the
      agency determined there were issues concerning their safety, China Health would
      not be able to market the products containing these ingredients in the United
      States. We have not determined whether any of the herbs in China Health’s
      products are on the FDA's list of problem herbs and we have not determined
      whether any such herbs are Generally Recognized as Safe. If any of the herbs
      in
      China Health’s products have not been evaluated by the FDA and are not Generally
      Recognized as Safe, then China Health would not be permitted to sell products
      containing them in the United States. Any such prohibition could materially
      adversely affect our results of operations and financial condition.





Further,
      if more stringent statutes are enacted for dietary supplements, or if more
      stringent regulations are promulgated, China Health may not be able to comply
      with such statutes or regulations without incurring substantial expense, or
      at
      all. Legislation has been introduced in Congress to impose substantial new
      regulatory requirements for dietary supplements including adverse event
      reporting, post market surveillance requirements, FDA reviews of dietary
      supplement ingredients, safety testing and records inspection. If enacted,
      any
      of the proposed legislation may result in difficulty getting China Health’s
      products to the market and could raise our costs and hinder our
      business.





18


In
      addition, we expect that the FDA soon will adopt the proposed rules on Good
      Manufacturing Practice in manufacturing, packaging, or holding dietary
      ingredients and dietary supplements, which will apply to the products we
      manufacture. These regulations will require dietary supplements to be prepared,
      packaged and held in compliance with strict rules, and will require quality
      control provisions similar to those in the Good Manufacturing Practice
      regulations for drugs. China Health may not be able to comply with the new
      rules
      without incurring additional expenses.





Each
      of
      China Health’s products imported into the United States may be blocked at the
      border by U.S. Customs. The FDA could issue Import Alerts for any of our
      products if the agency considers them to be misbranded, adulterated and/or
      unapproved new drugs.




The
      FTC
      exercises jurisdiction over the advertising of dietary supplements. In the
      past,
      the FTC has instituted numerous enforcement actions against dietary supplement
      companies for failure to have adequate substantiation for claims made in
      advertising or for the use of false or misleading advertising claims. These
      enforcement actions have often resulted in consent decrees and the payment
      of
      civil penalties by the companies involved.




We
      are
      also subject to regulation under various state, local, and international laws
      that include provisions governing, among other things, the processing,
      formulation, manufacturing, packaging, labeling, advertising and distribution
      of
      our products that are deemed "dietary supplements" or "over-the-counter drugs."
      Government regulations in foreign countries may prevent or delay the
      introduction, or require the reformulation, of certain of our products. In
      addition, from time to time in the future, Congress, the FDA, the FTC or other
      federal, state, local or foreign legislative and regulatory authorities may
      impose additional laws or regulations that apply to China Health, repeal laws
      or
      regulations that we consider favorable to China Health or impose more stringent
      interpretations of current laws or regulations. We are not able to predict
      the
      nature of such future laws, regulations, repeals or interpretations or to
      predict the effect additional governmental regulation, when and if it occurs,
      would have on China Health’s business in the future. Such developments could,
      however, require reformulation of certain products to meet new standards,
      recalls or discontinuance of certain products not able to be reformulated,
      additional record-keeping requirements, increased documentation of the
      properties of certain products, additional or different labeling, additional
      scientific substantiation, or other new requirements. Any such developments
      could have a material adverse effect on our business, financial condition and
      results of operations.




***The
      issuance of shares of our common stock to fund our operations and as
      consideration at the closing of our acquisition targets will result in
      significant dilution to our existing shareholders.***





To
      date
      our operations have been funded through cash advances from our officers and
      through the issuance of shares of our common stock. There can be no assurance
      that our officers will continue to fund our operations. The issuance of shares
      of our common stock will result in dilution to our existing holders. Further,
      to
      proceed with the closing of our acquisition targets in China, we will be
      required to issue shares of our common stock as consideration, this will result
      in significant dilution to our existing shareholders. The amount of dilution
      will be dependent upon the terms on which we issue shares of our common
      stock.




19


***Risks
      Related o Our Business***




***We
      are a development stage company and have a limited operating history upon which
      an evaluation of our company can be made. For that reason, it would be difficult
      for a potential investor to judge our prospects for
      success.***





We
      were
      organized in April 2002 and have had limited operations since our inception
      from
      which to evaluate our business and prospects. There can be no assurance that
      our
      future proposed operations will be implemented successfully or that we will
      ever
      have profits. If we are unable to sustain our operations, our shareholders
      may
      lose their entire investments. We face all the risks inherent in a new business,
      including the expenses, difficulties, complications and delays frequently
      encountered in connection with conducting operations, including capital
      requirements and management's potential underestimation of initial and ongoing
      costs. As a new business, we may encounter delays and other problems in
      connection with the methods of product distribution that we implement. We also
      face the risk that we will not be able to effectively implement our business
      plan. In evaluating our business and prospects, these difficulties should be
      considered. If we are not effective in addressing these risks, we will not
      operate profitably and we may not have adequate working capital to meet our
      obligations as they become due.




***We
      may incur material product liability costs.***





If
      our
      subsidiary, China Health, were to be engaged in the business of formulating
      and selling nutritional supplements for human consumption. As a distributor
      of
      products designed for human consumption, we are subject to product liability
      claims if the use of our products is alleged to have resulted in injury. We
      may
      be subject to various product liability claims, including, among others,
      allegations that our products include inadequate instructions for use or
      inadequate warnings concerning possible side effects and interactions with
      other
      substances. In addition, although our manufacturers maintain quality controls
      and procedures with respect to products that we sell, our products could contain
      contaminated substances. All of the products we sell are produced by third-party
      manufacturers. As a distributor of products manufactured by third parties,
      we
      may also be liable for various product liability claims for products we do
      not
      manufacture even though we have no control over the manufacturing procedures
      used in connection with the production of these third-party products. We are
      in
      the process of applying for product liability insurance. Such insurance, once
      obtained, may not be available at a reasonable cost, or may not be adequate
      to
      cover liabilities.




20


***If
      we are not able to manage growth of our business, our financial condition and
      results of operations will be negatively affected.***





We
      have
      expanded our business into renewable energy resources and have entered into
      agreements to cooperate to construct a number of biomass energy power plants.
      We
      also entered into an agreement to acquire Chalinhe Hydropower station. In
      addition, we have entered into an agreement to acquire Tong Ren KaiYu Minerals
      which owns 3 minerals licenses. We have not completed any of these planned
      acquisitions and expansion projects. If and when we consummate one or more
      of
      these transactions, we may experience a period of significant growth. Any future
      growth could cause significant strain on our managerial, operational, financial
      and other resources. Success in managing this expansion and growth will depend,
      in part, upon the ability of our senior management to effectively manage the
      growth of our business. Any failure to manage the proposed growth and expansion
      of our business could have a material adverse effect on our financial condition
      and results of operations.





***Our
      strategy of growth through acquisitions is inherently
      risky.***





Our
      strategy is to identify and target merger and/or acquisition candidates in
      China
      and throughout the world. Although we have signed a number of acquisition
      agreements to date, there can be no assurance that any or all of such
      acquisitions will be completed. Even if these acquisitions are completed, the
      final terms of the acquisition agreements may vary substantially from the terms
      described in the agreements. We have also entered into agreements to cooperate
      to construct a number of biomass energy power plants in China. These agreements
      require the investment of significant capital and require the approval of the
      appropriate administrative and regulatory bodies in China.






Our
      acquisition of companies and businesses and expansion of operations involve
      risks, including the following:





·
            the
                potential inability to identify the companies best suited to our
                business
                plan;




·
            the
                potential inability to successfully integrate acquired operations
                and
                businesses or to realize anticipated synergies, economics of scale
                or
                other expected value;




·
            the
                potential need to restructure, modify or terminate customer relationships
                of the acquired company; and




·
            loss
                of key employees of acquired
                operations.




21


The
      occurrence of any one or more of these risks could result in a material adverse
      effect on our operations.




***If
      we fail to acquire and develop other products or product candidates, we may
      be
      unable to grow our business.***





China
      Health licenses the rights to a majority of its neutraceutical products from
      outside third parties. As part of China Health’s growth strategy, we intend to
      license or acquire additional products and product candidates for development
      and commercialization. The success of this strategy depends upon our ability
      to
      identify, select and acquire the right product candidates. Any product candidate
      we license or acquire may require additional development efforts prior to
      commercial sale, including extensive clinical testing and approval by regulatory
      authorities. All product candidates are prone to the risks of failure inherent
      in product development, including the possibility that the product candidate
      will not be shown to be sufficiently safe and effective. In addition, we cannot
      assure you that any products that we license or acquire will be manufactured
      or
      produced economically, successfully commercialized or widely accepted in the
      marketplace. Proposing, negotiating and implementing an economically viable
      product acquisition or license is a lengthy and complex process. Other
      companies, including those with substantially greater financial, marketing
      and
      sales resources, may compete with us for the acquisition or license of product
      candidates. We may not be able to acquire or license the rights to additional
      products on terms that we find acceptable, or at all.





***If
      our relationships with our manufacturers terminate, or their facilities are
      damaged or destroyed, we may be unable to develop or commercialize our
      products.***





Currently,
      only a limited number of companies manufacture China Health’s products. The
      number of contract manufacturers with the expertise, required regulatory
      approvals and facilities to manufacture China Health’s product candidates on a
      commercial scale is extremely limited, and it would take a significant amount
      of
      time to arrange for alternative manufacturers. If any of China Health’s
      manufacturers fail to deliver the required commercial quantities of bulk
      substance or finished product on a timely basis and at commercially reasonable
      prices, and we are unable to find one or more replacement manufacturers capable
      of production at a substantially equivalent cost, in substantially equivalent
      volumes and quality, and on a timely basis, China Health will likely be unable
      to meet customer demand as it begins to market and sell its existing product
      lines.


22


***Risks
      Related to Doing Business in the People’s Republic of
      China***





***We
      face the risk that changes in the policies of the government of the People’s
      Republic of China could have a significant impact upon our business and
      profitability.***





The
      economy of the People’s Republic of China is in a transition from a planned
      economy to a market oriented economy subject to five-year and annual plans
      adopted by the government that set national economic development goals. Policies
      of the People’s Republic of China can have significant effects on the economic
      conditions of the People’s Republic of China. The government of the People’s
      Republic of China has confirmed that economic development will follow the model
      of a market economy. Under this direction, we believe that the People’s Republic
      of China will continue to strengthen its economic and trading relationships
      with
      foreign countries and business development in the People’s Republic of China
      will follow market forces. While we believe that this trend will continue,
      there
      can be no assurance that this will be the case. A change in policies by the
      government of the People’s Republic of China could adversely affect our
      interests by, among other factors:





·
            
            changes
                in laws,




·
            
            imposition
                of new regulations or the interpretations of such
                regulations,·
            
            confiscatory
                taxation,·
            
            restrictions
                on currency conversion, imports or sources of supplies,
                or·
            
            the
                expropriation or nationalization of private
                enterprises.




23


Although
      the government of the People’s Republic of China has been pursuing economic
      reform policies for more than two decades, there is no assurance that the
      government will continue to pursue such policies or that such policies may
      not
      be significantly altered, especially in the event of a change in leadership,
      social or political disruption, or other circumstances affecting political,
      economic and social life in the People’s Republic of China.





***The
      laws and regulations of the People’s Republic of China governing our current
      business operations are sometimes vague and uncertain. Any changes in these
      laws
      and regulations may have a material and adverse effect on our
      business.***




There
      are
      substantial uncertainties regarding the interpretation and application of laws
      and regulations of the People’s Republic of China, including but not limited to,
      the laws and regulations governing our business, or the enforcement and
      performance of our arrangements with customers in the event of the imposition
      of
      statutory liens, death, bankruptcy and criminal proceedings. The laws and
      regulations are sometimes vague and may be subject to future changes, and their
      official interpretation and enforcement may involve substantial uncertainty.
      The
      effectiveness of newly enacted laws, regulations or amendments may be delayed,
      resulting in detrimental reliance by foreign investors. New laws and regulations
      that affect existing and proposed future businesses may also be applied
      retroactively. We cannot predict what effect the interpretation of existing
      or
      new laws or regulations of the People’s Republic of China may have on our
      businesses.






***A
      slowdown or other adverse developments in the economy of the People’s Republic
      of China may materially and adversely affect our customers, demand for our
      products and our business.***




Much
      of
      our operations are conducted in the People’s Republic of China. Although the
      economy of the People’s Republic of China has grown significantly in recent
      years, we cannot assure investors that such growth will continue. The renewable
      energy industry in the People’s Republic of China is relatively new and growing,
      and we therefore do not know how sensitive it is to a slowdown in economic
      growth or other adverse changes in the economy of the People’s Republic of
      China. A slowdown in overall economic growth, an economic downturn or recession
      or other adverse economic developments in the People’s Republic of China could
      materially reduce the demand for our products and materially and adversely
      affect our business.




***Inflation
      in the People’s Republic of China could negatively affect our profitability and
      growth.***




While
      the
      People’s Republic of China economy has experienced rapid growth, such growth has
      been uneven among various sectors of the economy and in different geographical
      areas of the country. Rapid economic growth can lead to growth in the money
      supply and rising inflation. If prices for our products rise at a rate that
      is
      insufficient to compensate for the rise in the costs of supplies, it may have
      an
      adverse effect on profitability. In order to control inflation in the past,
      the
      People’s Republic of China has imposed controls on bank credits, limits on loans
      for fixed assets and restrictions on state bank lending. Such an austere policy
      can lead to a slowing of economic growth. On October 28, 2004, the People’s Bank
      of China, the People’s Republic of China’s central bank, raised interest rates
      for the first time in nearly a decade and indicated in a statement that the
      measure was prompted by inflationary concerns. Repeated rises in interest rates
      by the central bank would likely slow economic activity in the People’s Republic
      of China, which could, in turn, materially increase our costs and also reduce
      demand for our products.




24


***Any
      recurrence of severe acute respiratory syndrome, or SARS, or another widespread
      public health problem, could adversely affect our
      operations.***




A
      renewed
      outbreak of SARS or another widespread public health problem in the People’s
      Republic of China, where much of our revenue is derived, could have an adverse
      effect on our operations. Our operations may be impacted by a number of
      health-related factors, including quarantines or closures of some of our offices
      that would adversely disrupt our operations. Any of the foregoing events or
      other unforeseen consequences of public health problems could adversely affect
      our operations.





***Our
      principal assets and management are located outside the United States, which
      could make it difficult to enforce laws or judgments against
      us.***






Because
      our principal assets are located outside of the U.S. and all of our directors
      and officers reside outside of the U.S., it may be difficult for investors
      to
      enforce their rights based on U.S. federal securities laws against us and our
      officers and directors in the U.S. or to enforce a U.S. court judgment against
      us or them in the People’s Republic of China.




All
      of
      our directors and officers reside outside of the U.S. In addition, China
      Power, Inc. and China Minerals Holdings, Inc., our subsidaries (Nevada
      Corporations), which have alternative energy projects and mining projects in
      China, and are located in the People’s Republic of China and substantially all
      of their assets are located outside of the U.S. It may therefore be difficult
      or
      impossible for investors in the U.S. to enforce their legal rights based on
      the
      civil liability provisions of the U.S. federal securities laws against us in
      the
      courts of either the U.S. or the People’s Republic of China and, even if civil
      judgments are obtained in U.S. courts, to enforce such judgments in the People’s
      Republic of China courts. Further, it is unclear if extradition treaties now
      in
      effect between the U.S. and the People’s Republic of China would permit
      effective enforcement against us or our officers and directors of criminal
      penalties, under the U.S. federal securities laws or otherwise.




25


***We
      may have difficulty establishing adequate management, legal and financial
      controls in the People’s Republic of China.***




The
      People’s Republic of China historically has not adopted a western style of
      management and financial reporting concepts and practices, as well as in modern
      banking, computer and other control systems. We may have difficulty in hiring
      and retaining a sufficient number of qualified employees to work in the People’s
      Republic of China. As a result of these factors, we may experience difficulty
      in
      establishing management, legal and financial controls, collecting financial
      data
      and preparing financial statements, books of account and corporate records
      and
      instituting business practices that meet western standards.





***The
      legal system in China has inherent uncertainties that may limit the legal
      protections available in the event of any claims or disputes with third
      parties.***





The
      legal
      system in China is based on written statutes. Prior court decisions may be
      cited
      for reference but have limited precedential value. Since 1979, the central
      government has promulgated laws and regulations dealing with economic matters
      such as foreign investment, corporate organization and governance, commerce,
      taxation and trade. As China’s foreign investment laws and regulations are
      relatively new and the legal system is still evolving, the interpretation of
      many laws, regulations and rules is not always uniform and enforcement of these
      laws, regulations and rules involve uncertainties, which may limit the remedies
      available in the event of any claims or disputes with third parties. In
      addition, any litigation in China may be protracted and result in substantial
      costs and diversion of resources and management attention.




***Restrictions
      on currency exchange may limit our ability to receive and use our revenues
      effectively.***




Because
      a
      substantial portion of revenues in future periods will be in the form of
      Renminbi, any future restrictions on currency exchanges may limit our ability
      to
      use revenue generated in Renminbi to fund any future business activities outside
      China or to make dividend or other payments in U.S. dollars. Although the
      Chinese government introduced regulations in 1996 to allow greater
      convertibility of the Renminbi for current account transactions, significant
      restrictions still remain, including primarily the restriction that
      foreign-invested enterprises may only buy, sell or remit foreign currencies,
      after providing valid commercial documents, at those banks authorized to conduct
      foreign exchange business. In addition, conversion of Renminbi for capital
      account items, including direct investment and loans, is subject to government
      approval in China, and companies are required to open and maintain separate
      foreign exchange accounts for capital account items. We cannot be certain that
      the Chinese regulatory authorities will not impose more stringent restrictions
      on the convertibility of the Renminbi, especially with respect to foreign
      exchange transactions.




26





***We
      may be unable to enforce our rights due to policies regarding the regulation
      of
      foreign investments in China.***





China’s
      legal system is a civil law system based on written statutes in which decided
      legal cases have little value as precedents, unlike the common law system
      prevalent in the United States. China does not have a well-developed,
      consolidated body of laws governing foreign investment enterprises. As a result,
      the administration of laws and regulations by government agencies may be subject
      to considerable discretion and variation, and may be subject to influence by
      external forces unrelated to the legal merits of a particular matter. China's
      regulations and policies with respect to foreign investments are evolving.
      Definitive regulations and policies with respect to such matters as the
      permissible percentage of foreign investment and permissible rates of equity
      returns have not yet been published. Statements regarding these evolving
      policies have been conflicting and any such policies, as administered, are
      likely to be subject to broad interpretation and discretion and to be modified,
      perhaps on a case-by-case basis. The uncertainties regarding such regulations
      and policies present risks which may affect our ability to achieve our stated
      business objectives. If we are unable to enforce any legal rights we may have
      under our contracts or otherwise, our ability to compete with other companies
      in
      our industry could be limited which could result in a loss of revenue in future
      periods which could impact our ability to continue as a going
      concern.





***Recent
      regulations relating to acquisitions of Chinese companies by foreign entities
      may create regulatory uncertainties that could restrict or limit our ability
      to
      operate, including our ability to pay dividends.***





The
      State
      Administration of Foreign Exchange, or SAFE, issued a public notice in January
      2005 concerning foreign exchange regulations on mergers and acquisitions in
      China. The public notice states that if an offshore company controlled by
      Chinese residents intends to acquire a Chinese company, such acquisition will
      be
      subject to strict examination by the relevant foreign exchange authorities.
      The
      public notice also states that the approval of the relevant foreign exchange
      authorities is required for any sale or transfer by the Chinese residents of
      a
      Chinese company's assets or equity interests to foreign entities for equity
      interests or assets of the foreign entities.




27


In
      April
      2005, SAFE issued another public notice further explaining the January notice.
      In accordance with the April 2005 notice, if an acquisition of a Chinese company
      by an offshore company controlled by Chinese residents has been confirmed by
      a
      Foreign Investment Enterprise Certificate prior to the promulgation of the
      January 2005 notice, the Chinese residents must each submit a registration
      form
      to the local SAFE branch with respect to their respective ownership interests
      in
      the offshore company, and must also file an amendment to such registration
      if
      the offshore company experiences material events, such as changes in the share
      capital, share transfer, mergers and acquisitions, spin-off transaction or
      use
      of assets in China to guarantee offshore obligations. The April 2005 notice
      also
      provides that failure to comply with the registration procedures set forth
      therein may result in restrictions on our Chinese resident shareholders and
      our
      subsidiaries. Pending the promulgation of detailed implementation rules, the
      relevant government authorities are reluctant to commence processing any
      registration or application for approval required under the SAFE
      notices.




In
      addition, on August 8, 2006, the Ministry of Commerce ("MOFCOM"), joined by
      the
      State-Owned Assets Supervision and Administration Commission of the State
      Council, State Administration of Taxation, State Administration for Industry
      and
      Commerce, China Securities Regulatory Commission and SAFE, amended and released
      the Provisions for Foreign Investors to Merge and Acquire Domestic Enterprises,
      new foreign-investment rules which took effect September 8, 2006, superseding
      much, but not all, of the guidance in the prior SAFE circulars. These new rules
      significantly revise China's regulatory framework governing onshore-offshore
      restructurings and how foreign investors can acquire domestic enterprises.
      These
      new rules signify greater Chinese government attention to cross-border merger,
      acquisition and other investment activities, by confirming MOFCOM as a key
      regulator for issues related to mergers and acquisitions in China and requiring
      MOFCOM approval of a broad range of merger, acquisition and investment
      transactions. Further, the new rules establish reporting requirements for
      acquisition of control by foreigners of companies in key industries, and
      reinforce the ability of the Chinese government to monitor and prohibit foreign
      control transactions in key industries.





These
      new
      rules may significantly affect the means by which offshore-onshore
      restructurings are undertaken in China in connection with offshore private
      equity and venture capital financings, mergers and acquisitions. It is expected
      that such transactional activity in China in the near future will require
      significant case-by-case guidance from MOFCOM and other government authorities
      as appropriate. It is anticipated that application of the new rules will be
      subject to significant administrative interpretation, and we will need to
      closely monitor how MOFCOM and other ministries apply the rules to ensure its
      domestic and offshore activities continue to comply with Chinese law. Given
      the
      uncertainties regarding interpretation and application of the new rules, we
      may
      need to expend significant time and resources to maintain
      compliance.





It
      is
      uncertain how our business operations or future strategy will be affected by
      the
      interpretations and implementation of the SAFE notices and new rules. Our
      business operations or future strategy could be adversely affected by the SAFE
      notices and the new rules. For example, we may be subject to more stringent
      review and approval process with respect to our foreign exchange
      activities.





28


***Revised
      tax structure proposed by the National People’s Congress could have a material
      impact on our performance.***





On
      December 24, 2006, the Chinese government officially submitted a draft of the
      new Enterprise Income Tax Law which seeks to unify China's dual tax system.
      Presently China has a dual tax policy with different rates of taxation for
      domestic enterprises as opposed to foreign investment enterprises. The new
      unified tax rate is proposed to be 25% for all entities, which is higher than
      the 15% rate currently applied to foreign investment entities. However low
      profit enterprises, whether foreign investment enterprises or domestic
      enterprises, may be subject to a lower tax rate of 20%. It is uncertain how
      this
      new policy, if adopted, would impact our subsidiaries, as all the components
      of
      the revised policy have not been determined.





***Failure
      to comply with the United States foreign corrupt practices act could subject
      us
      to penalties and other adverse consequences.***





We
      are
      subject to the United States Foreign Corrupt Practices Act, which generally
      prohibits United States companies from engaging in bribery or other prohibited
      payments to foreign officials for the purpose of obtaining or retaining
      business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent
      practices occur from time-to-time in China. We can make no assurance, however,
      that our employees or other agents will not engage in such conduct for which
      we
      might be held responsible. If our employees or other agents are found to have
      engaged in such practices, we could suffer severe penalties and other
      consequences that may have a material adverse effect on our business, financial
      condition and results of operations.




**Risks
      Related to Our Common Stock**




***There
      is a limited public market for our common stock. Failure to develop or maintain
      a trading market could negatively affect the value of our shares and make it
      difficult or impossible for shareholders to sell their
      shares.***





On
      April
      18, 2005, our common stock was approved for quotation on the OTC Bulletin Board
      under the symbol "CHHH."  In May 2007 our trading symbol was changed
      to CHHL. To date there has been a limited trading market in our common stock
      on
      the OTC Bulletin Board. Failure to develop or maintain an active trading market
      could negatively affect the value of our shares and make it difficult for our
      shareholders to sell their shares or recover any part of their investment in
      us.
      The market price of our common stock may be highly volatile. In addition to
      the
      uncertainties relating to our future operating performance and the profitability
      of our operations, factors such as variations in our interim financial results,
      or various, as yet unpredictable factors, many of which are beyond our control,
      may have a negative effect on the market price of our common stock.




29


***The
      majority of our outstanding shares are controlled by our Chief Executive Officer
      and Chairman.***




Our
      Chief
      Executive Officer and Chairman, Julianna Lu, beneficially owns the majority
      of
      our outstanding shares of common stock and all of our outstanding shares or
      preferred stock. Accordingly, Ms. Lu controls the voting of our stock and has
      the ability to control the approval of most corporate actions, including
      increasing our authorized capital stock and the dissolution, merger or sale
      of
      our assets or business. Other stockholders will have limited or no ability
      to
      influence the outcome of stockholder votes on these or other
      matters.




***Our
      common stock is subject to the "penny stock" rules of the sec and the trading
      market in our securities is limited, which makes transactions in our common
      stock cumbersome and may reduce the value of an investment in our
      stock.***





The
      SEC
      has adopted Rule 3a51-1 which establishes the definition of a "penny stock,"
      for
      the purposes relevant to us, as any equity security that has a market price
      of
      less than $5.00 per share or with an exercise price of less than $5.00 per
      share, subject to certain exceptions. For any transaction involving a penny
      stock, unless exempt, Rule 15g-9 requires:




·
            that
                a broker or dealer approve a person's account for transactions in
                penny
                stocks; and




·
            the
                broker or dealer receive from the investor a written agreement to
                the
                transaction, setting forth the identity and quantity of the penny
                stock to
                be purchased.




In
      order to approve a person's account for transactions in penny stocks, the broker
      or dealer must:





·
            obtain
                financial information and investment experience objectives of the
                person;
                and




·
            make
                a reasonable determination that the transactions in penny stocks
                are
                suitable for that person and the person has sufficient knowledge
                and
                experience in financial matters to be capable of evaluating the risks
                of
                transactions in penny stocks.




30


The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prescribed by the SEC relating to the penny stock market,
      which, in highlight form:





·
            sets
                forth the basis on which the broker or dealer made the suitability
                determination; and




·
            that
                the broker or dealer received a signed, written agreement from the
                investor prior to the transaction.




Generally,
      brokers may be less willing to execute transactions in securities subject to
      the
      "penny stock" rules. This may make it more difficult for investors to dispose
      of
      our common stock and cause a decline in the market value of our
      stock.





Disclosure
      also has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading and about the commissions payable to both
      the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.




***We
      have not voluntarily implemented various corporate governance measures, in
      the
      absence of which, stockholders may have more limited protections against
      interested director transactions, conflicts of interest and similar
      matters.***





Recent
      Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted
      in
      the adoption of various corporate governance measures designed to promote the
      integrity of the corporate management and the securities markets. Some of these
      measures have been adopted in response to legal requirements. Others have been
      adopted by companies in response to the requirements of national securities
      exchanges, such as the NYSE or the Nasdaq Stock Market, on which their
      securities are listed. Among the corporate governance measures that are required
      under the rules of national securities exchanges are those that address board
      of
      directors' independence, audit committee oversight, and the adoption of a code
      of ethics. Although we have adopted a Code of Ethics, we have not yet adopted
      any of these other corporate governance measures and, since our securities
      are
      not yet listed on a national securities exchange, we are not required to do
      so.
      We have not adopted corporate governance measures such as an audit or other
      independent committees of our board of directors as we presently do not have
      any
      independent directors. If we expand our board membership in future periods
      to
      include additional independent directors, we may seek to establish an audit
      and
      other committees of our board of directors. It is possible that if we were
      to
      adopt some or all of these corporate governance measures, stockholders would
      benefit from somewhat greater assurances that internal corporate decisions
      were
      being made by disinterested directors and that policies had been implemented
      to
      define responsible conduct. For example, in the absence of audit, nominating
      and
      compensation committees comprised of at least a majority of independent
      directors, decisions concerning matters such as compensation packages to our
      senior officers and recommendations for director nominees may be made by a
      majority of directors who have an interest in the outcome of the matters being
      decided. Prospective investors should bear in mind our current lack of corporate
      governance measures in formulating their investment decisions.




***Provisions
      of our certificate of incorporation and bylaws may delay or prevent a takeover
      which may not be in the best interests of our
      stockholders.***





Provisions
      of our certificate of incorporation and bylaws may be deemed to have
      anti-takeover effects, which include when and by whom special meetings of our
      stockholders may be called, and may delay, defer or prevent a takeover attempt.
      In addition, certain provisions of Nevada law also may be deemed to have certain
      anti-takeover effects which include that control of shares acquired in excess
      of
      certain specified thresholds will not possess any voting rights unless these
      voting rights are approved by a majority of a corporation's disinterested
      stockholders.





In
      addition, our certificate of incorporation authorizes the issuance of up to
      20,000,000 shares of preferred stock with such rights and preferences as may
      be
      determined by our board of directors. Our board of directors may, without
      stockholder approval, issue preferred stock with dividends, liquidation,
      conversion or voting rights that could adversely affect the voting power or
      other rights of our common stockholders.




31


**ITEM
                3.**
            **CONTROLS
                AND PROCEDURES**




*(a)
      Evaluation of Disclosure Controls and Procedures.* Our
      management, with the participation of our principal executive and principal
      financial officer, evaluated the effectiveness of our disclosure controls and
      procedures as of the end of the period covered by this report. Based on that
      evaluation, our principal executive and principal financial officer concluded
      that our disclosure controls and procedures as of the end of the period covered
      by this report were effective such that the information required to be disclosed
      by us in reports filed under the Securities Exchange Act of 1934 is
      (i) recorded, processed, summarized and reported within the time periods
      specified in the SEC’s rules and forms and (ii) accumulated and
      communicated to our management, including our principal executive and principal
      financial officer, as appropriate to allow timely decisions regarding
      disclosure.




(b) *Changes
      in Internal Control over Financial Reporting.* There
      were no changes in our internal control over financial reporting, as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently
      completed fiscal quarter that have materially affected, or are reasonably likely
      to materially affect, our internal control over financial
      reporting.




(c) *Inherent
      Limitations on Effectiveness of Controls.* Our
      management, including our principal executive and financial officer, does not
      expect that our disclosure controls and procedures or our internal control
      will
      prevent all errors and all fraud. A control system, no matter how well conceived
      and operated, can provide only reasonable, not absolute, assurance that the
      objectives of the control system are met. Further, the design of a control
      system must reflect the fact that there are resource constraints, and the
      benefits of controls must be considered relative to their costs. Because of
      the
      inherent limitations in all control systems, no evaluation of controls can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within the company have been detected.




**PART
      II - OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS**




We
      are
      currently not involved in any litigation that we believe could have a material
      adverse effect on our financial condition or results of operations. There is
      no
      action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      or, to the knowledge of the executive officers of our company or any of our
      subsidiaries, threatened against or affecting our company, our common stock,
      any
      of our subsidiaries or of our companies or our subsidiaries' officers or
      directors in their capacities as such, in which an adverse decision could have
      a
      material adverse effect.




**ITEM
      2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
      SECURITIES**




During
      the quarter during the year ended September 30, 2008, the Company issued 717,940
      shares of common stock for the company’s office rent rendered at an aggregate
      market value of $0.0112 per share for a total value of
      $8,041.


The
      offer and sale of such shares of our common stock were effected in reliance
      on
      the exemptions for sales of securities not involving a public offering, as
      set
      forth in Rule 506 promulgated under the Securities Act and in Section 4(2)
      of
      the Securities Act. A legend was placed on the certificates representing each
      such security stating that it was restricted and could only be transferred
      if
      subsequent registered under the Securities Act or transferred in a transaction
      exempt from registration under the Securities Act.





32


**ITEM
      3.  DEFAULTS UPON SENIOR SECURITIES**




There
      were no defaults upon senior securities during the period ended September 30,
      2008.




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





There
      were no matters submitted to the vote of securities holders during the period
      ended September 30, 2008.




**ITEM
      5.  OTHER INFORMATION**





On
      February 22, 2008 we amended our Certificate of Incorporation to increase the
      number of authorized shares of common stock from 300,000,000 to 2,000,000,000.




**ITEM
      6.**  **EXHIBITS**





**Exhibit
                Number**
            
            **Description**3.01
            
            Articles
                of Incorporation of the AE&E Pharma Corporation (Incorporated by
                reference to the Company’s registration statement on Form SB-2 (File No.
                333-119034), filed with the Securities and Exchange Commission on
                September 16, 2004).3.02
            
            Certificate
                of Amendment to Articles of Incorporation, changing name to China
                Health
                Holding, Inc. (Incorporated by reference to the Company’s registration
                statement on Form SB-2 (File No. 333-119034), filed with the Securities
                and Exchange Commission on September 16, 2004).3.03
            
            Certificate
                of Amendment to Articles of Incorporation increasing the Company’s
                authorized shares of common stock (Incorporated by reference to the
                Company’s 10-QSB filed with the Securities and Exchange Commission on May
                12, 2005).3.04
            
            Bylaws
                (Incorporated by reference to the Company’s registration statement on Form
                SB-2 (File No. 333-119034), filed with the Securities and Exchange
                Commission on September 16, 2004).3.05
            
            Certificate
                of Designation, Powers, Preferences and Rights of Series A Preferred
                Stock, filed with the State of Nevada on February 21, 2006. (Incorporated
                by reference to Form 8-K filed with the Securities and Exchange Commission
                on March 28, 2006).3.06
            
            Amendment
                to Certificate of Designation, Powers, Preferences and Rights of
                Series A
                Preferred Stock, filed with the State of Nevada on June 19, 2006.3.07
            
            Certificate
                of Amendment to Articles of Incorporation increasing the Company’s
                authorized shares of common stock to 2,000,000,000, filed with the
                State
                of Nevada on February 22, 2008. (filed herewith).31.1
            
            Certification
                by Chief Executive Officer/Chief Financial Officer, required by Rule
                13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                by Chief Executive Officer/Chief Financial Officer, required by Rule
                13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
                of
                Chapter 63 of Title 18 of the United States Code, promulgated pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002.







33


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




**China
                Holdings, Inc.**Dated:
                November 10, 2008
            By:
            /s/*Julianna
                Lu*Julianna
              LuChief
                Executive Officer, Principal Financial Officer, Principal Accounting
                Officer, Treasurer and Chairman of the Board of
                Directors




34




**EXHIBIT
      INDEX**





**Exhibit
                Number**
            
            **Description**3.01
            
            Articles
                of Incorporation of the AE&E Pharma Corporation (Incorporated by
                reference to the Company’s registration statement on Form SB-2 (File No.
                333-119034), filed with the Securities and Exchange Commission on
                September 16, 2004).3.02
            
            Certificate
                of Amendment to Articles of Incorporation, changing name to China
                Health
                Holding, Inc. (Incorporated by reference to the Company’s registration
                statement on Form SB-2 (File No. 333-119034), filed with the Securities
                and Exchange Commission on September 16, 2004).3.03
            
            Certificate
                of Amendment to Articles of Incorporation increasing the Company’s
                authorized shares of common stock (Incorporated by reference to the
                Company’s 10-QSB filed with the Securities and Exchange Commission on May
                12, 2005).3.04
            
            Bylaws
                (Incorporated by reference to the Company’s registration statement on Form
                SB-2 (File No. 333-119034), filed with the Securities and Exchange
                Commission on September 16, 2004).3.05
            
            Certificate
                of Designation, Powers, Preferences and Rights of Series A Preferred
                Stock, filed with the State of Nevada on February 21, 2006. (Incorporated
                by reference to Form 8-K filed with the Securities and Exchange Commission
                on March 28, 2006).3.06
            
            Amendment
                to Certificate of Designation, Powers, Preferences and Rights of
                Series A
                Preferred Stock, filed with the State of Nevada on June 19, 2006.3.07
            
            Certificate
                of Amendment to Articles of Incorporation increasing the Company’s
                authorized shares of common stock to 2,000,000,000, filed with the
                State
                of Nevada on February 22, 2008. (filed herewith).31.1
            
            Certification
                by Chief Executive Officer/Chief Financial Officer, required by Rule
                13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                by Chief Executive Officer/Chief Financial Officer, required by Rule
                13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
                of
                Chapter 63 of Title 18 of the United States Code, promulgated pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002.







35