UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

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(Mark one)

[X]  Annual Report Under Section 13 or 15(d) of The  Securities  Exchange Act of
     1934 for the fiscal year ended December 31, 2004

[ ]  Transition Report Under Section 13 or 15(d) of The Securities  Exchange Act
     of 1934

         For the transition period from ______________ to _____________


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                        Commission file number: 000-49608


                            BASIC EMPIRE CORPORATION
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        (Exact name of small business issuer as specified in its charter)



                   Delaware                                75-2955368
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     (State or Other Jurisdiction                 (I.R.S. Employer I.D. No.)
     incorporation or organization)


      Room 511, 5/F Wing on Plaza                             N/A
      62 Mody Road, Tsim Sha Tsui
          Kowloon, Hong Kong
----------------------------------------      ----------------------------------
(Address of principal executive offices)                   (Zip Code)


           Issuer's telephone number              +852 6555 1799
                                       ----------------------------------

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


                                       1
<PAGE>

      Securities registered under Section 12 (b) of the Exchange Act: None

       Securities registered under Section 12(g) of the Exchange Act: None

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Check  whether  the issuer  has (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 the Company was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Company's knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended December 31, 2004 was $0.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  prices of such common  equity,  as of a
specified date within the past 60 days:  965,173  shares held by  non-affiliates
had an aggregate market value of $3,378,105 as of March 30, 2005.

As of March 30, 2005,  there were  12,374,903  shares of Common Stock issued and
outstanding.

                       DOCUMENT INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format: Yes   No  X


                                       2
<PAGE>

                            Basic Empire Corporation

                                Table of Contents

                                                                     Page Number
                                                                     -----------
Part I

Item 1       Description of Business                                           4
Item 2       Description of Property                                          10
Item 3       Legal Proceedings                                                10
Item 4       Submission of Matters to a Vote of Security Holders              11

Part II

Item 5       Market for Company's Common Stock and Related
             Stockholders Matters                                             11
Item 6       Management's Discussion and Analysis or Plan of Operation        12
Item 7       Financial Statements                                             15
Item 8       Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosures                             15
Item 8A      Controls and Procedures                                          16

Part III

Item 9       Directors, Executive Officers, Promoters and Control Persons;
             Compliance with Section 16(a) of the Exchange Act                16
Item 10      Executive Compensation                                           19
Item 11      Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters                       21
Item 12      Certain Relationships and Related Transactions                   22
Item 13      Exhibits and Reports on 8-K                                      22
Item 14      Principal Accountant Fees and Services                           22

Signatures                                                                    24

FINANCIAL STATEMENTS                                                         F-1

EXHIBITS


                                       3
<PAGE>

                                     PART I

Certain statements in this Form 10-KSB constitute "forward-looking  statements."
These forward-looking statements involve known and unknown risks, uncertainties,
and other factors that may cause our actual results, performance or achievements
to be materially different from any future results,  performance or achievements
expressed  or implied by the  forward-looking  statements.  The  forward-looking
statements  in this Form  10-KSB are  identified  by words  such as  "believes",
"anticipates",  "expects", "intends", "may", "will", "estimate",  "continue" and
other similar expressions regarding our intent, belief and current expectations.
However, these words are not the exclusive means of identifying such statements.
In addition,  any statements  that refer to  expectations,  projections or other
characterizations  of future events or circumstances  and statements made in the
future  tense  are  forward-looking   statements.   Actual  results  may  differ
materially from those projected in the forward-looking statements as a result of
various  factors,  many of  which  are  beyond  our  control.  We  undertake  no
obligation   to  publicly   release  the  results  of  any  revisions  to  these
forward-looking  statements that may be made to reflect events or  circumstances
occurring  subsequent to the filing of this Form 10-KSB with the  Securities and
Exchange  Commission.  Readers are urged to  carefully  review and  consider the
various  disclosures  made by us in this Form 10-KSB,  including those set forth
under "Risk Factors".

Item 1 - Description of Business

Overview

On February 3, 2005, Basic Empire  Corporation  completed a reorganization  with
China Tailong Holding Company Limited  ("Tailong")  pursuant to a Reorganization
Agreement (the  "Reorganization").  As a result of the combination with Tailong,
Basic Empire Corporation is a fertilizer manufacturer and conducts operations in
the People's Republic of China (the "PRC") through the wholly-owned  subsidiary,
Tailong and Tailong's 90% owned subsidiary,  Pacific Dragon Fertilizer Co., Ltd.
("Pacific Dragon").  Tailong was incorporated on October 27, 2003 under the laws
of Hong Kong, and the operating company, Pacific Dragon, is a foreign investment
joint venture and was incorporated in the PRC on May 20, 1994.

Unless  otherwise  specified  or the context  OTHERWISE  requires,  in this Form
10-KSB the terms the "Company",  "Basic Empire",  "we", and "our" shall mean the
operations  or business of Basic  Empire  Corporation,  a Delaware  corporation,
prior to the Reorganization. Unless otherwise specified or the context otherwise
requires,  in this Form 10-KSB the term  "Tailong"  and "Pacific  Dragon"  shall
refer to the operations of the Company on or after February 3, 2005.


                                       4
<PAGE>

Introduction

We were incorporated on January 5, 1925 under the laws of the State of Nevada as
Argyle Mining  Company for the  development  of mining  claims.  Throughout  our
history we have conducted various ventures.

Our initial business  objectives were directed towards the development of mining
claims and the infrastructure needed to development properties.  In 1970, we had
a change of management and our business focus became the development of property
in Southern  California.  These efforts were  unsuccessful  and were  abandoned.
Since 1986 we have not conducted any material business.

On April 19, 2004,  we  conducted a 1 for 5.6 reverse  stock split of our issued
and outstanding  shares of common stock. In addition,  we also decreased the par
value of the common stock from $.10 per share to $.001 per share. As a result of
the reverse stock split,  the total number of issued and  outstanding  shares of
our common stock was decreased from 1,604,746  shares of common stock to 286,561
shares of common stock.

On May 25, 2004, we sold 714,285  post-reverse split shares of restricted common
stock to Halter Financial Group,  Inc., an entity owned by Timothy P. Halter, at
the price of $0.28 per share for gross  proceeds of $200,000  ("May 2004 Private
Placement").  As  result of the May 2004  Private  Placement,  Halter  Financial
Group, Inc. became our controlling  shareholder owning  approximately 66% of our
common stock. On the following day,  Timothy P. Halter was appointed as the sole
director and elected as our Chief Executive Officer,  President, Chief Financial
Officer, Chairman of the Board and Secretary.

On May 25, 2004, we agreed to pay Little and Company Investment  Securities,  an
entity owned by Glenn A. Little, our former controlling stockholder, officer and
director,  an aggregate  $30,000,  consisting of $11,000 in advances for working
capital and $19,000 in consulting fees related to the May 2004 Private Placement
and as additional consideration for maintaining the corporate entity.

On August 10, 2004 we merged with and into a newly formed wholly-owned  Delaware
subsidiary of the same name for the purpose of changing our  corporate  domicile
from Nevada to Delaware. The new entity maintained the same capital structure as
the  pre-incorporated  entity.  In addition,  our  Certificate of  Incorporation
authorized 100 million shares of common stock and 10 million shares of preferred
stock.

On December 25, 2004, we entered into the Agreement and Plan of  Reorganization,
as amended, with Tailong, and the Tailong  stockholders.  The Reorganization was
deemed effective on February 3, 2005. The Reorganization  Agreement provided for


                                       5
<PAGE>

the acquisition  all of the issued and  outstanding  capital stock of Tailong in
consideration  for the issuance of 10,606,158  shares of our  restricted  common
stock.

Tailong has a 90%  interest in Pacific  Dragon.  Pacific  Dragon is a fertilizer
manufacturer  and conducts  operations  in the  People's  Republic of China (the
"PRC").  Tailong  was  incorporated  on October  27, 2003 under the laws of Hong
Kong, and the operating  company,  Pacific Dragon, is a foreign investment joint
venture and was incorporated in the PRC on May 20, 1994.

Following  our  Reorganization  on  February  3, 2005,  we  completed  a private
placement  (the  "February  2005  Private  Placement").  Subject  to a number of
restrictions  including a right of  rescission,  we sold  590,285  shares of our
common stock for $1,000,000, to two investors (the " February Investors").  Each
February Investor completed a stock purchase agreement.

On March 9, 2005 we filed an  information  statement with the SEC and we plan on
filing a  definitive  information  statement  in April or May.  The  information
statement, which was approved by written consent of the holders of a majority of
our common  stock,  contained the following  amendments  to our  Certificate  of
Incorporation:  (1) the changing of our name to China Agritech, Inc. in order to
reflect our new  business  of  manufacturing  and  marketing  liquid  fertilizer
products;  (2) allowing the Board of Directors to set the number of directors in
accordance with our bylaws; and (3) effecting a forward stock split whereby each
share of issued and  outstanding  common stock is converted  into 1.14 shares of
our common stock.

Employees

As of December 31, 2004, we had no employees.  During 2004, we used consultants,
attorneys  and  accountants  as  necessary  to assist in the  operations  of our
business.

Risk Factors

As of December 31, 2004, we had the following Risk Factors:

WE HAVE CONFLICTS OF INTEREST

Certain  conflicts of interest  exist between us and our officers and directors.
The  officers  have other  business  interests  to which they  currently  devote
attention,  and are  expected to continue  to do so. As a result,  conflicts  of
interest may arise that can be resolved only through their  exercise of judgment
in a manner which is consistent with their fiduciary duties.


                                       6
<PAGE>

POSSIBLE NEED FOR ADDITIONAL FINANCING

We have  very  limited  funds,  and  such  funds,  may not be  adequate  to take
advantage  of any  available  business  opportunities.  Even  if  our  currently
available  funds prove to be  sufficient to pay for its  operations  until it is
able to acquire an  interest  in, or  complete a  transaction  with,  a business
opportunity,  such funds will clearly not be  sufficient to enable it to exploit
the  opportunity.  Thus,  our ultimate  success will depend,  in part,  upon our
availability to raise additional  capital.  In the event that we requires modest
amounts  of  additional  capital  to fund  our  operations  until we are able to
complete a business  acquisition or transaction,  such funds, are expected to be
provided by the principal  shareholders.  However,  we have not investigated the
availability,  source,  or  terms  that  might  govern  the  acquisition  of the
additional  capital  which is  expected  to be  required  in order to  exploit a
business  opportunity,  and will not do so until we have determined the level of
need for  such  additional  financing.  There is no  assurance  that  additional
capital  will be  available  from any  source  or,  if  available,  if it can be
obtained on terms  acceptable to us. If not  available,  our  operation  will be
limited to those that can be financed with our modest capital.

REGULATION OF PENNY STOCKS

Our  securities are subject to a Securities  and Exchange  Commission  rule that
imposes special sales practice  requirements upon  broker-dealers  who sell such
securities to persons other than established  customers or accredited investors.
For purpose of the rule, the phrase accredited investor means, in general terms,
institutions  with assets in excess of $5,000,000,  or individuals  having a net
worth in excess of $1,000,000  or having an annual income that exceeds  $200,000
(or  that,  when  combined  with  a  spouse's  income,  exceeds  $300,000).  For
transactions   covered  by  the  rule,  the  broker  dealer  must  make  special
suitability  determination  for the  purchaser  and receive from the  purchasers
written agreement to the transaction prior to the sale.  Consequently,  the rule
may affect the ability of  broker-dealers  to sell our  securities  and also may
affect the ability of our purchasers to sell such  securities in any market that
might develop therefor.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to  regulate  penny  stocks.  Such rules  include  Rule  3a51-1  under the
Securities Act of 1933, an Rules 15g-1,  15g-2,  15g-3, 15g-4, 15g-5, 15g-6, and
15g-7  under the  Securities  Exchange  Act of 1934,  as  amended.  Because  our
securities  may  constitute  penny stocks  within the meaning of the rules,  the
rules would  apply us and to our  securities.  The rules may further  affect the
ability of our  shareholders  to sell their shares in any public  market,  which
might develop.

According to Securities and Exchange Commission Release No. 34-29093, the market
for penny stocks has suffered in recent years from  patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one or a few


                                       7
<PAGE>

broker-dealers   that  are  often  related  to  the  promoter  or  issuer;  (ii)
manipulation of prices through  prearranged  matching of purchases and sales and
false and  misleading  press  releases;  (iii) boiler room  practices  involving
high-pressure  sales tactics and unrealistic  price projections by inexperienced
sales persons;  (iv) excessive and undisclosed bid-ask  differential and markups
by selling broker-dealers;  and (v) the wholesale dumping of the same securities
by promoters and broker-dealers  after prices have been manipulated to a desired
level,  along with the  resulting  inevitable  collapse of those prices and with
consequent  investor  losses.  Our  management  is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the  behavior  of the market or of  broker-dealers  who
participate  in the  market,  management  will  strive  within the  confines  of
practical  limitations to prevent the described  patterns form being established
with respect to our securities.

NO OPERATING HISTORY

We had no meaningful  operating history,  revenues from operations or assets for
the year ended December 31, 2004.

NO ASSURANCE OF SUCCESS OR PROFITABILITY

There is no assurance  that we will  generate  revenues or profits,  or that the
market price of our outstanding shares will increase.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our  By-Laws  provide  for  the  indemnification  of  our  directors,  officers,
employees, and agents, under certain circumstances,  against attorney's fees and
other  expenses  incurred by them in any litigation to which they become a party
arising from their  association with or activities on behalf of us. We will also
bear  the  expenses  of  such  litigation  for any of our  directors,  officers,
employees,  or agents,  upon such persons  promise to repay us therefor if it is
ultimately  determined  that any such  person  shall not have been  entitled  to
indemnification.   This  indemnification  policy  could  result  in  substantial
expenditures by us, which we may be unable to recoup.

DEPENDENCE UPON OUTSIDE ADVISORS

To supplement the business  experience of our officers and directors,  we may be
required to employ accountants,  technical experts,  appraisers,  attorneys,  or
other consultants or advisors.  The selection of any such advisors will, be made
by our officers. Furthermore, it is anticipated that such persons may be engaged
on an as needed basis without a continuing  fiduciary or other obligation to us.
In the event our officers consider it necessary to hire outside  advisors,  they
may elect to hire people who are  affiliates,  if those  affiliates  are able to
provide the required services.


                                       8
<PAGE>

NO FORESEEABLE DIVIDENDS

We have not paid dividends on our  securities and do not anticipate  paying such
dividends in the foreseeable future.

NO PUBLIC MARKET EXISTS

While our  equity  securities  are listed  for  trading on the Over the  Counter
Bulletin  Board under the trading symbol  "BSEC.OB",  there is no significant or
consistent  public  market for our common  stock,  and no assurance can be given
that a market will develop or that a shareholder  will ever be able to liquidate
such  investment  without  considerable  delay,  if at all.  If a market  should
develop, the price may be highly volatile.

Factors  such as  those  discussed  in this  Risk  Factors  section  may  have a
significant impact upon the market price of the securities offered hereby. Owing
to the low price of the  securities,  many brokerage firms may not be willing to
effect  transactions  in the  securities.  Even if a  purchaser  finds a  broker
willing  to  effect a  transaction  in theses  securities,  the  combination  of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many leading institutions will not permit
the use of such securities as collateral for any loans.

RULE 144 SALES

Our  restricted  shares  of  common  stock may be  resold  only  pursuant  to an
effective  registration statement or under the requirements of Rule 144 or other
applicable  state securities law. Rule 144 provides in essence that a person who
has held  restricted  securities  for a  prescribed  period,  may under  certain
conditions,  sell every three  months,  in brokerage  transactions,  a number of
shares that does not exceed the greater of 1.0% of our outstanding  common stock
or the average  weekly  trading  volume during the four calendar  weeks prior to
sale. There is no limit on the amount of restricted  securities that may be sold
by a non-affiliate after the restricted  securities have been held by the owner,
for a period of at least two years.  A sale  under Rule 144,  or under any other
exemption from the Act, if available, or pursuant to subsequent registrations of
common  stock of present  shareholders,  may have a  depressive  effect upon the
price of our common stock.

STATE LAW CONSIDERATION

Because the securities  registered hereunder have not been registered for resale
under the laws of any state,  the  holders of such shares and persons who desire
to purchase them in any trading market that might develop in the future,  should
be aware, that there may be significant  state  restrictions upon the ability of


                                       9
<PAGE>

investors to sell the securities  and of purchasers to purchase the  securities.
Accordingly,  investors  should consider the secondary market for our securities
to be a limited one.

SOME  OF  THE  INFORMATION  IN  THIS  ANNUAL  REPORT  CONTAINS   FORWARD-LOOKING
STATEMENTS.

Some  of  the  information  in  this  Annual  Report  on  Form  10-KSB  contains
forward-looking statements that involve substantial risks and uncertainties. You
can identify these statements by  forward-looking  words such as "may",  "will",
"expect",  "intend",  "anticipate",  "believe",  "estimate"  and  "continue"  or
similar words.  You should read  statements  that contain these words  carefully
because they:

 -     discuss our expectations about our future performance;

 -     state other "forward-looking" information.

We believe it is important to communicate our expectations to our  stockholders.
There may be  events in the  future,  however,  that we are not able to  predict
accurately  or over which we have no control.  The risk  factors  listed in this
section,  as well as any  cautionary  language  in this Annual  Report,  provide
examples of risks, uncertainties and events that may cause our actual results to
differ  materially  from the  expectations  we describe  in our  forward-looking
statements.  Before you invest in our common stock, you should be aware that the
occurrence of any of the events described in these risk factors and elsewhere in
this  prospectus  could  have a material  and  adverse  effect on our  business,
results of operations  and financial  condition and that upon the  occurrence of
any of these events, the trading price of our common stock could decline and you
could lose all or part of your investment.

Item 2 - Description of Property

Since the  Reorganization,  our principal executive offices have been located at
Room 511, 5/F., Wing on Plaza 62 Mody Road, Tsim Sha Tsui,  Kowloon,  Hong Kong.
We rent this property for approximately $2,054 per month. This space is suitable
for our current uses and it is easily replaceable in the event that we decide to
relocate.

Item 3 - Legal Proceedings

We have no pending legal  proceedings.  From time to time, we may be involved in
various  claims,  lawsuits,  disputes  with  third  parties,  actions  involving
allegations of  discrimination  or breach of contract actions  incidental to the
normal operations of the business.


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<PAGE>

Item 4 - Submission of Matters to a Vote of Security Holders

No matter was  submitted  to a  shareholder  vote during the 2004  fiscal  year;
however two information statements were filed during 2004.

An  information  statement  on Schedule 14C was filed with the SEC and mailed to
shareholders  in March 2004. The  information  statement  informed  shareholders
that, pursuant to majority written consent of our shareholders, we conducted a 1
for 5.6  reverse  stock  split of our  issued and  outstanding  shares of common
stock.  In addition,  we also  decreased  the par value of the common stock from
$.10 per share to $.001 per share.

An  information  statement  on Schedule 14C was filed with the SEC and mailed to
shareholders on July 6, 2004. The information  statement  informed  shareholders
that,  pursuant to majority written consent of our shareholders,  we merged with
and into a newly formed  wholly-owned  Delaware  subsidiary of the same name for
the purpose of changing our corporate domicile from Nevada to Delaware.  The new
entity maintained the same capital structure as the pre-incorporated  entity. In
addition,  our  Certificate  of  Incorporation  authorized 100 million shares of
common stock and 10 million shares of preferred stock.

                                     PART II

Item 5 - Market for Company's Common Stock and Related Stockholder Matters

We trade on the OTCBB  under the  symbol  "BSEC.OB".  The  following  quotations
reflect the high and low bids for our common stock based on inter-dealer prices,
without  retail  mark-up,  markdown or commission  and may not represent  actual
transactions.  The high and low bid prices  for our  common  stock for each full
financial quarter for the two most recent full fiscal years were as follows:

                   Quarter Ended                    High                 Low

     2004
     -------------------------------------     ----------------     ------------
     4th Quarter                                    $.00                $.00
     -------------------------------------     ----------------     ------------
     3rd Quarter                                    $.00                $.00
     -------------------------------------     ----------------     ------------
     2nd Quarter                                    $.00                $.00
     -------------------------------------     ----------------     ------------
     1st Quarter                                    $.00                $.00

     2003
     -------------------------------------
     -------------------------------------
     4th Quarter                                    $.05                $.04
     -------------------------------------     ----------------     ------------
     3rd Quarter                                    $.04                $.04
     -------------------------------------     ----------------     ------------
     2nd Quarter                                    $.04                $.04
     -------------------------------------     ----------------     ------------
     1st Quarter                                    $.00                $.00
     -------------------------------------     ----------------     ------------


                                       11
<PAGE>

On March 30, 2005, the closing price of our common stock on the OTCBB was $3.50.
As of March 30,  2005,  the  stockholders'  list for our common stock showed 948
registered shareholders of record, which figure does not take into account those
stockholders  whose certificates are held in the name of broker-dealers or other
nominees and 12,374,903 shares of common stock issued and outstanding.

Dividend Policy

We have not paid,  nor  declared,  any dividends and we do not intend to declare
any such dividends in the  foreseeable  future.  Our ability to pay dividends is
subject to limitations imposed by Delaware law and the laws of the PRC.

Transfer Agent

Our stock  transfer  agent is  Securities  Transfer  Corporation.  Their mailing
address and telephone  number is Suite 102, 2591 Dallas Parkway,  Frisco,  Texas
75034; (469) 633-0101.

Item 6 - Management's Discussion and Analysis or Plan of Operation

THIS ANNUAL REPORT ON FORM 10-KSB CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION  27A OF THE  SECURITIES  ACT OF 1933 AND  SECTION  21E OF THE
SECURITIES  EXCHANGE  ACT OF 1934,  INCLUDING,  WITHOUT  LIMITATION,  STATEMENTS
REGARDING OUR  EXPECTATIONS,  BELIEFS,  INTENTIONS OR FUTURE STRATEGIES THAT ARE
SIGNIFIED  BY THE WORDS  "EXPECTS",  "ANTICIPATES",  "INTENDS",  "BELIEVES",  OR
SIMILAR LANGUAGE. THESE FORWARD-LOOKING  STATEMENTS INVOLVE RISKS, UNCERTAINTIES
AND OTHER FACTORS.  ALL  FORWARD-LOOKING  STATEMENTS INCLUDED IN THIS PROSPECTUS
ARE BASED ON INFORMATION AVAILABLE TO US ON THE DATE HEREOF AND SPEAK ONLY AS OF
THE DATE HEREOF.  THE FACTORS DISCUSSED ABOVE UNDER "RISK FACTORS" AND ELSEWHERE
IN THIS ANNUAL  REPORT ARE AMONG THOSE  FACTORS THAT IN SOME CASES HAVE AFFECTED
OUR RESULTS AND COULD CAUSE THE ACTUAL RESULTS TO DIFFER  MATERIALLY  FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS.

The  following  discussion  should  be read in  conjunction  with the  Financial
Statements and Notes thereto.


                                       12
<PAGE>

Overview

We were  originally  incorporated on January 5, 1925 under the laws of the State
of Nevada as Argyle Mining  Company for the  development  of mining  claims.  In
1970, we experienced a change in control and focused its business  activities on
the development of properties in Southern California. None of these efforts were
successful and we have been dormant since 1986.  Throughout  our  existence,  we
have experienced  several corporate name changes as follows:  Argyle Corporation
in January 1960; Basic Empire in November 1963; and Basic Empire  Corporation in
December 1976.

Our initial business  objectives were directed towards the development of mining
claims and the infrastructure needed to development properties.  In 1970, we had
a change of management and our business focus became the development of property
in the Southern  California.  These efforts were unsuccessful and were abandoned
prior to 1990,  at which time we cease  conducting  any  material  business.  In
February  2002,  we elected to initiate  the process of  voluntarily  becoming a
reporting company under the Securities Exchange Act of 1934.

On May 25, 2004 we experience a change in control. In consideration for agreeing
to serve as our officer and director,  Mr. Timothy P. Halter was granted a stock
warrant on May 26, 2004 to purchase up to 89,285  post-reverse  split  shares of
our  restricted,  unregistered  common  stock at a price of $0.28 per share,  in
reliance upon the exemption from  registration  set forth in Section 4(2) of the
Securities  Act of 1933,  as  amended.  Mr.  Halter  exercised  this  warrant on
November 16, 2004.

On July 19, 2004, we gave notice that we intended to merge with and into a newly
formed  wholly-owned  Delaware  subsidiary  of the same name for the  purpose of
changing our corporate  domicile from Nevada to Delaware.  This  reincorporation
and change in domicile  was  effective  on August 10,  2004.  Additionally,  the
reincorporated   entity   maintained   the  same   capital   structure   as  the
pre-incorporated entity.

On  October  25,  2004,  we  filed  a  Form  S-8  Registration  Statement.  This
Registration  Statement  related to the offer and sale of up to 89,285 shares of
common stock underlying Mr. Halter's warrants (the "Selling  Stockholder").  The
purpose was to compensate him for his services as our officer and director.

On December 25, 2004, the Company, Tailong, and the Tailong stockholders entered
into  the   Agreement   and  Plan  of   Reorganization,   as  amended  and  such
Reorganization   became  effective  on  February  3,  2005.  The  Reorganization
Agreement  provided  for  the  acquisition  by  the  Company  from  the  Tailong
stockholders of all of the issued and outstanding Tailong shares in exchange for
10,606,158 shares of newly issued restricted common stock of the Company.


                                       13
<PAGE>

As a result  of the  combination  with  Tailong,  the  Company  is a  fertilizer
manufacturer  and conducts  operations  in the  People's  Republic of China (the
"PRC")  through the  wholly-owned  subsidiary,  Tailong and  Tailong's 90% owned
subsidiary,  Pacific Dragon Fertilizer Co., Ltd. ("Pacific Dragon"). Tailong was
incorporated  on October 27, 2003 under the laws of Hong Kong, and the operating
company,  Pacific  Dragon,  is  a  foreign  investment  joint  venture  and  was
incorporated in the PRC on May 20, 1994.

Pacific Dragon engages in the business of  manufacturing  and marketing a series
of highly effective liquid compound fertilizers. These products are marketed and
sold to farmers in 11  provinces  of the PRC. We conduct  on-going  research and
development  to further  improve  existing  products  and develop  new  compound
fertilizers.

Results of Operations

Year Ended December 31, 2004 Compared To Year Ended December 31, 2003

Revenues.  We had no revenue  for the years  ended  December  31, 2004 and 2003,
respectively as the focus of our business has been to find a buyer.

General and Administrative Expenses. General and administrative expenses for the
years  ended  December  31,  2004 and 2003 were  approximately  $60,597  and $0,
respectively.  The increase was due primarily to costs related to completing the
Reorganization,   the  maintenance  of  our   stockholder   records  and  filing
requirements to comply with the Securities Exchange Act of 1934.

Net Loss. As a result of the foregoing factors,  our net loss increased slightly
to $55,597 for the year ended  December 31, 2004,  from a net loss of $0 for the
year ended December 31, 2003. Our net loss per share  decreased to $0.07 for the
year ended  December 31, 2004,  from $0.00 for the year ended December 31, 2003,
due to an increase in expenses in 2004.

Liquidity and Capital Resources

Our  operating  plan for calendar  year 2004 was focused on continued  effort to
find a buyer or merger  partner.  On May 25, 2004, we sold 714,285  post-reverse
split shares of our common stock for gross  proceeds of $200,000,  pursuant to a
subscription  agreement,  to Halter  Financial  Group,  Inc., an entity owned by
Timothy P. Halter. We relied upon Section 4(2) of The Securities Act of 1933, as
amended,  for an exemption from  registration of these shares and no underwriter
was used in this transaction. As a result of this transaction,  Halter Financial
Group,  Inc.  became our controlling  stockholder,  owning 714,285 shares of the
then 1,089,077 issued and outstanding  shares of the Registrant's  common stock,


                                       14
<PAGE>

or approximately 66%. As a result of the Reorganization,  our operating plan for
calendar year 2005 is focused on engaging in the business of  manufacturing  and
marketing a series of highly effective liquid compound fertilizers.

We estimate that after giving effect to the Reorganization,  the current capital
reserves that result will allow us to operate for at least twelve months without
relying on  additional  financing.  If additional  funds are raised  through the
issuance of equity or convertible debt securities,  the percentage  ownership of
our  stockholders  will  be  reduced,  stockholders  may  experience  additional
dilution and such securities may have rights,  preferences and privileges senior
to  those  of our  common  stock.  There  can be no  assurance  that  additional
financing  will be  available  on terms  favorable  to us or at all. If adequate
funds are not available or are not available on acceptable  terms, we may not be
able  to  fund   expansion,   take   advantage  of   unanticipated   acquisition
opportunities, develop or enhance services or products or respond to competitive
pressures.  Such  inability  could harm our business,  results of operations and
financial condition.

For the next twelve  months we expect the  primary  sources of  liquidity  to be
funds generated by operations and cash on hand. As of December 31, 2004, we have
not been profitable and have  experienced  negative cash flows from  operations.
During 2004,  operations were primarily  financed  through the issuance of stock
and advances from stockholders.

Critical Accounting Policies

The  preparation of financial  statements and related  disclosures in conformity
with accounting  principles  generally accepted in the United States requires us
to make judgments, assumptions and estimates that affect the amounts reported.

Item 7 - Index to Financial Statements

The Financial Statements can be found immediately following Item 14 below.

Item 8 -  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosures

Effective January 26, 2005, S.W. Hatfield,  CPA (SWHCPA) ("SW") was dismissed as
our  principal  accountant.  SW did not  audit or  review  any of our  financial
statements  for the fiscal year 2004.  Prior to their  dismissal,  there were no
disagreements  with SW on any  matter of  accounting  principles  or  practices,
financial   statement   disclosure  or  auditing   scope  or  procedure,   which
disagreements  if not resolved to the  satisfaction of SW would have caused them
to make reference to this subject matter of the disagreements in connection with
their report,  nor were there any "reportable  events" as such term as described


                                       15
<PAGE>

in Item  304(a)(1)(iv)  of  Regulation  S-B,  promulgated  under the  Securities
Exchange Act of 1934, as amended ("Regulation S-B").

Effective March 5, 2005, Weinberg & Co., P.A.  ("Weinberg") was dismissed as our
principal  accountant.  Weinberg  did not audit or review  any of our  financial
statements.  Prior to their dismissal, there were no disagreements with Weinberg
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure or auditing scope or procedure,  which  disagreements if not resolved
to the satisfaction of Weinberg would have caused them to make reference to this
subject matter of the  disagreements  in connection with their report,  nor were
there any "reportable events" as such term as described in Item 304(a)(1)(iv) of
Regulation S-B .

Effective on March 5, 2005, we engaged Kabani & Company,  Inc., whose address is
17011  Beach  Blvd.,  Suite  1230,  Huntington  Beach,  CA  92647,  to audit our
financial  statements.  During our most recent fiscal year,  and the  subsequent
period  prior to such  appointment,  we have not  consulted  the  newly  engaged
accountant  regarding the  application  of accounting  principals to a specified
transaction or the type of audit opinion that might be rendered on our financial
statements, nor on any matter that was either the subject of a disagreement or a
reportable event.

Our Board of  Directors  approved  the  aforementioned  changes  in  accountants
described herein.

Item 8A - Controls and Procedures

As of December  31,  2004,  evaluation  of the  effectiveness  of the design and
operation of our  disclosure  controls and  procedures was carried out under the
supervision  and with the  participation  of  management,  including  our  Chief
Executive and Financial Officer. Based upon that evaluation, our Chief Executive
and Financial Officer concluded that our disclosure  controls and procedures are
effective. There have been no significant changes in our internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date we carried out the evaluation.

                                    PART III

Item  9  -  Directors,   Executive  Officers,  Promoters  and  Control  Persons;
Compliance with Section 16(a) of the Exchange Act

The  following  table sets forth the names of all of our current  directors  and
executive officers as of February 3, 2005, the date of the Reorganization. These
persons will serve until the next annual  meeting of the  stockholders  or until
their successors are elected or appointed and qualified.


                                       16
<PAGE>


----------------------------- ------------- ------------------------------------
Name and Address                   Age      Position
----------------------------- ------------- ------------------------------------
Chang Yu                           49       Director/President/CEO/Secretary
----------------------------- ------------- ------------------------------------
Xiaorong Teng                      35       Vice President of Sales
----------------------------- ------------- ------------------------------------
Tak Shing Eddie Wong               41       Vice President of Sales
----------------------------- ------------- ------------------------------------
Tik Man Tsoi                       48       Vice President of Administration
----------------------------- ------------- ------------------------------------
Li Jun Peng                        63       Chief Financial Officer
----------------------------- ------------- ------------------------------------
Timothy P. Halter (1)                       Director, President, Chief Executive
                                            Officer, Chief Financial Officer and
                                            Secretary
----------------------------- ------------- ------------------------------------
(1) Timothy P. Halter  resigned as a member of the Board of Directors  and as an
officer as of February 3, 2005, the date of the Reorganization.

Chang  Yu:  Mr.  Chang  Yu has  been our sole  director  and has  served  as our
President,  Chief  Executive  Officer and  Secretary  since our  acquisition  of
Tailong on  February  3, 2005.  Since 1994,  Mr.  Chang has been  serving as the
Chairman of the Board of Directors  of Pacific  Dragon,  and Tailong.  Mr. Chang
graduated from the Heilongjiang  Forestry Cadre Management Institute majoring in
Chinese  language.  From 1992  to1994,  he served  as the  Chairman  of Board of
Directors of Harbin Yinlong Industry Co., Ltd.

Xiaorong  Teng:  Ms.  Teng  has  been  our  Vice  President  of Sale  since  our
acquisition  of Tailong on February 3, 2005.  Ms. Teng served as the director of
Pacific  Dragon since 2000.  She also served as a director of Tailong  since its
incorporation  in 2003. Ms. Teng worked for Harbin Yinlong  Company from 1994 to
2000  as  the  general  manager.   Previously  she  worked  for  Harbin  Post  &
Telecommunication Bureau from 1992 to 1994.

Tak Shing Eddie Wong:  Mr. Wong has been our Vice  President  of sales since our
acquisition  of Tailong on  February  3, 2005.  Mr. Wong served as a director of
Tailong  since 2004.  Previously  he worked for Lim Li Fung Group-HK as a senior
consultant from 1999 to 2004.

Mr. Tik Man Tsoi: Mr. Tsoi has been our Vice President of  Administration  since
our acquisition of Tailong on February 3, 2005. He served as director of Heng An
Tong Tai Investment Holding Co., Ltd. from 1999 to 2005.

Li Jun Peng: Ms. Peng has been our Chief Financial Officer since our acquisition
of Tailong on February 3, 2005. Ms. Peng has been working for Pacific Dragon and
later Tailong as the chief  accountant since August 1997. From 1990 to 1996, Ms.
Peng  served as the  director of the  auditing  faculty of Harbin  Institute  of
Technology.  From 1970 to 1989, Ms. Peng worked for Harbin Civil  Administration
Bureau. Ms. Peng graduated from Harbin Institute of Technology in 1968.

There are no family relationships among our directors or officers.


                                       17
<PAGE>

Board Composition and Committees

Since the  Reorganization,  the board of directors is currently  composed of one
member,  Chang Yu. All board  actions  require the approval of a majority of the
directors  in  attendance  at a meeting at which a quorum is  present.  Upon the
effectiveness  of the  Schedule  14C,  we intend to expand  our board to include
additional directors.

Since we currently  only have one member on the board of  directors,  we have no
committees Audit, Compensation or any other committees.

Code of Ethics

We do not  yet  have a Code  of  Ethics.  Due to the  recent  completion  of the
Reorganization with Tailong,  the board of directors had decided to postpone the
adoption of a code of ethics  until we are able to focus our  business  plan and
develop a greater infrastructure.  Once we have adopted a Code of Ethics, a copy
may be obtained by sending a written request to our corporate Secretary.

Director Compensation

No cash  compensation was paid to our director for services as a director during
the  fiscal  year ended  December  31,  2004.  We have no  standard  arrangement
pursuant to which our board of directors are  compensated  for their services in
their  capacity  as  directors.   The  board  of  directors  may  award  special
remuneration to any director  undertaking any special  services on behalf of our
company other than services  ordinarily  required of a director.  All authorized
out-of-pocket  expenses  incurred by a director on our behalf will be subject to
reimbursement upon our receipt of required supporting document of such expenses.
No director  received  and/or  accrued any  compensation  for his  services as a
director, including committee participation and/or special assignments.

Section 16(a) Beneficial Reporting Compliance

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires our
officers and directors,  and persons who own more than ten percent of a class of
our capital stock,  to file reports of ownership and changes in their  ownership
with the  Securities  and  Exchange  Commission.  These  persons are required to
furnish us with copies of all Section  16(a) forms they file.  Based solely on a
review of the copies of such forms  received  by us, we believe  that during the
year ended December 31, 2004, Mr. Little did not timely file certain Form 4's.


                                       18
<PAGE>
<TABLE>
<CAPTION>

Item 10 - Executive Compensation

The following table provides  compensation  information for the period indicated
with  respect  to the person who  served as our  President  for the years  ended
December  31,  2004,  2003 and  2002,  and all other of our  executive  officers
receiving  total  salary and bonus in excess of $100,000  during the years ended
December 31, 2004, 2003 and 2002 (collectively, the "Named Executive Officers"):

                                          SUMMARY COMPENSATION TABLE

<S>                       <C>      <C>        <C>   <C>         <C>        <C>             <C>     <C>
---------------------------------------------------------------- --------------------------------- ----------
                                                                     Long Term Compensation
---------------------------------------------------------------- --------------------------------- ----------
                                       Annual Compensation                Awards           Payouts
------------------------- -------- ----------------------------- ------------------------- ------- ----------
           (a)               (b)      (c)     (d)       (e)        (f)          (g)          (h)       (i)

                                                        Other                 Securities
                                                       Annual   Restricted   Under-lying    LTIP   All Other
    Name and Principal                        Bonus  Compensa-     Stock    Options/ SARs  Payouts  Compen-
         Position           Year   Salary ($)  ($)      tion    Awards ($)       (#)         ($)   sation ($)
------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------

------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------
Mr. Timothy Halter          2004       0       0         0          0            0            0         0
(1)(4)
------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------
CEO, President, Chief
Financial Officer and
Secretary
------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------
Glenn A. Little(2)(4)       2004       0       0         0          0            0            0         0
CEO, President, Chief       2003       0       0         0          0            0            0         0
Financial Officer           2002       0       0         0          0            0            0         0
------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------
Matthew Blair (3)(4)        2004       0       0         0          0            0            0         0
Secretary and               2003       0       0         0          0            0            0         0
Treasurer                   2002       0       0         0          0            0            0         0
------------------------- -------- ---------- ----- ----------- ---------- --------------- ------- ----------
</TABLE>

(1) Mr.  Timothy  Halter was  appointed  as a director  and elected as our Chief
Executive Officer,  President, Chief Financial Officer, and Secretary on May 26,
2004. Mr. Halter served in such capacities until the date of the Reorganization.

(2) Mr. Glen Little resigned as a director and officer effective May 26, 2004.

(3) Mr. Matthew Blair resigned as a director and officer effective May 26, 2004.

(4) Our  management  did not spend any  material  time  working  since we had no
material  business.  Accordingly,  we did not compensate any officer or director
during this time period.

Stock Option Grants and Exercises

We currently have no option, retirement,  pension or profit sharing programs for


                                       19
<PAGE>

the  benefit of the  directors,  officers or other  employees,  but the board of
directors may recommend adoption of one or more such programs in the future.

Employment, Severance and Change of Control Agreements

We currently have no employment, severance or change of control agreements.

Limitation of Liability and Indemnification

Our  certificate  of  incorporation,  with certain  exceptions,  eliminates  any
personal  liability  of  directors  or  officers to us or our  stockholders  for
monetary damages for the breach of such person's fiduciary duty, and, therefore,
an  officer  or  director  cannot  be  held  liable  for  damages  to us or  our
stockholders for gross negligence or lack of due care in carrying out his or her
fiduciary duties as a director or officer except in certain specified instances.
We have also  adopted  by-laws  which  provide for  indemnification  to the full
extent  permitted  under law which includes all liability,  damages and costs or
expenses arising from or in connection with service for, employment by, or other
affiliation with us to the maximum extent and under all circumstances  permitted
by law.

There are presently no material  pending legal  proceedings to which a director,
officer  and  employee  of ours is a party.  There is no pending  litigation  or
proceeding involving one of our directors,  officers,  employees or other agents
as to which indemnification is being sought, and we are not aware of any pending
or threatened  litigation that may result in claims for  indemnification  by any
director, officer, employee or other agent.

To  the  extent  provisions  of  our  articles  of  incorporation   provide  for
indemnification of directors for liabilities arising under the Securities Act or
the Exchange Act,  those  provisions  are, in the opinion of the  Securities and
Exchange Commission, against public policy and therefore are unenforceable.












                                       20
<PAGE>
<TABLE>
<CAPTION>

Item 11 - Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain  information  known to us with respect to
the beneficial  ownership of our common stock as of February 3, 2005 and (i) all
persons who are known to us to be  beneficial  owners of five percent or more of
the common stock, (ii) each of our Directors, (iii) the Named Executive Officers
named in the "Executive  Compensation"  section of this  prospectus and (iv) all
current Directors and executive officers as a group.

    NAME AND ADDRESS OF BENEFICIAL OWNER (1)          Shares Beneficially       % of Class Owned
                                                             Owned
<S>                                                   <C>                       <C>
Chang Yu (1)                                               9,545,544                    81

Xiaorong Teng                                                530,308                   4.5

Tak Shing Eddie Wong                                         530,308                   4.5

China Tailong Group Ltd                                    8,484,926                    72

Lijun Peng                                                         0                     0

Tik Man Tsoi (2)                                                   0                     0

Timothy Halter (3)                                           803,570                   6.8

Halter Financial Group, Inc. (3)                             714,285                     6

Officers and Directors as a group (five persons)          10,060,158                   90%
</TABLE>

(1) Includes  1,060,618 shares of common stock held by Chang Yu as an individual
and 8,484,926 shares of common stock of Group Limited in which Chang Yu owns 65%
of such entity.

(2) Tsoi Tik Man holds no shares of common stock as an individual;  however, Mr.
Tsoi does own 30% of Group Limited which owns  8,484,926  shares of common stock
of BEC.

(3) Includes 714,285 shares of common stock owned by Halter Financial Group,
Inc., and 89,285 shaFres of common stock owned by Timothy P. Halter owner of
Halter Financial Group, Inc.

Beneficial  ownership  is  determined  in  accordance  with  the  rules  of  the
Securities and Exchange  Commission and includes voting or investment power with
respect to the securities. Shares of Common stock subject to options or warrants
that are currently exercisable or exercisable within 60 days of February 3, 2005
are deemed to be outstanding and to be beneficially owned by the person or group
holding such options or warrants  for the purpose of  computing  the  percentage
ownership  of such  person or group but are not treated as  outstanding  for the
purpose of  computing  the  percentage  ownership  of any other person or group.
Unless otherwise  indicated,  the address for each of the individuals  listed in
the table is care of Basic  Empire  Corporation,  Room 511, 5/F Wing on Plaza 62
Mody Road, Tsim Sha Tsui,  Kowloon,  Hong Kong.  Unless  otherwise  indicated by
footnote,  the persons  named in the table have sole voting and sole  investment


                                       21
<PAGE>

power with respect to all shares of common stock shown as beneficially  owned by
them, subject to applicable  community  property laws.  Percentage of beneficial
ownership is based on 12,374,903  shares of our common stock  outstanding  as of
February 3, 2005.

Item 12 - Certain Relationships and Related Transactions

During  2004  we  entered  into  a  Financial   Advisory   Agreement   with  HFG
International  Limited,  an entity  controlled by Mr. Timothy Halter, to provide
assistance regarding the reverse merger.

Item 13 - Exhibits and Reports on Form 8-K

(a) (1) Our audited  financial  statements are included in this Annual Report on
Form 10-KSB.

(a) (2) The following exhibits are being filed herewith.


-------------- -----------------------------------------------------------------
Exhibit No.    Description
-------------- -----------------------------------------------------------------

-------------- -----------------------------------------------------------------
3.1*           Certificate of Incorporation filed on July 19, 2004.
-------------- -----------------------------------------------------------------
10.1*          Subscription  Agreement  dated May 25,  2004 by and  among  Basic
               Empire  Corporation  and Halter  Financial Group filed on May 25,
               2004
-------------- -----------------------------------------------------------------
10.2*          Agreement  and Plan of  Merger  dated  July 1,  2004 by and among
               Basic Empire  Corporation,  a Nevada Corporation and Basic Empire
               Corporation, a Delaware corporation filed on July 19, 2004.
-------------- -----------------------------------------------------------------

* Previously filed

(b)  Reports on Form 8-K. No Current  Reports on Form 8-K were filed  during the
quarter ended December 31, 2004.

Item 14. Principal Accountant Fees and Services

The following table shows the aggregate fees billed us for professional services
by .W. Hatfield,  CPA (2003 to January 26, 2005),  Weinberg & Co.,  P.A.(January
27,  2005  until  March 5,  2005) and Kabani &  Company,  Inc.  our  independent
auditors, for fiscal years 2004 and 2003:

                                       FISCAL 2004                FISCAL 2003
                              ---------------------------    -------------------

--------------------------------------------------------------------------------
Audit Fees                    $                 3,937.50     $          2,887.50
--------------------------------------------------------------------------------

Audit-Related Fees            $                        0     $                 0
--------------------------------------------------------------------------------


                                       22
<PAGE>

Tax Fees                      $                   150.00     $            150.00
--------------------------------------------------------------------------------

All Other Fees                $                 1,225.00     $                 0
--------------------------------------------------------------------------------

Total                         $                 5,312.50     $          3,037.50
--------------------------------------------------------------------------------


Audit Fees.  This category  includes the aggregate fees billed for  professional
services rendered f or the audits of our consolidated  financial  statements for
fiscal  years  2004 a nd  2003,  for the  reviews  of the  financial  statements
included in our  quarterly  reports on Form 10-QSB  during fiscal 2004 and 2003,
and for  services  that are n ormally  provided by the  independent  auditors in
connection with statutory and regulatory filings or engagements for the relevant
fiscal years.

Audit-Related  Fees. This category includes the aggregate fees billed in each of
the last two fiscal- years for assurance and related services by the independent
auditors  that are r  easonably  related  to the  performance  of the  audits or
reviews of the  financial st atements  and are not  reported  above under "Audit
Fees,"  and  generally  consist  of fees  for  other  attest  engagements  under
professional  auditing  standards,   accounting  and  reporting   consultations,
internal control-related matters, and audits of employee benefit plans.

Tax Fees.  This category  includes the aggregate fees billed in each of the last
two fiscal years for professional  services rendered by the independent auditors
for tax compliance, tax planning and tax advice.

All Other Fees. This category  includes the aggregate fees billed in each of the
last two fiscal  years for products  and  services  provided by the  independent
auditors that are not reported above under "Audit Fees,"  "Audit-Related  Fees,"
or "Tax Fees."

The  Audit  Committee  considered  the  compatibility  of the  non-audit-related
services  performed  by and fees paid to S.W.  Hatfield,  CPA in 2003 and to (i)
S.W. Hatfield,  CPA, (ii) Weinberg & Co., P.A., and (iii) Kabani & Company, Inc.
in the  proposed  non-audit-related  services  and  proposed  fees  for 2004 and
determined that such services and fees are compatible  with the  independence of
such auditors. During 2004, we and S.W. Hatfield, CPA, Weinberg & Co., P.A., and
Kabani & Company,  Inc. did not utilize any leased  personnel in connection with
the audits.





                                       23
<PAGE>

                                   SIGNATURES

In accord with Section 13 or 15(d) of the  Securities  Act of 1933,  as amended,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereto duly authorized.

                                                        Basic Empire Corporation

Dated: April 15, 2005                               By:  /s/ Chang Yu
       ---------------                                  ------------------------
                                                        Chang Yu
                                                        Chief Executive Officer,
                                                        President and Director

In accordance with the Securities Exchange Act of 1934, as amended,  this report
has been signed below by the following  persons on behalf of  registrant  and in
the capacities and on the date as indicated.


Dated: April 15, 2005                               By:  /s/ Chang Yu
       ---------------                                  ------------------------
                                                        Chang Yu
                                                        Chief Executive Officer,
                                                        President, and Director

Dated: April 15, 2005                               By:  /s/ Li Jun Peng
       ---------------                                  ------------------------
                                                        Li Jun Peng
                                                        Chief Financial Officer,











                                       24
<PAGE>


............................................................................Pages

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM......................F-1


Balance Sheets as of December 31, 2004 and 2003..............................F-2

Statements of Operations for the Years Ended
  December 31, 2004 and 2003.................................................F-3

Statements of Changes in Stockholders' Equity
  for the Years Ended December 31, 2004 and 2003.............................F-4

Statements of Cash Flows for the Years Ended
  December 31, 2004 and 2003.................................................F-5

Notes to Financial Statements........................................F-6 to F-12











<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------



To the Board of Directors and Stockholders of
Basic Empire Corporation

We have audited the accompanying balance sheet of Basic Empire Corporation as of
December  31,  2004  and  the  related  statements  of  operations,  changes  in
stockholders'  equity,  and cash flows for the year then ended.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audits of these  statements in accordance with the standards of
the Public Company Accounting  Oversight Board (United States).  Those standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the consolidated financial statements are free of material misstatement.
An audit includes  examining,  on a test basis,  evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Basic Empire Corporation as of
December 31, 2004 and the results of its  operations  and its cash flows for the
year then ended, in conformity with accounting  principles generally accepted in
the United States of America.




Kabani & Company, Inc.
Huntington Beach, California

April 10, 2005





                                       F-1
<PAGE>

                            BASIC EMPIRE CORPORATION

                                 BALANCE SHEETS

                                                         December 31,
                                                             2004
                                                         ------------
ASSETS

Cash and cash equivalents                                $    198,340
                                                         ------------

  Total assets                                           $    198,340
                                                         ============


LIABILITIES

Other payable and accrued expenses                       $     12,705
Amount due to a shareholder                                      --
                                                         ------------

  Total liabilities                                            12,705
                                                         ------------

SHAREHOLDERS' EQUITY

Preferred Stock, $0.001 par value, 10,000,000 shares
authorized, nil share issued and outstanding

Common Stock, $0.001 par value, 100,000,000 shares
authorized, 1,178,362 shares issued and outstanding

                                                                1,178
Additional paid-in capital                                    411,549
Accumulated deficit                                          (227,092)
                                                         ------------

  Total shareholders' equity                                  185,635
                                                         ------------

  Total liabilities and shareholders' equity             $    198,340
                                                         ============




   The accompanying notes are an integral part of these financial statements.




                                       F-2
<PAGE>


                            BASIC EMPIRE CORPORATION
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                     2004         2003
                                                  ---------    ---------

REVENUE                                           $    --      $    --
                                                  ---------    ---------

EXPENSES
  General and administrative expenses               (60,597)        --
                                                  ---------    ---------

  Total expenses                                    (60,597)        --
                                                  ---------    ---------

LOSS FROM OPERATIONS                                (60,597)        --

Gain on settlement of debt                            5,000         --
                                                  ---------    ---------
Loss before provision for income tax                (55,597)        --


PROVISION FOR INCOME TAXES                             --           --
                                                  ---------    ---------

LOSS AVAILABLE FOR COMMON STOCKHOLDERS
                                                  $ (55,597)   $    --
                                                  =========    =========


Net loss per share - basic and diluted            $   (0.07)   $    --
                                                  =========    =========

Weighted average number of shares outstanding -
  basic and diluted                                 781,700      285,507
                                                  =========    =========




   The accompanying notes are an integral part of these financial statements.





                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                            BASIC EMPIRE CORPORATION
                   STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                          Common Stock at 0.001                                          Total
                                                                par value              Additional      Retained     Stockholders'
                                                         No. of                           Paid-        Earnings         Equity
                                                         Shares          Amount        In Capital     (Deficit)        (Deficit)
                                                     -------------   -------------   -------------  -------------   -------------
<S>                                                  <C>             <C>             <C>            <C>             <C>
 Balances, January 1, 2003                               1,604,952   $     160,495   $           0  $    (171,495)  $     (11,000)

 One to 5.6 reverse stock split                         (1,319,445)       (160,209)        160,209              0               0

Net loss for the year ended December 31, 2003                    0               0               0              0               0
                                                     -------------   -------------   -------------  -------------   -------------

 Balances, December 31, 2003                               285,507             286         160,209       (171,495)        (11,000)



 Shares issued to a shareholder                            714,285             714         199,286              0         200,000

 Shares issued upon conversion of promissory notes          89,285              89          24,911              0          25,000

 Warrants issued to a shareholder                                0               0           2,232              0           2,232

 Shares issued upon exercise of warrants                    89,285              89          24,911              0          25,000

 Net loss for the year ended December 31, 2004                   0               0               0        (55,597)        (55,597)
                                                     -------------   -------------   -------------  -------------   -------------


Balances, December 31, 2004                              1,178,362   $       1,178   $     411,549  $    (227,092))  $     185,635
                                                     =============   =============   =============  =============   =============
</TABLE>





   The accompanying notes are an integral part of these financial statements.





                                       F-4
<PAGE>

                            BASIC EMPIRE CORPORATION
                             STATEMENTS OF CASH FLOW
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                           2004         2003
                                                        ---------    ---------

Cash flows from operating activities:
Net loss                                                $ (55,597)   $    --
Adjustments to reconcile net loss to net cash used in
   operating activities:
Warrants issued to a shareholder                            2,232         --
Gain on settlement of debt                                 (5,000)
Changes in operating assets and liabilities:
   Increase in other payable                               12,705         --
                                                        ---------    ---------

Net cash used in operating activities                     (45,660)        --
                                                        ---------    ---------

Cash flows from investing activities:
   Decrease in amount due to a shareholder                (11,000)        --
                                                        ---------    ---------

Cash flows from financing activities:
   Cash received from the issue of common stock           200,000         --
   Cash received from promissory notes                     30,000         --
   Cash received from exercise of warrants                 25,000         --
                                                        ---------    ---------

Net cash provided by financing activities                 255,000         --
                                                        ---------    ---------

Net increase in cash and cash equivalents                 198,340         --

Cash and cash equivalents at beginning of year               --           --
                                                        ---------    ---------

Cash and cash equivalents at end of year                $ 198,340    $    --
                                                        =========    =========




   The accompanying notes are an integral part of these financial statements.





                                       F-5
<PAGE>

                            BASIC EMPIRE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

     Basic Empire  Corporation  (the  "Company") was  incorporated on January 5,
1925  under the laws of the State of Nevada  as Argyle  Mining  Company  for the
development  of mining  claims.  In 1970,  the Company  experienced  a change in
control and focused its business  activities on the development of properties in
Southern  California.  None of these efforts were successful and the Company has
been dormant since 1986.

     The Company has  experienced  several  corporate  name changes as follows:-
Argyle  Corporation  in January 1960;  Basic Empire in November  1963; and Basic
Empire Corporation in December 1976.

     The Company has had no operations, assets and liabilities since 1986.



NOTE 2. PREPARATION OF FINANCIAL STATEMENTS

     The Company  follows the accrual basis of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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 financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

     Management further  acknowledges that it is solely responsible for adopting
sound  accounting  practices,  establishing and maintaining a system of internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial statements which present fairly the financial  conditions,  results of
operations  and cash flows of the  Company  for the  prospective  periods  being
presented.





                                       F-6
<PAGE>

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
----------------

     The  preparation of  consolidated  financial  statements in conformity with
accounting  principles  generally  accepted  in the  United  States  of  America
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 and the amount
of revenues and expenses during the reporting  periods.  Management  makes these
estimates  using the best  information  available at the time the  estimates are
made. However, actual results could differ materially from those results.

Cash and cash equivalents
-------------------------

     Cash and cash  equivalents  include cash on hand,  demand and time deposits
with banks and liquid  investments with an original  maturity of three months or
less.

Revenue Recognition
-------------------

     The Company's  revenue  recognition  policies are in compliance  with Staff
accounting  bulletin  (SAB)  104.  Sales  revenue is  recognized  at the date of
shipment to customers when a formal  arrangement  exists,  the price is fixed or
determinable, the delivery is completed, no other significant obligations of the
Company exist and collectibility is reasonably assured. Payments received before
all of the relevant criteria for revenue  recognition are satisfied are recorded
as unearned revenue.

Impairment of Long-lived assets
-------------------------------

     Effective  January 1, 2002,  the Company  adopted  Statement  of  Financial
Accounting  Standards  No. 144,  "Accounting  for the  Impairment or Disposal of
Long-Lived  Assets"  ("SFAS 144"),  which  addresses  financial  accounting  and
reporting for the  impairment or disposal of  long-lived  assets and  supersedes
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets  to  be  Disposed  Of,"  and  the  accounting  and  reporting
provisions of APB Opinion No. 30,  "Reporting  the Results of  Operations  for a
Disposal of a Segment of a Business."  The Company  periodically  evaluates  the
carrying value of long-lived  assets to be held and used in accordance with SFAS
144. SFAS 144 requires  impairment  losses to be recorded on  long-lived  assets
used  in  operations   when   indicators  of  impairment  are  present  and  the
undiscounted  cash flows estimated to be generated by those assets are less than
the assets' carrying  amounts.  In that event, a loss is recognized based on the
amount  by which  the  carrying  amount  exceeds  the fair  market  value of the
long-lived assets.  Loss on long-lived assets to be disposed of is determined in
a similar  manner,  except that fair  market  values are reduced for the cost of
disposal.  The Company did not have any impairment of the assets at December 31,
2004 and 2003.

Stock-based compensation
------------------------

     The Company accounts for stock-based  compensation plans under Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation"  (SFAS 123).  SFAS No. 123  prescribes  accounting  and  reporting
standards for all  stock-based  compensation  plans,  including  employee  stock
options,  restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS No. 123 requires  compensation expense to be recorded (i) using the
new fair value method or (ii) using the existing  accounting rules prescribed by
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for stock issued to


                                       F-7
<PAGE>

employees"  (APB 25) and related  interpretations  with pro forma  disclosure of
what net income and earnings  per share would have been had the Company  adopted
the new  fair  value  method.  The  company  uses  the  intrinsic  value  method
prescribed  by APB25 and has  opted  for the  disclosure.  The  Company  has not
granted any options through December 31, 2004.

Advertising Costs
-----------------

     The  Company   expenses  the  cost  of   advertising  as  incurred  or,  as
appropriate,  the first time the advertising takes place.  Advertising costs for
the years ended December 31, 2004 and 2003 were insignificant.

Income taxes
------------

     The  Company  accounts  for  income  taxes  using  an asset  and  liability
approach,  which  allows for the  recognition  and  measurement  of deferred tax
assets based upon the likelihood of realization of tax benefits in future years.
Under the asset and liability approach,  deferred taxes are provided for the net
tax effects of temporary  differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.  A valuation  allowance  is provided  for deferred tax assets if it is
more likely than not these items will either  expire  before the Company is able
to realize  their  benefits,  or that  future  deductibility  is  uncertain.  No
provision  for  deferred  taxation  has been  made,  as there  are no  temporary
differences at the balance sheet date.

     Through  December 31, 2004, the Company  incurred net operating  losses for
tax  purposes  of  approximately  $217,000.  Difference  between  the  financial
statement and tax losses was  immaterial at December 31, 2004. The net operating
loss  carryforwards  may be used to reduce taxable income through the year 2019.
The availability of the Company's net operating loss  carryforwards  are subject
to limitation if there is a 50% or more positive  change in the ownership of the
Company's  stock.  The provision for income taxes  consists of the state minimum
tax imposed on corporations.

     The  net  deferred  tax  asset   balance,   due  to  net   operating   loss
carryforwards,  as of  December  31,  2004  was  approximately  $73,000.  A 100%
valuation allowance has been established against the deferred tax assets, as the
utilization of the loss carrytforwards cannot reasonably be assured.

Earning per share
-----------------

     The Company has presented a dual presentation of basic and diluted earnings
per share ("EPS") with a reconciliation  of the numerator and denominator of the
EPS computations.  Basic EPS amounts are based on the weighted average shares of
common  stock  outstanding.  Diluted  EPS assumes  the  conversion,  exercise or
issuance of all potential common stock instruments such as options, warrants and
convertible  securities,  unless  the  effect  is to  reduce a loss or  increase
earnings per share. As of December 31, 2004 and 2003  respectively,  the Company
had no  warrants  and /or  options  outstanding.  On May 22,  2004,  the Company
effected a 1 for 5.6 reverse stock split. Loss per common stock calculations for
the year ended December 31, 2004 and 2003 give retroactive effect to the one for
5.6 reverse stock split as if it occurred on January 1, 2003.

Statement of Cash Flows
-----------------------

     In  accordance  with  Statement of Financial  Accounting  Standards No. 95,
"Statement  of  Cash  Flows,"  cash  flows  from  the  Company's  operations  is
calculated  based upon the local  currencies.  As a result,  amounts  related to
assets  and  liabilities  reported  on the  statement  of cash  flows  will  not
necessarily  agree with  changes in the  corresponding  balances  on the balance
sheet.


                                       F-8
<PAGE>

Segment Reporting
-----------------

     Statement  of  Financial   Accounting   Standards  No.  131  ("SFAS  131"),
"Disclosure  About Segments of an Enterprise and Related  Information"  requires
use of the  "management  approach" model for segment  reporting.  The management
approach  model is based on the way a company's  management  organizes  segments
within the company for making  operating  decisions and  assessing  performance.
Reportable  segments  are  based on  products  and  services,  geography,  legal
structure,  management  structure,  or any  other  manner  in  which  management
disaggregates  a company.  SFAS 131 has no effect on the Company's  consolidated
financial statements as the Company consists of one reportable business segment.

Recent Pronouncements
---------------------

     In November 2004,  the FASB has issued FASB  Statement No. 151,  "Inventory
Costs,  an Amendment of ARB No. 43,  Chapter 4" ("FAS No. 151").  The amendments
made by FAS No. 151 are intended to improve  financial  reporting by  clarifying
that abnormal  amounts of idle facility  expense,  freight,  handling costs, and
wasted materials  (spoilage) should be recognized as current-period  charges and
by requiring the allocation of fixed production  overheads to inventory based on
the normal capacity of the production facilities.  The guidance is effective for
inventory  costs  incurred  during fiscal years  beginning  after June 15, 2005.
Earlier  application  is permitted for inventory  costs  incurred  during fiscal
years  beginning  after November 23, 2004. The provisions of FAS No. 151 will be
applied  prospectively.  The Company does not expect the adoption of FAS No. 151
to have a material impact on its  consolidated  financial  position,  results of
operations or cash flows.

     In December  2004,  the FASB issued FASB  Statement No. 123R,  "Share-Based
Payment,  an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R
requires  companies to recognize in the statement of operations  the grant- date
fair  value of stock  options  and  other  equity-based  compensation  issued to
employees.  FAS No. 123R is effective  beginning in the Company's second quarter
of fiscal  2006.  The  Company is in process  of  evaluating  the impact of this
pronouncements on its consolidated financial position,  results of operations or
cash flows.

     In December  2004,  the FASB issued SFAS  Statement No. 153,  "Exchanges of
Nonmonetary  Assets."  The  Statement  is an  amendment of APB Opinion No. 29 to
eliminate the exception for nonmonetary  exchanges of similar  productive assets
and replaces it with a general  exception  for exchanges of  nonmonetary  assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial statements.

     In March 2004, the Emerging Issues Task Force ("EITF")  reached a consensus
on Issue No.  03-1,  "The  Meaning of  Other-Than-Temporary  Impairment  and its
Application  to Certain  Investments."  The EITF  reached a consensus  about the
criteria  that should be used to  determine  when an  investment  is  considered
impaired,  whether that impairment is other-than-temporary,  and the measurement
of an  impairment  loss and how that criteria  should be applied to  investments
accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND
EQUITY   SECURITIES."  EITF  03-01  also  included   accounting   considerations
subsequent to the recognition of an other-than-temporary impairment and requires
certain  disclosures  about  unrealized  losses that have not been recognized as
other-than-temporary   impairments.   Additionally,   EITF  03-01  includes  new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  In September  2004, the Financial  Accounting  Standards Board (FASB)
delayed  the  accounting  provisions  of  EITF  03-01;  however  the  disclosure
requirements remain effective for annual reports ending after June 15, 2004. The
Company will evaluate the impact of EITF 03-01 once final guidance is issued.


                                       F-9
<PAGE>

NOTE 4 FAIR VALUES OF FINANCIAL INSTRUMENTS

     The carrying value of cash, accounts receivable, accounts payable and other
payable, as applicable,  approximates fair value due to the short-term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

     Interest rate risk is the risk that the  Company's  earnings are subject to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest risk, if any.

     Financial  risk is the risk that the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  Company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE 5 AMOUNT DUE TO A SHAREHOLDER

     As of December 31, 2004, the Company's controlling shareholder, Mr. Timothy
P. Halter,  had repaid all the outstanding  amounts due to the Company's  former
controlling  shareholder and director.  During the year ended December 31, 2003,
the  Company's  former  controlling  shareholder  and  director had advanced the
Company a total of $11,000 to provide for the  Company's  working  capital.  The
amount due to a shareholder was non-interest bearing and repayable on demand.

     On May 25, 2004,  the Company  agreed to pay Little and Company  Investment
Securities,  an  entity  owned by Mr.  Glenn A.  Little,  the  Company's  former
controlling  shareholder  and director,  a total of $30,000 which  consists of a
repayment of the advance from the Company's  former  shareholder and director of
$11,000  and a payment of $19,000  consulting  fee  related to the May 25,  2004
private placement and as additional  consideration for maintaining the corporate
entity.  In order to formalize  this  obligation,  the Company  issued a $30,000
non-interest bearing promissory note to the Company's  controlling  shareholder.
The note was repayable on demand.

NOTE 6 SHAREHOLDERS' EQUITY

     On April 12, 2004,  the Company filed an Amendment and  Restatement  of its
Articles  of  Incorporation  with the  Secretary  of the State of  Nevada.  This
Amendment allows for the issuance of up to 10,000,000 shares of $0.001 par value
of Preferred Stock and 100,000,000 shares of $0.001 par value of Common Stock.

     On May 25, 2004,  the  Company's  Board of Directors  effected a one to 5.6
reverse stock split of the then issued and outstanding Common Stock. The reverse
stock split did not change the number of  authorized  shares of Common  Stock or
the par value of the Company's Common Stock.  Except for any changes as a result
of  the  treatment  of  fractional  shares,  each  shareholder  holds  the  same
percentage of Common Stock outstanding  immediately  following the reverse stock
split as such shareholder did immediately  prior to the reverse stock split. The
reverse  stock  split  resulted in the  decrease  in the issued and  outstanding
shares of Common  Stock from  1,604,952  to  285,507.  The effect of the reverse
stock split had been reflected in the  accompanying  financial  statements as of
the first day of the year presented.


                                      F-10
<PAGE>

     On May 25, 2004,  pursuant to a  subscription  agreement,  the Company sold
714,285  post-reverse  split shares of restricted  Common Stock for a proceed of
$200,000 to Halter  Financial  Group,  Inc.,  an entity owned by Mr.  Timothy P.
Halter,  who became the Company's  controlling  shareholder  and director.  As a
result of such  subscription,  Halter Financial Group, Inc. became the Company's
controlling shareholder at that time.

     On May 25, 2004, the Company  settled a promissory  note amounting  $30,000
(see Note 5) by issuance of 89,285  shares of common stock valued at $25,000 and
resulted in a gain of $5,000 on settlement of debt.

     Concurrent with the change in control on May 25, 2004 and in  consideration
for  agreeing to serve as an officer and  director of the  Company,  the Company
granted Mr.  Timothy P. Halter on May 26, 2004  three-year  warrants to purchase
89,285  post-reverse split shares of the Company's Common Stock with an exercise
price equal to $0.28 per share.  The fair market value of the  Company's  Common
Stock as of May 26, 2004 was $0.05 per share after  adjustment  of  post-reverse
stock split.  The fair value of the warrants was  determined  to be $2,232 as of
the date of grant  using the  Black-Scholes  option  valuation  model,  which is
assumed a risk free  interest rate of 3.10%,  an expected  life of 3 years,  and
volatility  rate of 0%.  The  Company  charged  the  value  of the  warrants  as
compensation expense for the year ended December 31, 2004. On November 16, 2004,
the warrants were fully exercised at a proceed of $25,000.

NOTE 7 INCOME TAXES

     There is no income tax (benefit)  expense for the years ended  December 31,
2004 and 2003  respectively.  As a result of various changes in control in prior
years,  the Company has a nominal net operating loss carrying forward for income
tax purposes.  The amount and  availability  of any net operating  loss carrying
forward may be subject to  limitations  set forth by the Internal  Revenue Code.
Factors  such as the  number of shares  ultimately  issued  within a  three-year
look-back period; whether there is a deemed more than 50% change in control; the
applicable  long-term tax exempt bond rate;  continuity of historical  business;
and subsequent income of the Company all entered into the annual  computation of
allowable utilization of the tax loss carrying forward.

     The Company does not have any temporary  differences  between the financial
statement  carrying  amounts  and  tax  bases  of  assets  and  liabilities  and
accordingly,  the Company did not have any deferred assets and liabilities as of
December 31, 2004 and 2003 respectively.

NOTE  8 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS

     The Company prepares its statements of cash flows using the indirect method
as defined under the Financial Accounting Standard No. 95.

     The Company paid $0 for income tax in the year ended  December 31, 2004 and
2003.  The Company paid $0 for interest  during the year ended December 31, 2004
and 2003.


                                      F-11
<PAGE>

NOTE 9 SUBSEQUENT EVENTS

     On December 25, 2004,  the Company,  China  Tailong  Holdings  Company Ltd.
("China  Tailong"),  a company  incorporated under the laws of Hong Kong Special
Administrative  Region of People's  Republic of China  ("China") and each of the
stockholders   of  China   Tailong   entered  into  an  Agreement  and  Plan  of
Reorganization  as amended (the  "Agreement").  Pursuant to the  Agreement,  the
Company  acquired from the China Tailong  stockholders  of all of the issued and
outstanding common stock of China Tailong in exchange for 10,606,158 (post stock
split) restricted  shares of the Company's common stock (the  "Reorganization").
The Reorganization was completed on February 3, 2005. The Reorganization will be
accounted for as a reverse merger and  recapitalization of China Tailong,  which
will be deemed as the accounting acquirer.

     China  Tailong  owns a 90% equity  interest in Pacific  Dragon  Fertilizers
Limited ("Pacific Dragon"),  a Sino-foreign joint venture company established in
China on May 20, 1994.  Pacific  Dragon is primarily  engaged in the business of
manufacturing  and marketing a series of compound  liquid  fertilizer  products,
including a series of liquid organic fertilizers and crop-specific fertilizers.

     The  acquisition  of  China  Tailong  will be  accounted  for as a  reverse
acquisition  under the purchase method of accounting  since the  shareholders of
China Tailong  obtained  control of the consolidated  entity.  Accordingly,  the
merger of the two  companies  will be  recorded as a  recapitalization  of China
Tailong  with  China  Tailong  being  treated  as  the  continuing  entity.  The
historical  financial statements to be presented will be those of China Tailong.
The  continuing  company  has  retained  December  31 as its  fiscal  year  end.
Unaudited  Pro-forma  revenue,  net income and  income  per share  assuming  the
transaction  had been  completed at the  beginning  of the periods  reported on,
pro-forma financial results would be as follows:

                                                Year ended December 31
                                                      (Unaudited)

                                                2004              2003
                                           -------------     -------------
     Revenue                               $  13,008,000     $  12,180,000
     Net income for the period             $   3,209,000     $   2,007,000
     Earnings per share                    $        0.27     $        0.17


                                      F-12
<PAGE>

EXHIBIT INDEX

-------------- -----------------------------------------------------------------
Exhibit No.    Description
-------------- -----------------------------------------------------------------

-------------- -----------------------------------------------------------------
3.1*           Certificate of Incorporation filed on July 19, 2004.
-------------- -----------------------------------------------------------------
10.1*          Subscription  Agreement  dated May 25,  2004 by and  among  Basic
               Empire  Corporation  and Halter  Financial Group filed on May 25,
               2004
-------------- -----------------------------------------------------------------
10.2*          Agreement  and Plan of  Merger  dated  July 1,  2004 by and among
               Basic Empire  Corporation,  a Nevada Corporation and Basic Empire
               Corporation, a Delaware corporation filed on July 19, 2004.
-------------- -----------------------------------------------------------------

* Previously filed