**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  
 **FORM
        10-KSB**
 
 **x**  **ANNUAL
        REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
        1934**
  **For
        the annual period ended December 31, 2006**
  **o**  **TRANSITION
        REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
        1934**
  For
        the
        transition period from _________ to _________
  **HUIFENG
        BIO-PHARMACEUTICAL TECHNOLOGY, INC.**
 
  (Name
        of
        Small Business Issuer in Its Charter)
  NEVADA
              Commission
                  File No:
              87-0650264(State
                  or other jurisdiction of incorporation or organization)
              000-32253
              (I.R.S.
                  Employer Identification No.)16B/F
                  Ruixin Road Bldg. No. 25 Gaoxin Road Xi An 710075 Shaanxi Province,
                  China(Address
                  of principal executive offices)(86)
                  29 8824 6358(Issuer's
                  telephone number, including area
                  code)
 
 **Securities
        Registered Pursuant to Section 12(b) of the Act: None**
  **Securities
        Registered Pursuant to Section 12(g) of the Act:**
  **Common
        Stock, Par Value $0.018 Per Share**
 **(Title
        of Class)**
  Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports); and (2) has been
        subject
        to such filing requirements for the past 90 days.
  Yes x No o
  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 registrant's knowledge, in definite proxy or information statements
        incorporated by reference in Part III of this form 10-KSB or any amendment
        to
        this Form 10-KSB. o
  The
        issuer's revenues for the fiscal year ended December 31, 2006 were
        $3,076,779.
  The
        aggregate market value of the common stock held by non-affiliates as of March
        30, 2007 was $ 5 ,170,527.
  State
        the
        number of shares outstanding of each of the issuer's classes of equity
        securities, as of the latest practicable date:
  Title
                  of Each Class of Equity Securities
              
              Number
                  of Shares Outstanding as of December 31, 2006Common
                  Stock, $0.018 par value
              
              18,466,169
  Transitional
        Small Business Disclosure Format (check one): Yes o No x









TABLE
        OF
        CONTENTS


PagePART
                    IITEM
                    1.  Description of Business
                
                2ITEM
                    2.  Description of Properties
                
                7ITEM
                    3.  Legal Proceedings
                
                7ITEM
                    4.  Submission of Matters to a Vote of Security
                    Holders
                
                7PART
                    IIITEM
                    5.  Market for Common Equity and Related Stockholder
                    Matters
                
                8ITEM
                    6.  Management's Discussion and Analysis
                
                9ITEM
                    7.  Financial Statements
                
                28ITEM
                    8.  Changes in and Disagreements with Accountants on Accounting and
                    Financial Disclosures
                
                28ITEM
                    8A. Controls and Procedures
                
                29ITEM
                    8B. Other Information
                
                29PART
                    IIIITEM
                    9.  Directors, Executive Officers, Promoters and Control Persons,
                    Compliance With Section 16(A) of the Exchange Act
                
                29ITEM
                    10. Executive Compensation
                
                30ITEM
                    11. Security Ownership of Certain Beneficial Owners and
                    Management
                
                30ITEM
                    12. Certain Relationships and Related Transactions
                
                31ITEM
                    13. Exhibits
                
                31ITEM
                    14. Principal Accounting Fees and Services
                
                31









This
      annual report contains certain forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
      Securities Exchange Act of 1934, as amended. These include statements about
      our
      expectations, beliefs, intentions or strategies for the future, which we
      indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
      "will," "we believe," "our company believes," "management believes" and similar
      language. These forward-looking statements are based on our current expectations
      and are subject to certain risks, uncertainties and assumptions, including
      those
      set forth in the discussion under Item 1."Description of Business" and Item
      6.
      "Management's Discussion and Analysis", including under the heading “-Risk
      Factors” under Item 6. Our actual results may differ materially from results
      anticipated in these forward-looking statements. We base our forward-looking
      statements on information currently available to us, and we assume no obligation
      to update them. In addition, our historical financial performance is not
      necessarily indicative of the results that may be expected in the future and
      we
      believe that such comparisons cannot be relied upon as indicators of future
      performance.




Certain
      financial information included in this annual report has been derived from
      data
      originally prepared in Renminbi (RMB), the currency of the People's Republic
      of
      China. For purposes of this annual report, a conversion rate of US$1 to RMB
      7.8087 was utilized. There is no assurance that RMB amounts could have been
      or
      could be converted into US dollars at that rate.




Huifeng
      Bio-Pharmaceutical Technology, Inc., through its subsidiary Northwest BioTechnic
      Inc. ("NBTI") owns and operates, Huifeng Biochemistry Joint Stock Company
      ("Huifeng"), which is a joint venture company established under the laws of
      the
      People's Republic of China ("PRC" or China) ” with its
      main business as production and sales of plant extracts, biochemical products
      and pharmaceutical raw products in the PRC.









**PART
      I**





**ITEM
      1.**  **DESCRIPTION
      OF BUSINESS**




**HISTORY**




Our
      company, HUIFENG BIO-PHARMACEUTICAL TECHNOLOGY, INC. (“we”,
      “us”, “our”, “HFGB”, the ”Company” or “our Company”) was
      incorporated under the laws of the State of Nevada and trades on the Over the
      Counter ("OTC") Bulletin Board under the symbol "HFGB".




HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY, INC. is a corporation formed under the laws
      of
      the State of Nevada on March 16, 2000. During the year 2000, we acquired a
      license to market VitaMineralHerb.com products to customers in Oklahoma and
      New
      Mexico. VitaMineralHerb.com hosts an Internet web site where health related
      products can be purchased for resale; the web site then automatically credits
      the licensee with purchases from their customers. We did not generate any
      revenues from the above endeavors and during March 2002, we decided to terminate
      our involvement with marketing vitamins and such related projects; Consequently,
      we cancelled our license agreement with VitaMineralHerb.com. Since October
      2002,
      management's business plan was to seek out a privately held business with whom
      the Company can reorganize so as to take advantage of the Company's status
      as a
      publicly held corporation.





On
      December 20, 2004, pursuant to the terms of a Stock Purchase Agreement ("Malone
      Agreement"), Art Malone, Jr. ("Selling Shareholder") sold 7,229,601 shares
      of
      the common stock of Secured Data, Inc. ("Company") for $300,000.00 (the "Sale")
      to Zhi Lan Wang and Jun Lin, individuals. As a result, the 7,229,601 shares
      of
      the common stock of the Company sold represented approximately 56.18% of the
      total outstanding stock of the Company. Immediately thereafter, pursuant to
      the
      terms of an Agreement and Plan of Reorganization dated December 20, 2004
      ("Northwest Agreement"), the Company initially purchased 30% of the common
      shares of Northwest BioTechnic Inc. ("NBTI"), a British Virgin Islands
      corporation, in exchange for 80,735,590 shares of the Company's common stock
      ("Acquisition"). The purchase price for the remaining 70% of NBTI's common
      shares was $1,900,000.00 payable by the Company's issuance of a promissory
      note
      ("Promissory Note") on December 20, 2004. The Promissory Note was subsequently
      converted into 10,465,725 (post a one for eighteen reverse split) shares of
      the
      Company's common stock. As a result, the 80,735,590 shares of the common stock
      of the Company sold represented approximately 86.3% of the total outstanding
      stock of the Company.




NBTI
      was
      incorporated in the British Virgin Islands on June 25, 2004. NBTI operates
      through its wholly owned subsidiary, Huifeng Biochemistry Joint Stock Company
      ("Huifeng"), which is a joint venture company established under the laws of
      the
      PRC and is a company engaging in the production and sales of plant extracts,
      biochemical products and pharmaceutical raw products in the PRC.




**BUSINESS
      OVERVIEW**




HFGB,
      through its wholly owned subsidiary NBTI, owns 100% of Huifeng which produces
      and sells plant extracts, biochemical products and pharmaceutical raw products
      in the PRC. Huifeng was founded on January 18, 2000. With its proprietary
      technology of “Producing Rutin by Eliminating Enzyme and Mucus” together with
      abundant resources of high quality pagoda rice in the Northwest region of China
      as raw material, Huifeng developed and specialized itself as one of the major
      technology based Rutin company in Xian city within two years after
      establishment. Huifeng possesses one of the most advanced and patented
      Rutin-refining technology in China and is a major Rutin supplier for the world
      market.




Huifeng
      emphasized technology and product innovation and its strategic mission is to
      commercialize Chinese traditional medicine.




2




At
      the
      end of 2006, we achieved the business missions of the followings:


(a)
              Achieved
                  sale revenues of $3,076,779;




(b)
              Finished
                  and commercialized two new products line, Diosmin and
                  L-Rhamnose;




**OUR
      PRODUCTS**




Huifeng
      produces a series of Rutin and Rutin related products, listed below by
      category:




Pharmaceutical
                Intermediates
            1. NF11
                Rutin (USP standard)
              2. DAB8_DAB9_DAB10_DAB11
                Rutin (German Codex Standard)
              3. Troxerutin
                (farinaceous injection_oral application)
              4. Quercetin,
                L-RhamnonePharmaceutical
                Material
            1. Venoruton
                (farinaceous injection_oral application)
              2. Rutin
              3. Berberine
                Hydrochloride
              4. Matrine
              5. Diosmin
              6. L-RhamnosePlant
                Extracts
            1. Hesperidin
              2. Naringin
              3. Epimedium
                Extract
              4. Matrine
              5. Puerorin
              6. Siybun
                Marianum P.E


The
      chemical name of Rutin is rue glycoside (Molecular formula: C 27 H 30 O 163 H 2O )
      and it
      is a kind of plant extract. It can inhibit platelet aggregation and prevent
      thrombosis. It can also improve the permeability of capillary vessels, and
      has
      the properties of:




1.
            Anti
                - inflammatory;




2.
            Decreasing
                  blood pressure and fat; and




3.
            Mitigating
                  cerebral hemorrhage.




Additionally,
      it has positive effect in protecting heart and cerebral hemorrhage and
      ischemia-reperfusion injury. It is widely used as a raw material for the heart
      and cerebral blood vessel medicines as well as an additive for cosmetics and
      functional food. The demand for Rutin increases at an annual rate of
      approximately 30% due to the increased demand for heart and cerebral blood
      vessel medicines as a result of the aging population. Furthermore, the
      improvement in living standards in China also stimulates the growth in the
      demand for functional food and natural cosmetics.




During
      2006 we have finished two new products lines, Diosmin and
      L-Rhamnose.




The
      chemical name of Diosmin is 7-[[6-o(6-Deoxy-2-L-mannopyranosyl)-β-D-glucopyran
      -osyl]oxy]-5-hydroxy-2-(3-hydroxy-4-methoxyphenyl)-4H-l-ben-zopyran-4-one) .
      Diosmin
      is a pharmaceutical material, which has comprehensive impact on blood vessel
      feedback system and is suitable for treatment of acute or chronic hemorrhoids
      and chronic insufficiency of vein (lower limbs varicosity, dropsy and chronic
      canker)




The
      chemical name of L-Rhamnose is (thymidine-5'-diphosphate-L-rhamnose). Belonging
      to the category of monosackcharide, it is generally applied in manufacturing
      antivirus and anti-tumor raw medicines. In addition, this product can be an
      ingredient for food. It has been used for testing permeation of intestines
      and
      sweet additives. At present, L-Rhamnose is mostly applied in synthetic perfume
      of fruit spice. It is the basic material for fruit spice composition. L-Rhamnose
      has been widely applied in the industrial production and scientific research,
      such as intermediate synthetic perfumes and heart-strength medicines made from
      organic matters. Furthermore, as an ingredient for food, L-Rhamnose can be
      directly added into top-grade coffee, beverage or meat.




3




**PRODUCTION
      FACILITIES**




In
      2006
      we had two major production facilities that included the following equipment
      resources:




1.
            Manufacturing
                plant located at NO 1,Huifeng Rd, Changwu,
                Xianyang:




·
            This
                production site is for refining and manufacturing of new
                products




·
            Has
                a total of eight buildings
                including:




·
            A
                two-level office building


·
            A
                four-level staff building


·
            Three
                manufacturing buildings (including extract workshops, refining workshops
                and packaging workshops)


·
            One
                raw materials storage building


·
            One
                building for storage of finished
                products


·
            One
                building for dangerous products


·
            Building
                for power and maintenance (including boiler, power distribution and
                maintenance)


·
            One
                cafeteria and staff canteen




2.
            Manufacturing
                plant located in Fenghui, Changan,
                Xian




·
            This
                production site is for the extraction and supplies of raw materials
                for
                refining




·
            Has
                a total of four buildings
                including:




·
            One
                office building


·
            One
                manufacturing building (including extract workshops, crystallization
                workshops, communication workshops and packaging
                workshops),


·
            One
                raw materials building


·
            One
                boiler




The
      two
      production facilities together occupy a total area of approximately 300,000
      square feet.





In
      2006
      we have finishd 2 new production lines: Diosmin production line for Diosmin,
      L-Rhamnose production line.




**TARGET
      MARKETS AND PRINCIPAL CUSTOMERS**




There
      was
      no change in the target customers of our Company. Our existing products and
      new
      products launched during 2006 are all raw materials intermediaries for
      production of medicines and the users of these products are industrial clients.
      As a result, Huifeng's main target customers are pharmaceutical companies and
      food manufacturers.




4




**SALES
      AND MARKETING**




In
      2006,
      there was no change in our target market and the majority of our products are
      still raw materials and intermediaries for production of medicines. Our target
      customers are mostly industrial clients and we continue to sell and distribute
      our products through direct selling to medicine and food manufacturers. These
      customers placed purchase orders directly with our sales and marketing team.
      Our
      sales department was divided into two teams, domestic sales team and export
      sales team. Our domestic sales team was responsible for domestic market while
      export sales team was responsible for international market
      customers.




In
      2006,
      we increased one employee in our domestic sales department and enrolled one
      new
      employee in our export sales department. As a result, we increase the total
      staff forces of our whole sales departments to eighteen people. We strengthened
      the whole sales team including Export Section 1 for European and West-Asia
      business and Export Section 2 for America, Eastern and Sourth Asia.




In
      2006,
      in order to diversify and expand our product sales networks, we started to
      expand to outside distribution channels for some of our export sales. We
      accepted purchase orders from professional foreign trade corporations in order
      to expand our international distribution channels and increase the sale revenues
      from exports.




We
      did
      not establish any regional representative or sale office in 2006 because our
      products were sold through direct orders from our clients with our sales
      department. There was no need for any retail distribution of our product and
      as
      a result we did not need any regional sales office.




**COMPETITION**




Huifeng
      engages in Rutin production in China. With its proprietary technology of
“Producing Rutin by Eliminating Enzyme and Mucus” and with abundant resources of
      high quality pagoda rice in the Northwest region of China as raw material,
      Huifeng does not face substantial competitions within China.




In
      2006
      our major competitor was still Sichuan Xieli Pharmaceutical Company Limited
      (Xieli). However, because of a lack of technological patents and the ready
      access to raw materials, Xietong is gradually fading out of the Rutin refining
      business and is shifting its business from raw medicine production to finished
      medicine production, and retains a rather small portion of its business in
      raw
      medicine production.




In
      2006
      there was a little increase in small domestic Rutin manufacturers. but these
      manufacturers did not impose any threat to our business and sometimes they
      even
      became our suppliers and supported our operations.





Looking
      forward to 2007, we estimate there will be some new domestic competitors because
      of sales of the company’s two new products, including Diosmin and L-Rhamnose.
      However, we do not believe that these other companies have ripe technologies
      for
      producing Diosmin and L-Rhamnose, and therefore do not impose an immediate
      threat to our business.




**PRINCIPAL
      OFFICE**




Our
      principal office is located at FL16B, Ruixin Building, NO.25, Gaoxin Rd, Xian
      China.




**EMPLOYEES
      AND ORGANIZATION**




As
      of
      December 31, 2005, we had approximately 198 full-time employees. During 2006,
      we
      employed 5 new employees. Two new employees were allotted to the sales team.
      One
      of them was allotted in the domestic sales team and another one was allotted
      in
      the export sales team. The other three new employees were allotted to the
      production department. As a result, by the end of 2006, we had a total of 203
      employees. None of our employees are covered by a collective bargaining
      agreement and we have never experienced a work stoppage, and we consider our
      labor relations to be excellent.




5




As
      of
      December 31, 2006, our Company organization was as follow:





Department
            
            Employee
                as of end of 2006
            
            Employee
                as of end of 2005Sales
                department:Domestic
                sales department
            
            
            6
            
            
            5Export
                sales department:Export
                section I
            
            
            7
            
            
            6Export
                section II
            
            
            5
            
            
            5Production
                department
            
            
            146
            
            
            143Technical
                department
            
            
            9
            
            
            9Inspection
                department
            
            
            8
            
            
            8Provision
                department
            
            
            5
            
            
            5Personnel
                department
            
            
            5
            
            
            5Finance
                department
            
            
            6
            
            
            6Security
                department
            
            
            6
            
            
            6TOTAL
            
            
            203
            
            
            198




**BUSINESS
      DEVELOPMENT AND ACQUISITIONS**




In
      2006
      we still focused on new products development and sales channels development.
      We
      successfully commercialized 2 new products and get the benefits form the new
      export sales channels. Looking forward to 2007 and 2008, we will focus
      on:




1.
            Commercializing
                an additional one to two new pharmaceutical raw medicines and plant
                extract products and striving to launch these products into the public
                market;




2.
            Increasing
                our market share in pharmaceutical raw medicines and plant extract
                products in both international and domestic
                markets;




3.
            Streamlining
                our organization to ensure smooth operations and
                productions.




4.
            We
                plan to acquire one or two overseas sales companies and one domestic
                hygienical medicine products manufacturer in 2007.




**RESEARCH
      AND DEVELOPMENT**




In
      2006
      we continued to focus ourselves on research and development of new products.
      We
      kept the structure of our research and development team.




Looking
      forward to our research and development strategies in 2007, we will focus our
      research and development effort on new products with an aim to develop one
      to
      two new products within 2007. We are striving to launch these products into
      the
      public market in 2007.




**PATENTS
      AND INTELLECTUAL PROPERTIES**




Huifeng's
      proprietary technology “Producing Rutin by Eliminating Enzyme and Mucus”
received Chinese national technology patent with a ten-year protection
      period.




Although
      we developed two new products during 2005, we did not obtain any patent for
      our
      new products.




6




**GOVERNMENT
      REGULATIONS**




The
      Chinese government requires all medicine and medicinal products related
      manufacturers to obtain GMP certification on their pharmaceutical manufacturing
      facilities. Huifeng obtained GMP certification from relevant government
      regulatory in January 1, 2005. Other than GMP certification requirements, there
      was no significant change in the regulatory environment in China.





**ITEM
      2.**  **DESCRIPTION
      OF PROPERTIES**




See
      “production facilities” in ITEM 1 - DESCRIPTION OF BUSINESS.




There
      is
      no lien or encumbrance on any of the mentioned properties.





**ITEM
      3**  **LEGAL
      PROCEEDINGS**




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





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




There
      was
      no submission of matters to a vote of security holders in 2006.





A
      convertible promissory note issued by the company took effect on January 1,
      2006. The number of the company’s outstanding common shares increased from
      5,200,444 shares to 15,666,169 shares as of January 1, 2006.





In
      accordance with the 2005 Equity Incentive Plan of Huifeng Bio-pharmaceutical
      Technology Inc., which is a subsidiary of HFBG, the company disclosed the
      issuance of 800,000 shares of the company’s common stock on December 29, 2005
      pursuant to a registration under Form S-8. The number of the company’s
      outstanding common stock increased from 15,666,169 shares to 16,466,169 shares
      in April, 2006.





On
      October 31, 2006 the company disclosed in an 8-K for the issuance of
      2,000,000 shares of the company’s common stock to purchase two new production
      lines. The number of the company’s outstanding common stock increased from
      16,466,169 to 18,466,169 on November 8, 2006.




7





**PART
      II**





**ITEM
      5**  **MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**




Our
      common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) under
      the
      symbol "HFGB”




Trading
      of our common stock has been limited and sporadic. The following table shows
      the
      range of high and low bid quotations reported by the OTCBB in each fiscal
      quarter from January 1, 2004 to December 31, 2006, and the subsequent interim
      period. The OTCBB quotations reflect inter-dealer prices, without retail
      mark-up, mark-down or commission, and may not represent actual transactions.
      As
      of March 28, 2007, there were approximately 711 holders of record of our common
      stock. This number does not include an indeterminate number of shareholders
      whose shares are held by brokers in street name.





**BID
      PRICES FOR THE REPORTING PERIOD**




**Year**
            
            **Period**
            
            **High**
            
            **Low**2004
            
            First Quarter
            
            $
            0.300
            
            $
            0.010Second
                Quarter
            
            
            0.070
            
            
            0.060Third
                Quarter
            
            
            0.300
            
            
            0.050Fourth
                quarter
            
            
            0.590
            
            
            0.0202005
            
            First
                Quarter
            
            $
            0.160
            
            $
            0.050Second
                Quarter
            
            
            2.720
            
            
            0.720Third
                Quarter
            
            
            1.260
            
            
            0.540Fourth
                quarter
            
            
            2.150
            
            
            0.5802006
            
            First
                Quarter
            
            $
            0.700
            
            $
            0.370Second
                Quarter
            
            
            0.600
            
            
            0.300Third
                Quarter
            
            
            0.600
            
            
            0.300Fourth
                Quarter
            
            
            0.700
            
            
            0.2602007
            
            First
                Quarter (through March 30, 2007)
            
            $
            0.700
            
            
            0.280




**DIVIDENDS**




We
      presently intend to retain future earnings, if any, to provide funds for use
      in
      the operation and expansion of our business. Accordingly, we have not declared
      or paid any dividends to our common shareholders and do not presently intend
      to
      do so. Any future decision whether to pay dividends will depend on our financial
      condition and any other factors that our Board of Directors deems
      relevant.




**ISSUANCE
      OF SHARES**




On
      September 13, 2005 we filed an information statement pursuant to section 14(c)
      of the Securities Exchange Act of 1934 to approve a reverse Split that resulted
      in a reduction of our number of issued and outstanding shares from 93,604,958
      to
      approximately 5,200,444 shares. As of the effective date of the Reverse Split,
      each previously outstanding share was reduced to 0.0556 shares. Subsequent
      to
      the reverse split, we issued 10,465,725 shares of our restricted common stock
      at
      $0.1815 per share to repay to the holders of a convertible promissory note
      with
      a principal sum of $1,900,000.00.




On
      December 29, 2005, we filed a Form S-8 registration statement under the
      Securities Act of 1933 to register 800,000 shares of our common stocks to four
      individuals. On
      April
      27, 2006, we issued these 800,000 shares of common stock to four members of
      our
      staff as stock bonuses.





On
      November 8, 2006, we issued 2,000,000 shares of restricted common stock to
      third
      parties for the acquisition of plants and machinery.





Unless
      otherwise noted, the sales set forth above involved no underwriter's discounts
      or commissions and are claimed to be exempt from registration with the
      Securities and Exchange Commission pursuant to Section 4 (2) of the Securities
      Act of 1933, as amended, as transactions by an issuer not involving a public
      offering, the issuance and sale by the Company of shares of its common stock
      to
      financially sophisticated individuals who are fully aware of the Company's
      activities, as well as its business and financial condition, and who acquired
      said securities for investment purposes and understood the ramifications of
      same.





8





**ITEM
      6**  **MANAGEMENT'S
      DISCUSSIONS AND ANALYSIS**




This
      annual report contains forward-looking statements within the meaning of the
      federal securities laws. These include statements about our expectations,
      beliefs, intentions or strategies for the future, which we indicate by words
      or
      phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
      "HFGB believes," "management believes" and similar language. The forward-looking
      statements are based on the current expectations of HFGB and are subject to
      certain risks, uncertainties and assumptions, including those set forth in
      the
      discussion under "Description of Business" and "Management's Discussion and
      Analysis or Plan of Operation,". The actual results may differ materially from
      results anticipated in these forward-looking statements. We base the
      forward-looking statements on information currently available to us, and we
      assume no obligation to update them.




On
      December 20, 2004, pursuant to the Malone Agreement, Art Malone, Jr. ("Selling
      Shareholder") sold 7,229,601 shares of the common stock of the Company for
      $300,000 (the "Sale") to Zhi Lan Wang and Jun Lin, individuals on the closing
      date of December 20, 2004. As a result, the 7,229,601 shares of the common
      stock
      of the Company sold represented approximately 56.18% of the total outstanding
      stock of the Company. Immediately thereafter, On December 20, 2004 HFGB
      completed a Northwest Agreement, of which the Company initially purchased 30%
      of
      the common shares of NBTI in exchange for 80,735,590 shares of the Company's
      common stock ("Acquisition"). The purchase price for the remaining 70% of NBTI's
      common shares was $1,900,000 payable by the Company's issuance of a promissory
      note ("Promissory Note") on December 20, 2004 The Promissory Note may be
      convertible into 10,465,725 (post a one for eighteen reverse split) shares
      of
      the Company's common stock. As a result, the 80,735,590 shares of the common
      stock of the Company sold represented approximately 86.3% of the total
      outstanding stock of the Company. The Exchange resulted in a change of voting
      control of the Company.




NBTI
      was
      incorporated in the British Virgin Islands on June 25, 2004. NBTI operates
      through its wholly owned subsidiary, Huifeng Biochemistry Joint Stock Company
      ("Huifeng"), which is a joint venture company established under the laws of
      China and is engaged in the production and sales of plant extracts, biochemical
      products and pharmaceutical raw products in the PRC.




The
      exchange was treated as a reverse acquisition for accounting purposes. As such,
      the financial information reflected activity subsequent to the acquisition
      for
      HFGB and its subsidiaries and financial activity of NBTI prior to the
      acquisition. We will continue the business operations conducted by
      NBTI.




**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**




We
      have
      identified one policy area as critical to the understanding of our consolidated
      financial statements. The preparation of our consolidated financial statements
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the consolidated financial statements and the
      reported amounts of sales and expenses during the reporting periods. With
      respect to net realizable value of the Company's accounts receivable and
      inventories, significant estimation judgments are made and actual results could
      differ materially from these estimates.




The
      Company does not have any reserves against its accounts receivable or
      inventories at December 31, 2006 and 2005. Management's estimation that there
      are no reserves is based on the current facts that there is no significant
      aged
      accounts receivable and the current inventory turnover is sufficient to realize
      the current carrying value of the inventories. In making their judgment,
      management has assumed that there will be continued demand for their products
      in
      the future, thereby maintaining adequate turnover of the inventories.
      Additionally, management has assumed that customers will continue to pay their
      outstanding invoices in a timely manner, and that their customers' financial
      position will not deteriorate significantly in the future, which would result
      in
      their inability to pay their debts to the Company. While the Company's
      management currently believes that there is little likelihood that the actual
      results of their current estimates will differ materially from its current
      estimates, if customer demand for its products decreases significantly in the
      near future, or if the financial position of its customers deteriorates in
      the
      near future, the Company could realize significant write downs for slow moving
      inventories or uncollectible accounts receivable.





9




We
      believe the following is among the most critical accounting policies that impact
      our consolidated financial statements. We suggest that our significant
      accounting policies, as described in our consolidated financial statements
      in
      the Summary of Significant Accounting Policies, be read in conjunction with
      this
      Management's discussion and Analysis of Financial Condition and Results of
      Operations.




We
      recognize revenue in accordance with Staff Accounting Bulletin ("SAB") No.
      104.
      All of the following criteria must exist in order for us to recognize
      revenue:




1.
      Persuasive evidence of an arrangement exists;




2.
      Delivery has occurred or services have been rendered;




3.
      The
      seller's price to the buyer is fixed or determinable and




4.
      Collectibility is reasonably assured.




The
      majority of the Company's revenue results from sales contracts with distributors
      and revenue is generated upon the shipment of goods. The Company's pricing
      structure is fixed and there are no rebate or discount programs. Management
      conducts credit background checks for new customers as a means to reduce the
      subjectivity of assuring collectibility. Based on these factors, the Company
      believes that it can apply the provisions of SAB 104 with minimal
      subjectivity.




**RESULTS
      OF OPERATIONS**




The
      following table sets forth selected statement of operations data as a percentage
      of revenues for the periods indicated.




**Year
                Ended**
              **December
                31, 2006**
            
            **Year
                Ended**
              **December
                31, 2005**Revenues
            
            
            100.00
            %
            
            100.00
            %Cost
                of revenues
            
            
            (85.13
            %)
            
            (95.28
            %)Gross
                margin
            
            
            14.87
            %
            
            4.72
            %Selling
                and distribution expenses
            
            
            (3.99
            %)
            
            (5.57
            %)General
                and administrative expenses
            
            
            (9.47
            %)
            
            (12.40
            %)Stock
                bonuses
            
            
            (0.00
            %)
            
            (22.92
            %)Depreciation
                and amortization
            
            
            (1.49
            %)
            
            (1.78
            %)Equity
                in loss of affiliate
            
            
            (0.00
            %)
            
            (0.00
            %)Goodwill
                written off
            
            
            (0.00
            %)
            
            (0.11
            %)Interest
                income
            
            
            1.90
            %
            
            1.61
            %Interest
                expense
            
            
            (0.31
            %)
            
            (0.06
            %)Other
                income, net
            
            
            1.82
            %
            
            1.73
            %Income
                tax expense
            
            
            (0.04
            %)
            
            (0.01
            %)Minority
                interest
            
            
            0.10
            %
            
            0.73
            %Net
                Profit
            
            
            4.28
            %
            
            (34.09
            %)




**YEAR
      ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31,
      2005**




Revenues,
      Cost of Revenues and Gross Margin





Revenues
      for the year ended December 31, 2006 were $3,076,779, an increase of $633,719
      from $2,443,060 in 2005. Our increase in sales revenues in 2006 was mainly
      attributable to the increase in our sales in pharmaceutical raw materials,
      plant
      extracts and pharmaceutical intermediates in 2006 against
      2005.


10




For
                the year ended December 31,Product
            
            2006
            
            2005
            
            Increase/(Decrease)Pharmaceutical
                raw materials
            
            $
            2,364,185
            
            $
            1,941,036
            
            $
            423,149Plant
                extracts
            
            
            164,877
            
            
            68,932
            
            
            95,945Pharmaceutical
                intermediates
            
            
            547,717
            
            
            433,092
            
            
            114,625TOTAL
            
            $
            3,076,779
            
            $
            2,443,060
            
            $
            633,719




Our
      increase in sales of pharmaceutical raw materials in 2006 was mainly due to
      a
      increase in our sales of Diosmin and Troxerutin, two of our major products
      in
      the category of pharmaceutical raw materials. The sales of plant extracts
      increased in 2006 as compared to 2005 due to an increase in our sales of
      Hesperidin Extracts. Our increase in sales of pharmaceutical intermediates
      in
      2006 was mainly due to increase of our sales of L-Rhamnose, our major products
      in the category of pharmaceutical intermediates.





Cost
      of
      revenues for the year ended December 31, 2006 were $2,619,261, an increase
      of
      $291,494 from $2,327,767 as compared to 2005. Compared to 2005, the increase
      in
      cost of sales of our products was because of the change in costs in the
      following product categories:




For
                the year ended December 31,Product
            
            2006
            
            2005
            
            Increase/ (Decrease)Pharmaceutical
                raw materials
            
            $
            1,969,711
            
            $
            1,858,515
            
            $
            111,196Plant
                extracts
            
            
            137,270
            
            
            56,351
            
            
            80,919Pharmaceutical
                intermediates
            
            
            512,280
            
            
            412,901
            
            
            99,379TOTAL
            
            $
            2,619,261
            
            $
            2,327,767
            
            $
            291,494




Our
      overall profit margin increased from 5% in 2005 to 15% in 2006. Our profit
      margin for pharmaceutical raw materials increased from 4% in 2005 to 17% in
      2006. The profit margin for Plant extracts decreased from 18% in 2005 to 17%
      in
      2006. The profit margin for Pharmaceutical intermediates increased from 5%
      in
      2005 to 6% in 2006. The increase in our profit of Pharmaceutical raw materials
      was mainly due to make use of the new Diosmin production line. The gross profit
      margin of Diosmin is very high in our products. The new Diosmin production
      line
      enabled us to produce a batch of Diosmin. On the other hand, L-Rhamnose’s cost
      was low because its material resource is from the liquid waste in the production
      of Rutin. However, L-Rhamnose’s selling price is high and the gross profit
      margin is high. The decrease in our profit margin of Plant extracts was mainly
      due to the little


increase
      of unit market price of Ginkgo Biloba Extract. The increase in our profit margin
      of Pharmacutical intermediates was mainly due to the decreases in the unit
      cost
      of Quercetin.





Gross
      margin for the year ended December 31, 2006 was $457,518, an increase of
      $342,225 from $115,293 from 2005.





**General
      and Administrative Expenses**





General
      and Administrative expenses totaled to $291,363 for the year ended December
      31,
      2006, a decrease of $11,619 from $302,982 in 2005. The decrease in general
      and
      administrative expenses was mainly due to changes in the following
      expenses:




1.
                Decrease in professional expenses of $25,402
            :
            In
                2005, we had finished the acquisition and incurred more legal and
                professional fees. Consequently, in 2006 our professional fees
                decreased slightly.2.
                Increase in salary of $15,944
            :
            As
                a result of three new employees in the production
                department.


11




**Selling
      and Distribution Expenses**





Selling
      and distribution expenses amounted to $122,845 for the year ended December
      31,
      2006, a decrease of $13,217 from $136,062 in 2005. The decreases in our selling
      and distribution expenses in 2006 compared to 2005 were mainly due to the
      following:





Decrease
                in advertising and marketing expenses of $19,998
            :
            In
                2006, our brand name was more established due to previous advertising
                efforts resulting in reduced advertising expenses incurred during
                the
                year.





**Liquidity
      and Capital Resources**




Cash




Our
      cash
      balance amounted to $463,468 at December 31, 2006.




In
      the
      year ended December 31, 2006, our cash provided by operating activities amounted
      to $141,457, mainly due to the net profit in the current year of $131,736.
      Also,
      in the current year, our accounts receivable decreased by $2,697 as a result
      of
      the policies of sales and accounts receivable had no changes. Our inventories,
      however, were reduced by $343,256 due to our effort in managing our inventories
      purchases effectively and increasing of our sales. In the year ended December
      31, 2006, cash used in investing activities amounted to $159,242. This was
      mainly due to the fact that we used cash to purchase property and equipment
      in
      2006. Cash flow from financing activities amounted to $307,349 from notes
      payable.




The
      Company is currently funding its operations from and in addition to sales
      revenues.




Working
      Capital




Our
      working capital amounted to $2,899,060 at December 31, 2006.




12




**NEW
      ACCOUNTING PRONOUNCEMENTS**




In
      February 2006, the FASB issued SFAS No. 155, “ *Accounting
      for Certain Hybrid Financial Instruments* ”
(SFAS
      155”), which amends SFAS No. 133, “ *Accounting
      for Derivatives Instruments and Hedging Activities* ”
(“SFAS
      133”) and SFAS No. 140, “ *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishment of
      Liabilities* ”
(SFAS
      140”). SFAS 155 amends SFAS 133 to narrow the scope exception for interest-only
      and principal-only strips on debt instruments to include only such strips
      representing rights to receive a specified portion of the contractual interest
      or principle cash flows. SFAS 155 also amends SFAS 140 to allow qualifying
      special-purpose entities to hold a passive derivative financial instrument
      pertaining to beneficial interests that itself is a derivative instruments.
      The
      Company is currently evaluating the impact this new Standard, but believes
      that
      will not have that it will not have a material impact on the Company’s financial
      position





In
      March 2006, the FASB issued SFAS No. 156, “ *Accounting
      for Servicing of Financial Assets—an amendment to FASB Statement
      No. 140”* (“SFAS
      156”). SFAS 156 requires that all separately recognized servicing rights be
      initially measured at fair value, if practicable. In addition, this statement
      permits an entity to choose between two measurement methods (amortization method
      or fair value measurement method) for each class of separately recognized
      servicing assets and liabilities. This new accounting standard is effective
      January 1, 2007. We do not expect the adoption of SFAS 156 to have an
      impact on our results of operations or financial condition.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “ *Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement
      109* ”
(“FIN
      48”), which clarifies the accounting for uncertainty in tax positions. This
      Interpretation provides that the tax effects from an uncertain tax position
      can
      be recognized in the Company’s financial statements, only if the position is
      more likely than not of being sustained on audit, based on the technical merits
      of the position. The provisions of FIN 48 are effective as of the beginning
      of
      fiscal 2007, with the cumulative effect of the change in accounting principle
      recorded as an adjustment to opening retained earnings. The Company is currently
      evaluating the impact this new Standard, but believes that it will not have
      a
      material impact on the Company’s financial position.





In
      September 2006, FASB issued Statement 157, “ *Fair
      Value measurements* ”.
      This
      statement defines fair value and establishes a framework for measuring fair
      value in generally accepted accounting principles (“GAAP”). More precisely, this
      statement sets forth a standard definition of fair value as it applies to assets
      or liabilities, the principal market (or most advantageous market) for
      determining fair value (price), the market participants, inputs and the
      application of the derived fair value to those assets and liabilities. The
      effective date of this pronouncement is for all full fiscal and interim periods
      beginning after November 15, 2007. The Company is currently evaluating the
      impact this new Standard, but believes that it will not have a material impact
      on the Company’s financial position.





In
      September 2006, FASB issued Statement 158, “ *Employers’
      Accounting for Defined Benefit Pension and other Postretirement Plans, which
      amend FASB Statements No. 87, 88, 106 and 132(R)* ”.
      This
      statement requires employers to recognize the overfunded or underfunded status
      of a defined benefit postretirement plan as an asset or liability in its
      financial statements and to recognize changes in that funded status in the
      year
      in which the changes occur. The effective date for the Company would be for
      any
      full fiscal years ending after December 15, 2006. The Company is currently
      evaluating the impact this new Standard, but believes that it will not have
      a
      material impact on the Company’s financial position.





We
      believe that the implementation of this new pronouncement will not have any
      affect on our 2006 consolidated financial statements.




**INFLATION**




Inflation
      has not had a material impact on our business.




**CURRENCY
      EXCHANGE FLUCTUATIONS**




All
      of
      Company's revenues and majority of the expenses in 2006 were denominated
      primarily in Renminbi ("RMB"), the currency of China, and was converted into
      US
      dollars at the exchange rate of 7.9741 to 1. On 31 December, 2006, the value
      of
      Renminbi appreciated to 7.8087 to 1 against the US dollar. As a result of the
      appreciation of RMB we recognized a foreign currency translation gain of
      $227,732. There could be no assurance that RMB-to-U.S. dollar exchange rates
      will remain stable. The appreciation of RMB relative to the U.S. dollar would
      affect our business, financial condition and results of operations. We do not
      engage in currency hedging.





13


***RISK
        FACTORS***
 
 ***FACTORS
        THAT MAY AFFECT FUTURE PERFORMANCE***
  Before
        investing in our common stock, you should carefully consider (i) the following
        risk factors, (ii) the other information included herein and (iii) the
        information included in our other reports and filings.  Our business,
        financial condition, and the trading price of our common stock could be
        adversely affected by these and other risks.
 
 **RISKS
        RELATING TO OUR COMPANY**
 
 **TO
        MAXIMIZE OUR POTENTIAL FOR FUTURE GROWTH AND ACHIEVE OUR EXPECTED REVENUES,
        WE
        NEED TO MANAGE GROWTH IN OUR CURRENT OPERATIONS.**
 
 In
        order
        to maximize potential growth in our current and potential
 markets,
        we believe that we must expand our manufacturing and marketing
 operations.
        This expansion will place a significant strain on our management and on our
        operational, accounting, and information systems. We expect that as we continue
        to grow we will need to improve our financial controls, operating procedures,
        and management information systems to handle increased operations. We will
        also
        need to effectively train, motivate, and manage our employees. Failure to
        manage
        our growth could disrupt our operations and ultimately prevent us from
        generating the revenues we expect.
 
 **WE
        CANNOT GUARANTEE THAT OUR ORGANIC GROWTH STRATEGY WILL BE
        SUCCESSFUL.**
 
 One
        of
        our growth strategies is to grow organically by increasing the distribution
        and
        sales of our products in new markets outside of China. However, many obstacles
        to entering new markets exist, such as the costs associated with entering
        into
        new markets, developing and implementing effective marketing efforts abroad
        and
        maintaining attractive foreign exchange ratios. We cannot, therefore, assure
        you
        that we will be able to successfully overcome such obstacles and establish
        our
        products in any additional markets. Our inability to successfully implement
        our
        organic growth strategy may have a negative impact on our growth strategy
        and on
        our future financial condition, results of operations or cash
        flows.
   14
 WE CANNOT ASSURE YOU THAT OUR ACQUISITION GROWTH
      STRATEGY WILL BE
      SUCCESSFUL.  
 In
        addition to our organic growth strategy we also expect to grow through strategic
        acquisitions. We intend to pursue opportunities to acquire businesses that
        are
        complementary or related to our existing product lines. We may not be able
        to
        locate suitable acquisition candidates at prices that we consider appropriate
        or
        fair. If we do identify an appropriate acquisition candidate, we may not
        be able
        to successfully negotiate the terms of an acquisition, finance the acquisition
        on terms that are satisfactory to us or if the acquisition occurs successfully,
        integrate the acquired business into our existing business. Acquisitions
        of
        businesses or other material operations may require debt financing or additional
        equity financing, resulting in leverage or dilution of ownership. Integration
        of
        acquired business operations could disrupt our business by diverting management
        away from day-to-day operations. The difficulties of integration may be
        increased by the necessity of coordinating geographically dispersed
        organizations, integrating personnel with disparate business backgrounds
        and
        combining different corporate cultures. We also may not be able to maintain
        key
        employees or customers of an acquired business or realize cost efficiencies
        or
        synergies or other benefits we anticipated when selecting our acquisition
        candidates. In addition, we may need to record write-downs from future
        impairments of intangible assets, which could reduce our future reported
        earnings. At times, acquisition candidates may have liabilities or adverse
        operating issues that we fail to discover through due diligence prior to
        the
        acquisition which will be required to comply with laws of the People's Republic
        of China ("PRC"), to the extent applicable. There can be no assurance that
        any
        proposed acquisition will be able to comply with PRC requirements, rules
        and/or
        regulations, or that we will successfully obtain governmental approvals to
        the
        extent required, which may be necessary to consummate such
        acquisitions.
 
 **IF
        WE ARE NOT ABLE TO IMPLEMENT OUR STRATEGIES TO ACHIEVE OUR BUSINESS OBJECTIVES,
        OUR BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE MAY BE ADVERSELY
        AFFECTED.**
 
 Our
        business plan and growth strategy is based on currently prevailing circumstances
        and the assumption that certain circumstances will or will not occur, as
        well as
        the inherent risks and uncertainties involved in various stages of development.
        However, there is no assurance that we will be successful in implementing
        our
        strategies or that our strategies, even if implemented, will lead to the
        successful achievement of our objectives. If we are not able to successfully
        implement our strategies, our business operations and financial performance
        may
        be adversely affected.
 
 **IF
        WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE
        ABLE TO
        OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR
        OPERATIONS.**
 
 As
        we
        implement our growth strategies, we may experience increased capital needs
        and
        we may not have enough capital to fund future operations without additional
        capital investments. Our capital needs will depend on numerous factors,
        including (1) our profitability; (2) the release of competitive products
        by our
        competition; (3) the level of our investment in research and development;
        and
        (4) the amount of our capital expenditures. We cannot assure you that we
        will be
        able to obtain capital in the future to meet our needs.
  15
  If
        we
        cannot obtain additional funding, we may be required to:
 wreduce
        our
        investments in research and development;
 wlimit
        our
        marketing efforts; and
 wdecrease
        or
        eliminate capital expenditures.
 Such
        reductions could have a material adverse affect our business and our ability
        to
        compete. Even if we do find a source of additional capital, we may not be
        able
        to negotiate acceptable terms and conditions for receiving the additional
        capital. Any future capital investments could dilute or otherwise materially
        and
        adversely affect the holdings or rights of our existing shareholders. In
        addition, new equity or convertible debt securities issued by us to obtain
        financing could have rights, preferences and privileges senior to our common
        stock. We cannot give you any assurance that any additional financing will
        be
        available to us, or if available, will be on terms favorable to us.
 
 **WE
        DEPEND ON THIRD PARTIES TO SUPPLY RAW MATERIALS, AND ANY ADVERSE CHANGES
        IN SUCH
        SUPPLY OR THE COSTS OF RAW MATERIALS MAY ADVERSELY AFFECT OUR
        OPERATIONS.**
 
 We
        currently obtain all of our raw materials from third parties and through
        various
        farms. Due to the nature of the raw materials, mainly plants, the supply
        of
        these raw materials can be adversely affected by any material change in the
        climate or environmental conditions in China, which may, in turn, result
        in
        increased costs to purchase these raw materials.
 
 **INTENSE
        COMPETITION FROM EXISTING AND NEW ENTITIES MAY ADVERSELY AFFECT OUR REVENUES
        AND
        PROFITABILITY.**
 
 We
        compete with other companies, many of whom are developing, or can be expected
        to
        develop, products similar to ours. Some of our competitors are more established
        than we are, and have significantly greater financial, technical, marketing
        and
        other resources than we presently possess. Some of our competitors have greater
        name recognition and a larger customer base. These competitors may be able
        to
        respond more quickly to new or changing opportunities and customer requirements
        and may be able to undertake more extensive promotional activities, offer
        more
        attractive terms to customers, and adopt more aggressive pricing policies.
        We
        intend to create greater brand awareness for our brand name so that we can
        successfully compete with our competitors. We cannot guarantee that we will
        be
        able to compete effectively with current or future competitors or that the
        competitive pressures we face will not harm our business.
  16
  **WE
        DEPEND ON OUR KEY MANAGEMENT PERSONNEL AND THE LOSS OF THEIR SERVICES COULD
        ADVERSELY AFFECT OUR BUSINESS.**
 
 We
        place
        substantial reliance upon the efforts and abilities of our executive officers,
        Jing’an Wang, our Chairman and Chief Executive Officer; Sanding Tao, our acting
        Chief Financial Officer; and Xinwen Hou, Chief Operations Officer and Secretary.
        The loss of the services of any of our executive officers could have a material
        adverse effect on our business, operations, revenues or prospects. We do
        not
        maintain key man life insurance on the lives of these individuals.
 
 **WE
        MAY INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE
        AND ACCOUNTING REQUIREMENTS.**
 
 We
        may
        incur significant costs associated with our public company reporting
        requirements, costs associated with newly applicable corporate governance
        requirements, including requirements under the Sarbanes-Oxley Act of 2002
        and
        other rules implemented by the Securities and Exchange Commission and the
        NASDAQ
        OTCBB. We expect all of these applicable rules and regulations to increase
        our
        legal and financial compliance costs and to make some activities more
        time-consuming and costly. We also expect that these applicable rules and
        regulations may make it more difficult and more expensive for us to obtain
        director and officer liability insurance and we may be required to accept
        reduced policy limits and coverage or incur substantially higher costs to
        obtain
        the same or similar coverage. As a result, it may be more difficult for us
        to
        attract and retain qualified individuals to serve on our board of directors
        or
        as executive officers. We are currently evaluating and monitoring developments
        with respect to these newly applicable rules, and we cannot predict or estimate
        the amount of additional costs we may incur or the timing of such
        costs.
 
 **WE
        MAY HAVE DIFFICULTY RAISING NECESSARY CAPITAL TO FUND OPERATIONS AS A RESULT
        OF
        MARKET PRICE VOLATILITY OF OUR SHARES OF COMMON STOCK.**
 
 If
        our
        business development plans are successful, we may require additional financing
        to continue to develop and exploit existing and new technologies and to expand
        into new markets. The exploitation of our technologies may, therefore, be
        dependent upon our ability to obtain equity financing through debt and equity
        or
        other means. In recent years, the securities markets in the United States
        have
        experienced a high level of price and volume volatility, and the market price
        of
        securities of many companies have experienced wide fluctuations that have
        not
        necessarily been related to the operations, performance, underlying asset
        values
        or prospects of such companies.
  For
        these
        reasons, our shares of common stock can also be expected to be subject to
        volatility resulting from purely market forces over which we will have no
        control. Such volatility may make it more difficult to find investors willing
        to
        invest in our common stock, or to negotiate equity financing or terms that
        are
        acceptable to us.
  17
  
 
 **RISKS
        RELATING TO THE PEOPLE'S REPUBLIC OF CHINA**
 
 **THERE
        COULD BE CHANGES IN GOVERNMENT REGULATIONS TOWARDS THE PHARMACEUTICAL AND
        HEALTH
        SUPPLEMENT INDUSTRIES THAT MAY ADVERSELY AFFECT OUR
        BUSINESS.**
 
 The
        manufacture and sale of pharmaceutical products in the PRC is heavily regulated
        by many state, provincial and local authorities. These regulations significantly
        increase the difficulty and costs involved in obtaining and maintaining
        regulatory approvals for marketing new and existing products. Our future
        growth
        and profitability depend to a large extent on our ability to obtain regulatory
        approvals.
 The
        State
        Food and Drug Administration of China recently implemented new guidelines
        for
        licensing of pharmaceutical products. All existing manufacturers with licenses,
        which are currently valid under the previous guidelines, are required to
        apply
        for the Good Manufacturing Practices ("GMP") certifications, and we receive
        approvals in January 2005. We have received our certifications. However,
        should
        we fail to maintain the GMP certifications under the new guidelines in the
        future, our businesses would be materially and adversely affected. Moreover,
        the
        laws and regulations regarding acquisitions of the pharmaceutical industry
        in
        the PRC may also change and may significantly impact our ability to grow
        through
        acquisitions.
 
 **CURRENCY
        CONVERSION AND EXCHANGE RATE VOLATILITY COULD ADVERSELY AFFECT OUR FINANCIAL
        CONDITION.**
 
 The
        PRC
        government imposes control over the conversion of Renminbi into foreign
        currencies. Under the current unified floating exchange rate system, the
        People's Bank of China publishes an exchange rate, which we refer to as the
        People's Bank of China exchange rate, based on the previous day's dealings
        in
        the inter-bank foreign exchange market. Financial institutions authorized
        to
        deal in foreign currency may enter into foreign exchange transactions at
        exchange rates within an authorized range above or below the People's Bank
        of
        China exchange rate according to market conditions.
 Pursuant
        to the Foreign Exchange Control Regulations of the PRC issued by the State
        Council which came into effect on April 1, 1996, and the Regulations on the
        Administration of Foreign Exchange Settlement, Sale and Payment of the PRC
        which
        came into effect on July 1, 1996, regarding foreign exchange control, conversion
        of Renminbi into foreign exchange by Foreign Investment Enterprises, for
        use on
        current account items, including the distribution of dividends and profits
        to
        foreign investors, is permissible. Foreign Investment Enterprises are permitted
        to convert their after-tax dividends and profits to foreign exchange and
        remit
        such foreign exchange to their foreign exchange bank accounts in the PRC.
        Conversion of Renminbi into foreign currencies for capital account items,
        including direct investment, loans, and security investment, is still under
        certain restrictions. On January 14, 1997, the State Council amended the
        Foreign
        Exchange Control Regulations and added, among other things, an important
        provision, which provides that the PRC government shall not impose restrictions
        on recurring international payments and transfers under current account
        items.
  18
  Enterprises
        in the PRC (including Foreign Investment Enterprises ) which require foreign
        exchange for transactions relating to current account items, may, without
        approval of the State Administration of Foreign Exchange, or SAFE, effect
        payment from their foreign exchange account or convert and pay at the designated
        foreign exchange banks by providing valid receipts and proofs.
 
 **IT
        MAY BE DIFFICULT TO EFFECT SERVICE OF PROCESS AND ENFORCEMENT OF LEGAL JUDGMENTS
        UPON OUR COMPANY AND OUR OFFICERS AND DIRECTORS BECAUSE THEY RESIDE OUTSIDE
        THE
        UNITED STATES**
 
 As
        our
        operations are presently based in China and our officers and certain of our
        directors reside in China, service of process on our company and our officers
        and certain directors may be difficult to effect within the United States.
        Also,
        our main assets are located in China and any judgment obtained in the United
        States against us may not be enforceable outside the United States.
 
 **MOST
        OF OUR ASSETS ARE LOCATED IN CHINA, ANY DIVIDENDS OF PROCEEDS FROM LIQUIDATION
        IS SUBJECT TO THE APPROVAL OF THE RELEVANT CHINESE GOVERNMENT
        AGENCIES.**
 
 Our
        assets are predominantly located inside China. Under the laws governing foreign
        invested enterprises in China, dividend distribution and liquidation are
        allowed
        but subject to special procedures under the relevant laws and rules. Any
        dividend payment will be subject to the decision of the board of directors
        and
        subject to foreign exchange rules governing such repatriation. Any liquidation
        is subject to both the relevant government agency's approval and supervision
        as
        well the foreign exchange control. This may generate additional risk for
        our
        investors in case of dividend payment and liquidation.
 
  19
 ***FACTORS
        THAT MAY AFFECT FUTURE PERFORMANCE***
  Before
        investing in our common stock you should carefully consider the following
        risk
        factors, the other information included herein and the information included
        in
        our other reports and filings.  Our business, financial condition, and the
        trading price of our common stock could be adversely affected by these and
        other
        risks.
 
 **RISKS
        RELATING TO OUR COMPANY**
 
 **TO
        MAXIMIZE OUR POTENTIAL FOR FUTURE GROWTH AND ACHIEVE OUR EXPECTED REVENUES,
        WE
        NEED TO MANAGE GROWTH IN OUR CURRENT OPERATIONS.**
 
 In
        order
        to maximize potential growth in our current and potential markets, we believe
        that we must expand our manufacturing and marketing operations. This expansion
        will place a significant strain on our management and on our operational,
        accounting, and information systems. We expect that as we continue to grow
        we
        will need to improve our financial controls, operating procedures, and
        management information systems to handle increased operations. We will also
        need
        to effectively train, motivate, and manage our employees. Our failure to
        manage
        our growth could disrupt our operations and ultimately prevent us from
        generating the revenues we expect.
 
 **WE
        CANNOT ASSURE YOU THAT OUR ORGANIC GROWTH STRATEGY WILL BE
        SUCCESSFUL.**
 
 One
        of
        our growth strategies is to grow organically by increasing the distribution
        and
        sales of our products in new markets outside of China. However, many obstacles
        to entering new markets exist, such as the costs associated with entering
        into
        new markets, developing and implementing effective marketing efforts abroad
        and
        maintaining attractive foreign exchange ratios. We cannot, therefore, assure
        you
        that we will be able to successfully overcome such obstacles and establish
        our
        products in any additional markets. Our inability to successfully implement
        our
        organic growth strategy may have a negative impact on our growth strategy
        and on
        our future financial condition, results of operations or cash
        flows.
 
  20
  **WE
        CANNOT ASSURE YOU THAT OUR ACQUISITION GROWTH STRATEGY WILL BE
        SUCCESSFUL.**
 
 In
        addition to our organic growth strategy we also expect to grow through strategic
        acquisitions. We intend to pursue opportunities to acquire businesses that
        are
        complementary or related to our existing product lines. We may not be able
        to
        locate suitable acquisition candidates at prices that we successfully consider
        appropriate. If we do identify an appropriate acquisition candidate, we may
        not
        be able to successfully negotiate the terms of an acquisition, finance the
        acquisition on terms that are satisfactory to us or if the acquisition occurs
        successfully, integrate the acquired business into our existing business.
        Acquisitions of businesses or other material operations may require debt
        financing or additional equity financing, resulting in leverage or dilution
        of
        ownership. Integration of acquired business operations could disrupt our
        business by diverting management away from day-to-day operations. The
        difficulties of integration may be increased by the necessity of coordinating
        geographically dispersed organizations, integrating personnel with disparate
        business backgrounds and combining different corporate cultures. We also
        may not
        be able to maintain key employees or customers of an acquired business or
        realize cost efficiencies or synergies or other benefits we anticipated when
        selecting our acquisition candidates. In addition, we may need to record
        write-downs from future impairments of intangible assets, which could reduce
        our
        future reported earnings. At times, acquisition candidates may have liabilities
        or adverse operating issues that we fail to discover through due diligence
        prior
        to the acquisition which will be required to comply with laws of the People's
        Republic of China ("PRC"), to the extent applicable. There can be no assurance
        that any proposed acquisition will be able to comply with PRC requirements,
        rules and/or regulations, or that we will successfully obtain governmental
        approvals to the extent required, which may be necessary to consummate such
        acquisitions.
 
 **IF
        WE ARE NOT ABLE TO IMPLEMENT OUR STRATEGIES TO ACHIEVE OUR
        BUSINESS**
 **OBJECTIVES,
        OUR BUSINESS OPERATIONS AND FINANCIAL PERFORMANCE MAY BE ADVERSELY
        AFFECTED.**
 
 Our
        business plan and growth strategy is based on currently prevailing circumstances
        and the assumption that certain circumstances will or will not occur, as
        well as
        the inherent risks and uncertainties involved in various stages of development.
        However, there is no assurance that we will be successful in implementing
        our
        strategies or that our strategies, even if implemented, will lead to the
        successful achievement of our objectives. If we are not able to successfully
        implement our strategies, our business operations and financial performance
        may
        be adversely affected.
 
  21
  **IF
        WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE
        ABLE TO
        OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR
        OPERATIONS.**
 
 As
        we
        implement our growth strategies, we may experience increased capital needs
        and
        we may not have enough capital to fund future operations without additional
        capital investments. Our capital needs will depend on numerous factors,
        including (1) our profitability; (2) the release of competitive products
        by our
        competition; (3) the level of our investment in research and development;
        and
        (4) the amount of our capital expenditures. We cannot assure you that we
        will be
        able to obtain capital in the future to meet our needs.
  If
        we
        cannot obtain additional funding, we may be required to:
  •reduce
        our investments in research and development;
  •limit
        our marketing efforts; and
  •decrease
        or eliminate capital expenditures.
  Such
        reductions could have a material adverse affect our business and our ability
        to
        compete.
  Even
        if
        we do find a source of additional capital, we may not be able to negotiate
        acceptable terms and conditions for receiving the additional capital. Any
        future
        capital investments could dilute or otherwise materially and adversely affect
        the holdings or rights of our existing shareholders. In addition, new equity
        or
        convertible debt securities issued by us to obtain financing could have rights,
        preferences and privileges senior to our common stock. We cannot give you
        any
        assurance that any additional financing will be available to us, or if
        available, will be on terms favorable to us.
  22
  **WE
        DEPEND ON THIRD PARTIES TO SUPPLY RAW MATERIALS, AND ANY ADVERSE CHANGES
        IN SUCH
        SUPPLY OR THE COSTS OF RAW MATERIALS MAY ADVERSELY AFFECT OUR
        OPERATIONS.**
 
 We
        currently obtain all of our raw materials from third parties and through
        various
        farms. Due to the nature of the raw materials, mainly plants, the supply
        of
        these raw materials can be adversely affected by any material change in the
        climatic or environmental conditions in China, which may, in turn, result
        in
        increased costs to purchase these raw materials.
 
 **INTENSE
        COMPETITION FROM EXISTING AND NEW ENTITIES MAY ADVERSELY AFFECT OUR REVENUES
        AND
        PROFITABILITY.**
 
 We
        compete with other companies, many of whom are developing, or can be expected
        to
        develop, products similar to ours. Some of our competitors are more established
        than we are, and have significantly greater financial, technical, marketing
        and
        other resources than we presently possess. Some of our competitors have greater
        name recognition and a larger customer base. These competitors may be able
        to
        respond more quickly to new or changing opportunities and customer requirements
        and may be able to undertake more extensive promotional activities, offer
        more
        attractive terms to customers, and adopt more aggressive pricing policies.
        We
        intend to create greater brand awareness for our brand name so that we can
        successfully compete with our competitors. We cannot assure you that we will
        be
        able to compete effectively with current or future competitors or that the
        competitive pressures we face will not harm our business.
 
 **WE
        DEPEND ON OUR KEY MANAGEMENT PERSONNEL AND THE LOSS OF THEIR SERVICES COULD
        ADVERSELY AFFECT OUR BUSINESS.**
 
 We
        place
        substantial reliance upon the efforts and abilities of our executive officers,
        Jing’an Wang, our Chairman and Chief Executive Officer; Sanding Tao our acting
        Chief Financial Officer; Xinwen Hou, Chief Operations Officer and Secretary.
        The
        loss of the services of any of our executive officers could have a material
        adverse effect on our business, operations, revenues or prospects. We do
        not
        maintain key man life insurance on the lives of these individuals.
 
  23
  **WE
        MAY INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE
        AND ACCOUNTING REQUIREMENTS.**
 
 We
        may
        incur significant costs associated with our public company reporting
        requirements, costs associated with newly applicable corporate governance
        requirements, including requirements under the Sarbanes-Oxley Act of 2002
        and
        other rules implemented by the Securities and Exchange Commission and the
        NASDAQ
        OTCBB. We expect all of these applicable rules and regulations to increase
        our
        legal and financial compliance costs and to make some activities more
        time-consuming and costly. We also expect that these applicable rules and
        regulations may make it more difficult and more expensive for us to obtain
        director and officer liability insurance and we may be required to accept
        reduced policy limits and coverage or incur substantially higher costs to
        obtain
        the same or similar coverage. As a result, it may be more difficult for us
        to
        attract and retain qualified individuals to serve on our board of directors
        or
        as executive officers. We are currently evaluating and monitoring developments
        with respect to these newly applicable rules, and we cannot predict or estimate
        the amount of additional costs we may incur or the timing of such
        costs.
 
 **WE
        MAY HAVE DIFFICULTY RAISING NECESSARY CAPITAL TO FUND OPERATIONS AS A RESULT
        OF
        MARKET PRICE VOLATILITY OF OUR SHARES OF COMMON STOCK.**
 
 If
        our
        business development plans are successful, we may require additional financing
        to continue to develop and exploit existing and new technologies and to expand
        into new markets. The exploitation of our technologies may, therefore, be
        dependent upon our ability to obtain equity financing through debt and equity
        or
        other means. In recent years, the securities markets in the United States
        have
        experienced a high level of price and volume volatility, and the market price
        of
        securities of many companies have experienced wide fluctuations that have
        not
        necessarily been related to the operations, performance, underlying asset
        values
        or prospects of such companies.
  24
  For
        these
        reasons, our shares of common stock can also be expected to be subject to
        volatility resulting from purely market forces over which we will have no
        control. Such volatility may make it more difficult to find investors willing
        to
        invest in our common stock, or to negotiate equity financing or terms that
        are
        acceptable to us.
 
 **RISKS
        RELATING TO THE PEOPLE'S REPUBLIC OF CHINA**
 
 **THERE
        COULD BE CHANGES IN GOVERNMENT REGULATIONS TOWARDS THE PHARMACEUTICAL AND
        HEALTH
        SUPPLEMENT INDUSTRIES THAT MAY ADVERSELY AFFECT OUR
        BUSINESS.**
 
 The
        manufacture and sale of pharmaceutical products in the PRC is heavily regulated
        by many state, provincial and local authorities. These regulations significantly
        increase the difficulty and costs involved in obtaining and maintaining
        regulatory approvals for marketing new and existing products. Our future
        growth
        and profitability depend to a large extent on our ability to obtain regulatory
        approvals. The State Food and Drug Administration of China recently implemented
        new guidelines for licensing of pharmaceutical products. All existing
        manufacturers with licenses, which are currently valid under the previous
        guidelines, are required to apply for the Good Manufacturing Practices ("GMP")
        certifications, and we receive approvals in January 2005. We have received
        our
        certifications. However, should we fail to maintain the GMP certifications
        under
        the new guidelines in the future; our businesses would be materially and
        adversely affected. Moreover, the laws and regulations regarding acquisitions
        of
        the pharmaceutical industry in the PRC may also change and may significantly
        impact our ability to grow through acquisitions.
 
  25
  **CURRENCY
        CONVERSION AND EXCHANGE RATE VOLATILITY COULD ADVERSELY AFFECT OUR FINANCIAL
        CONDITION.**
 
 The
        PRC
        government imposes control over the conversion of Renminbi into foreign
        currencies. Under the current unified floating exchange rate system, the
        People's Bank of China publishes an exchange rate, which we refer to as the
        People's Bank of China exchange rate, based on the previous day's dealings
        in
        the inter-bank foreign exchange market. Financial institutions authorized
        to
        deal in foreign currency may enter into foreign exchange transactions at
        exchange rates within an authorized range above or below the People's Bank
        of
        China exchange rate according to market conditions. Pursuant to the Foreign
        Exchange Control Regulations of the PRC issued by the State Council which
        came
        into effect on April 1, 1996, and the Regulations on the Administration of
        Foreign Exchange Settlement, Sale and Payment of the PRC which came into
        effect
        on July 1, 1996, regarding foreign exchange control, conversion of Renminbi
        into
        foreign exchange by Foreign Investment Enterprises, for use on current account
        items, including the distribution of dividends and profits to foreign investors,
        is permissible. Foreign Investment Enterprises are permitted to convert their
        after-tax dividends and profits to foreign exchange and remit such foreign
        exchange to their foreign exchange bank accounts in the PRC. Conversion of
        Renminbi into foreign currencies for capital account items, including direct
        investment, loans, and security investment, is still under certain restrictions.
        On January 14, 1997, the State Council amended the Foreign Exchange Control
        Regulations and added, among other things, an important provision, which
        provides that the PRC government shall not impose restrictions on recurring
        international payments and transfers under current account items.
  Enterprises
        in the PRC (including Foreign Investment Enterprises ) which require foreign
        exchange for transactions relating to current account items, may, without
        approval of the State Administration of Foreign Exchange, or SAFE, effect
        payment from their foreign exchange account or convert and pay at the designated
        foreign exchange banks by providing valid receipts and proofs.
 
  26
  **IT
        MAY BE DIFFICULT TO EFFECT SERVICE OF PROCESS AND ENFORCEMENT OF LEGAL JUDGMENTS
        UPON OUR COMPANY AND OUR OFFICERS AND DIRECTORS BECAUSE THEY RESIDE OUTSIDE
        THE
        UNITED STATES**
 
 As
        our
        operations are presently based in China and our officers and certain of our
        directors reside in China, service of process on our company and our officers
        and certain directors may be difficult to effect within the United States.
        Also,
        our main assets are located in China and any judgment obtained in the United
        States against us may not be enforceable outside the United States.
 
 **MOST
        OF OUR ASSETS ARE LOCATED IN CHINA, ANY DIVIDENDS OF PROCEEDS FROM LIQUIDATION
        IS SUBJECT TO THE APPROVAL OF THE RELEVANT CHINESE GOVERNMENT
        AGENCIES.**
 
 Our
        assets are predominantly located inside China. Under the laws governing foreign
        invested enterprises in China, dividend distribution and liquidation are
        allowed
        but subject to special procedures under the relevant laws and rules. Any
        dividend payment will be subject to the decision of the board of directors
        and
        subject to foreign exchange rules governing such repatriation. Any liquidation
        is subject to both the relevant government agency's approval and supervision
        as
        well the foreign exchange control. This may generate additional risk for
        our
        investors in case of dividend payment and liquidation.
 
 27





**ITEM
      7**  **FINANCIAL
      STATEMENTS**





The
      financial statements, together with the independent auditors' report thereon,
      appears beginning on page F-1 of this report.





**ITEM
      8**  **CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES**




On
      March
      14, 2005, the accounting firm of Jimmy C. H. Cheung & Co., Certified Public
      Accountants (a member of Kreston International), 304 Dominion Centre, 43 Queen's
      Road East, Hong Kong, was engaged to take over the audit responsibilities from
      Epstein Weber & Conover, PLC, Certified Public Accountants; and Epstein
      Weber & Conover, PLC was dismissed on that same date.




During
      our three most recent fiscal years and any subsequent interim period prior
      to
      the engagement of Jimmy C. H. Cheung & Co., Certified Public Accountants, we
      has not consulted with Jimmy C. H. Cheung & Co., Certified Public
      Accountants, or any other auditor, regarding any accounting or audit concerns,
      to include, but not by way of limitation, those stated in Item 304(a)(2) of
      Regulation S-B.




During
      our three most recent fiscal years and the subsequent interim period through
      the
      date of dismissal, we are not aware of any disagreements with its former
      accountants, whether resolved or not resolved, on any matter of accounting
      principals or practices, financial statement disclosure, or auditing scope
      or
      procedure, which, if not resolved to said accountants' satisfaction, would
      have
      caused it to make reference to the subject matter of the disagreements(s) in
      connection with its report.




28





**ITEM
      8A**  **CONTROLS
      AND PROCEDURES**




We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in the Company's Exchange Act reports
      is
      recorded, processed, summarized and reported within the time periods specified
      in the SEC's rules and forms, and that such information is accumulated and
      communicated to our management, including its Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure based closely on the definition of "disclosure controls and
      procedures" in Rule 13a-14(c). Our disclosure controls and procedures are
      designed to provide a reasonable level of assurance of reaching our desired
      disclosure control objectives. In designing and evaluating the disclosure
      controls and procedures, our management recognized that any controls and
      procedures, no matter how well designed and operated, can provide only
      reasonable assurance of achieving the desired control objectives, and management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures. Our certifying officers have
      concluded that our disclosure controls and procedures are effective in reaching
      that level of assurance.




As
      of the
      end of the period of this report, we carried out an evaluation, under the
      supervision and with the participation of our management including our Chief
      Executive Officer and our Chief Financial Officer, of the effectiveness of
      the
      design and operation of our disclosure controls and procedures. Based on the
      foregoing, our Chief Executive Officer and Chief Financial Officer concluded
      that our disclosure controls and procedures were effective.





**ITEM
      8B OTHER INFORMATION**




Not
      applicable.





**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 and ages of our current directors and
      executive officers, their principal offices and positions and the date each
      such
      person became a director or executive officer of our company. Our executive
      officers are elected annually by the Board of Directors. Our directors serve
      one
      year terms until their successors are elected. The executive officers serve
      terms of one year or until their death, resignation or removal by the Board
      of
      Directors. There are no family relationships between any of the directors and
      executive officers. In addition, there were no arrangements or understanding
      between any executive officer and any other person pursuant to which any person
      was selected as an executive officer. Currently, directors are not compensated
      for serving on the Board of Directors. We have not established compensation
      or
      executive committees. Currently, our entire board of directors serves as our
      audit committee. Because of the small size of the Company and the risk attendant
      to a small public company, we are currently unable to attract an audit committee
      financial expert to our Board of Directors.





**BIOGRAPHIES
      OF OFFICERS AND DIRECTORS**




Jingan
      Wang




Mr.
      Jingan Wang, age 47, Chief Executive Officer of the Company, is the founder
      and
      currently serves as President of Huifeng. Mr. Wang has over fifteen years of
      experience in accounting and financial management area. Mr. Wang has served
      as
      Accounting Supervisors and Chief Financial Officers for various companies during
      his professional career. Before Mr. Wang founded Huifeng in 2000, he was the
      Chief Financial Officer for Wei Xing Enterprises from 1999 to 2000. In 2004,
      he
      was awarded "the Entrepreneur of the Year" by the Xian Hi Tech Development
      Zone.
      Mr. Wang is also a certified public accountant.




Sanding
      Tao




Mr.
      Sanding Tao, age 39, Chief Financial Officer of the Company and of Huifeng.
      Mr.
      Tao served as VP of Finance and CFO for various technology and bio-tech firms
      before he joined Huifeng in 2003. From 1998 - 2000, Mr. Tao served as Chief
      Financial Officer for Xian Lan Xi Science & Technology Inc.; and from 2000
      -2003, Mr. Tao served as Chief Financial Officer for Xian Xing Yi Science &
Technology Inc. Mr. Tao is a graduate of Chinese Southern Financial
      College.




29




Xinwen
      Hou




Mr.
      Xinwen Hou, age 39,Director and Secretary of the Company, currently also serves
      as Assistant to the President and as Company Secretary for Huifeng Biochemistry
      Joint Stock Company ("Huifeng") in Xian, China. Mr. Hou held various leadership
      positions in different public companies in China before he joined Huifeng in
      January 2004. From 1997 - 2003, Mr. Hou served as Company Secretary for De
      Li
      Bang Pharmaceutical Inc., which is listed on China's A share stock exchange.
      He
      is also a reputable economist. He graduated from Xian Transportation University
      with a major in Business Administration.




The
      following table summarizes the information of the directors and executive
      officers of our Company:




**Name**
            
            **Position**
            
            **Date
                Of Appointment**Jingan
                Wang
            
            Chief
                Executive Officer
            
            December
                20, 2004Sanding
                Tao
            
            Chief
                Financial Officer
            
            December
                20, 2004Xinwen
                Hou
            
            Director
                and Secretary
            
            December
                20, 2004




**INDEMNIFICATION
      OF DIRECTORS AND OFFICERS**




Our
      articles of incorporation limit the liability of directors to the maximum extent
      permitted by Nevada law. This limitation of liability is subject to exceptions
      including intentional misconduct, obtaining an improper personal benefit and
      abdication or reckless disregard of director duties. Our articles of
      incorporation and bylaws provide that we may indemnify its directors, officer,
      employees and other agents to the fullest extent permitted by law. Our bylaws
      also permit us to secure insurance on behalf of any officer, director, employee
      or other agent for any liability arising out of his or her actions in such
      capacity, regardless of whether the bylaws would permit indemnification. We
      currently do not have such an insurance policy.




Insofar
      as indemnification for liabilities arising under the Securities Act of 1933
      may
      be permitted for our directors, officers and controlling 1934 persons pursuant
      to the foregoing provisions, or otherwise, we have been advised that in the
      opinion of the Securities and Exchange Commission such indemnification is
      against public policy as expressed in the Securities Act and is, therefore,
      unenforceable.




**CODE
      OF ETHICS**




We
      have
      adopted a Code of Ethics and Business Conduct authorizing the establishment
      of a
      committee to ensure that our disclosure controls and procedures remain
      effective.  Our Code also defines the standard of conduct expected by our
      officers, directors and employees.





**ITEM
      10.**  **EXECUTIVE
      COMPENSATION**




The
      executives of the Company received no compensation from the Company for the
      fiscal year ending December 31, 2006. The Company currently has no agreements
      for compensation of its executives, and has no stock option plan or other equity
      compensation plan for its employees.





**ITEM
      11.**  **SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**




The
      following table sets forth certain information regarding beneficial ownership
      of
      common stock as of March 30, 2007 by each person known to us to own beneficially
      more than 5% of our common stock, each of our directors, each of our named
      executive officers; and all executive officers and directors as a
      group.




30




Name
            
            Position
                Held
            
            Shares
                Owned
            
            %
                OwnedJingan
                Wang
            
            Chief
                Executive Officer
            
            7,305,074
            
            39.56%Sanding
                Tao
            
            Chief
                Financial Officer
            
            325,442
            
            1.76%Xinwen
                Hou
            
            Director
                and Secretary
            
            325,442
            
            1.76%Xian
                Runfeng Investment Ltd. Co.
            
            821,567
            
            4.45%**All
                directors and executive officers as a group**
            
            **8,777,525**
            
            **47.53%**





**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTION**




As
      of
      December 31, 2006 and 2005, the stockholders owed the Company $24,162 and
      $100,071 respectively for advances made on an unsecured basis and repayable
      on
      demand. Interest is charged at 6% per annum on the amount due. Total interest
      income amounted to $10,486 and $5,664 for the years ended December 31, 2006
      and
      2005, respectively. The amounts owed by stockholders were advances made by
      Huifeng Biochemistry prior to the reorganization plan in 2004.





As
      of
      December 31, 2006 and 2005, the Company also owed the stockholders $0 and $1,239
      respectively for advances made on an unsecured basis, free of interest payment
      and repayable on demand.





The
      Company issued a Convertible Promissory Note of $1,900,000 to the shareholders
      of Northwest, the Note is convertible into 10,465,725 (post a one for eighteen
      reverse split) shares to exchange for 70% of the outstanding shares of
      Northwest. On
      October 12, 2005, the Company issued 10,465,725 shares of restricted common
      stock in conversion of the Convertible Promissory Note of
      $1,900,000





As
      of
      December 31, 2006, a stockholder and director guaranteed debts owed by third
      party to the company totalling $240,117.




**ITEM
      13.**  **EXHIBITS**




3.1.
            
            Articles
                of Incorporation (1)3.2
            
            By
                Laws (1)3.3
            
            Certificate
                of Amendment to Articles of Incorporation (2)10.1
            
            Stock
                Purchase Agreement dated as of December 20, 2004 by and among Art
                Malone,
                Jr., Zhi Lan Wang and Jun Lin (3)10.2
            
            Agreement
                and Plan of Reorganization dated as of December 20, 2004 by and among
                Secured Data, Inc., Northwest Bio-Technic Inc., and the shareholders
                of
                Northwest Bio- Technic Inc.; and Convertible Promissory Note
                (3)10.3
            
            Amendment
                No. 1 to the Convertible Promissory Note Due June 30, 2005
                (4)23.1
            
            Consent
                of Jimmy C.H. Cheung & Co., Certified Public
                Accountants31.1
            
            Sarbanes
                Oxley Section 302 Certification of Chief Executive
                Officer31.2
            
            Sarbanes
                Oxley Section 302 Certification of Chief Financial
                Officer32.1
            
            Sarbanes
                Oxley Section 906 Certification of Chief Executive
                Officer32.2
            
            Sarbanes
                Oxley Section 906 Certification of Chief Financial
                Officer99.1
            
            Code
                of Ethics (2)





(1)
      Incorporated by reference from the Registration Statement on Form SB-2 filed
      on
      or about July 28, 2000.




(2)
      Incorporated by reference from the Annual Report on Form 10-K filed on or about
      June 20, 2005.




(3)
      Incorporated by reference from the Current Report on Form 8-K filed on or about
      December 27, 2004.




(4)
      Incorporated by reference from the Current Report on Form 8-K filed on or about
      July 7, 2005.





**ITEM
      14. PRINCIPAL ACCOUNTING FEES AND SERVICES**




**AUDIT
      FEES**




The
      aggregate fees billed for each of the last two fiscal years for professional
      services rendered by the principal accountant for our audit of annual financial
      statements and review of financial statements included in our Form 10-KSBs
      and
      10-QSBs for services that are normally provided by the accountant in connection
      with statutory and regulatory filings or engagements for those fiscal years
      was:




31




2006:
      $68,550 - Jimmy C.H. Cheung & Co.




2005:
      $60,000  - Jimmy C.H. Cheung & Co.




2004:
      $40,000 - Jimmy C. H. Cheung & Co.




**AUDIT-RELATED
      FEES**





For
      fiscal 2006 and 2005, the Company's auditors did not bill any fees for assurance
      and related services that are reasonably related to the performance of the
      audit
      or review of the Company's financial statements and are not reported under
      "Audit Fees" above.





**TAX
      FEES**





No
      fees
      were billed by the Company's auditors for professional services for tax
      compliance, tax advice, and tax planning for fiscal 2006 and 2005,
      respectively.





**ALL
      OTHER FEES**




The
      aggregate fees billed in each of the last two fiscal years for the products
      and
      services provided by the principal accountant, other than the services reported
      in paragraph (1) was:




2006
      and
      2005: $0  - Jimmy C. H. Cheung & Co.




**AUDIT
      COMMITTEE**





The
      Company's Board of Directors acts as its audit committee, and it meets prior
      to
      filing of any Form 10-QSB or 10-KSB to approve those filings. In addition,
      the
      committee meets to discuss audit plans and anticipated fees for audit and tax
      work prior to the commencement of that work. Approximately 100% of all fees
      paid
      to our independent auditors for fiscal 2006 are pre-approved by the audit
      committee.




32





**SIGNATURES**




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




Date: March
                28, 2007
            By:
            /s/ Jingan
                WangChief
                Executive Officer




Pursuant
      to the requirements of the Securities and Exchange Act of 1934, this Report
      has
      been signed below by the following person on behalf of the Registrant and in
      the
      capacities and on the dates indicated.




SIGNATURE
            
            TITLE
            
            DATE/s/ Jingan
                  Wang
            
            Chairman
                and Chief Executive Officer
              (Principal
                Executive Officer)
            
            March
                28, 2007


/s/ Sanding
                  Tao
            
            Chief
                Financial Officer (Principal Financial Officer)
            
            March
                28, 2007


/s/ Xinwen
                  Hou
            
            Secretary,
                Director
            
            March
                28, 2007




33




HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.




(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES




CONSOLIDATED
      FINANCIAL STATEMENTS




AS
      OF
      DECEMBER 31, 2006 AND 2005









HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.




(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES




CONTENTS





**Pages**Report
                of Independent Registered Public Accounting Firm
            
            F-1Consolidated
                Balance Sheets as of December 31, 2006 and 2005
            
            F-2Consolidated
                Statements of Operationsand
                Comprehensive income (loss) for the
                years ended December 31, 2006 and 2005
            
            F-3Consolidated
                Statements of Stockholders’ Equity for the years ended December 31, 2006
                and 2005
            
            F-4Consolidated
                Statements of Cash Flows for the years ended December 31, 2006 and
                2005
            
            F-5Notes
                to Consolidated Financial Statements as of December 31, 2006 and
                2005
            
            F-6
                - F-17











jimmy logo
            
            **Jimmy
                C.H. Cheung & Co**
              *Certified
                Public Accountants*
              *(A
                member of Kreston International)*
            
            Registered
                with the Public Company
              Accounting
                Oversight Board




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors of:


Huifeng
      Bio-pharmaceutical Technology Inc. (Previously Secured Data, Inc.)




We
      have
      audited the accompanying consolidated balance sheets of Huifeng
      Bio-pharmaceutical Technology Inc. (previously Secured Data, Inc.) and
      subsidiaries as of December 31, 2006 and 2005 and the related consolidated
      statements of operation s,
      stockholders’ equity
      and cash flows for the
      years
      ended December 31, 2006 and 200 5.
      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 audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits of the financial statements provide 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 Huifeng Bio-pharmaceutical
      Technology Inc. (previously Secured Data, Inc.) and subsidiaries, as of December
      31, 2006 and 2005, and the consolidated results of its operations and its cash
      flows for the years ended December 31, 2006 and 2005, in conformity with
      accounting principles generally accepted in the United States of America.







**JIMMY
      C.H. CHEUNG & CO**


Certified
      Public Accountants




Hong
      Kong





Date:
      March 9, 2007





1607
                Dominion Centre, 43 Queen’s Road East, Wanchai, Hong Kong
              Tel:
                (852) 25295500 Fax: (852) 28651067 Email:jchc@krestoninternational.com.hk
              Website:
                http://www.jimmycheungco.com
            
            cheungo logo




F-1




HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.




(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES




CONSOLIDATED
      BALANCE SHEETS


AS
      OF
      DECEMBER 31, 2006 AND 2005




2006
            
            2005**ASSETS****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            
            
            
            $
            463,468
            
            $
            89,108Accounts
                receivable, net of allowances
            
            
            
            
            
            1,109,095
            
            
            1,136,558Inventories,
                net
            
            
            
            
            
            582,525
            
            
            925,781Notes
                receivable
            
            
            
            
            
            448,218
            
            
            433,168Due
                from stockholders
            
            
            
            
            
            24,162
            
            
            100,071Other
                assets
            
            
            
            
            
            981,657
            
            
            291,811Total
                Current Assets
            
            
            
            
            
            3,609,125
            
            
            2,976,497**PROPERTY
                AND EQUIPMENT, NET**
            
            3,338,082
            
            
            2,524,243**LAND
                USE RIGHTS, NET**
            
            
            
            
            
            136,233
            
            
            131,227**TOTAL
                ASSETS**
            
            
            
            
            $
            7,083,440
            
            $
            5,631,967**LIABILITIES
                AND STOCKHOLDERS' EQUITY****CURRENT
                LIABILITIES**Accounts
                payable
            
            
            
            
            $
            52,358
            
            $
            163,872Other
                payables and accrued expenses
            
            
            
            
            
            139,092
            
            
            156,765Value
                added tax payables
            
            
            
            
            
            210,302
            
            
            92,281Income
                tax and other tax payables
            
            
            
            
            
            964
            
            
            380Notes
                payable
            
            
            
            
            
            307,349
            
            
            -Due
                to stockholders
            
            
            
            
            
            -
            
            
            1,239Total
                Current Liabilities
            
            
            
            
            
            710,065
            
            
            414,537**COMMITMENTS
                AND CONTINGENCIES**
            
            -
            
            
            -**MINORITY
                INTERESTS**
            
            
            
            
            
            452,751
            
            
            456,274**STOCKHOLDERS'
                EQUITY**Preferred
                stock ($0.001 par value, 5,000,000 shares authorized,none
                issued and outstanding)
            
            
            
            
            
            -
            
            
            -Common
                stock ($0.018 par value, 100,000,000 shares authorized,18,466,169
                shares issued and outstanding as ofDecember
                31, 2006; 16,466,169 shares issued and outstandingas
                of December 31, 2005)
            
            
            
            
            
            332,388
            
            
            296,388Additional
                paid-in capital
            
            
            
            
            
            8,020,066
            
            
            7,256,066Retained
                earnings (deficit)Unappropriated
            
            
            
            
            
            (2,818,054
            )
            
            (2,890,139
            )Appropriated
            
            
            
            
            
            82,925
            
            
            23,274Accumulated
                other comprehensive income
            
            
            
            
            
            303,299
            
            
            75,567Total
                Stockholders' Equity
            
            
            
            
            
            5,920,624
            
            
            4,761,156**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            $
            7,083,440
            
            $
            5,631,967




The
      accompanying notes are an integral part of these financial
      statements




F-2




HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.




(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF OPERATIONS


AND
      COMPREHENSIVE INCOME (LOSS)


FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND 2005





2006
            
            2005**NET
                SALES**
            
            $
            3,076,779
            
            $
            2,443,060**COST
                OF SALES**
            
            
            (2,619,261
            )
            
            (2,327,767
            )**GROSS
                PROFIT**
            
            
            457,518
            
            
            115,293**OPERATING
                EXPENSES**Selling
                expenses and distribution expenses
            
            
            122,845
            
            
            136,062General
                and administrative expenses
            
            
            291,363
            
            
            302,982Stock
                bonuses
            
            
            -
            
            
            560,000Goodwill
                written off
            
            
            -
            
            
            2,764Depreciation
                and amortization
            
            
            45,958
            
            
            43,559Total
                Operating Expenses
            
            
            460,166
            
            
            1,045,367**LOSS
                FROM OPERATIONS**
            
            
            (2,648
            )
            
            (930,074
            )**OTHER
                INCOME (EXPENSES)**Equity
                in loss of affiliate
            
            
            -
            
            
            (112
            )Interest
                income
            
            
            58,522
            
            
            39,297Interest
                expense
            
            
            (9,528
            )
            
            (1,625
            )Other
                income
            
            
            55,956
            
            
            42,270Total
                Other Income
            
            
            104,950
            
            
            79,830**INCOME
                (LOSS) FROM OPERATIONS BEFORE TAXES****AND
                MINORITY INTERESTS**
            
            
            102,302
            
            
            (850,244
            )**INCOME
                TAX EXPENSE**
            
            
            (1,313
            )
            
            (253
            )**MINORITY
                INTERESTS**
            
            
            30,747
            
            
            17,730**NET
                INCOME (LOSS)**
            
            
            131,736
            
            
            (832,767
            )**OTHER
                COMPREHENSIVE INCOME**Foreign
                currency translation gain
            
            
            227,732
            
            
            75,567**COMPREHENSIVE
                INCOME (LOSS)**
            
            $
            359,468
            
            $
            (757,200
            )**Net
                income (loss) per share-basic and diluted**
            
            $
            0.01
            
            $
            (0.11
            )Weighted
                average number of shares outstanding during the year-basic
                and diluted
            
            
            16,827,812
            
            
            7,529,550




The
      accompanying notes are an integral part of these financial
      statements




F-3


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND 2005





Additional
            
            Unappropriated
            
            Appropriated
            
            Accumulated
                otherPreferred
                Stock
            
            Common
                Stock
            
            paid-in
            
            retained
            
            retained
            
            comprehensiveShares
            
            Amount
            
            Shares
            
            Amount
            
            capital
            
            deficit
            
            earnings
            
            income
            
            TotalBalance
                at January 1, 2005
            
            
            
            
            $
            -
            
            
            5,200,444
            
            $
            93,605
            
            $
            2,583,391
            
            $
            (2,041,348
            )
            $
            7,250
            
            $
            -
            
            $
            642,898Contribution
                by shareholders
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            2,415,458
            
            
            -
            
            
            -
            
            
            -
            
            
            2,415,458Share
                issued for convertible note
            
            
            
            
            
            -
            
            
            10,465,725
            
            
            188,383
            
            
            1,711,617
            
            
            -
            
            
            -
            
            
            -
            
            
            1,900,000Share
                issued for services
            
            
            
            
            
            -
            
            
            800,000
            
            
            14,400
            
            
            545,600
            
            
            -
            
            
            -
            
            
            -
            
            
            560,000Net
                loss for the year
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (832,767
            )
            
            -
            
            
            -
            
            
            (832,767
            )Comprehensive
                income
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            75,567
            
            
            75,567Transfer
                to statutory and staffwelfare
                reserves
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (16,024
            )
            
            16,024
            
            
            -
            
            
            -Balance
                at December 31, 2005
            
            
            -
            
            
            -
            
            
            16,466,169
            
            
            296,388
            
            
            7,256,066
            
            
            (2,890,139
            )
            
            23,274
            
            
            75,567
            
            
            4,761,156Share
                issued foracquisition
                of fixed assets
            
            
            
            
            
            -
            
            
            2,000,000
            
            
            36,000
            
            
            764,000
            
            
            -
            
            
            -
            
            
            -
            
            
            800,000Net
                income for the year
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            131,736
            
            
            -
            
            
            -
            
            
            131,736Comprehensive
                income
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            227,732
            
            
            227,732Transfer
                to statutory and staffwelfare
                reserves
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (59,651
            )
            
            59,651
            
            
            -
            
            
            -Balance
                at December 31, 2006
            
            
            -
            
            $
            -
            
            
            18,466,169
            
            $
            332,388
            
            $
            8,020,066
            
            $
            (2,818,054
            )
            $
            82,925
            
            $
            303,299
            
            $
            5,920,624




The
      accompanying notes are an integral part of these financial
      statements





F-4


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND 2005




2006
            
            2005**CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                income (loss)
            
            $
            131,736
            
            $
            (832,767
            )Adjusted
                to reconcile net income (loss) to cash provided by(used
                in) operating activities:Allowance
                for doubtful accounts - accounts receivable
            
            
            23,214
            
            
            30,516Depreciation
                and amortization - cost of sales
            
            
            251,101
            
            
            124,893Depreciation
                and amortization
            
            
            45,958
            
            
            43,559Minority
                interests
            
            
            (30,747
            )
            
            397,359Stock
                issued for services
            
            
            -
            
            
            560,000Changes
                in operating assets and liabilities(Increase)
                decrease in:Accounts
                receivable
            
            
            2,697
            
            
            (1,062,930
            )Inventories,
                net
            
            
            343,256
            
            
            376,244Due
                from stockholders
            
            
            75,909
            
            
            (37,578
            )Other
                assets
            
            
            (689,846
            )
            
            43,247Increase
                (decrease) in:Accounts
                payable
            
            
            (111,514
            )
            
            107,418Other
                payables and accrued expenses
            
            
            (17,673
            )
            
            11,574Value
                added tax payables
            
            
            118,021
            
            
            79,958Income
                tax and other taxes payable
            
            
            584
            
            
            (6,304
            )Due
                to stockholders
            
            
            (1,239
            )
            
            (192,194
            )Net
                cash provided by (used in) operating activities
            
            
            141,457
            
            
            (357,005
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Increase
                in notes receivable
            
            
            -
            
            
            (433,168
            )Purchase
                of property and equipment
            
            
            (159,242
            )
            
            (1,810,445
            )Decrease
                in investment in affiliate
            
            
            -
            
            
            31,190Net
                cash used in investing activities
            
            
            (159,242
            )
            
            (2,212,423
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Proceeds
                from note payable
            
            
            307,349
            
            
            -Contribution
                by the stockholders
            
            
            -
            
            
            2,415,458Net
                cash provided by financing activities
            
            
            307,349
            
            
            2,415,458**EFFECT
                OF EXCHANGE RATES ON CASH**
            
            
            84,796
            
            
            75,567**NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
            
            
            374,360
            
            
            (78,403
            )**CASH
                AND CASH EQUIVALENTS AT BEGINNING OF YEAR**
            
            
            89,108
            
            
            167,511**CASH
                AND CASH EQUIVALENTS AT END OF YEAR**
            
            $
            463,468
            
            $
            89,108**SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION**Cash
                paid during the year for:Income
                taxes
            
            $
            558
            
            $
            7,225Interest
                expenses
            
            $
            9,505
            
            $
            -




**SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING
      ACTIVITIES:**





On
      October 12, 2005, the Company issued 10,465,725 shares of restricted common
      stock to exercise the conversion of the Convertible Promissory Note of
      $1,900,000.





On
      November 8, 2006, the Company issued 2,000,000 shares of restricted common
      stock
      having a fair value of $800,000 to a third party for the acquisition of plant
      and machinery.





The
      accompanying notes are an integral part of these financial
      statements





F-5


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





1.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION**





(A)
            Organization





Huifeng
      Bio-pharmaceutical Technology Inc. (previously Secured Data, Inc.) (“Huifeng
      Bio-pharmaceutical”) is a US listed company which was incorporated in Nevada on
      March 16, 2000 under the name Enternet, Inc. On May 23, 2002, the Articles
      of
      Incorporation were amended to change the name of the Company to Secured Data,
      Inc. On October 12, 2005, the Articles of Incorporation were amended to change
      the name of the Company to Huifeng Bio-pharmaceutical Technology
      Inc.





Northwest
      Bio-Technic Inc. (“Northwest”) was incorporated in the British Virgin Islands
      (“BVI”) on June 25, 2004. Xian Huifeng Biochemistry Group Joint-Stock Company
      Limited (previously Xian Huifeng Biochemistry Joint-Stock Company Limited)
      (“Huifeng Biochemistry”) was incorporated in the People’s Republic of China
      (“PRC”) on January 20, 2000 as a company with limited liabilities and was
      restructured as a joint stock company on September 29, 2002 under the laws
      of
      the PRC. On April 20, 2005, the Articles of Incorporation were amended to change
      the name of Huifeng Biochemistry to Xian Huifeng Biochemistry Group Joint-Stock
      Company Limited.





Huifeng
      Biochemistry produces plant extracts and bio-chemical products used as
      pharmaceutical raw materials in the PRC. Most of its products are distributed
      within the PRC and some European countries.





On
      August
      23, 2001, Huifeng Biochemistry established a 70% owned subsidiary, Xian Huifeng
      Biochemistry Engineering Company Limited (“Huifeng Engineering”) in the PRC with
      a registered capital of $265,778. The subsidiary has no operations since its
      incorporation.





On
      June
      16, 2004 Huifeng Biochemistry acquired an 86.7% interest in Baoji
      Jinsen Pharmaceutical Company Limited, later renamed to Xian Huifeng
      Pharmaceutical Company Limited (“Huifeng Pharmaceutical”), a limited liability
      company in the PRC. On November 10, 2004 Huifeng Pharmaceutical increased its
      registered capital from $181,159 to $603,865. The increased registered capital
      was fully subscribed by a stockholder of the Company, diluting the Company’s
      interest in Huifeng Pharmaceutical from 86.7% to 26%. On May 27, 2005 the PRC
      Government approved Huifeng Biochemistry’s increased investment in Huifeng
      Pharmaceutical from $31,401 to $1,685,990 through an increase in the registered
      capital of Huifeng Pharmaceutical from $603,865 to $2,258,454. The acquisition
      of Huifeng Pharmaceutical by Huifeng Biochemistry was through a step process
      increasing Huifeng Biochemistry’s interest in Huifeng Pharmaceutical from 26% to
      80.2%.





During
      2004, Huifeng Biochemistry’s shareholders exchanged 100% of their ownership of
      Huifeng Biochemistry for 500,000 shares of Northwest under a reorganization
      plan. The transfer has been accounted for as a reorganization of entities under
      common control as the companies were beneficially owned by principally identical
      shareholders and share common management.





On
      December 20, 2004, pursuant to a Stock Purchase Agreement, a Huifeng
      Bio-pharmaceutical shareholder sold 401,646 shares in Huifeng Bio-pharmaceutical
      to two Northwest shareholders for $300,000. On the same date, Huifeng
      Bio-pharmaceutical entered into an Agreement and Plan of Reorganization with
      the
      shareholders of Northwest to exchange 30% of Northwest’s outstanding shares for
      4,485,311 shares of Huifeng Bio-pharmaceutical. In addition, the Agreement
      calls
      for Huifeng Bio-pharmaceutical to issue a Convertible Promissory Note for
      $1,900,000 that is convertible into 10,465,725 (post a one for eighteen reverse
      split) shares of Huifeng Bio-pharmaceutical for the remaining 70% of Northwest.
      On October 12, 2005, the Company issued 10,465,725 shares of restricted common
      stock in conversion of the Convertible Promissory Note of
      $1,900,000.





The
      merger of Huifeng Bio-pharmaceutical and Northwest has been recorded as a
      recapitalization by Northwest, with Northwest being treated as the continuing
      entity. The financial statements have been prepared as if the reorganization
      had
      occurred retroactively. Huifeng Bio-pharmaceutical, Northwest, Huifeng
      Biochemistry, Huifeng Engineering and Huifeng Pharmaceutical are hereafter
      referred to as (the “Company”).





F-6


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





1.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION**





(A)
            Organization
                (continued)





Accordingly,
      the financial statements include the following:





(1)
            The
                balance sheet consists of the net assets of the acquirer at historical
                cost and the net assets of the acquiree at historical
                cost.





(2)
            The
                statement of operations includes the operations of the acquirer for
                the
                periods presented and the operations of the acquiree from the date
                of the
                merger.





(B)
            Use
                of estimates





The
      preparation of the financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amount 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.





(C)
            Principles
                of consolidation





The
      accompanying 2006 consolidated financial statements include the financial
      statements of Huifeng Bio-pharmaceutical and its 100% owned subsidiary
      Northwest, 100% owned subsidiary Huifeng Biochemistry, 70% owned subsidiary
      Huifeng Engineering and 80.2% owned subsidiary Huifeng
      Pharmaceutical.





The
      accompanying 2005 consolidated financial statements include the financial
      statements of Huifeng Bio-pharmaceutical and its 100% owned subsidiary
      Northwest, 100% owned subsidiary Huifeng Biochemistry, 70% owned subsidiary
      Huifeng Engineering and 80.2% owned subsidiary Huifeng Pharmaceutical from
      the
      date of its step acquisition on May 27, 2005 to December 31, 2005.





All
      significant inter-company balances and transactions have been eliminated in
      consolidation.





In
      October 2005, the Company effected a one for eighteen reverse stock split.
      All
      shares and per share information of common stock in the accompanying financial
      statements have been retroactively restated to reflect the effect of this stock
      split.





(D)
            Cash
                and cash equivalents





For
      purpose of the statements of cash flows, cash and cash equivalents include
      cash
      on hand and demand deposits with a bank with a maturity of three months or
      less.





(E)
            Accounts
                receivable





The
      Company extends unsecured credit to its customers in the ordinary course of
      business but mitigates the associated risks by performing credit checks and
      actively pursuing past due accounts. An allowance for doubtful accounts is
      established and recorded based on managements’ assessment of the credit history
      with the customer and current relationships with them. For the years ended
      December 31, 2006 and 2005, the Company recorded an allowance for doubtful
      accounts of $23,214 and $30,516 respectively.





(F)
            Inventories





Inventories
      are stated at the lower of cost or market value, cost being determined on a
      weighted average method. The Company provides for inventory allowances based
      on
      excess and obsolete inventories determined principally by customer
      demand.





F-7


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





1.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
      (CONTINUED)**





(G)
            Property
                and equipment





Property
      and equipment are stated at cost, less accumulated depreciation. Expenditure
      for
      additions, major renewals and betterments are capitalized and expenditures
      for
      maintenance and repairs are charged to expense as incurred.





Depreciation
      is provided on a straight-line basis over the assets’ estimated useful lives.
      The estimated useful lives are as follows:





Factory
                buildings
            20
                YearsPlant
                and machinery
            10
                YearsMotor
                vehicles
            10
                YearsFurniture,
                fixtures and equipment
            5
                Years





Land
      use
      rights are stated at cost, less accumulated amortization. The land use rights
      are amortized over the term of the relevant rights of 50 years from the date
      of
      acquisition.





(H)
            Long-lived
                assets





The
      Company accounts for long-lived assets under the Statements of Financial
      Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other
      Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived
      Assets” (“SFAS No. 142 and 144”). In accordance with SFAS No. 142 and 144,
      long-lived assets, goodwill and certain identifiable intangible assets held
      and
      used by the Company are reviewed for impairment whenever events or changes
      in
      circumstances indicate that the carrying amount of an asset may not be
      recoverable. For purposes of evaluating the recoverability of long-lived assets,
      when undiscounted future cash flows will not be sufficient to recover an asset’s
      carrying amount, the asset is written down to its fair value.




(I)
            Fair
                value of financial instruments





Statement
      of Financial Accounting Standards No. 107, "Disclosure About Fair Value of
      Financial Instruments," requires certain disclosures regarding the fair value
      of
      financial instruments. Fair
      value of financial instruments is made at a specific point in time, based on
      relevant information about financial markets and specific financial instruments.
      As these estimates are subjective in nature, involving uncertainties and matters
      of significant judgment, they cannot be determined with precision. Changes
      in
      assumptions can significantly affect estimated fair values.





The
      carrying value of cash and cash equivalents, accounts receivable (trade and
      others), accounts payable (trade and related party) and accrued liabilities
      approximate their fair value because of the short-term nature of these
      instruments. The Company places its cash and cash equivalents with what it
      believes to be high credit quality financial institutions. The Company has
      a
      diversified customer base, most of which are in the PRC. The Company controls
      credit risk related to accounts receivable through credit approvals, credit
      limit and monitoring procedures. The Company routinely assesses the financial
      strength of its customers and, based upon factors surrounding the credit risk,
      establishes an allowance, if required, for uncollectible accounts and, as a
      consequence, believes that its accounts receivable credit risk exposure beyond
      such allowance is limited.





The
      Company’s major operation is in the PRC, which may give rise to significant
      foreign currency risks from fluctuations and the degree of volatility of foreign
      exchange rates between the United States dollars (“US$”) and the Chinese
      Renminbi (“RMB”). During the fourth quarter, The RMB rate increase quickly. At
      the end of 2006, the new RMB rate against the US$ is about 7.8087. Historically,
      the PRC government has benchmarked the RMB exchange ratio against the US$,
      thereby mitigating the associated foreign currency exchange rate fluctuation
      risk. The Company does not believe that its foreign currency exchange rate
      fluctuation risk is significant, especially if the PRC government continues
      to
      benchmark the RMB against the US$.





F-8




HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005




1.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
      (CONTINUED)**





(J)
            Revenue
                recognition




The
      Company recognizes revenue upon delivery or shipment of the products, at which
      time title passes to the customer provided that: there are no uncertainties
      regarding customer acceptance; persuasive evidence of an arrangement exists;
      the
      sales price is fixed or determinable; and collectability is deemed
      probable.





(K)
            Income
                taxes





The
      Company accounts for income taxes under the Statement of Financial Accounting
      Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
      Statement 109, deferred tax assets and liabilities are recognized fort the
      future tax consequences attributable to differences between the financial
      statement carrying amounts of existing assets and liabilities and their
      respective tax bases. Deferred tax assets and liabilities are measured using
      enacted tax rates expected to apply to taxable income in the years in which
      those temporary differences are expected to be recovered or settled. Under
      Statement 109, the effect on deferred tax assets and liabilities of a change
      in
      tax rates is recognized in income in the period that included the enactment
      date.





(L)
            Foreign
                currency translation





Huifeng
      Bio-Pharmaceutical, Northwest, Huifeng Biochemistry, Huifeng Engineering and
      Huifeng Pharmaceutical maintain their accounting records in their functional
      currencies of US$, US$, RMB, RMB and RMB respectively.





Foreign
      currency transactions during the year are translated to the functional currency
      at the approximate rates of exchange on the dates of transactions. Monetary
      assets and liabilities denominated in foreign currencies at the balance sheet
      date are translated at the approximate rates of exchange at that date.
      Non-monetary assets and liabilities are translated at the rates of exchange
      prevailing at the time the asset or liability was acquired. Exchange gains
      or
      losses are recorded in the statement operations.





The
      financial statements of Huifeng Biochemistry, Huifeng Engineering and Huifeng
      Pharmaceutical (whose functional currency is the RMB) are translated into US$
      using the closing rate method. The balance sheet items are translated into
      US$
      using the exchange rates at the respective balance sheet dates. The capital
      and
      various reserves are translated at historical exchange rates prevailing at
      the
      time of the transactions while income and expenses items are translated at
      the
      average exchange rate for the year. All exchange differences are recorded within
      equity.





The
      translation gain recorded for the years ended December 31, 2006 and 2005 was
      $227,732 and $75,567 respectively.





(M)
            Comprehensive
                income (loss)





The
      foreign currency translation gain or loss resulting from translation of the
      financial statements expressed in RMB to US$ is reported as other comprehensive
      income in the statements of operations and stockholders’ equity. The foreign
      currency translation gain for the years ended December 31, 2006 and 2005 was
      $227,732 and $75,567 respectively.




(N)
            Income
                (loss) per share





Basic
      income (loss) per share is computed by dividing income (loss) available to
      common stockholders by the weighted average number of common shares outstanding
      during the period. Diluted income (loss) per share is computed similar to basic
      income (loss) per share except that the denominator is increased to include
      the
      number of additional common shares that would have been outstanding if the
      potential common shares had been issued and if the additional common shares
      were
      dilutive. As of December 31, 2006 and 2005, the Company does not have any
      outstanding dilutive securities.





(O)
            Segments





The
      Company operates in only one segment, thereafter segment disclosure is not
      presented.




F-9


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





1.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
      (CONTINUED)**




(P)
            Reclassification





Certain
      amounts included in prior years’ consolidated balance sheet and the consolidated
      statements of operations and cash flows have been reclassified to conform to
      the
      current year’s presentation. These reclassifications had no effect on reported
      total assets, liabilities, shareholders’ equity, or net income.





(Q)
            Recent
                Accounting Pronouncements





In
      February 2006, the FASB issued SFAS No. 155, “ *Accounting
      for Certain Hybrid Financial Instruments* ”
(SFAS
      155”), which amends SFAS No. 133, “ *Accounting
      for Derivatives Instruments and Hedging Activities* ”
(“SFAS
      133”) and SFAS No. 140, “ *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishment of
      Liabilities* ”
(SFAS
      140”). SFAS 155 amends SFAS 133 to narrow the scope exception for interest-only
      and principal-only strips on debt instruments to include only such strips
      representing rights to receive a specified portion of the contractual interest
      or principle cash flows. SFAS 155 also amends SFAS 140 to allow qualifying
      special-purpose entities to hold a passive derivative financial instrument
      pertaining to beneficial interests that itself is a derivative instruments.
      The
      Company is currently evaluating the impact this new Standard, but believes
      that
      will not have that it will not have a material impact on the Company’s financial
      position





In
      March 2006, the FASB issued SFAS No. 156, “ *Accounting
      for Servicing of Financial Assets—an amendment to FASB Statement
      No. 140”* (“SFAS
      156”). SFAS 156 requires that all separately recognized servicing rights be
      initially measured at fair value, if practicable. In addition, this statement
      permits an entity to choose between two measurement methods (amortization method
      or fair value measurement method) for each class of separately recognized
      servicing assets and liabilities. This new accounting standard is effective
      January 1, 2007. We do not expect the adoption of SFAS 156 to have an
      impact on our results of operations or financial condition.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “ *Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement
      109* ”
(“FIN
      48”), which clarifies the accounting for uncertainty in tax positions. This
      Interpretation provides that the tax effects from an uncertain tax position
      can
      be recognized in the Company’s financial statements, only if the position is
      more likely than not of being sustained on audit, based on the technical merits
      of the position. The provisions of FIN 48 are effective as of the beginning
      of
      fiscal 2007, with the cumulative effect of the change in accounting principle
      recorded as an adjustment to opening retained earnings. The Company is currently
      evaluating the impact this new Standard, but believes that it will not have
      a
      material impact on the Company’s financial position.





In
      September 2006, FASB issued Statement 157, “ *Fair
      Value measurements* ”.
      This
      statement defines fair value and establishes a framework for measuring fair
      value in generally accepted accounting principles (“GAAP”). More precisely, this
      statement sets forth a standard definition of fair value as it applies to assets
      or liabilities, the principal market (or most advantageous market) for
      determining fair value (price), the market participants, inputs and the
      application of the derived fair value to those assets and liabilities. The
      effective date of this pronouncement is for all full fiscal and interim periods
      beginning after November 15, 2007. The Company is currently evaluating the
      impact this new Standard, but believes that it will not have a material impact
      on the Company’s financial position.





In
      September 2006, FASB issued Statement 158, “ *Employers’
      Accounting for Defined Benefit Pension and other Postretirement Plans, which
      amend FASB Statements No. 87, 88, 106 and 132(R)* ”.
      This
      statement requires employers to recognize the overfunded or underfunded status
      of a defined benefit postretirement plan as an asset or liability in its
      financial statements and to recognize changes in that funded status in the
      year
      in which the changes occur. The effective date for the Company would be for
      any
      full fiscal years ending after December 15, 2006. The Company is currently
      evaluating the impact this new Standard, but believes that it will not have
      a
      material impact on the Company’s financial position.




F-10


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





2.  **ACQUISITION
      OF SUBSIDIARY**





On
      May
      27, 2005, the Company’s subsidiary - Huifeng Biochemistry completed its 80.2%
      interest step acquisition of Huifeng Pharmaceutical. Under the purchase method
      of accounting, the total purchase price was allocated to Huifeng
      Pharmaceutical’s net tangible assets based upon the estimated fair values of the
      assets as of the date of completion of the acquisition.





A
      summary
      of the fair value of net assets of Huifeng Pharmaceutical at the date of
      acquisition is as follows:





Current
                assets
            
            $
            582,743Non-current
                assets
            
            
            1,526,118Total
                assets
            
            
            2,108,861Current
                liabilities
            
            
            (10,870
            )Net
                assets acquired
            
            
            2,097,991Minority
                interest
            
            
            (415,088
            )1,682,903Share
                of pre-acquisition losses prior to becoming a subsidiary
            
            
            3231,683,226Goodwill
                acquired
            
            
            2,764Consideration
                paid
            
            $
            1,685,990





3.  **GOODWILL**




2006
            
            2005Cost
                of goodwill acquired in step acquisition of a subsidiary
            
            $
            -
            
            $
            2,764Amount
                written off
            
            
            -
            
            
            (2,764
            )$
            -
            
            $
            -




4.  **ACCOUNTS
      RECEIVABLE**





Accounts
      receivable at December 31, 2006 and 2005 consisted of the following:




2006
            
            2005Accounts
                receivable
            
            $
            1,164,377
            
            $
            1,167,074Less:
                allowance for doubtful accounts
            
            
            (55,282
            )
            
            (30,516
            )Accounts
                receivable, net
            
            $
            1,109,095
            
            $
            1,136,558





For
      the
      years ended December 31, 2006 and 2005, the Company recorded an allowance for
      doubtful accounts of $23,214 and $30,516 respectively.




F-11


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





5.  **NOTES
      RECEIVABLE**





Notes
      receivable at December 31, 2006 and 2005 consisted of the
      followings:





2006
            
            2005Note
                receivable from a third party, interest rate of 12%
            
            $
            192,093
            
            $
            185,643per
                annum, non-secured, due September 2007Note
                receivable from a third party, interest rate of 10%per
                annum, non-secured, due November 2006(see
                note 17)
            
            
            256,125
            
            
            247,525$
            448,218
            
            $
            433,168





Interest
      income in respect to loans receivable for the years ended December 31, 2006
      and
      2005 were $35,114 and $29,351 respectively.




6.  **INVENTORIES**





Inventories
      at December 31, 2006 and 2005 consisted of the following:




2006
            
            2005Raw
                materials
            
            $
            269,887
            
            $
            158,838Work-in-progress
            
            
            176,934
            
            
            7,575Finished
                goods
            
            
            135,704
            
            
            759,368582,525
            
            
            925,781Less:
                provision of obsolescence
            
            
            -
            
            
            -$
            582,525
            
            $
            925,781





For
      the
      year ended December 31, 2006 and 2005, the Company did not have any obsolete
      inventories.




7.  **OTHER
      ASSETS**





Other
      assets at December 31, 2006 and 2005 consisted of the following:




2006
            
            2005Short-term
                note receivable
            
            $
            6,403
            
            $
            -Interest
                on notes receivable
            
            
            89,644
            
            
            51,980Advances
                to staff
            
            
            46,998
            
            
            10,845Other
                receivables and prepayments
            
            
            272,959
            
            
            38,679Trade
                deposits paid
            
            
            565,653
            
            
            190,307$
            981,657
            
            $
            291,811





F-12


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005




8.  **PROPERTY
      AND EQUIPMENT**





The
      following is a summary of property and equipment at December 31, 2006 and 2005:




2006
            
            2005Factory
                buildings
            
            $
            573,385
            
            $
            463,151Plant
                and machinery
            
            
            3,325,909
            
            
            1,905,282Motor
                vehicles
            
            
            96,273
            
            
            90,881Furniture
                and office equipment
            
            
            33,484
            
            
            30,420Construction
                in progress - factory building
            
            
            85,790
            
            
            483,7394,114,841
            
            
            2,973,473Less:
                accumulated depreciation
            
            
            (776,759
            )
            
            (449,230
            )Property
                and equipment, net
            
            $
            3,338,082
            
            $
            2,524,243





Depreciation
      expenses for the years ended December 31, 2006 and 2005 were $294,205 and
      $165,705 respectively.




9.  **LAND
      USE RIGHTS**





Land
      use
      rights at December 31, 2006 and 2005 consisted of the following:





2006
            
            2005Land
                use rights
            
            $
            142,789
            
            $
            134,660Less:
                accumulated amortization
            
            
            6,556
            
            
            3,433Land
                use rights, net
            
            $
            136,233
            
            $
            131,227





Amortization
      expenses for the years ended December 31, 2006 and 2005 were $2,854 and $2,747
      respectively.




10.  **OTHER
      PAYABLES AND ACCRUED EXPENSES**





Other
      payables and accrued liabilities at December 31, 2006 and 2005 consist of the
      following:





2006
            
            2005Other
                payables
            
            $
            20,059
            
            $
            42,213Accrued
                expenses
            
            
            97,227
            
            
            106,590Deposits
                received from customers
            
            
            21,806
            
            
            7,962$
            139,092
            
            $
            156,765





11.  **INCOME
      TAX**





a.
            Huifeng
                Bio-pharmaceutical was incorporated in the United States and has
                incurred
                net operating loss as for income tax purposes for 2006 and 2005.





Northwest,
      wholly owned subsidiary of the Company, was incorporated in the British Virgin
      Islands and, under current law of the British Virgin Islands, is not subject
      to
      tax on income or on capital gains.





Huifeng
      Biochemistry, wholly owned subsidiary of Northwest, was incorporated in the
      PRC
      being registered as a new and high technology enterprise is entitled to an
      income tax reduction. According to the document of reductions approved by the
      local tax bureau, the income tax rate was reduced from 33% to 15% on a permanent
      basis. No provision for income tax expenses for 2006 has been made as Huifeng
      Biochemistry incurred a net operating loss.




F-13


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





11.  **INCOME
      TAX (CONTINUED)**





Huifeng
      Engineering, 70% owned subsidiary of Huifeng Biochemistry, was incorporated
      in
      the PRC and subject to PRC income tax which is computed according to the
      relevant laws and regulations in the PRC. No provision for income tax expenses
      for 2006 and 2005 as Huifeng Engineering has incurred net operating
      loss.





Huifeng
      Pharmaceutical, 80.2% owned subsidiary of Huifeng, was also incorporated in
      the
      PRC and subject to PRC income tax which is computed according to the relevant
      laws and regulations in the PRC. The applicable tax rates for 2006 and 2005
      were
      27% and 33% respectively due to the taxable income was less than $12,541 for
      2006 and incurred net operating loss for 2005. The provision for income tax
      expenses for 2006 and 2005 was $1,313 and $0 respectively.





The
      income tax expenses for 2006 and 2005 are summarized as follows:




2006
            
            2005PRC
                Income TaxCurrent
            
            $
            1,313
            
            $
            253$
            1,313
            
            $
            253




b.
              The
                  Company’s deferred tax assets at December 31, 2006 and 2005 consist of
                  net
                  operating loss carry forwards calculated using statutory effective
                  tax
                  rates. Due to its history of losses, the Company determined that
                  realization of its net deferred tax assets is currently judged
                  to be
                  unlikely rather than not. Consequently, the Company has provided
                  a
                  valuation allowance covering 100% of its net deferred tax
                  assets.





As
      of in
      December 31, 2006 and 2005, the Company had net operating loss carry forwards
      of
      approximately $861,494 and $737,172 respectively for U.S. income tax purposes
      available for offset against future taxable U.S. income, which expire 2025.
      The
      net changes in the valuation allowance for 2005 and 2004 were increases of
      $292,908 and $243,838 respectively.





c.
            The
                reconciliation of income taxes computed at the statutory income tax
                rates
                to total income taxes for the years ended December 31, 2006 and 2005
                is as
                follows:





2006
            
            2005Huifeng
                Bio-PharmaceuticalIncome
                tax computed at the federal statutory rate
            
            
            34
            %
            
            34
            %State
                income taxes, net of federal tax benefit
            
            
            0
            %
            
            0
            %Valuation
                allowance
            
            
            (34
            %)
            
            (34
            %)Total
                deferred tax asset
            
            
            0
            %
            
            0
            %




12.  **NET
      INCOME (LOSS) PER SHARE**





The
      following is net income (loss) per share information at December
      31:





2006
            
            2005Net
                income (loss)
            
            $
            131,736
            
            $
            (832,767
            )Basic
                and diluted weighted-average commonstock
                outstanding
            
            $
            16,827,812
            
            $
            7,529,550Net
                income (loss) per share - basic and diluted
            
            $
            0.01
            
            $
            (0.11
            )




F-14


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





13.  **COMMITMENTS
      AND CONTINGENCIES**





(A)  Capital
      commitments





As
      of
      December 31, 2006, the Company had capital commitments of $57,628 with suppliers
      for the purchase of production equipment.





(B)  Operating
      lease commitments




The
      Company occupies office and storage spaces from a third party under operating
      leases which expires on March 31, 2008 and November 10, 2007 at a quarterly
      rental of $2,571 and $361 respectively. Accordingly, for 2006 and 2005, the
      Company recognized rental expense for these spaces in the amount of $12,355
      and
      $12,816, respectively.





As
      of
      December 31, 2006, the Company has outstanding commitments with respect to
      non-cancelable operating leases, which are due as follows:




2007
            
            $
            11,5272008
            
            
            2,57114,098





14.  **SHAREHOLDERS’
      EQUITY**





(A)  Stock
      issuances





In
      October 2005, the Company effected a one for eighteen reverse split of its
      common stock that resulted in a reduction of the number of issued and
      outstanding shares from 93,604,958 to approximately 5,200,444 shares. The
      financial statements have been retroactively restated to reflect the effect
      of
      this stock split.





On
      the
      effective date of the reverse split of its common stock, the Company decreased
      the par value of its common stock from $0.001 to $0.000555 instead of increasing
      the par value of its common stock from $0.001 to $0.018. The Company corrected
      this situation by filing an amendment to its Articles of Incorporation on March
      28, 2005 to increase the par value of its common stock from $0.000555 to $0.018.
      The issued capital was retroactively adjusted to reflect the increase in the
      par
      value of the common stock.





On
      October 12, 2005, the Company issued 10,465,725 shares of restricted common
      stock in conversion of the Convertible Promissory Note of $1,900,000. The shares
      were valued at the closing market price of $0.75 per share and there was no
      owner loss on the conversion.





On
      April
      27, 2006, the Company issued 800,000 shares of common stock having a fair value
      of $560,000 to four staff as stock bonuses.





On
      October 27, 2006, the Company entered into a material definitive agreement
      with
      a third party to acquire certain plants and machinery from the third party
      for a
      fair value of $800,000 to be satisfied by the issuance of 2,000,000 shares
      of
      the Company’s restricted common stock. The value of the common shares issued was
      determined based on the closing market price of $0.4 per share on October 27,
      2006. These shares have been issued on November 8, 2006.




F-15


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





14.  **SHAREHOLDERS’
      EQUITY (CONTINUED)**





(B)  Appropriated
      retained earnings





The
      Company’s wholly owned subsidiaries, Huifeng Biochemistry, Huifeng Engineering
      and Huifeng Pharmaceutical are required to make appropriations to reserves
      funds, comprising the statutory surplus reserve, statutory public welfare fund
      and discretionary surplus reserve, based on after-tax net income determined
      in
      accordance with generally accepted accounting principles of the People’s
      Republic of China (the “PRC GAAP”). Appropriation to the statutory surplus
      reserve should be at least 10% of the after tax net income determined in
      accordance with the PRC GAAP until the reserve is equal to 50% of the entities’
registered capital. Appropriations to the statutory public welfare fund are
      at
      5% to 10% of the after tax net income determined in accordance with the PRC
      GAAP. The statutory public welfare fund is established for the purpose of
      providing employee facilities and other collective benefits to the employees
      and
      is non-distributable other than in liquidation. Appropriations to the
      discretionary surplus reserve are made at the discretion of the Board of
      Directors.





During
      2006 and 2005, the Company’s wholly owned subsidiary Huifeng Biochemistry
      appropriated $59,651 and $16,024, respectively to the reserves funds based
      on
      its net income under PRC GAAP.




15.  **RELATED
      PARTY TRANSACTIONS**





As
      of
      December 31, 2006 and 2005, the stockholders owed the Company $24,162 and
      $100,071 respectively for advances made on an unsecured basis and repayable
      on
      demand. Interest is charged at 6% per annum on the amount due. Total interest
      income amounted to $10,486 and $5,664 for the years ended December 31, 2006
      and
      2005, respectively. The amounts owed by stockholders were advances made by
      Huifeng Biochemistry prior to the reorganization plan in 2004.





As
      of
      December 31, 2006 and 2005, the Company also owed the stockholders $0 and $1,239
      respectively for advances made on an unsecured basis, free of interest payment
      and repayable on demand.





The
      Company issued a Convertible Promissory Note of $1,900,000 to the shareholders
      of Northwest, the Note is convertible into 10,465,725 (post a one for eighteen
      reverse split) shares to exchange for 70% of the outstanding shares of
      Northwest. On
      October 12, 2005, the Company issued 10,465,725 shares of restricted common
      stock in conversion of the Convertible Promissory Note of
      $1,900,000.





As
      of
      December 31, 2006, a stockholder and director guaranteed debts owed by a third
      party to the Company totaling $240,117.




16.  **CONCENTRATIONS
      AND RISKS**





During
      2006 and 2005, 100% of the Company’s assets were located in China.





During
      2006 and 2005, 61% and 65% of the Company’s revenues were derived from companies
      located in China respectively.





The
      Company relied on one customer for approximately $521,562 representing in
      aggregate 17% of sales for the year ended December 31, 2006, and relied on
      two
      customers for approximately $644,641 and $315,613 respectively representing
      in
      aggregate 39% of sales for the year ended December 31, 2005. At December 31,
      2006 and 2005, accounts receivable from those customers totaled $126,653 and
      $340,302 respectively.





The
      Company relied on three suppliers for approximately $350,519, $254,318 and
      $233,638 representing in aggregate 42% of purchases for the year ended December
      31, 2006, and relied on one supplier for approximately $181,743 representing
      in
      aggregate 14% of purchases for the year ended December 31, 2005. At December
      31,
      2006 and 2005, accounts payable to those two suppliers totaled $4,367 and
      $29,576 respectively.




F-16


HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY INC.


(PREVIOUSLY
      SECURED DATA, INC.) AND SUBSIDIARIES


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      DECEMBER 31, 2006 AND 2005





17.  **SUBSEQUENT
      EVENT**





On
      January 30, 2007, a note receivable of $256,125 was fully repaid.





F-17