UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(MARK ONE)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the annual period ended December 31, 2006

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

              For the transition period from _________ to _________

                        Commission file number: 333-67884


                             GLOBAL PHARMATECH, INC.
                 (Name of Small Business Issuer in Its Charter)

          DELAWARE                                        33-0976805
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

          89 Ravine Edge Drive, Richmond Hill, Ontario, Canada L4E 4J6
               (Address of Principal Executive Offices, Zip Code)

                                 (905) 787-8225
                (Issuer's telephone number, including area code)

           Securities Registered Pursuant to Section 12(b) of the Act:

  Title of Each Class                  Name of Each Exchange on Which Registered
Common Stock, $.0001 par value

           Securities Registered Pursuant to Section 12(g) of the Act:

                                (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

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 [ ]

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 definitive proxy or information
statements incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The issuer's revenues for the fiscal year ended December 31, 2006 were
$2,375,511

The aggregate market value of the registrant's common stock held by
non-affiliates as of March 15, 2007 was $10,506,181.28 million.

State the number of shares outstanding of each of the issuer's classes of equity
securities, as of the latest practicable date:

                                                    Number of Shares Outstanding
Title of Each Class of Equity Securities               as of March 28, 2007
----------------------------------------            ----------------------------
Common Stock, par value $0.0001 per share                   23,247,935
Preferred Stock, par value $0.0001 per share                  None

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I....................................................................    1

ITEM 1.  Description of Business..........................................    1
ITEM 2.  Description of Properties........................................    5
ITEM 3.  Legal Proceedings................................................    5
ITEM 4.  Submission Of Matters To A Vote Of Security Holders..............    5

PART II ..................................................................    5

ITEM 5.  Market For Common Equity and Related Stockholder Matters.........    5
ITEM 6.  Management Discussion and Analysis...............................    6
ITEM 7.  Financial Statements.............................................   15
ITEM 8.  Changes In And Disagreements With Accountants On Accounting And
          Financial Disclosures...........................................   15
ITEM 8A. Controls and Procedures..........................................   16

PART III..................................................................   16

ITEM 9.  Directors, Executive Officers, Promoters And Control Persons,
          Compliance With Section 16(A) Of The Exchange Act...............   16
ITEM 10. Executive Compensation...........................................   18
ITEM 11. Security Ownership of Certain Beneficial Owners and Management...   21
ITEM 12. Certain Relationships and Related Transactions...................   21
ITEM 13. Exhibits List and Reports on Form 8-K............................   22
ITEM 14. Principal Accounting Fees and Services...........................   24
<PAGE>
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 ("China" or "PRC"). For purposes of this annual report, a
conversion rate of approximately US$1.00 to RMB 7.8 was utilized. There is no
assurance that RMB amounts could have been or could be converted into US dollars
at that rate.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

HISTORY

Global Pharmatech, Inc. ("Global" or the "Company") was incorporated in Delaware
on June 26, 2001 under the name Autocarbon.com, Inc. After engaging, under prior
management, in several businesses unrelated to its current one, on February 9,
2005, Global acquired Jilin Tian Yao Science and Technology Limited Company
("JTY"), by acquiring JTY's parent, Natural Pharmatech, Inc. ("Natural"),
through the issuance to Natural's shareholders of 13,703,125 of its common
shares for all of the outstanding common shares of Natural. Located in
Changchun, China, JTY is a Chinese limited liability company, organized on
February 7, 2001, which, together with its subsidiaries, is principally engaged
in the research and development of modernized traditional Chinese medicine and
bio-pharmacy, the sale of this technology, and the manufacture and sale of
Chinese medicine and vitamins throughout China. Natural was incorporated in the
British Virgin Islands on February 2, 2004, and acquired JTY on June 15, 2004 by
issuing 43,800,000 of its common shares for all of the outstanding common shares
of JTY.

Under generally accepted accounting principles, these acquisitions are
considered in substance to be capital transactions rather than business
combinations. In each case, for accounting purposes, the acquired company is
deemed to have issued its stock for the net monetary assets of the acquiring
company. Each transaction is accompanied by a recapitalization, and is accounted
for as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the comparative
historical financial statements are primarily those of JTY and its subsidiaries.

In June 2005, JTY, the Company's wholly-owned subsidiary, acquired an 80% equity
interest in a new company, Changchun Xiandai Technology Inc. ("XD").

On December 11, 2005 the Company sold its entire 51% interest in MDX. MDX had
been established in July 2003 and had focused on research and development, and
technical consulting.

BUSINESS OVERVIEW

We are a leader in China in the research, production and development of
Traditional Chinese Medicine ("TCM") using internationally-accepted scientific
standards. China's TCM annual sales reached US $4.8 billion in 2002. We market
our expertise in three major ways: sales of TCM products in convenient dosage
forms such as capsules and pills, revenues from technology transfer, and
revenues derived from conducting experiments and research for other companies.
TCM accounts for approximately 30% to 40% of all medicines sold in China.

THE EMPLOYEES

The Company currently has 397 full-time employees and no part-time employees.
None of our employees is covered by a collective bargaining agreement. We
consider relations with our employees to be good.

THE PRODUCTS

Our product line consists of more than 96 products, primarily TCM-based
prescription drugs, over-the-counter drugs and dietary supplements, including
several western medicines and bio-medicines. We sell our products through
distributors and directly to consumers through our own sales team. We currently
have three principal drugs that are patented in China and approved for sale by
the Chinese State Food & Drug Administration (SFDA):

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QINGXUAN ANTI-HYPERTENSION TABLET is an SFDA-approved over-the-counter drug
product indicated for the treatment of hypertension and high serum cholesterol
level. The drug substance of Qingxuan is extracted from a single Chinese medical
herb, radish seed. The extract contains methyl mercaptan, erucic acid,
octadecatrienoic acid, nC13, Glycerol sinapate, raphanin, cyanidin and coumarin.
Pharmacology experiments showed that Qingxuan may reduce blood pressure in
several animal models. In a three-month toxicity study, after Qingxuan was
orally given to mice at ten to 40 times greater than human clinical dose (based
on body surface areas), no mortality or organ toxicity was observed in the
animal tested. As an over-the-counter drug product, these tablets can be
marketed in China without prescription.

The JUTAI SOFT CAPSULE is an SFDA-approved dietary supplement. Substances of
this product are extracted from ginseng and ECHINACEA PURPUREA, a plant
originally grown in North America. This dietary supplement and energy provider
was developed by Global Pharmatech. As reported previously in the literature,
ECHINACEA PURPUREA may increase the concentration of blood leukocyte and enhance
human immunity. In addition, Jutai is approved for sale to combat fatigue.

HUANGZHIHUA ORAL LIQUID is an SFDA-approved prescription drug for the treatment
of common colds, especially for children. The drug substances of Huanzhihua are
extracted from several Chinese herbs. Global Pharmatech developed this product
based upon the written experience of more than a thousand years of Chinese
medical practice. Pharmacology studies illustrated that Huangzhihua can inhibit
the growth of various bacteria in vitro, and inhibit the proliferation of
influenza virus in mouse lungs in vivo and has been shown to have
anti-inflammatory benefits in animal models. Long-term toxicology studies showed
that orally administered Huangzhihua drug substance at 25 or 50 g/kg/day
(several times greater than the human clinical dose) did not induce significant
organ toxicity in rats. A clinical study demonstrated that Huangzhihua could
significantly reduce the symptoms of common cold in a randomized,
comparator-controlled clinical trial. Stability studies showed that the drug
product was stable within a three- year testing period. According to Chinese
regulations, Huangzhihua has been granted a seven-year administrative market
protection by the SFDA.

JIN LIAN HUA is a new Anti-Upper Respiratory Infection drug composed of natural
plant extracts. It has high efficiency to cure acute and chronic Pharyngitis,
Tonsillitis, and various Upper Respiratory Infections.

GONG YAN KANG granules is a new feminine care drug choicely composed of various
precious Chinese herbs and refinedly manufactured through modern technology. It
has the power to activate blood circulation, and dispel stasis and turgescence.
Gong Yan Kang Granules can be used for chronic Pelvic Inflammatory Disease,
Hysteritis, Adnexitis and other feminine illness..

WEI KANG LING capsule is a classic drug for various stomachaches. It conceives
the long and rich clinical experiences of the Traditional Chinese Medicine. And
it is refinedly manufactured by modern technology (e.g. dynamic warm-soak
extraction technology and etc). Through clinical proof, its general efficiency
rate for Gastric Ulcer, Duodenum Cap Ulcer, Chronic Atrophic Gastritis,
Anacamptics Gastritis, and Duodenum Enteritis

The XS CAPSULE (XIN-SHU) is indicated for the treatment of angina and other
coronary disease. It has been developed by using modern biotechnologies. Based
on clinical experience, we believe our product formulation could improve the
efficacy of this drug. The drug substances of XS were extracted from six Chinese
medical herbal materials. Safety and efficacy of these drug substances and their
combination were tested in previous clinical trials conducted in China..
In addition to these patented products, Global Pharmatech manufactures and sells
other proprietary drugs, generics and dietary supplements used to treat symptoms
ranging from headaches, coughing and dry mouth to infections and numbness of
limbs.

PRODUCTION FACILITIES AND EQUIPMENT

The Company's approximately 15,000- sq.m. manufacturing plant contains
manufacturing capacity for over 300 million capsules, 200 million pills and
tablets, 50 million bags of granules, 50 million vials of liquid dosage form
drugs and 200 tons of pilular (orally-administered) drugs annually. Its
facilities are certified as compliant with Chinese Current Good Manufacturing
Practices, which are governmentally-established current, scientifically sound
methods, practices and principles that are implemented and documented during
product development and production to ensure consistent and uniform manufacture
of safe products. Current Good Manufacturing Practices require the design and
implementation of standard operating procedures for each step in the
manufacturing process, beginning with the selection of raw materials suppliers
and ending with storage and shipment.

Our principal capsule supplier is Zhejiang Huaguang Capsule Co., Ltd. Shenzhen
Dongyangguang Development Co., Ltd. is our principal source for medicine
wrappers. We have a number of other smaller suppliers of raw materials and other
materials. We believe that a loss of any of these suppliers could be compensated
for through arrangements with alternative sources of supply.

DISTRIBUTION CHANNELS

The Company has historically generated revenue from transferring technology
during various stages of development to other pharmaceutical companies, in which
it retains no ownership interest and for which it receives lump-sum payments
based on pre-established milestones rather than royalties or other compensation.
We plan to continue to do so with certain drugs, primarily in cases where

                                       2
<PAGE>
products are requested and selected by pharmaceutical companies that do not have
their own research facilities. For example, Global Pharmatech currently provides
services to medium-sized pharmaceutical companies in northern China that have
mature manufacturing capacities and sales channels, but do not have similar
research and development capabilities.

We also plan to increase our focus in the future on manufacturing in-house
developed medicines in our own production facilities. We intend to target the
urban consumer market in China. Currently, sales are mainly through
distributors, such as wholesale companies and chain store representatives. We
also target the sale of our products to medical institutions, such as hospitals
and clinics.

Geographically, Global Pharmatech focuses its sales efforts in Beijing, Anhui,
Shandong, Shanxi, Liaoning, Heilongjiang, Jilin, Chongqing, Shenzhen and other
provinces in China. The Company also sells to parts of Southeast Asia.

Our Chinese operating subsidiaries have received more than thirty commendations
since 2001 from various governmental agencies, including several commendations
related to the Company's technology and intellectual property.

COMPETITION

The Chinese pharmaceuticals market is highly fragmented and competitive. Market
entry is generally not controlled, although regulatory and technological
hurdles, significant start-up costs and limited available facilities may deter
inexperienced or undercapitalized entrants. We anticipate that competition in
this market will continue to intensify. Our competitors include national and
regional pharmaceutical promotion companies, independent pharmaceutical research
and development companies and pharmaceutical distributors. We anticipate
substantial new competition from foreign and domestic competitors entering the
Chinese pharmaceutical marketing and distribution market.

Some of our competitors are more established, and have significantly greater
financial, technical, marketing and other resources than we do. Many also have
greater name recognition and a larger customer base. Our competitors may be
better able than we are to respond to new or changing opportunities and customer
requirements, undertake more extensive research and development, manufacturing
and distribution activities, offer more attractive terms to customers, and adopt
more aggressive pricing policies.

We believe we best compete with other pharmaceutical companies in China on the
basis of our modern facilities, talented research and development professionals
and comprehensive research and development and production resources. We believe
our facilities approach or meet Western standards and have sufficient capacity
to meet our research and development and production needs for the foreseeable
future. In contrast, we believe many Chinese pharmaceutical companies rely on
outdated equipment, inadequate facilities and/or less stringent quality control
measures.

GOVERNMENT REGULATION

The law of China on the Administration of Pharmaceuticals was promulgated on
September 20, 1984 by the Executive Committee of the National People's Congress
and amended effective December 1, 2001. This law sets out the basic legal
framework for administration of pharmaceutical production and sale in China,
covering manufacture, distribution, packaging, pricing and advertising. The
Implementation Rules on the Administration of Pharmaceuticals were promulgated
effective September 15, 2002 to set out detailed implementation rules.

The State Drug Administration was established in 1998 as the Chinese
pharmaceutical regulatory authority, to assume supervisory and administrative
functions previously carried out by the Ministry of Health, the State
Administration Bureau for Pharmaceuticals and the State Administration Bureau
for Traditional Chinese Medicine. In March 2003, China's SFDA was established to
assume the functions previously carried out by the SDA. The SFDA's primary
responsibilities include:

     *    formulating and supervising the implementation of regulations and
          policies concerning drug administration;
     *    promulgating standards for pharmaceutical products and medical
          appliances;
     *    categorizing drugs and medical appliances for regulatory purposes;
     *    registering and approving new drugs, generic drugs and imported and
          Chinese medicines;
     *    granting approvals for the production of pharmaceutical products and
          medical appliances; and
     *    approving the manufacture and distribution of pharmaceutical products.

Before any pharmaceutical distribution enterprise, including any wholesaler or
retailer, can distribute pharmaceutical products in China, it must obtain a
Pharmaceutical Distribution Permit issued by the relevant provincial or
county-level SFDA where the enterprise is located. Issuance of a permit is
subject to inspection of the facilities, warehouse, hygiene environment, quality
control systems, personnel and equipment of the enterprise and, when granted,

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<PAGE>
the permit is valid for five years. Enterprises must apply for permit renewals
no later than six months prior to expiration, subject to reassessment by the
relevant authority. Pharmaceutical distribution enterprises must also obtain a
business license from the relevant administration bureau for industry and
commerce to commence business.

Good Supply Practice standards have been established in China regulating
pharmaceutical wholesale and retail enterprises to ensure quality distribution
of pharmaceutical products. Currently applicable GSP standards, passed by the
SDA effective July 1, 2000, require wholesale and retail enterprises to
implement strict control of staff qualifications, distribution premises,
warehouses, inspection equipment and facilities, management and quality control
in order to obtain a GSP certificate to conduct business. GSP certificates are
valid for five years, after a one-year certification for newly established
enterprises. Renewal applications must be made no later than three months prior
to expiration, subject to reassessment by the relevant authority.

Pursuant to the Decision of the State Council on the Establishment of the State
Basic Medical Insurance System for Urban Employees and relevant Implementation
Measures, the Chinese Ministry of Labor and Social Security established a
Catalogue listing medicines covered by social insurance (the "Insurance
Catalogue"). The Insurance Catalogue is divided into Parts A and B. Part A
medicines are qualified for general application, and their content may not be
changed by local authorities. Provincial level authorities may make limited
changes to Part B medicines, resulting in some regional variations. Patients
purchasing Part A medicines are entitled to reimbursement of their costs from
the social medical fund in accordance with relevant regulations. Patients
purchasing Part B medicines are required to pay a predetermined proportion of
their costs.

Medicines included in the Insurance Catalogue are selected by the Chinese
government authorities based on factors including treatment requirements,
frequency of use, effectiveness and price, and are subject to government price
control. The Insurance Catalogue is revised every two years. In connection with
each revision, relevant provincial drug authorities collect proposals from
relevant enterprises, and the SFDA makes final revisions based on the
preliminary opinions suggested by the provincial drug administrations.

Medicine products included in the Insurance Catalogue and those whose production
or trading will constitute monopolies are also subject to government price
control. Maximum prices for these products are periodically revised by state and
provincial administration authorities. Prices for medicines not subject to price
control are determined by the pharmaceutical manufacturers, subject in some
cases to providing notice to provincial pricing authorities. Price controls are
set to create reasonable profit margins for pharmaceutical enterprises after
taking into account the type and quality of the products, their production
costs, prices of substitute products and other similar factors.

RESEARCH AND DEVELOPMENT (R&D)

Our own R&D efforts result in new drug patents which form the basis for some of
our products. We sell patented technology to other drug manufacturers when we
are unable to manufacture the products ourselves due to lack of appropriate
manufacturing facilities or choose not to because certain products are
incompatible with or duplicative of our current product mix or lack required
profitability criteria. We also provide research services, primarily through
contracts with other drug manufacturers which lack their own R&D capabilities.

Our R&D capabilities conduct almost all our pre-clinical trial research and
develop products according to consumer requirements, distinguishing us from many
of our competitors. R&D expenditures were US$693,786 for 2006 and US$508,405 for
2005.

We currently have a total of 32 patents applied, with 19 of them being granted,
among these 19 granted patents, 15 are innovation Aupatents. Wehave 16
trademarks, and are not a party to any license, royalty or franchise contracts.

We are currently focusing our development efforts on 32 drugs and 2 dietary
supplements.

Additionally, we have at least 14 drugs that have been approved for clinical
trial, And 10 drugs that have been approved for production.

                                       4
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES

The Company, either directly or through its subsidiaries, operates under 50-year
ground leases acquired from the Chinese government for lump-sum payments, (1) an
office building and factory located at 509 Maoxiang St., Changchun
(approximately 9,300 and 5,600 sq.m., respectively), including the 20,800 sq.m.
of land on which they are situated; and (2) an office building, factory and
storage facility located at 44 Xinghuanan St., Kuaitong, Tongyu (approximately
2,800, 3,331 and 2,600 sq.m., respectively), including the 20,800 sq.m. of land
on which they are situated. The Changchun and Tongyu ground leases expire in
2050 and 2053, respectively. The Company owns the buildings and improvements on
the properties, which will revert to the Chinese government at the end of the
relevant lease term in the absence of extension.

ITEM 3. LEGAL PROCEEDINGS

We are not currently a party to, nor is any of our property currently the
subject of, any pending legal proceeding.

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

No matter was submitted to the security holders for a vote during the period
covered by this report.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASERS OF EQUITY SECURITIES

Our common stock is quoted on the over the counter bulletin board (OTCBB) under
the symbol "GBLP". The following table sets forth, for the calendar quarters
indicated, the range of high and low bid prices of common stock reported by the
Pink Sheets since February 9, 2005, the date of its acquisition of the business
of its predecessor, Natural Pharmatech. The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions. Prior to February 9, 2005, the Company, under different
management and a different name, was either in other lines of business or was
dormant, and Natural Pharmatech was a privately-held British Virgin Islands
company based in the People's Republic of China.

                                               High             Low
                                               ----             ---
FISCAL 2005
First Quarter (from February 9)                $2.90            $0.31
Second Quarter                                 $1.65            $0.55
Third Quarter                                  $1.65            $0.55
Fourth Quarter                                 $2.50            $1.01

FISCAL 2006
First Quarter (from February 9)                $2.50            $1.45
Second Quarter                                 $1.80            $1.25
Third Quarter                                  No trade         No trade
Fourth Quarter                                 $1.17            $0.75

FISCAL 20062007
First Quarter (through March 15, 2007)         $1.25            $0.61

As of March 28, 2007, there were 137 record holders of our common stock. The
total number of beneficial holders is unknown as they hold our common stock in
street name, and such number is not provided to us by our Transfer Agent and
Registrar.

We have not paid any cash dividends on our common stock, and we currently intend
to retain any future earnings to fund the development and growth of our
business.

During 2006, the Company issued 5,000,000 shares of common stock for net
proceeds of $4,625,000. During January 2007, an SB-2 was filed with the SEC to
register one million of these shares. In the same month, January 2007, the SEC
declared the SB-2 effective.

The Company relied on the exemption from the registration requirements of the
Securities Act afforded by Regulation S thereunder for this issuance.

At the Company's annual shareholders' meeting in December 2006, the Company
approved an equity compensation plan.

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<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

The following discussion should be read in conjunction with the Audited
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
Form 10-KSB. The information in this discussion contains 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 forward-looking statements involve risks and uncertainties, including
statements regarding our capital needs, business strategy and expectations,
including but not limited to the following:

     *    our ability to raise funds in the future through public or private
          financings;
     *    our ability to develop marketable products through our research and
          development efforts;
     *    our ability to protect our patents and technologies and related
          intellectual properties;
     *    customers' acceptance of our products;
     *    our ability to compete against new companies entering the Chinese
          pharmaceutical market and larger, more established companies which
          have more resources than our company;
     *    our business expenses being greater than anticipated due to
          competitive factors or unanticipated developments;
     *    changes in political and economic conditions in China;
     *    changes in Chinese laws and regulations applicable to our business,
          including the Administration of Pharmaceuticals, the rules and
          regulations of the State Food and Drug Administration, the Good Supply
          Practice standards, and the inclusion of our products in the insurance
          catalogue of the Ministry of Industry and Social Security;
     *    our ability to retain management and key personnel; and
     *    our ability to comply with the requirements of Section 404 of the
          Sarbanes-Oxley Act of 2002.

Any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. For example, words such as "may,"
"will," "should," "estimates," "predicts," "potential," "continue," "strategy,"
"believes," "anticipates," "plans," "expects," "intends" and similar expressions
are intended to identify forward-looking statements. You should not place undue
reliance on these forward-looking statements. Actual results could differ
materially from those anticipated in these statements as a result of a number of
factors, including our good faith assumptions being incorrect, our business
expenses being greater than anticipated due to competitive factors or
unanticipated development or sales costs, revenues not resulting in the manner
anticipated due to a slowdown in technology spending, particularly in the
telecommunications market and/or our failure to generate investor interest or to
sell certain of our assets or business segments. The forward-looking statements
may also be affected by the additional risks faced by us as described in this
Report and in our filings with the Securities and Exchange Commission (the
"SEC"). All forward-looking statements included in this Report are based on
information available to us on the date hereof, and we assume no obligation to
update any such forward- looking statements.

BACKGROUND

Global Pharmatech, Inc. ("Global Pharmatech," the "Company", "we", "us" or
"ours") was incorporated under the laws of the State of Delaware in 2001 under
the name Autocarbon.com, Inc. On November 1, 2002, we filed a Certificate of
Ownership with the Secretary of State of the State of Delaware whereby we merged
with our wholly-owned subsidiary and amended our Certificate of Incorporation,
changing our name to Autocarbon, Inc.

On January 24, 2005, our company entered into a Share Purchase Agreement with
Natural Pharmatech, Inc., a British Virgin Islands corporation ("Natural
Pharmatech"), and the shareholders of Natural Pharmatech. Under the terms of the
Share Purchase Agreement, we agreed to acquire 100% of Natural Pharmatech's
shares in exchange for 80% of our common stock, to be issued to the Natural
Pharmatech shareholders. Our acquisition of Natural Pharmatech was completed on
February 9, 2005. In connection with this transaction, we amended our
Certificate of Incorporation on January 31, 2005, changing our name to Global
Pharmatech, Inc.

Through our subsidiaries, we develop, manufacture and market proprietary drugs
and nutritional supplements that are based on traditional Chinese medicine.We
also offer a full range of "start to finish" biotechnology services, including
research and development, testing, manufacturing drugs in liquid and solid dose

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<PAGE>
forms, sales and marketing. We utilize unique extraction methods and innovative
techniques that have been developed by our research and development team. Our
core business is to leverage our patents and scientific expertise for
botanical/biological drug and nutritional supplements and to manufacture and
market the products to China and the globe. Our operations are currently
conducted in the People's Republic of China with sales distribution in China,
U.S, Hong Kong, Malaysia, Singapore, Indonesia and Vietnam. Sales outside China
are made either directly to foreign distributors by our subsidiary, Jilin Ben
Cao Tang Pharmacy Co., Ltd. ("BCT"), or through China Ben Cao Tang International
Development Ltd. ("BCT HK"), which sells on to those areas indicated above.

Natural Pharmatech was formed on February 2, 2004 under the laws of the British
Virgin Islands. Natural Pharmatech was formed as a holding company to own the
five subsidiaries that make up Natural Pharmatech's business operations. Natural
Pharmatech (Jilin China) Co., Ltd. ("Natural Pharmatech China" or "JTY") is a
wholly owned subsidiary of Natural Pharmatech located in Changchun in Jilin
Province of China. Natural Pharmatech China originated as a research department
within the Affiliated Hospital of Changchun Traditional Chinese Medicine
College. It was organized as a separate private for-profit entity in February
2001.

Natural Pharmatech China has four subsidiaries: BCT, Jilin Yi Cao Tang Pharmacy
Co., Ltd. ("YCT"), Jilin Tian Yao Drug Safety Evaluation Co., Ltd. ("JDE") and
Changchun Xiandai Technology Inc. Natural Pharmatech China owns 75% of the
shares of BCT, which was established in September 2002 as a Sino-foreign joint
venture with BCT HK, a Hong Kong distributor of natural drugs. BCT is
principally engaged in the manufacture and sale of Chinese medicine of the solid
dose type, and is capable of manufacturing 15 drugs in three forms. Our solid
dose and capsule manufacturing, pre-manufacturing and extraction plants received
a national GMP (Good Manufacturing Practice) certificate in April 2004.

Natural Pharmatech China owns 95% of the shares of YCT, which was established in
September 2003. It is engaged in the manufacturing and sales of Chinese and
Western medicine. YCT obtained a national GMP certificate in July 2004, and is
capable of manufacturing 78 drugs in eight forms.

Natural Pharmatech China owns 99.5% of the shares of JDE, which was established
in April 2003. It is engaged in pharmacology, safety pharmacology, and short-
and long-term toxicology studies. JDE obtained a national GLP (Good Laboratory
Practice) certificate in December 2004.

On May 13, 2005, we changed our fiscal year end from March 31 to December 31.
Natural Pharmatech's (and its subsidiaries') fiscal year end is December 31, and
we elected to change our fiscal year end to match our operating companies'
fiscal year end.

In June 2005, JTY, the Company's wholly-owned subsidiary, acquired an 80% equity
interest in a new company, Changchun Xiandai Technology Inc. ("XD"), by making a
$619,000 investment.

Since inception, our revenues have been mainly generated from technical-related
services, including the sale of patents and research services. We have recently
sought to increase revenues from sales of goods, through the operations of our
two manufacturing subsidiaries, BCT and YCT.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006

REVENUE. Sales for the current year were $2,375,511 a decrease of $709,664
compared with revenue in the same period of 2005. These revenues were derived as
follows: revenue from goods sold was $1,220,322 contract revenue earned from the
transfer of technology was $1,231,778 and revenue derived from experiments,
research and related ancillary services was $16,557.

Contract revenue earned from the transfer of technology increased $81,778 or
107%, compared with contract revenue in the same period of 2005, which totaled
$1,150,000. The increase was due to a greater emphasis on higher margin
operations such as technology transfer.

Although total revenue decreased, revenue at the company's BCT subsidiary
recorded a sales increase of approximately $400,000 as sales of its newly
introduced "Jutai" product gained traction in the market. Sales in the Company's
JDE subsidiary also recorded an increase of approximately $200,000 over the
prior year as the Company's position as a provider of pre-clinical experimental
services gained wider recognition.

As noted above, sales at the Company's BCT subsidiary were particular strong in
2006, recording a sales increase of more than 60%. This sales increase was
driven by two major factors: first, sales of the company's Jutai product were
close to $500,000, and had a gross profit exceeding 60%. Secondly, BCT had five
new products enter the market, including Xinshu , Jinlianhua, Guanyankang,
Weikangling, and Kangnaoshuai. These five products already accounted for 12% of
BCT's sales in the first year of introduction and 8% of gross profits.

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In late 2006, the Chinese government made it mandatory that Chinese companies
that conduct pre-clinical trials for SFDA approval must use a GLP-certified lab.
The Company is one of only 22 labs in China that is qualified to provide
pre-clinical testing services for drugs that are to be approved by the Chinese
SFDA.

Although the Company has already been recognized for at least two years as
having one on the only GLP-certified labs to conduct clinical trials in China,
the fact that the Chinese government will now enforce mandatory compliance by
forcing companies to use GLP-certified trials effective January 1, 2007 gives
the Company a clear competitive advantage.

Additionally, sales fell temporarily at the Company's YCT subsidiary as that
company underwent renovation from May to November 2006.

COST OF SALES. Cost of sales for the year ended December 31, 2006 was $788,560
compared to $1,400,014 for the same period of 2005. The decrease is directly
associated with the corresponding decrease in revenues generally and those from
sales of goods, which have higher costs of sales than our other revenue streams.

GROSS PROFIT. Gross profit for the year ended December 31, 2006 was $1,586,951,
compared to $1,685,161 for the corresponding period of 2005. Although sales
decreased, gross profit remained steady due to a higher proportion of sales from
technology transfer which do not have a cost of sales element.

ADVERTISING EXPENSES. Advertising expenses decreased substantially, to $67,869
for the year ended December 31, 2006, compared to $173,828 for 2005. The
decrease was due to a major promotional campaign launched by BCT to increase
sales and product awareness that occurred in 2005. A similar promotion did not
occur in 2006.

SELLING EXPENSES. Selling expenses were flat, $89,042 for the year ended
December 31, 2006, as compared to $91,980 for the corresponding period of 2005.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for the
year ended December 31, 2006 increased $1,759,979, compared to 1,290,053 for the
same period in 2005. There were three primary reasons for increase: first, the
Company's increased depreciation costs resulting from capital expenditures at
the Company's YCT subsidiary, as outlined in the "Revenues" section, and also
the Company's capital expenditures at its Xiandai facility. The second reason
was legal fees resulting from the Company's successful litigation of a patent
transfer as outlined in "Other Income" below. Also, there were continuing legal
and auditing expenses as a result of the Company's listing on the OTCBB market.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development (R&D) expenses for
2006 was $693,786 as compared to expenses of $508,405 as the Company continued
to invest heavily in its product pipeline. The Company currently has projects in
various stages of completion, some in early stages and some that are close to
gaining approval to market.

In 2006, the Company completed 52 different research products. Five of these
projects have already gained government approval for the Company to commence
manufacturing, two of the projects have gained government approval to conduct
clinical trials, and 9 projects are pending approval by various provincial,
municipal and national regulatory authorities. Additionally in 2006, three of
the Company's research projects were recognized by the government with awards.
Finally, the Company gained six new discovery patents (the highest level of
patents in China) and the Company's research team published 15 different
research articles.

MISCELANNEOUS INCOME. Miscellaneous income consists principally of two items:
1)government grants and 2) revenue accrued from a judgment issued by the Chinese
Court of Final Appeal.

Each year, the Chinese government provides allowances to help companies doing
business in medical pharmaceuticals research and development. These payments
vary according to the projects we are engaged in and the priorities of the
government in funding particular efforts. Accordingly, grants are
opportunistically granted and will fluctuate widely from period to period. In
2006, government grants totaled $167,318, compared to 2005's total of $695,160.

In May, the Company won a judgment of approximately $410,000 from the Chinese
Court of Final Appeal related to litigation involving the transfer of drug
technology to a research hospital. This money had been fully paid by the end of
2006.

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses. These
estimates and assumptions are affected by management's applications of

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accounting policies. Critical accounting policies for Global Pharmatech include
the useful lives of property and equipment, the allowance for doubtful
receivables and revenue recognition.

We review the carrying value of property and equipment for impairment at least
annually or whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of long-lived
assets is measured by the comparison of its carrying amount to the undiscounted
cash flows that the asset or asset group is expected to generate. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the property, if any, exceeds its
fair market value.

The Company recognizes an allowance for doubtful accounts to ensure accounts
receivable, other receivables and related party receivables that are not
overstated due to uncollectibility. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's inability to meet its financial obligation, such
as in the case of bankruptcy filings or deterioration in the customer's
operating results or financial position. If circumstances related to customers
change, estimates of the recoverability of receivables would be further
adjusted.

Contract revenues earned from the transfer of technology (licensing
arrangements) are recognized in accordance with contract terms. Revenue derived
from experiments, research and related ancillary services is recognized when the
customer accepts the service. Revenue from goods sold is recognized when title
has passed to the purchaser, which generally is at the time of delivery.
Government grants are recognized as other income upon receipt.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2006, we had cash of $5,555,155 and working capital of
$7,771,559, and for the year we incurred a net loss of ($1,234,391). During 2006
we generated cash from operations of $261,772 The significant reasons for the
provision of cash are:

     *    a decrease in accounts receivable of $660,779;
     *    a decrease in related party receivables of $558,489;
     *    an increase in inventories of $342,164;
     *    a decrease in accounts payable and accrued expenses of $151,603;
     *    an increase in advances from customers of $38,475;

During the year ended December 31, 2006, we used cash of $399,133 towards the
purchase of fixed assets, with most of the money being used for the upgrading of
facilities at both YCT and Xiandai building. We obtain a short-term loan from
one bank totaling approximately $250,000. We also issued 5,000,000 shares of
common stock raising net proceeds of $4,625,000.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance arrangements.

RISK FACTORS

Our business, financial condition, operating results and prospects are subject
to the following risks. Additional risks and uncertainties not presently
foreseeable to us may also impair our business operations. If any of the
following risks actually occurs, our business, financial condition or operating
results could be materially adversely affected. In such case, the trading price
of our common stock could decline, and our stockholders may lose all or part of
their investment in the shares of our common stock.

RISKS RELATED TO OUR BUSINESS

WE HAVE A LIMITED OPERATING HISTORY. We were founded and commenced operations in
2001. Our operating history may be insufficient for you to evaluate our business
and future prospects. We have sustained losses in the past and cannot assure you
that we will become profitable or that we will not incur more losses in the
future. We expect that our operating expenses will increase as we expand. We

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will have significant operating losses if we fail to realize anticipated revenue
growth. We will continue to encounter risks and difficulties frequently
experienced by companies at a similar stage of development, including that we
may fail to implement successfully our business model and strategy, or prudently
adapt and modify them as needed; increase awareness of our brands, protect our
reputation and develop customer loyalty; competently manage our expanding
operations and service offerings, including integration of any future
acquisitions; maintain adequate control of our expenses; and anticipate and
adapt to changing conditions in our markets, government regulation, our
competition and relevant technology.

If we are not successful in addressing any or all of these risks, our business
may be materially and adversely affected.

WE HAVE HAD LOSSES IN THE PAST AND MAY HAVE FUTURE LOSSES. WE MAKE NO ASSURANCES
THAT WE WILL BE ABLE TO ACHIEVE SUSTAINABLE PROFITABILITY. We have had operating
losses since completing our reverse merger in 2005. We will not be profitable
unless we materially increase our sales. The burden of our debt and current
interest liabilities makes it prudent to attract equity investment rather than
further debt to help us grow. Our new product development and management's
ability to successfully manage the business will be essential to achieving
consistent profitability. Although our revenues have grown in recent quarters,
this growth may not be sustained and we may never become consistently
profitable. As sales of goods grow and become a larger part of our total
revenues, we may experience smaller overall margins, as sales of our products
have higher costs of sales than our other revenue streams.

WE HAVE NEVER PAID CASH DIVIDENDS AND ARE NOT LIKELY TO DO SO IN THE FORESEEABLE
FUTURE. We currently intend to retain any future earnings for use in the
operation and expansion of our business. We do not expect to pay any cash
dividends in the foreseeable future but will review this policy as circumstances
dictate.

THE MARKET IN WHICH WE COMPETE IS HIGHLY COMPETITIVE, FAST-PACED AND FRAGMENTED,
AND WE MAY NOT BE ABLE TO MAINTAIN MARKET SHARE. We expect competition to
persist and intensify in the future. Our principal competitors are Tongrentang
and Guangzhou Pharmaceutical, and we also compete with a number of other,
smaller firms. Both Tongrentang and Guangzhou Pharmaceutical are publicly-traded
companies that are substantially larger and have greater resources than Global.
We face the risk that new competitors with greater resources than ours will
enter our market, and that increasing competition will result in lower prices.
If we must significantly reduce our prices, the decrease in revenues could
adversely affect our profitability.

Our products must keep pace with developments in our industry or they may be
displaced by competitors' products. Our industry is characterized by rapid
product development, with significant competitive advantages gained by companies
that introduce products that are first to market, deliver constant innovation in
products and techniques, offer frequent new product introductions and have
competitive prices. Our future growth partially depends on our ability to
develop products that are more effective in meeting consumer needs. In addition,
we must be able to manufacture and effectively market those products. The sales
of our existing products may decline if a competing product is introduced by
other companies.

The success of our new product offerings depends upon a number of factors,
including our ability to accurately anticipate consumer needs, innovate and
develop new products, successfully commercialize new products in a timely
manner, price our products competitively, manufacture and deliver our products
in sufficient volumes and in a timely manner and differentiate our product
offerings from those of our competitors. If we fail to make sufficient
investments in research and pay close attention to consumer needs or we focus on
technologies that do not lead to more effective products, our current and future
products could be surpassed by more effective or advanced products of others.

We have limited control over the activities of our distributors, which generally
are not employed or otherwise controlled by us, are free to conduct their
business at their own discretion and may be dedicated more to establishing their
own reputations and business relationships than to promoting our products. By
the same token, the simultaneous loss of a number of our distributors could have
a material adverse effect on our business, financial condition and results of
operations.

KEY EMPLOYEES ARE ESSENTIAL TO OUR BUSINESS. Our senior management are essential
to executing our strategy. We will need to retain these people and attract
others to succeed. We require specialized professionals in a variety of areas,
some of which are addressed by relatively few companies. As a result, depending
upon how our business grows, we may experience difficulty in hiring and
retaining highly skilled employees.

We compete for qualified professionals with a number of Chinese research
institutions, some of which are more established than we are and have the
ability to pay more cash and other compensation than we do. Competition for
qualified individuals is intense, and we cannot be certain that our search for
them will be successful. If we are unable to hire and retain skilled
professionals, our business, financial condition, operating results and future
prospects could be materially adversely affected. We do not have key-person
insurance for any of our senior managers or employees.

ESTABLISHING AND EXPANDING INTERNATIONAL OPERATIONS REQUIRES SIGNIFICANT
MANAGEMENT ATTENTION. Substantially all of our current revenues are derived from
China. We intend to expand our international operations in Southeast Asia and
the United States, which, if not planned and managed properly, could materially

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adversely affect our business, financial condition and operating results.
Expanding internationally exposes us to legal uncertainties, new regulatory
requirements, liability, export and import restrictions, tariffs and other trade
barriers, difficulties in managing operations across disparate geographic areas,
foreign currency fluctuations, dependence on local distributors and potential
disruptions in sales or manufacturing due to military or terrorist acts, as well
as longer customer payment cycles and greater difficulties in collecting
accounts receivable. We may also face challenges in protecting our intellectual
property or avoiding infringement of others' rights, and in complying with
potentially uncertain or adverse tax laws.

We do not currently enter into forward exchange rate contracts to hedge some of
the financial risks of international operations, but expect to do so in the
future.

FLUCTUATIONS IN THE VALUE OF THE RMB RELATIVE TO FOREIGN CURRENCIES COULD AFFECT
OUR OPERATING RESULTS. Most of our operations are conducted in Hong Kong dollars
and Chinese Renminbi. To the extent future revenue is denominated in foreign
currencies, such as the U.S. dollar, we would be subject to increased risks of
foreign currency exchange rate fluctuations that could have a material adverse
affect on our business, financial condition and operating results. The value of
Hong Kong dollars and Chinese Renminbi against the U.S. dollar and other
currencies may fluctuate and is affected by, among other things, changes in the
PRC's political and economic conditions. As our operations are primarily in
Asia, any significant revaluation of Hong Kong dollars or the Chinese Renminbi
may materially and adversely affect our cash flows, revenues and financial
condition. For example, to the extent that we need to convert U.S. dollars into
Hong Kong dollars or Chinese Renminbi for our operations, appreciation of either
currency against the U.S. dollar could have a material adverse effect on our
business, financial condition and results of operations. Conversely, if we
decide to convert our Hong Kong dollars or Chinese Renminbi into U.S. dollars
for other business purposes and the U.S. dollar appreciates against either
currency, the U.S. dollar equivalent of the currency we convert would be
reduced. To date, we have not engaged in any hedging transactions in connection
with our international operations.

CHINESE FOREIGN EXCHANGE CONTROLS MAY LIMIT OUR ABILITY TO UTILIZE REVENUES
EFFECTIVELY AND RECEIVE DIVIDENDS AND OTHER PAYMENTS FROM OUR CHINESE
SUBSIDIARIES. Our Chinese subsidiaries are subject to Chinese rules and
regulations on currency conversion. The Chinese government regulates the
conversion of the Chinese RMB into foreign currencies. Currently, foreign
investment enterprises are required to apply for authority (renewed annually) to
open foreign currency accounts governing conversion for payment of dividends,
limited capital items such as direct investments, loans, and issuances of
securities, some of which may be effected with governmental approval, while
others require authorization.

Our subsidiaries' ability to remit funds to us may be limited by these
restrictions. There can be no assurance that the relevant regulations in China
will not be amended so as to adversely affect our ability to obtain funds from
our subsidiaries.

OUR OPERATIONS COULD BE CURTAILED IF WE ARE UNABLE TO OBTAIN REQUIRED ADDITIONAL
FINANCING. ADDITIONAL FINANCING COULD ALSO RESULT IN DILUTION TO OUR EXISTING
STOCKHOLDERS OR RESTRICTIONS ON OUR FINANCIAL DISCRETION. Since inception our
investments and operations primarily have been financed through sales of our
common stock and proceeds from our current sales. In the future we may need to
raise additional funds through public or private financing, which may include
the sale of equity securities or equity or debt securities convertible into or
exchangeable for our common stock. The issuance of these securities could result
in dilution to our stockholders. To the extent that we raise additional capital
by issuing debt securities, we would incur substantial interest obligations, may
be required to pledge assets as security for the debt and may be constrained by
restrictive financial and/or operational covenants. Debt financing would also be
superior to your interest in bankruptcy or liquidation. To the extent we raise
additional funds through licensing or other arrangements, it may be necessary to
relinquish some rights to our technologies or products, or grant licenses on
unfavorable terms.

If we are unable to raise capital when needed, our business growth strategy may
slow, which could severely limit our ability to increase revenue, and we may be
unable to take advantage of business opportunities or respond to competition.

OUR COMPLIANCE WITH THE SARBANES-OXLEY ACT AND SECURITIES AND EXCHANGE
COMMISSION ("SEC") RULES CONCERNING INTERNAL CONTROLS MAY BE TIME CONSUMING,
DIFFICULT AND COSTLY. Although individual members of our management team have
experience as officers of publicly-traded companies, much of that experience
came prior to the adoption of the Sarbanes-Oxley Act of 2002. We have only
recently become a publicly-traded company. It may be time consuming, difficult
and costly for us to develop and implement the internal controls and reporting
procedures required by Sarbanes-Oxley. We may need to hire additional financial
reporting, internal controls and other finance staff in order to develop and
implement appropriate internal controls and reporting procedures. If we are
unable to comply with Sarbanes-Oxley's internal controls requirements, we may
not be able to obtain the independent accountant certifications that
Sarbanes-Oxley Act requires publicly-traded companies to obtain.

RISKS OF DOING BUSINESS IN CHINA

OUR OPERATIONS AND ASSETS ARE SUBJECT TO SIGNIFICANT POLITICAL AND ECONOMIC
UNCERTAINTIES. Changes in laws and regulations, or their interpretation, or the
imposition of confiscatory taxation, restrictions on currency conversion,
imports and sources of supply, devaluations of currency or the nationalization
or other expropriation of private enterprises could have a material adverse

                                       11
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effect on our business, results of operations and financial condition. Under its
current leadership, the Chinese government has been pursuing economic reform
policies that encourage private economic activity and greater economic
decentralization. There is no assurance, however, that the Chinese government
will continue to pursue these policies, or that it will not significantly alter
these policies from time to time without notice.

As China changes its economy from planned to more market-oriented, uncertainties
arise regarding governmental policies and measures. Although, in recent years,
the Chinese government has implemented measures emphasizing the use of market
forces for economic reform, reduction of state ownership of productive assets,
and establishment of sound corporate governance practices, a substantial portion
of productive assets in China are still owned by the Chinese government. For
example, all lands are state owned and leased to business entities or
individuals through governmental grants of state-owned land use rights. The
grant process is typically based on government policies at the time of grant,
which can be lengthy and complex and may adversely affect any expansion of our
operations. The Chinese government also exercises significant control over
China's economic growth through allocation of resources, foreign currency
control and providing preferential treatment to particular industries or
companies.

Products distributed outside China are subject to government regulations of
different jurisdictions, which could be stricter than in China. In some
developed countries, the government regulations for product approval could be
stricter than in China, while in developing countries, government regulation
could be uncertain.

WE ARE REQUIRED TO OBTAIN LICENSES TO EXPAND OUR BUSINESS IN MAINLAND CHINA. Our
activities must be reviewed and approved by various national and local agencies
of the Chinese government before they will issue business licenses to us. There
can be no assurance that Chinese authorities will continue to approve and renew
our licenses. If we are unable to obtain licenses or renewals we will not be
able to continue our business operations in China, which would have a material
adverse effect on our business, financial condition and results of operations.

WEAKENED POLITICAL RELATIONS BETWEEN THE U.S. AND CHINA COULD MAKE US LESS
ATTRACTIVE. Sino-U.S. relations are subject to sudden fluctuation and periodic
tension. Changes in political conditions in China and the U.S. are difficult to
predict and could adversely affect our operations, and its future business plans
and profitability.

OUR OPERATIONS MAY NOT DEVELOP IN THE SAME WAY OR AT THE SAME RATE AS MIGHT BE
EXPECTED IF THE PRC ECONOMY WERE SIMILAR TO THE MARKET-ORIENTED ECONOMIES OF
OECD MEMBER COUNTRIES. The economy of the PRC has historically been a
nationalistic, "planned economy," meaning it functions and produces according to
governmental plans and pre-set targets or quotas. In certain aspects, the PRC's
economy has been transitioning to a more market-oriented economy. However, there
can be no assurance of the future direction of these economic reforms or the
effects these measures may have. The PRC economy also differs from the economies
of most countries belonging to the Organization for Economic Cooperation and
Development, an international group of member countries sharing a commitment to
democratic government and market economy. For instance:

     *    the number and importance of state-owned enterprises in the PRC is
          greater than in most OECD countries;
     *    the level of capital reinvestment is lower in the PRC than in most
          OECD countries; and
     *    Chinese policies make it more difficult for foreign firms to obtain
          local currency in China than in OECD jurisdictions.

As a result of these differences, the combined company's operations may not
develop in the same way or at the same rate as might be expected if the PRC
economy were similar to those of OECD member countries.

THE ECONOMY OF CHINA HAS BEEN EXPERIENCING UNPRECEDENTED GROWTH, WHICH COULD BE
CURTAILED IF THE GOVERNMENT TRIES TO CONTROL INFLATION BY TRADITIONAL MEANS OF
MONETARY POLICY OR ITS RETURN TO PLANNED-ECONOMY POLICIES, ANY OF WHICH WOULD
HAVE AN ADVERSE EFFECT ON US. The Chinese economy's rapid growth has led to
higher levels of inflation. Government attempts to control inflation may
adversely affect the business climate and growth of private enterprise in China,
and may create a more challenging revenue and expense environment for our
business, which could have an adverse effect on our profitability.

CHINESE BUSINESS AND COMMERCIAL LAW IS RELATIVELY RECENT AND REMAINS IN FLUX,
AND WE MAY HAVE LIMITED LEGAL RECOURSE UNDER CHINESE LAW IF DISPUTES ARISE UNDER
OUR CONTRACTS WITH THIRD PARTIES. The Chinese government has enacted some laws
and regulations dealing with matters such as corporate organization and
governance, foreign investment, commerce, taxation and trade. Its experience in
implementing, interpreting and enforcing these laws and regulations, however, is
limited, and our ability to enforce commercial claims or to resolve commercial
disputes is unpredictable. If our business is unsuccessful, or other adverse
circumstances arise from our business transactions, we face the risk that our
counterparties may seek ways to terminate the transactions, or, may hinder or
prevent us from accessing important information regarding their financial and
business operations. The resolution of these matters may be subject to the
exercise of considerable discretion by agencies of the Chinese government, and
forces unrelated to the legal merits of a particular matter or dispute may
influence their determination. Any rights we may have to specific performance,

                                       12
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or to seek an injunction under Chinese law, may be limited. Without a means of
recourse by virtue of the Chinese legal system, we may be unable to prevent
these situations from occurring. The occurrence of any such events could have a
material adverse effect on our business, financial condition and results of
operations.

YOU MAY EXPERIENCE DIFFICULTIES IN EFFECTING SERVICE OF LEGAL PROCESS, ENFORCING
FOREIGN JUDGMENTS OR BRINGING ORIGINAL ACTIONS IN CHINA BASED ON UNITED STATES
JUDGMENTS AGAINST US, OUR SUBSIDIARIES, OFFICERS AND DIRECTORS AND OTHERS.
Substantially all of our assets are located in the PRC, and our management
principally reside and have their assets there. As a result, it may not be
possible for U.S. investors to effect service of process within the U.S. or
elsewhere outside the PRC on our directors or executive officers, including with
respect to matters arising under U.S. federal or state securities laws. The PRC
does not have treaties providing for reciprocal recognition and enforcement of
judgments of courts with the U.S. or many other countries. As a result,
recognition and enforcement in the PRC of such judgments in relation to any
matter, including U.S. securities laws, may be difficult or impossible. An
original action may be brought in the PRC against our subsidiaries' assets,
directors and executive officers only if the actions are not required to be
arbitrated by PRC law and the facts alleged in the complaint give rise to a
cause of action under PRC law. In connection with such an original action, a PRC
court may award civil liability, including monetary damages.

WE MUST COMPLY WITH U.S. LAWS PROHIBITING CORRUPT BUSINESS PRACTICES OUTSIDE THE
UNITED STATES, WHICH MAY PUT US AT A COMPETITIVE DISADVANTAGE. We are required
to comply with the U.S. Foreign Corrupt Practices Act, which prohibits U.S.
companies from engaging in bribery or other prohibited payments to foreign
officials for the purpose of obtaining or retaining business. Foreign companies,
including some of our competitors, are not subject to these prohibitions.
Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices
occur from time-to-time in mainland China. If our competitors engage in these
practices they may receive preferential treatment from personnel of some
companies, giving our competitors an advantage in securing business, or from
government officials who might give them priority in obtaining new licenses,
which would put us at a disadvantage. Although we inform our personnel that such
practices are illegal, we can not assure you that our employees or other agents
will not engage in such conduct for which we might be held responsible. If our
employees or other agents are found to have engaged in such practices, we could
suffer severe penalties.

RISKS RELATED TO OUR PRODUCTS

WE MAY INCUR SUBSTANTIAL UNINSURED LIABILITIES AND BE REQUIRED TO LIMIT
COMMERCIALIZATION OF OUR PRODUCTS IN RESPONSE TO PRODUCT LIABILITY LAWSUITS. The
manufacture, marketing and sale of our products entail inherent risks of product
liability. As a manufacturer of products designed for human consumption, we are
subject to product liability claims that use of our products has resulted in
injury. Some of our products contain vitamins, minerals, herbs and other
ingredients that are not subject to pre-market regulatory approval. Our products
could contain contaminated substances, and some of our products contain
innovative ingredients that do not have long histories of human consumption.
Previously unknown adverse reactions resulting from human consumption of these
ingredients could occur.

We may be held liable if serious adverse reactions from the use of our products
occur. If we cannot successfully defend ourselves against product liability
claims, we may incur substantial liabilities and damage to our commercial
reputation, or be required to limit commercialization of our products.

Our inability to obtain sufficient product liability insurance at acceptable
cost against claims could prevent or inhibit commercialization of our products.
We currently do not carry product liability insurance. We may not be able to
obtain insurance at reasonable cost, if at all. If we obtain insurance in the
future, it may not adequately compensate us for all losses that we may incur,
which could have a material adverse effect on our business.

CONSUMERS MAY NOT ACCEPT AND USE OUR PRODUCTS. Even if regulatory bodies approve
our products, consumers may not accept and use them. Acceptance and use will
depend upon a number of factors, including perceptions by the health and
nutrition community about their safety and effectiveness, changing consumer
preferences and trends, our products' cost-effectiveness relative to competing
products and the effectiveness of marketing and distribution efforts by us, our
licensees and distributors, if any. Reimbursement for our products from
government or other healthcare payors is generally minimal, and any such
reimbursement is problematic, in that payors routinely challenge prices charged,
limit coverage and provide inadequate reimbursement, which would diminish market
acceptance of our products.

Our success depends in part on our ability to anticipate and respond to changes
in consumer trends, and we may not respond in a timely or commercially
appropriate manner to them. Because markets for our products differentiate
geographically, we must accurately assess demand in each specific market into
which we wish to make sales. If we fail to invest in extensive market research
on consumer health needs in each market we target, we may face limited market
acceptance of our products, which could have a material adverse effect on our
sales and earnings. If we cannot compete successfully for market share against
other drug companies, we may not achieve sufficient product revenues, and our
business will suffer.

                                       13
<PAGE>
OBTAINING AND MAINTAINING NECESSARY REGULATORY APPROVALS FOR OUR PRODUCTS MAY BE
TIME CONSUMING, DIFFICULT AND COSTLY. IF WE FAIL TO DO SO, WE WILL BE UNABLE TO
SELL OUR PRODUCTS IN SOME AREAS. Our current products require and have obtained
regulatory review and approval for sale. We anticipate that future product
candidates we develop will also require such review and approval. Government
regulation includes inspection of and controls over testing, manufacturing,
safety and environmental standards, efficacy, labeling, advertising, promotion,
record keeping and sale and distribution generally. The required effort to
achieve approval may be time consuming, difficult and costly, and we cannot
predict whether such approvals would be obtained in particular cases. Regulators
have substantial discretion in approving products such as ours, and may either
decline to do so or require us to spend considerable effort to achieve a
different result. That process may also be delayed by changes in government
regulation, future legislation, administrative action or changes in policy that
occur prior to or during regulatory review. Delays in obtaining regulatory
approvals may delay commercialization of, and our ability to derive product
revenues from, the affected products, impose costly procedures on us, and
diminish any competitive advantages we may otherwise enjoy.

In addition, even after approval, regulated products are subject to continuing
review, reporting requirements and other compliance obligations. The discovery
of previously unknown problems with our products, our own manufacturing or
manufacturing by third parties, may result in restrictions on our products or in
their manufacture, including withdrawal of the product from the market.

Internationally, our products are subject to regulatory requirements that vary
by country. Obtaining approval to sell our products internationally involves
complexities of dealing with a variety of governmental regulations. We have
limited experience in dealing with the specific regulations that may be required
to sell our products in certain international markets, which could delay our
ability to obtain relevant regulatory approval for our products. In addition,
our product sales in other countries are subject to product regulatory regimes
of various degrees and direct marketing or distribution regulations. There can
be no assurance that our current operations will not be adversely affected by
compliance issues and changes in applicable laws and regulations in relevant
jurisdictions.

WE RELY ON A LIMITED NUMBER OF VENDORS TO SUPPLY RAW MATERIALS AND FINISHED
GOODS FOR OUR PRODUCTS. Regulatory authorities also periodically inspect
manufacturing facilities, including third parties who manufacture our products
or our active ingredients for us, and may challenge their qualifications or
competence. Pharmaceutical manufacturing facilities must comply with applicable
good manufacturing practice standards, and manufacturers usually must invest
substantial funds, time and effort to ensure full compliance with these
standards and make quality products. We do not have control over our contract
manufacturers' compliance with these requirements. Failure to comply with
regulatory requirements can result in sanctions, fines, delays, suspension of
approvals, seizures or recalls of products, operating restrictions,
manufacturing interruptions, costly corrective actions, injunctions, adverse
publicity against us and our products and criminal prosecutions.

If we are unable to obtain sufficient supplies of raw materials, if climatic or
environmental conditions adversely affect them or if they increase significantly
in price, our business would be seriously harmed. If any of our current or
future third-party suppliers cease to supply products in the quantity and
quality we need to manufacture our products, or if they are unable to comply
with applicable regulations, the qualification of other suppliers could be a
lengthy process, and there may not be adequate alternatives to meet our needs.
As a result, we may not be able to obtain the necessary ingredients used in our
products in the future on a timely basis, if at all. This would negatively
affect our business.

MANUFACTURING RISKS. There are risks associated with ingredients mixing and
production processes and techniques. Our manufacturing process requires a
significant degree of technical expertise. If we fail to manufacture our
products to specifications or inadvertently use defective materials in the
manufacturing process, the reliability and performance of our products will be
compromised.

Any significant disruption in our manufacturing operations for any reason, such
as regulatory requirements and loss of certifications, power interruptions,
fires, hurricanes, war or other force majeure, could adversely affect our sales
and customer relationships.

IF WE FAIL TO PROTECT ADEQUATELY OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS, OR
TO SECURE RIGHTS TO PATENTS OF OTHERS, THE VALUE OF OUR INTELLECTUAL PROPERTY
RIGHTS COULD DIMINISH. Our success, competitive position and revenues will
depend in part on our ability, and the ability of our licensors, to obtain and
maintain patent or other intellectual property protection for our products,
methods, processes and other technologies, to preserve our trade secrets, to
prevent third parties from infringing on our proprietary rights and to operate
without infringing the proprietary rights of third parties.

Our patents, trade secrets, trademarks, service marks and similar intellectual
property are critical to our success. We rely on patent, trademark and trade
secret law, as well as confidentiality and license agreements with our
employees, customers, partners and others, to protect our proprietary rights. We
have received patent protection for certain of our products in the People's
Republic of China. We have not applied for any patent or other protection in
countries other than China. We cannot predict the degree and range of protection
patents or other intellectual property rights will afford us against
competitors, including whether third parties will find ways to invalidate or
otherwise circumvent our patents, if and when patents will issue, whether or not
others will obtain patents claiming aspects similar to ours, or if we will need
to initiate litigation or administrative proceedings, which may be costly
whether we win or lose.

Our success also depends on the skills, knowledge and experience of our
employees, consultants, advisors, licensors and contractors. To help protect our
proprietary know-how and inventions for which patents may be unobtainable or
difficult to obtain, we rely on trade secret protection and confidentiality
agreements. To this end, we require all of our employees, consultants, advisors
and contractors to enter into confidentiality and, where applicable, grant-back

                                       14
<PAGE>
agreements. These agreements may not provide adequate protection in the event of
unauthorized use or disclosure or the lawful development by others of such
information. If any of our intellectual property is disclosed, its value would
be significantly impaired, and our business and competitive position would
suffer.

IF WE INFRINGE THE RIGHTS OF THIRD PARTIES, WE COULD BE PREVENTED FROM SELLING
PRODUCTS, FORCED TO PAY DAMAGES, AND COMPELLED TO DEFEND AGAINST LITIGATION. We
could also incur substantial costs, and have to obtain licenses, which may not
be available on commercially reasonable terms (if at all), redesign our products
or processes, stop using the subject matter claimed in the asserted patents, pay
damages or defend litigation or administrative proceedings. All these may be
costly, whether we win or lose, and could result in a substantial diversion of
valuable management resources.

We believe we do not infringe others' proprietary rights. However, we cannot
guarantee that no third party will claim infringement in the future. Resolving
such issues traditionally has resulted, and could in our case result, in lengthy
and costly legal proceedings, the outcome of which cannot be predicted
accurately.

RISK RELATED TO MANAGEMENT

THE CONCENTRATED OWNERSHIP OF OUR CAPITAL STOCK MAY BE AT ODDS WITH YOUR
INTERESTS, AND HAVE THE EFFECT OF DELAYING OR PREVENTING A CHANGE IN CONTROL OF
OUR COMPANY. Our directors, officers, key personnel and their affiliates as a
group beneficially own or control the vote of approximately 69% of our
outstanding capital stock, and control the Company. They will be able to
continue to exercise significant influence over all matters affecting the
Company, including the election of directors, formation and execution of
business strategy and approval of mergers, acquisitions and other significant
corporate transactions, which may have an adverse effect on the stock price.
They may have conflicts of interest and interests that are not aligned with
yours in all respects.

MANAGEMENT IS INEXPERIENCED IN RUNNING A U.S. PUBLIC COMPANY. We are managed by
a management team that is relatively unfamiliar with the capital market and the
processes by which a U.S. public company should be managed and operated.
Management is currently making efforts to familiarize itself with the relevant
laws, rules and regulations and market practice, but there can be no assurance
that it can master the relevant knowledge and skills and set up the required
systems in time to prevent mistakes and to meet shareholder and market
expectations.

WE MAY NOT SUCCESSFULLY MANAGE OUR GROWTH. Our success will depend upon the
expansion of our operations and the effective management of our growth, which
will place a significant strain on our management and administrative,
operational, and financial resources. To manage this growth, we must expand our
facilities, augment our operational, financial and management systems, and hire
and train additional qualified personnel. If we are unable to manage our growth
effectively, our business would be harmed.

ITEM 7. FINANCIAL STATEMENTS

Our Financial Statements together with the independent auditor's report thereon
are included on pages F-1 through F-14 hereof.

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

On February 11, 2005, the board of directors unanimously approved the dismissal
of Russell Brennan as its then certifying accountant and notified Mr. Brennan
that it was terminating his services. The Company dismissed Mr. Brennan after it
was advised by the SEC staff on December 26, 2004 that Mr. Brennan had not
applied for registration with the Public Company Accounting Oversight Board. On
the same date, the Company engaged its former accountant, Aaron Stein CPA, to
serve as its independent registered public accountant to review the Company's
financial statements for the periods ended June 30, September 30 and December
31, 2004.

During the period from September 28, 2004 through February 11, 2005 when Mr.
Brennan was retained by the Company, (i) there were no disagreements between the
Company and Mr. Brennan on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to Mr. Brennan's satisfaction, would have caused him to make reference
to the matter in his reports on the Company's financial statements, and (ii) Mr.
Brennan's reports on the Company's financial statements did not contain an
adverse opinion or disclaimer of opinion, and were not modified as to
uncertainty, audit scope or accounting principles. During the period of Mr.
Brennan's engagement, there were no reportable events described in Item
304(a)(1)(iv) of Regulation S-B.

During the two fiscal years ended December 31, 2003 and 2002, and until
September 28, 2004, Mr. Stein was retained as the Company's principal accountant
to audit and review the Company's financial statements during such periods.
During those two fiscal years and through February 12, 2005, the Company did not
consult with Mr. Stein regarding any matter or event described in Item
304(a)(2)(i) or (ii) of Regulation S-B.

                                       15
<PAGE>
On February 24, 2005, the Company provided Mr. Brennan with a copy of the
foregoing disclosure, and requested that he furnish it with a letter addressed
to the SEC stating whether he agrees with the above statements. Such letter has
been filed with the SEC.

On April 20, 2005, the Company dismissed Mr. Stein, which dismissal was
effective immediately and was approved by the board of directors on that date.
Mr. Stein had been most recently engaged by the Company from February 11, 2005,
and had previously been engaged by the Company as its principal independent
accountant for the fiscal years ended December 31, 2002 and 2003, and through
September 28, 2004.

On the same date, the Company engaged Moore Stephens, P.C. as its new principal
independent accountants, which engagement was effective immediately and was
approved by the Company's Board of Directors on that date.

During his 2005 engagement period, Mr. Stein reviewed the Company's consolidated
financial statements as of and for the interim periods ended June 30, September
30 and December 31, 2004 in connection with the Company's filing or amended
filings of Quarterly Reports on Form 10-QSB for such periods. During that
engagement, Mr. Stein did not issue a report containing any adverse opinion or
disclaimer of opinion or that was qualified or modified as to uncertainty, audit
scope or accounting principles. There were also during that engagement no
disagreements between the Company and Mr. Stein on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to Mr. Stein's satisfaction, would have caused
him to make reference to the subject matter of the disagreement in connection
with his report. None of the reportable events described under Item
304(a)(1)(iv) of Regulation S-B occurred within the two most recent fiscal years
of the Company ended December 31, 2005.

The Company has provided Mr. Stein of with a copy of the foregoing disclosures,
and he has furnished a letter, addressed to the SEC stating that he agrees with
the foregoing statements, which has been filed with the SEC.

During the two most recent fiscal years of the Company, and through the date of
the engagement of Moore Stephens on April 20, 2004, the Company did not consult
with Moore Stephens P.C. regarding any of the matters or events set forth in
Item 304(a)(2)(i) or (ii) of Regulation S-B.

ITEM 8A. CONTROLS AND PROCEDURES

We maintain "disclosure controls and procedures," as such term is defined under
Exchange Act Rule 13a-15(e), that are designed to ensure that information
required to be disclosed in our 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 our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosures. 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
objective, and in reaching a reasonable level of assurance our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. We have carried out an
evaluation under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2006. Based upon their evaluation and subject to
the foregoing, the Chief Executive Officer and Chief Financial Officer concluded
that as of December 31, 2006, our disclosure controls and procedures were
effective at the reasonable assurance level in ensuring that material
information relating to us is made known to the Chief Executive Officer and
Chief Financial Officer by others within our company during the period in which
this report was being prepared.

There were no changes in our internal controls or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND, CONTROL PERSONS, AND
        CORPORATE GOVERNANCE; 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.

Set forth below are the names of the directors, executive officers and key
employees of the Company, during the fiscal year ended December 31, 2006:

                                       16
<PAGE>
   Name                   Age                     Position
   ----                   ---                     --------
Lianqin Qu (1)            51     Chairwoman of the Board of Directors, President
                                 and Chief Executive Officer
Tom Du                    51     Director and Chief Technology Officer
Zhenyou Zhang             48     Director
Joseph J. Levinson        30     Director and Chief Financial Officer
Xiaobo Sun (1)            49     President, Chief Executive Officer and Director

----------
(1)  From February 8, 2005 until December 1, 2006, Xiaobo Sun, Ph.D. served as
     President and Chief Executive Officer and as a director of the Company. On
     December 1, 2006, Dr. Sun notified the Company of his resignation as
     President and Chief Executive Officer and as a director of the Company. On
     December 1, 2006, Dr. Sun also resigned from his position as President and
     as a director of Jilin Natural Pharmatech, a wholly-owned subsidiary of the
     Company. There were no disagreements between Dr. Sun and the Company on any
     matter relating to the Company's operation, policies or practices that
     resulted in his resignation. Effective December 2, 2006, Dr. Sun was
     retained as a senior technology advisor to Jilin Natural Pharmatech where
     he will continue his work as a researcher in the field of botanically-based
     medicine. On December 2, 2006, the Board of Directors of the Company
     appointed Ms. Lianqin Qu to serve as Chief Executive Officer and President
     of the Company.

Pursuant to the Company's bylaws, directors are elected at the annual meeting of
stockholders and each director holds office until his successor is elected and
qualified. Officers are elected by the Board of Directors and hold office until
an officer's successor has been duly appointed and qualified unless an officer
sooner dies, resigns or is removed by the Board. There are no family
relationships among any of the Company's directors and executive officers.

BACKGROUND OF EXECUTIVE OFFICERS AND DIRECTORS

LIANQIN QU is currently the Chairwoman and General Manager at Dongyuan
Investment Consultancy, H.K. Limited in Hong Kong. She has held her current
position since August 9, 2001. From December 12, 1999 to December 30, 2003, she
was Chairwoman and General Manager of Jilin Dongyuan Strategy Consulting Co.,

22 Ltd., located in Jilin province, Northeast part of China. Over the past five
years, she worked as a financial advisor for both Jilin Province Huinan
Changlong Bio-pharmacy Co., Ltd. and Changchun Da Xing Pharmaceutical Company
Ltd., which are listed on the Growth Enterprise Market of the Hong Kong Stock
Market. Ms. Qu has many years of experience in financial research, financing
practice and corporate management, having advised more than 30 companies with
restructuring transactions. Ms. Qu is also Chairwoman of Changchun Da Xing
Pharmaceuticals Ltd, a Hong Kong- listed company (Ticker symbol: 8067) and
Chairwoman of Dongyuan Investment Consultancy (H.K.) Limited. She received her
MBA degree from Asia International Open University (Macau).

TOM DU, M.D., PH.D., has held his current position with the Company since
February, 2005, and is currently Vice President, Regulatory Affairs, for
Humphairs Industries Ltd., a global pharmaceutical consulting company. Dr. Du
has held this position since October 2004. Prior to joining Humpharis, Dr. Du
worked as Senior Director, Clinical and Regulatory Affairs, for Hutchison
Medipharma, a Hutchison Whampoa Company from 2002 to July 2004. From 2001 to
2002, Dr. Du worked as Acting Managing Director, China operation, at Ingenix
Pharmaceutical Services, a UnitedHealth Group Company. From 1994 to 2000, Dr. Du
worked as a reviewing officer for the U.S. Food and Drug Administration.

JOSEPH J. LEVINSON, CPA, joined the Company in January 2006. From 2004 to 2006,
he was Chief Financial Officer of BDL Media, a closely-held China-based media
holding company. From 2001 to 2003, he was Vice President, Business Development
for Chengdu Environmental Control Incorporated in southwest China, and from 2000
to 2001, he was a manager in the New York office of Deloitte and Touche. During
the 1990's, Mr. Levinson was Corporate Development Officer at Hong Kong-listed
China Strategic Holdings, an Asian mergers and acquisitions company led by Asian
businessman Oei Hong Leong, where his major responsibilities included the
company's subsidiary, China Tire, one of the first Mainland Chinese companies to
list on the New York Stock Exchange. Mr. Levinson has been a U.S. Certified
Public Accountant since 1996.

ZHENYOU ZHANG has been active in the Chinese pharmaceutical industry for more
than 20 years. He currently serves as the Chairman of the Board of several
companies, including Guangdong Baiyi Pharmaceutical, Guangzhou Youcheng
Industrial, and Guangzhou Tianhe Zhenkai Trading Company. He also serves as the
director of Tianjin Tianshili Pharmaceutical, a publicly-traded company in
China. He graduated from Guangxi Chinese Medicine Institute and is a
professional pharmacologist.

                                       17
<PAGE>
The Board of Directors does not have any committees. All members of the Board
participate in the consideration of all matters, including the nomination of
directors, the consideration of executive officer and director compensation, the
retention of the Company's independent public accountants and the review of the
Company's financial statements. Joseph J. Levinson, the Chief Financial Officer
and a director of the Company, is a financial expert as defined in the Exchange
Act.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by applicable law, our Bylaws provide that we will indemnify our
officers, directors, employees, consultants and agents. This includes
indemnification against attorneys' fees and other expenses and liabilities they
incur to defend, settle or satisfy any civil or criminal action brought against
them arising out of their association with or activities on behalf of our
company. However, they will not be indemnified if they are adjudged to have
acted with gross negligence, engaged in willful misconduct, knowingly violated
the law, breached their duty of loyalty or received improper personal benefit.
We will bear the expenses of such litigation for any such persons upon their
promise to repay such sums if it is ultimately determined that they are not
entitled to indemnification.

Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act") may be permitted to our directors,
officers and controlling persons (within the meaning of the Securities Exchange
Act) 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

The Company has not adopted a formal Code of Ethics for its executive officers.
However, the Company believes that the employment and service contracts that the
Company has entered into with each of its executive officers and directors
contain provisions which promote the ethical conduct of such persons in their
performance of duties or services for the Company and deter unethical behaviors
in the performance of such duties or services.

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

The following table sets forth all cash compensation paid or to be paid by the
Company, as well as certain other compensation paid or accrued, during each of
the Company's last two fiscal years to each of the following named executive
officers (the "Named Executive Officers").

                                             Option      All other
                Year   Salary($)  Bonus($)  Awards($)  compensation($)  Total($)
                ----   ---------  --------  ---------  ---------------  --------
Lianqin Qu (2)  2006    36,000                                           36,000
                2005    36,000                                           36,000

Xiaobo Sun (1)  2006    60,000                                           60,000
                2005    60,000                                           60,000

----------
(1)  From February 8, 2005 until December 1, 2006, Dr. Sun served as President
     and Chief Executive Officer and as a director of the Company. On December
     1, 2006, Dr. Sun notified the Company of his resignation as President and
     Chief Executive Officer and as a director of the Company.
(2)  On December 2, 2006, the Board of Directors of the Company appointed Ms. Qu
     to serve as Chief Executive Officer and President of the Company.

2006 EQUITY INCENTIVE PLAN

On December 26, 2006, the Company's stockholders adopted and approved the
Company's 2006 Equity Incentive Plan (the "Plan"). The purpose of the Plan is to
attract and retain qualified individuals for positions of substantial
responsibility with the Company and to provide incentives to such individuals to
promote the success of the Company's business. The Plan will initially be
administered by the Board of Directors of the Company. A maximum of 2,000,000
shares of Common Stock will be available for issuance pursuant to options,
restricted stock, stock appreciation rights and/or performance stock
(collectively, "Awards") under the Plan. Awards may be granted to all employees,
officers and directors of and consultants or advisor to the Company and its
subsidiaries. To date, no Awards have been granted under the Plan.

                                       18
<PAGE>
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

None.

PENSION BENEFITS

We do not sponsor any qualified or non-qualified defined benefit plans.

NONQUALIFIED DEFERRED COMPENSATION

We do not maintain any non-qualified defined contribution or deferred
compensation plans.

DIRECTOR COMPENSATION

The following table summarizes compensation that our directors earned during
2006 for services as members of our Board.

                   Fees Earned or     Options          All Other
   Name            Paid in Cash($)    Awards($)    Compensation($)(1)   Total($)
   ----            ---------------    ---------    ------------------   --------
Lianqin Qu            36,000                0                            36,000
Tom Du                48,000           20,000                            48,000
Joseph Levinson       54,000           16,150                            54,000
Zhenyou Zhang              0            9,200                                 0

----------
(1)  Our directors receive monthly cash compensation for their services as
     members of the Board of Directors. The aggregate amounts of perquisites and
     other personal benefits paid to the Company's directors in the year ended
     December 31, 2006 did not exceed $10,000.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

On February 8, 2005, the Company entered into an Executive Services Contract
with Lianqin Qu, pursuant to which Lianqin Qu has agreed to act as a Director
and Chairperson of the Company's Board of Directors. Lianqin Qu's salary under
the Executive Services Contract is US$3,000 per month. In addition, the Company
agreed to grant Lianqin Qu an option to purchase 100,000 shares of the Company's
common stock upon the achievement of working goals as determined by the Board.
During the term of Madam Qu's appointment, unless the relevant competition is
made known to the public and (if required) approved by relevant regulatory
authorities, she has agreed not to engage in any business in competition with
the Company, or seek any position from any company or individual who competes in
business with the Company or any subsidiary or branch of the Company. Lianqin Qu
has also agreed to certain confidentiality covenants regarding information
obtained from the Company and any of its subsidiaries and branches. The
Executive Services Contract may be terminated upon any of the following events,
unless otherwise determined by the Board of Directors: (a) Lianqin Qu is
prohibited by any laws, regulations or rules from acting in any of her positions
or she is no longer qualified to act in any position; (b) Lianqin Qu is unable
to perform her duties for a period of three months due to health reasons; (c)
Lianqin Qu commits a material breach and/or repeated and/or continual breach of
her obligations under the Executive Services Contract; (d) Lianqin Qu is guilty
of any serious misconduct or serious neglect in the discharge of her duties; (e)
Lianqin Qu's actions or omissions bring the name or reputation of the Company or
any subsidiary or branch of the Company into serious disrepute or prejudice; (f)
Lianqin Qu is or becomes of unsound mind or becomes a patient for the purpose of
any laws relating to mental health; (g) Lianqin Qu is sued for criminal
liability or convicted of any criminal offense other than an offense which in
the reasonable opinion of the Board of Directors does not affect her position
with the Company; (h) Lianqin Qu is removed from her position by the Board of
Directors; (i) Lianqin Qu leaves the service of the Company in accordance with
the Company's Certificate of Incorporation; or (j) Lianqin Qu fails to attend
three consecutive meetings of the Board of Directors. There is no expiration
date of the Executive Services Agreement.

On February 14, 2005, the Company entered into a Director and Chief Technology
Officer Service Contract with Tom Du, pursuant to which Mr. Du has agreed to act
as the Company's Chief Technology Officer and as a member of the Company's Board
of Directors. Mr. Du's salary under the Director and Chief Technology Officer
Service Contract is US$4,000 per month. In addition, the Company agreed to grant
Mr. Du an option to purchase 50,000 shares of the Company's common stock upon
the achievement of working goals as determined by the Board. During his term of
employment, Mr. Du agreed not to engage in any business that individually
develops any of the products developed by the Company, including all products
approved by the SFDA, products marketed by the Company prior to, during, or
under development during the employment period. Mr. Du has also agreed to
certain confidentiality covenants regarding information obtained of the Company
and any of its subsidiaries and branches. The Director and Chief Technology
Officer Service Contract may be terminated upon any of the following events,

                                       19
<PAGE>
unless otherwise determined by the Board of Directors: (a) Tom Du is prohibited
by any laws, regulations or rules from acting in any of his positions or he is
no longer qualified to act in any position; (b) Mr. Du is unable to perform his
duties for a period of three months due to health reasons; (c) Mr. Du commits a
material breach and/or repeated and/or continual breach of his obligations under
the Director and Chief Technology Officer Service Contract; (d) Mr. Du is guilty
of any serious misconduct or serious neglect in the discharge of his duties; (e)
Mr. Du's actions or omissions bring the name or reputation of the Company or any
subsidiary or branch of the Company into serious disrepute or prejudice; (f) Mr.
Du is or becomes of unsound mind or becomes a patient for the purpose of any
laws relating to mental health; (g) Mr. Du is sued for criminal liability or
convicted of any criminal offense other than an offense which in the reasonable
opinion of the Board of Directors does not affect his position with the Company;
(h) Mr. Du is removed from his position by the Board of Directors; (i) Mr. Du
leaves the service of the Company in accordance with the Company's Certificate
of Incorporation; or (j) Mr. Du fails to attend three consecutive meetings of
the Board of Directors. In addition, Mr. Du may terminate the Director and Chief
Technology Officer Service Contract with one-month notice for good cause arising
from impossibility of performance and/or conflict of interest. There is no
expiration date of the Director and Chief Technology Officer Service Contract.

On January 1, 2006, the Company entered into a Chief Financial Officer service
contract with Joseph J. Levinson, pursuant to which Mr. Levinson has agreed to
act as the Company's Chief Financial Officer. Mr. Levinson's salary under the
Executive Employment Contract is US$3,000 per month. During his term of
employment, unless the relevant competition is made known to the public and (if
required) approved by relevant regulatory authorities, Mr. Levinson has agreed
not to engage in any business in competition with the Company, or seek any
position from any company or individual who competes in business with the
Company or any subsidiary or branch of the Company. Mr. Levinson has also agreed
to certain confidentiality covenants regarding information obtained of the
Company and any of its subsidiaries and branches. The Executive Employment
Contract may be terminated upon any of the following events, unless otherwise
determined by the Board of Directors: (a) Mr. Levinson is prohibited by any
laws, regulations or rules from acting in any of his positions or he is no
longer qualified to act in any position; (b) Mr. Levinson is unable to perform
his duties for a period of three months due to health reasons; (c) Mr. Levinson
commits a material breach and/or repeated and/or continual breach of his
obligations under the Executive Employment Contract; (d) Mr. Levinson is guilty
of any serious misconduct or serious neglect in the discharge of his duties; (e)
Mr. Levinson's actions or omissions bring the name or reputation of the Company
or any subsidiary or branch of the Company into serious disrepute or prejudice;
(f) Mr. Levinson is or becomes of unsound mind or becomes a patient for the
purpose of any laws relating to mental health; (g) Mr. Levinson is sued for
criminal liability or convicted of any criminal offense other than an offense
which in the reasonable opinion of the Board of Directors does not affect his
position with the Company; (h) Mr. Levinson is removed from his position by the
Board of Directors; or (i) Mr. Levinson leaves the service of the Company in
accordance with the Company's Certificate of Incorporation. There is no
expiration date of the Executive Employment Agreement.

On October 9, 2006, the Company entered into a Director and Chief Financial
Officer service contract with Mr. Levinson, pursuant to which Mr. Levinson has
agreed to act as the Company's director and Chief Financial Officer. Mr.
Levinson's salary under the Director and Chief Financial Officer service
contract is US$4,000 per month. In addition, Mr. Levinson shall be granted
40,000 shares of the Company's common stock, pending the completion of certain
goals. During his term of employment Mr. Levinson has agreed not to engage in
any business in direct competition with the Company, or seek any position from
any company or individual who competes in business with the Company or any
subsidiary or branch of the Company. Mr. Levinson has also agreed to certain
confidentiality covenants regarding information obtained of the Company and any
of its subsidiaries and branches. The Director and Chief Financial Officer
service contract may be terminated upon any of the following events, unless
otherwise determined by the Board of Directors: (a) Mr. Levinson is prohibited
by any laws, regulations or rules from acting in any of his positions or he is
no longer qualified to act in any position; (b) Mr. Levinson is unable to
perform his duties for a period of three months due to health reasons; (c) Mr.
Levinson commits a material breach and/or repeated and/or continual breach of
his obligations under the Director and Chief Financial Officer service contract;
(d) Mr. Levinson is guilty of any serious misconduct or serious neglect in the
discharge of his duties; (e) Mr. Levinson's actions or omissions bring the name
or reputation of the Company or any subsidiary or branch of the Company into
serious disrepute or prejudice; (f) Mr. Levinson is or becomes of unsound mind
or becomes a patient for the purpose of any laws relating to mental health; (g)
Mr. Levinson is sued for criminal liability or convicted of any criminal offense
other than an offense which in the reasonable opinion of the Board of Directors
does not affect his position with the Company; (h) Mr. Levinson is removed from
his position by the Board of Directors; or (i) Mr. Levinson leaves the service
of the Company in accordance with the Company's Certificate of Incorporation.
There is no expiration date of this Director and Chief Financial Officer service
contract. This Director and Chief Financial Officer service contract terminates
and supersedes the Chief Financial Officer service contract entered into on
January 1, 2006 by and between the Company and Mr. Levinson.

On October 9, 2006, the Company entered into a Director service contract with
Mr. Zhenyou Zhang, pursuant to which Mr. Zhang has agreed to serve as the
Company's director. Under the Director service contract, Mr. Zhang shall be paid
a fee of $2,000 per month. In addition, Mr. Zhang shall be granted 80,000 shares
of the Company's common stock, pending the completion of certain goals. During
his term as a director of the Company, Mr. Zhang has agreed not to engage in any
business in direct competition with the Company, or seek any position from any
company or individual who competes in business with the Company or any
subsidiary or branch of the Company. Mr. Zhang has also agreed to certain
confidentiality covenants regarding information obtained of the Company and any
of its subsidiaries and branches. The Director and Chief Financial Officer
service contract may be terminated upon any of the following events, unless
otherwise determined by the Board of Directors: (a) Mr. Zhang is prohibited by
any laws, regulations or rules from acting in any of his positions or he is no
longer qualified to act in any position; (b) Mr. Zhang is unable to perform his
duties for a period of three months due to health reasons; (c) Mr. Zhang commits

                                       20
<PAGE>
a material breach and/or repeated and/or continual breach of his obligations
under the Executive Employment Contract; (d) Mr. Zhang is guilty of any serious
misconduct or serious neglect in the discharge of his duties; (e) Mr. Zhang's
actions or omissions bring the name or reputation of the Company or any
subsidiary or branch of the Company into serious disrepute or prejudice; (f) Mr.
Zhang is or becomes of unsound mind or becomes a patient for the purpose of any
laws relating to mental health; (g) Mr. Zhang is sued for criminal liability or
convicted of any criminal offense other than an offense which in the reasonable
opinion of the Board of Directors does not affect his position with the Company;
(h) Mr. Zhang is removed from his position by the Board of Directors; (i) Mr.
Zhang leaves the service of the Company in accordance with the Company's
Certificate of Incorporation; or (j) Mr. Zhang fails to attend three consecutive
meetings of the Board of Directors. There is no expiration date of this Director
service contract.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

The following table sets forth as of March 28, 2007, the number of shares of our
common stock beneficially owned by (i) each person who is known by us to be the
beneficial owner of more than five percent of the Company's common stock; (ii)
each director; (iii) each of the named executive officers in the Summary
Compensation Table; and (iv) all directors and executive officers as a group.
Unless otherwise indicated, the stockholders listed in the table have sole
voting and investment power with respect to the shares indicated.

                                                  Number of         % of Common
                                                    Shares             Stock
                                                 Beneficially       Beneficially
Name and Address of Beneficial Owner (1)           Owned (2)          Owned (3)
----------------------------------------           ---------          ---------
Lianqin Qu                                        14,762,951 (4)         63.5
Xiaobo Sun                                                 0                0
Tom Du                                                     0                0
Joseph J. Levinson                                         0                0
Zhenyou Zhang                                      5,000,000            21.51
All officers and directors
 as a group (four persons)                        19,762,951            84.96

----------
(1)  Except as otherwise indicated, the address of each beneficial owner is c/o
     Global Pharmatech, Inc., 89 Ravine Edge Drive, Richmond Hill, Ontario,
     Canada L4E 4J6.
(2)  Beneficial ownership is determined in accordance with the rules of the
     Securities and Exchange Commission and generally includes voting or
     investment power with respect to the shares shown. Except where indicated
     by footnote and subject to community property laws where applicable, the
     persons named in the table have sole voting and investment power with
     respect to all shares of voting securities shown as beneficially owned by
     them.
(3)  Based on 23,247,935 shares outstanding.
(4)  Includes 13,738,264 shares as to which Ms. Qu holds irrevocable proxies
     given by stockholders who acquired shares of our common stock in the
     acquisition of Natural Pharmatech, and as to which Ms. Qu disclaims
     beneficial ownership and 1,024,687 shares held by Dong Yuan Investment (HK)
     Limited, of which Ms. Qu may be deemed to be the control person.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS , AND DIRECTOR
         INDEPENDENCE

As of December 31, 2006, the Company has the following amounts due from and to
related parties:

             ADVANCES DUE FROM RELATED PARTIES
             Xiao Bo Sun                               23,508
             Yu Ming Li                                34,594
             STOCKHOLDERS
             Min Yun Peng                               7,033
             Dong Hai Zhang                             1,285
                                                      -------
             TOTAL                                    $66,420
                                                      =======
             ADVANCES DUE TO RELATED PARTIES
             Yu Qi Li                                   2,880
                                                      -------

             TOTAL                                    $ 2,880
                                                      =======

                                       21
<PAGE>
These balances have no stated terms for repayment and are not interest bearing.

Xiao Bo Sun is the former CEO of the Company.

Yu Ming Li is the brother in law of the chairwoman of the company.

Min Yun Peng is a shareholder of the Company.

Yu Qi Li is the spouse of the chairwoman of the company.

Donghai Zhang is employed by Natural Pharmatech China, and owns more than 5% of
the Company's issued shares.

In May, 2006, the Company won a judgment of approximately $410,000 from the
Chinese Court of Final Appeal related to litigation involving the transfer of
drug technology to a research hospital. The Company's outside (PRC) counsel
advised the Company's management in July 2006 that the Company would receive the
money from the research hospital by the end of August 2006. However, the money
was not received by such date.

In early November 2006, a three-way legal arrangement was entered into between
the Company, the research hospital, and the spouse of the chairperson of our
Company. In exchange for waiving a pre-existing debt between the research
hospital and the spouse of our Company's chairperson, the spouse undertook to
pay the $410,000 judgment on behalf of the research hospital to our Company. As
of December 4, 2006, the judgment had been paid in full.

On April 28, 2006, the Company entered into a subscription agreement with
Zhengyou Zhang for the private sale of 5,000,000 shares of its common stock for
$5,000,000. At the time, Mr. Zhang was not a director of the Company. The
transaction was made in reliance on the provisions of Regulation S and
Regulation D under the Securities Act of 1933 and on Section 4(2) of the Act.

None of our directors are independent under the standards used by any national
securities exchange.

ITEM 13. EXHIBITS

(a) Exhibits

Exhibit
 Number                            Description
 ------                            -----------
3(i)    Certificate of incorporation of the registrant. Incorporated by
        reference to Exhibit 3.1 to the Company's registration statement on Form
        SB-2 filed with the SEC on August 17, 2001.*

3(ii)   By-laws of the registrant. Incorporated by reference to Exhibit 3.2 to
        the Company's registration statement on Form SB-2 filed with the SEC on
        August 17, 2001.*

10.1    Share Purchase Agreement, dated as of January 24, 2005, by and among
        Autocarbon, Inc., Natural Pharmatech, Inc. and the shareholders of
        Natural Pharmatech, Inc. Incorporated by reference to Exhibit 4.1 to the
        Company's Form 8-K filed with the SEC on January 28, 2005.*

10.2    Executive Employment Agreement dated February 8, 2005 with Xiaobo Sun.
        Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K
        filed with the SEC on February 15, 2005.*

10.3    Executive Services Agreement dated February 8, 2005 with Lianqin Qu.
        Incorporated by reference to Exhibit 10.3 to the Company's Form 8-K
        filed with the SEC on February 15, 2005.*

                                       22
<PAGE>
10.4    Director and Chief Technology Officer service contract dated February
        14, 2005 with Tom Du. Incorporated by reference to Exhibit 10.6 to the
        Company's Form 8-K filed with the SEC on February 15, 2005.*

10.5    Chief Financial Officer service contract dated January 1, 2006 with
        Joseph J. Levinson. Incorporated by reference to Exhibit 10.1 to the
        Company's Form 8-K filed with the SEC on January 5, 2006.*

10.6    Executive Employment Agreement dated February 8, 2005 with Zhuojun Li.
        Incorporated by reference to Exhibit 10.4 to the Company's Form 8-K
        filed with the SEC on February 15, 2005.*

10.7    Director Service Contract by and between the Company and Mr. Zhengyou
        Zhang, dated October 9, 2006. Incorporated by reference to Exhibit 10.1
        to the Company's Form 8-K filed with the SEC on October 11, 2006.*

10.8    Director and Chief Financial Officer Service Contract by and between the
        Company and Mr. Joseph J. Levinson, dated October 9, 2006. Incorporated
        by reference to Exhibit 10.2 to the Company's Form 8-K filed with the
        SEC on October 11, 2006.*

16.1    Letter of Russell Brennan, dated February 11, 2005. Incorporated by
        reference to Exhibit 16.1 to the Company's Form 8-K filed with the SEC
        on February 28, 2005.*

16.2    Letter of Aaron Stein, dated April 25, 2005. Incorporated by reference
        to Exhibit 16.1 to the Company's Form 8-K dated April 20, 2005, filed
        with the SEC on April 25, 2005.*

21      Subsidiaries of the registrant.*

31.1    Certificate of the Chief Executive Officer pursuant Section 302 of the
        Sarbanes-Oxley Act of 2002. **

31.2    Certificate of the Chief Financial Officer pursuant Section 302 of the
        Sarbanes-Oxley Act of 2002. **

32.1    Certificate of the Chief Executive Officer pursuant to Section 906 of
        the Sarbanes-Oxley Act of 2002. **

32.2    Certificate of the Chief Financial Officer pursuant to Section 906 of
        the Sarbanes-Oxley Act of 2002. **

----------
*  Previously filed
** Filed herewith

                                       23
<PAGE>
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Aggregate fees billed to us by Moore Stephens P.C. for the fiscal years ended
December 31, 2006 and 2005 were:

                                    2006            2005

     Audit Fees                   $               $76,943
     Audit Related Fees           $               $ 6,003
     Tax Fees                     $               $     0
     All Other Fees               $               $     0
                                  ------          -------
     Total                        $               $82,946
                                  ======          =======

AUDIT FEES

This category includes aggregate fees billed by our independent auditors for the
audit of our annual financial statements on Form 10-KSB, audit or management's
assessment and effectiveness of internal controls over financial reporting,
review of financial statements included in our quarterly reports on Form 10-QSB
and services that are normally provided by the auditor in connection with
statutory and regulatory filings for those fiscal years.

AUDIT RELATED FEES

This category consists of services by our independent auditors that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported above under Audit Fees. This category includes
accounting consultations on transaction and proposed transaction related
matters.

TAX FEES

This category consists of professional services rendered for tax compliance and
preparation of our corporate tax returns and other tax advice.

ALL OTHER FEES

There are no other fees to disclose.

APPROVAL OF SERVICES

The Board of Directors reviewed and approved all audit and non-audit services
provided by Moore Stephens P.C. during the fiscal year ended December 31, 2006
and concluded that these services were compatible with Moore Stephens P.C.
maintaining its independence.

PRE-APPROVAL POLICIES AND PROCEDURES

The prior approval of the Board of Directors is not required for all auditing
services and non auditing services.

                                       24
<PAGE>
                                   SIGNATURES

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

                                    GLOBAL PHARMATECH, INC.


Date: April 17, 2007                By: /s/ Lianqin Qu
                                       -----------------------------------------
                                    Name:  Lianqin Qu
                                    Title: Chief Executive Officer and President


                                    By: /s/ Joseph J. Levinson
                                       -----------------------------------------
                                    Name:  Joseph J. Levinson
                                    Title: Chief Financial Officer

In accordance with 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.

<TABLE>
<CAPTION>
       Signature                                  Title                                 Date
       ---------                                  -----                                 ----
<S>                                <C>                                              <C>

/s/ Lianqin Qu                      Chairwoman and Chief Executive Officer          April 17, 2007
--------------------------------
Lianqin Qu

/s/ Joseph J. Levinson              Director and Chief Financial Officer            April 17, 2007
--------------------------------
Joseph J. Levinson

/s/ Tom Du                          Director                                        April 17, 2007
--------------------------------
Tom Du

/s/ Zhenyou Zhang                   Director                                        April 17, 2007
--------------------------------
Zhenyou Zhang
</TABLE>

                                       25
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS



                                                                        Page No.
                                                                        --------

Report of Independent Registered Public Accounting Firm                    F-2

Consolidated Balance Sheet                                                 F-3

Consolidated Statements of Operations                                      F-4

Consolidated Statement of Changes in Stockholders' Equity                  F-5

Consolidated Statements of Cash Flows                                      F-6

Notes to Consolidated Financial Statements                                 F-7

                                      F-1
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of Global Pharmatech Inc.

We have audited the accompanying consolidated balance sheet of Global Pharmatech
Inc. and Subsidiaries as of December 31, 2006 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
two years in the period then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. 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 provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Global Pharmatech
Inc. and Subsidiaries as of December 31, 2006 and the results of their
operations and their cash flows for each of the two years in the period then
ended in conformity with United States generally accepted accounting principles.


                                   /s/ Moore Stephens, P.C.
                                   --------------------------------
                                   Moore Stephens, P.C.
                                   Certified Public Accountants


New York, New York
April 16, 2007

                                      F-2
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2006


CURRENT ASSETS
  Cash                                                             $  5,555,155
  Notes Receivable                                                       42,093
  Accounts Receivable, net                                              965,420
  Related Party Receivable                                               66,420
  Inventories                                                         1,534,537
  Other Receivables and Prepayment, net                                1,007,393
  Prepaid Expenses                                                       20,759
                                                                   ------------
TOTAL CURRENT ASSETS                                                  9,191,777
                                                                   ------------

PROPERTY PLANT & EQUIPMENT, NET                                       6,350,812

LAND LEASE, NET                                                         458,217
CONSTRUCTION IN PROGRESS                                                 16,789
INTANGIBLE ASSETS                                                       120,006
                                                                   ------------

TOTAL ASSETS                                                       $ 16,137,601
                                                                   ============

CURRENT LIABILITIES
  Current Portion of Long-term Debt                                $    256,276
  Accounts Payable and Accrued Expenses                                 421,483
  Advance from Customers                                                107,894
  Other Payables and Accruals                                           455,561
  Taxes Payable                                                          50,218
  Other Current Liabilities                                             128,786
                                                                   ------------
TOTAL CURRENT LIABILITIES                                             1,420,218
                                                                   ------------

LONG TERM DEBT                                                        2,620,417
                                                                   ------------

MINORITY INTEREST                                                     1,001,123
                                                                   ------------
STOCKHOLDERS' EQUITY
  Preferred stock, par value .0001 per share
   5,000,000 shares authorized, no shares
   issued and outstanding
  Common Stock par value .0001 per share, 95,000,000 shares
   authorized, 23,247,935 issued and outstanding                          2,325
  Additional paid-in capital                                         11,374,300
  Appropriated Retained Earnings                                        237,052
  Unappropriated Retained Earnings                                     (960,663)
  Accumulated Other Comprehensive Income                                457,829
  Subscription Receivable                                               (15,000)
                                                                   ------------
TOTAL STOCKHOLDERS' EQUITY                                           11,095,843

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 16,137,601
                                                                   ============

          See accompanying Notes to Consolidated Financial Statements

                                      F-3
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE YEARS ENDED
                           DECEMBER 31, 2006 AND 2005


                                                  2006                 2005
                                              ------------         ------------

Sales                                         $  2,375,511         $  3,085,175
Cost of Sales                                      788,560            1,400,014
                                              ------------         ------------

Gross Profit                                     1,586,951            1,685,161
                                              ------------         ------------
Operating Expenses
  Advertising                                       67,869              173,828
  Research and Development                         693,786              508,405
  Selling Expenses                                  89,042               91,980
  General and Administrative                     1,759,989            1,290,053
  Bad Debt                                         461,503
                                              ------------         ------------
                                                 3,072,189            2,064,266
                                              ------------         ------------

(Loss) from Operations                          (1,485,238)            (379,105)
                                              ------------         ------------
Other Income (Expenses)
Miscellaneous Income                               510,597              695,160
Interest Expense                                  (162,415)            (187,530)
                                              ------------         ------------
                                                   348,182              507,630
                                              ------------         ------------
Income(Loss) before Income Taxes and
 Minority Interest                              (1,137,056)             128,525
                                              ------------         ------------
Provision for Income Taxes
Current                                                  0                1,162
Deferred                                                 0                    0
                                              ------------         ------------

Income(Loss) Before Minority Interest           (1,137,056)             127,363

Minority Interest                                  (97,335)              73,332
                                              ------------         ------------

Net Income(Loss)                              $ (1,234,391)        $    200,695
                                              ============         ============
Earnings(Loss) Per Common Share
 Basic and Diluted                            $      (0.06)        $       0.01
                                              ============         ============

Weighted Average Common Shares Outstanding      21,581,268           17,658,543
                                              ============         ============
Other Comprehensive Income:
  Foreign Currency Translation Adjustment          457,829                    0
                                              ------------         ------------
  Comprehensive Income                        $    776,562         $          0
                                              ============         ============

          See accompanying Notes to Consolidated Financial Statements

                                      F-4
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE YEARS ENDED
                           DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                          Common Stock                                   Accumulated
                                                    -------------------------            Paid-in        Comprehensive
                                                    Shares             Amount            Capital           Income
                                                    ------             ------            -------           ------
<S>                                              <C>                   <C>             <C>               <C>
Balance at December 31, 2004                      17,118,752           $1,712          $5,470,690          $     0
                                                 -----------           ------          ----------          -------

Common Stock Issued for Cash                       1,114,183              111           1,264,110

Common Stock Issued, not Paid for                     15,000                2              15,000
                                                 -----------           ------           ---------          -------
Balance at December 31, 2005                      18,247,935            1,825           6,749,800

Common Stock Issued for Cash                       5,000,000              500           4,624,500

Common Stock Issued, not Paid for
Stock Subscription Receivable

Foreign Currency Translation Adjustment                                                                    457,829
                                                 -----------           ------         -----------         --------

Balance at December 31, 2006                     23,247,935            $2,325         $11,374,300         $457,829
                                                 ===========           ======         ===========         ========

                                                 Appropriated      Unappropriated         Stock
                                                   Retained           Retained         Subscription    Stockholders'
                                                   Earnings           Earnings          Receivable        Equity
                                                   --------           --------          ----------        ------

Balance at December 31, 2004                                           310,085                           5,782,487
                                                 ----------        -----------         ----------      -----------

Common Stock Issued for Cash                                                                             1,264,221

Common Stock Issued, Not Paid for                                                                           15,002

Stock Subscription Receivable                                                             (15,000)         (15,000)

Net Income                                           20,642            180,053                             200,695
                                                 ----------        -----------         ----------      -----------
Balance At December 31, 2005                         20,642            490,138            (15,000)       7,247,405

Issuance of Common Stock                                                                                 4,625,000

Reclassification of
 Appropriated Retained Earnings                     216,410           (216,410)


Comprehensive income                                                                                       457,829

Net Loss                                                            (1,234,391)                         (1,234,391)
                                                 ----------        -----------         ----------      -----------
Balance at December 31, 2006                     $  237,052        $  (960,663)        $  (15,000)     $11,095,843
                                                 ==========        ===========         ==========      ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements

                                      F-5
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED
                                DECEMBER 31, 2006

<TABLE>
<CAPTION>
                                                               2006                  2005
                                                            -----------           -----------
<S>                                                         <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income(Loss)                                          $(1,234,391)          $   200,695
  Adjustments to reconcile net income to net
   cash used by operating activities
     Minority interest                                           97,335               (73,332)
     Bad debt                                                   461,503
     Loss on disposal                                             1,086
     Depreciation                                               509,518               503,093
     Amortization of land lease and intangible assets            28,841                27,077

DECREASE (INCREASE) IN OPERATING ASSETS
  Accounts receivable                                           660,799            (1,114,427)
  Related party receivable                                      558,489              (581,302)
  Notes Receivable                                              (41,114)
  Inventories                                                  (342,164)              (48,576)
  Other Receivable and prepayment                              (487,389)
  Prepaid expenses                                                3,559              (409,389)
  Other Current Assets                                                                 17,058

INCREASE (DECREASE) IN OPERATING LIABILITIES
  Accounts payable and accrued expenses                        (151,603)               26,645
  Related party advance                                         (69,858)             (244,108)
  Advance from customers                                         38,475               (48,257)
  Other payables and accruals                                   148,687               (91,164)
  Income taxes payable                                           14,468               (27,673)
  Other liabilities                                              65,531                 3,331
                                                            -----------           -----------

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                261,772            (1,860,329)
                                                            -----------           -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceed from disposal of fixed assets                          25,031
  Purchase of fixed assets                                     (399,133)             (363,431)
  Purchase of intangible assets                                                       (17,896)
  Puchase in Construction in progress                           (15,818)
                                                            -----------           -----------

NET CASH (USED) BY INVESTING ACTIVITIES                        (389,920)             (381,327)
                                                            -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short term borrowing                              250,313            (1,362,900)
Net change in long term borrowing                               (50,063)            2,583,315
Contributions from minority interest                                                  247,800
Proceeds from common stock                                    4,625,000             1,264,110
                                                            -----------           -----------
                                                              4,825,250             2,732,325
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
                                                            -----------           -----------
Effect of exchange rate changes on cash                         167,218                 7,242

NET INCREASE IN CASH                                          4,697,102           $   497,911

CASH AT BEGINNING OF YEAR                                       690,835           $   192,924
                                                            -----------           -----------
CASH AT END OF YEAR                                           5,555,155           $   690,835
                                                            ===========           ===========
Supplemental Data Cash paid during the year for:
  Interest                                                      163,021           $   187,530
                                                            ===========           ===========
  Income taxes                                                   21,838           $   172,005
                                                            ===========           ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements

                                      F-6
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      (AMOUNTS EXPRESSED IN UNITED STATES DOLLARS UNLESS OTHERWISE STATED)

1. THE COMPANY

Global Pharmatech, Inc. ("Global" or the "Company") was incorporated in Delaware
on June 26, 2001 under the name Autocarbon.com, Inc. After engaging, under prior
management, in several businesses unrelated to its current one, on February 9,
2005, Global acquired Jilin Tian Yao Science and Technology Limited Company
("Natural Pharmatech China"), by acquiring Natural Pharmatech China's parent,
Natural Pharmatech, Inc. ("Natural"), through the issuance to Natural's
shareholders of 13,703,125 of its common shares for all of the outstanding
common shares of Natural. Located in Changchun, China, Natural Pharmatech China
is a Chinese limited liability company, organized on February 7, 2001, which,
together with its subsidiaries, is principally engaged in the research and
development of modernized traditional Chinese medicine and bio-pharmacy, the
sale of this technology, and the manufacture and sale of Chinese medicine and
vitamins throughout China. Natural was incorporated in the British Virgin
Islands on February 2, 2004, and acquired Natural Pharmatech China on June 15,
2004 by issuing 43,800,000 of its common shares for all of the outstanding
common shares of Natural Pharmatech China.

Under generally accepted accounting principles, these acquisitions are
considered in substance to be capital transactions rather than business
combinations. In each case, for accounting purposes, the acquired company is
deemed to have issued its stock for the net monetary assets of the acquiring
company. Each transaction is accompanied by a recapitalization, and is accounted
for as a change in capital structure. Accordingly, the accounting for the
acquisition is identical to that resulting from a reverse acquisition, except
that no goodwill is recorded. Under reverse takeover accounting, the comparative
historical financial statements are primarily those of Natural Pharmatech China.

In June 2005, Natural Pharmatech China, the Company's wholly owned subsidiary,
acquired an 80% equity interest in a new company, Changchun Xiandai Technology
Inc. ("XD").

On December 11, 2005 the Company sold its entire 51% interest in Jilin Mai Di
Xing ("MDX"). Because the sale price of the Company's interest was the same as
book value, there was no gain or loss on the transaction. MDX had been
established in July 2003 and had focused on research and development and
technique consulting.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. PRINCIPLES OF CONSOLIDATION

The consolidated financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America and include the
accounts of Global and its majority-owned subsidiaries as of December 31, 2006
and for the year then ended. The comparative consolidated financial statements
for the year ended December 31, 2005 are those of Natural Pharmatech China and
its subsidiaries for the whole year and Global from February 9, 2005, the date
of Global's acquisition of the subsidiaries. All significant inter-company
balances and transactions have been eliminated in consolidation.

B. USE OF ESTIMATES

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reported
periods. Significant estimates include depreciation and allowance for doubtful
accounts receivable. Actual results could differ from those estimates.

C. CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities of
three months or less at the time of purchase to be cash equivalents. As of
December 31, 2006 the Company did not have any cash equivalents.

D. INVENTORY

Inventories are stated at the lower of cost or market. Substantially all
inventory costs are determined using the first-in, first-out (FIFO) method.
Overhead has been allocated to inventory.

                                      F-7
<PAGE>
E. PROPERTY AND EQUIPMENT, NET

Property and equipment is stated at cost. Depreciation and amortization is
provided principally by use of the straight-line method over the useful lives of
the related assets. Expenditures for maintenance and repairs, which do not
improve or extend the expected useful life of the assets, are expensed to
operations while major repairs are capitalized. The Company uses a residual
value when computing depreciation.

F. INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting
Standards (`SFAS") No. 109, "Accounting for Income Taxes". Under SFAS No. 109,
deferred tax assets and liabilities are recognized for 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 SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

G. REVENUE RECOGNITION

Contract revenues earned from the transfer of technology (licensing
arrangements) are recognized in accordance with contract terms. Such revenues
were approximately $1,232,000 and $1,150,000 for the years ended December 31,
2006 and 2005, respectively.

Revenue derived from experiments, research and related ancillary services is
recognized when the customer accepts the service. Such revenues were
approximately $16,600 and $241,000 for the years ended December 31, 2006 and
2005, respectively.

Revenue from goods sold is recognized when title has passed to the purchaser,
which generally is at the time of delivery. Such revenues were approximately
$1,220,000 and $1,694,000 for the years ended December 31, 2006 and 2005,
respectively.

Government grants are recognized as other income upon receipt. Such revenues
were approximately $167,000 and $695,160 for the years ended 2006 and 2005,
respectively.

H. IMPAIRMENT

In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of
Long-Lived Assets" the Company evaluates its long-lived assets to determine
whether later events and circumstances warrant revised estimates of useful lives
or a reduction in carrying value due to impairment. If indicators of impairment
exist and if the value of an asset is impaired, an impairment loss would be
recognized for the difference between the fair value of the asset and its
carrying value.

I. FOREIGN CURRENCY TRANSLATION

The functional currency of Natural Pharmatech China and its subsidiaries is the
Chinese Yuan (RMB) and their reporting currency is the US dollar. Natural
Pharmatech China's consolidated balance sheet accounts are translated into US
dollars at the period-end exchange rate and all revenue and expenses are
translated into U.S. dollars at the average exchange rate prevailing during the
period in which these items arise. Translation gains and losses are deferred and
accumulated as a component of other comprehensive income in shareholders'
equity. Transaction gains and losses that arise from exchange rate fluctuations
affecting transactions denominated in a currency other than the functional
currency are included in the statement of operations as incurred. The
transaction gains and losses were immaterial for the years ended December 31,
2006 and 2005.

The Chinese government imposes significant exchange restrictions on fund
transfers out of China that are not related to business operations. These
restrictions have not had a material impact on the Company because it has not
engaged in any significant transactions that are subject to the restrictions.

J. ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income represents the change in equity of the
Company during the periods presented from foreign currency translation
adjustments.

K. FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Values of Financial Instruments", requires
disclosing fair value to the extent practicable for financial instruments that
are recognized or unrecognized in the balance sheet. The fair value of the
financial instruments disclosed herein is not necessarily representative of the
amount that could be realized or settled, nor does the fair value amount
consider the tax consequences of realization or settlement.

                                      F-8
<PAGE>
For certain financial instruments, including cash, accounts, related party and
other receivables, accounts payable, other payables and accrued expenses and
short term debt, it was assumed that the carrying amounts approximate fair value
because of the near term maturities of such obligations. For long-term debt, the
carrying amount is assumed to approximate fair value based on the current rates
at which the Company could borrow funds with similar remaining maturities.

L. ADVERTISING COSTS

Advertising costs are charged to operations when incurred. Advertising costs for
each of the years ended December 31, 2006 and 2005 are approximately $68,000 and
$173,800, respectively.

M. EARNINGS PER SHARE

Basic earnings per share is computed by dividing the earnings for the year by
the weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities by including
other potential common stock, including stock options and warrants, in the
weighted average number of common shares outstanding for a period, if dilutive.

At December 31, 2006 and 2005, there were no common stock equivalents.

N. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company recognizes an allowance for doubtful accounts to ensure accounts
receivable, related party receivables and other receivables that are not
overstated due to uncollectibility. Bad debt reserves are maintained for all
customers based on a variety of factors, including the length of time the
receivables are past due, significant one-time events and historical experience.
An additional reserve for individual accounts is recorded when the Company
becomes aware of a customer's inability to meet its financial obligation, such
as in the case of bankruptcy filings or deterioration in the customer's
operating results or financial position. If circumstances related to customers
change, estimates of the recoverability of receivables would be further
adjusted. As of December 31, 2006, the allowance for doubtful accounts are
approximately $190,700 for accounts receivable, $37,600 for related party
receivable and $233,130 for other receivables.

O. APPROPRIATED RETAINED EARNINGS

In accordance with Chinese regulations, the Company's Chinese subsidiaries must
appropriate 15% of their annual profits as computed under Chinese generally
accepted accounting principles, which is reflected in the consolidated financial
statements as appropriated retaining earnings and which, at December 31, 2006,
had a $237,502 balance.

3. INVENTORY

Inventory is comprised of the following:

                            December 31, 2006
                            -----------------
     Raw materials             $  199,022
     Work in progress             833,759
     Finished goods               501,756
                               ----------

     Total                     $1,534,537
                               ==========

4. OTHER CURRENT LIABILITIES

Other current liabilities consist of approximately $89,400 of salaries payable,
$32,800 of benefits payable and $6,600 of deferred Chinese taxes.

                                      F-9
<PAGE>
5. PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

                                                    December 31, 2006
                                                    -----------------
     Office equipment                                   $  167,852
     Machinery and equipment                             2,542,007
     Machinery and equipment pledged
      as security to creditor                              383,005
     Furniture and fixtures                                 11,446
     Computer equipment                                     75,866
     Vehicles                                               49,884
     Buildings and improvements                          2,312,968
     Buildings pledged as security to creditor           2,800,439
     TOTAL AT COST                                       8,343,467
                                                        ----------
     ACCUMULATED DEPRECIATION AND AMORTIZATION           1,992,655
                                                        ----------

     NET                                                $6,350,812
                                                        ==========

Depreciation and amortization expense for the years ended December 31, 2006 and
2005 was approximately $510,000 and $503,000, respectively.

Depreciation and amortization expenses included in research and development, and
general and administrative expenses were approximately $319,000 and $191,000,
respectively, for 2006. For 2005, such expenses were approximately $410,000, and
$693,000, respectively.

6. INCOME TAXES

The deferred tax liability as of December 31, 2006 is immaterial and is included
with other liabilities.

A reconciliation between taxes computed at the Chinese statutory rate of 15% and
the Company's effective tax rate is as follows:

                                                       2006              2005
                                                     --------          --------
     Income tax(benefit) on pretax income(loss)
      at statutory rate                              $(393,700)        $ 30,020
     Effect of  income tax exemption                 $ 393,700         $(28,858)
     Income tax at effective rate                    $       0         $  1,162

As at December 31, 2006, the Company had accumulated net operating loss
carryforwards for United States federal tax purposes of approximately $1,033,000
that are available to offset future taxable income. Realization of the net
operating loss carryforwards is dependent upon future profitable operations. In
addition, the carryforwards may be limited upon a change of control in
accordance with Internal Revenue Code Section 382, as amended. Accordingly,
management has recorded a valuation allowance to reduce deferred tax asset of
approximately $296,800 associated with the net operating loss carryforwards to
zero at December 31, 2006.

Additionally, as of December 31, 2006 and 2005, the Company had accumulated net
operating loss carryforwards for Chinese tax purposes of approximately $848,000
and $447,000, respectively. Realization of the Chinese tax net operating loss
carryforwards is dependent on future profitable operations, as well as a maximum
five-year carryforward period. Accordingly, management has recorded a valuation

                                      F-10
<PAGE>
allowance to reduce the deferred tax associated with the net operating loss
carryforwards to zero at December 31, 2006. These tax losses yield deferred tax
assets of approximately $67,000 and $18,000, respectively, as of December 31,
2006 and 2005. Valuation allowance of an equal amount has been recorded as of
December 31, 2005.The valuation allowance has increased approximately $49,000
from 2005 to 2006.

The Company and each of its subsidiaries file separate income tax returns.
Natural Pharmatech China qualifies as a "high-technology foreign joint venture"
which entitles it to an exemption from PRC income tax for two years beginning
with its first profitable year. Since its first profitable year was 2005,
Natural Pharmatech China is entitled to an exemption from PRC tax for the years
2005 and 2006. Because Natural Pharmatech China qualifies as a "high-technology
joint venture" and is located in an economic development zone, it is entitled to
a reduced tax rate of 10% for the three years beginning in 2007 through 2009.
Thereafter, it will be taxed at the standard income tax rate of 15%.

Jilin BCT Pharmacy Company, Ltd ("BCT") is a "wholly-owned foreign venture"
which entitles it to an exemption from PRC income tax for two years beginning
with its first profitable year. After these two years, it is entitled to a
reduced income tax rate of 10% for three additional years. After these three
years, it will be taxed at the standard income tax rate for a "wholly-owned
foreign venture" of 15%.

Jilin Tian Yao Drug Safety Evaluation Co., Ltd ("JDE") is a "high technology
joint venture" and is exempt from income taxes for two years beginning with its
first profitable year. It is thereafter taxed at a standard income tax rate of
15%.

XD is considered a "high technology joint venture" and so is entitled to full
exemptions from income tax for two years, beginning with its first profitable
year. Thereafter, it is assessed at the standard income tax rate for joint
ventures of 15%.

Natural Pharmatech China's other Chinese subsidiary, Jilin Yi Cao Tang Pharmacy
Co., Ltd. ("YCT"), is not a foreign joint venture and so is assessed at the
ordinary tax rate for Chinese companies at 33%.

The Company is also subject to value added tax (VAT), business tax and surtax
totaling 5.5 percent of gross sales.

The Company is still in the full-tax-exemption period for the Chinese
subsidiaries which reported positive net income for the year ended December 31,
2006, and therefore no tax was due for the period. The only subsidiary that is
currently subject to tax, YCT, incurred a net loss for the period, and therefore
no tax was due.

7. CONCENTRATIONS AND CREDIT RISK

The Company operates principally in China and grants credit to customers located
there. Although China is considered economically stable, it is possible that
unanticipated events there or in foreign countries could disrupt the Company's
operations.

At December 31, 2006, the Company has a credit risk exposure of uninsured cash
in banks of approximately $5,555,155. The Company does not require collateral or
other securities to support financial instruments that are subject to credit
risk.

For the year ended December 31, 2006, one customer accounted for more than 10%
of sales at $ 250,000 (10%). For 2005, one customer accounted for $854,701 of
sales (28%).

8. LONG-TERM DEBT

The Company has two long-term loans from two separate financial institutions
totaling approximately $2,620,417 at December 31, 2006. The weighted average
interest rate of these loans at December 31, 2006 was approximately 6.18
percent. One loan, secured by Natural Pharmatech China's office building, is for
approximately $2,306,480 and matures in one lump sum payment on November 15,
2008. The other loan is for approximately $313,937. Total annual principal
payments on both loans for the years ending December 31are as follows:

                    Amounts Due
                    -----------
      2008          $2,473,059
      2009             147,358
                    ----------
     Total          $2,620,417
                    ==========

Interest expense and related service charges were $162,415 and $187,530 for the
years ended December 31, 2006 and 2005, respectively.

                                      F-11
<PAGE>
9. RELATED PARTY TRANSACTIONS

As of December 31, 2006, the Company has the following amounts due from and to
related parties:

     ADVANCES DUE FROM RELATED PARTIES
     Xiao Bo Sun                               23,508
     Yu Ming Li                                34,594
     STOCKHOLDERS
     Min Yun Peng                               7,033
     Dong Hai Zhang                             1,285
                                              -------
     TOTAL                                    $66,420
                                              =======
     ADVANCES DUE TO RELATED PARTIES
     Yu Qi Li                                   2,880
                                              -------

     TOTAL                                    $ 2,880
                                              =======

These balances have no stated terms for repayment and are not interest bearing.

Xiao Bo Sun is the former CEO of the Company.

Yu Ming Li is the brother in law of the chairwoman of the company.

Min Yun Peng is a shareholder of the Company.

Yu Qi Li is the spouse of the chairwoman of the company.

Donghai Zhang is employed by Natural Pharmatech China, and owns more than 5% of
the Company's issued shares.

10. UNREGISTERED SALES OF EQUITY SECURITIES

During the year, the company issued 5,000,000 shares for aggregate net proceeds
of $5,000,000. A separate SB-2 was filed with the SEC for 1 million of these 5
million shares in January 2007. This SB-2 was declared effective in January
2007.

11. INTANGIBLE ASSETS

The Company's intangible assets of approximately $187,700 consist primarily of
purchased technology and self-developed patents. No patent has any significant
residual value. Each patent has an estimated useful life of twenty years but the
legal rights are limited to ten years by the Chinese government, therefore, the
Company uses ten years as its amortization period. Amortization expense was
approximately $18,700 and $18,300 for 2006 and 2005, respectively.

The accumulated amortization was approximately $67,700 and $47,000 as of
December 31, 2006 and 2005, respectively. Amortization for each of the next five
years is estimated to be $18,700 each year.

12. EMPLOYEE BENEFITS

The Company is required by statutory Chinese employment laws to fund certain
government sponsored employee benefits. The expense incurred by the Company for
the years ended December 31, 2006 and 2005 was approximately $41,000 and
$32,000, respectively.

                                      F-12
<PAGE>
13. INCENTIVE STOCK OPTION PLAN

On December 26, 2006, the Company's stockholders adopted and approved the
Company's 2006 Equity Incentive Plan (the "Plan"). The purpose of the Plan is to
attract and retain qualified individuals for positions of substantial
responsibility with the Company and to provide incentives to such individuals to
promote the success of the Company's business. The Plan will initially be
administered by the Board of Directors of the Company. A maximum of 2,000,000
shares of Common Stock will be available for issuance pursuant to options,
restricted stock, stock appreciation rights and/or performance stock
(collectively, "Awards") under the Plan. Awards may be granted to all employees,
officers and directors of and consultants or advisor to the Company and its
subsidiaries. To date, no Awards have been granted under the Plan.

14. INVESTMENT IN LAND LEASE

As of December 31, 2006 the Company had a parcel of land leased from the Chinese
government. The term of the lease is fifty years. The consideration under the
agreement amounts to approximately $498,100. The Company classifies the leases
as operating and therefore amortizes the cost using the straight-line method
over the life of the lease. Rent expense was approximately $10,000 for the year
ended December 31, 2006 and $8,650 for the year ended December 31, 2005.
Accumulated amortization at December 31, 2006 was approximately $55,600. The
estimated amount of amortization expense for each of the five succeeding fiscal
years is $10,000 annually.

15. NEW ACCOUNTING PRONOUNCEMENTS

In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments", which amends
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and
SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". SFAS No. 155 provides guidance to simplify the
accounting for certain hybrid instruments by permitting fair value remeasurement
for any hybrid financial instrument that contains an embedded derivative, as
well as clarifies that beneficial interests in securitized financial assets are
subject to SFAS No. 133. In addition, SFAS No. 155 eliminates a restriction on
the passive derivative instruments that a qualifying special-purpose entity may
hold under SFAS No. 140. SFAS No. 155 is effective for all financial instruments
acquired, issued or subject to a new basis occurring after the beginning of an
entity's first fiscal year that begins after September 15, 2006. We do not
expect the adoption of SFAS 155 to have a material impact on the consolidated
financial statements.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets", which amends SFAS No. 140. SFAS No. 156 specifically provides
guidance addressing the recognition and measurement of separately recognized
servicing assets and liabilities, common with mortgage securitization
activities, and provides an approach to simplify efforts to obtain hedge
accounting treatment. SFAS No. 156 is effective for all separately recognized
servicing assets and liabilities acquired or issued after the beginning of an
entity's fiscal year that begins after September 15, 2006, with early adoption
being permitted. We do not expect the adoption of SFAS 156 to have a material
impact on our consolidated results of operations and financial condition.

In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" ("FIN
48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in a company's financial statements in accordance with SFAS No. 109, "Accounting
for Income Taxes". FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. The requirements of FIN 48 are
effective for our fiscal year beginning January 1, 2007. We do not expect the
adoption of fin 48 to have a material impact on our consolidated results of
operations and financial condition.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 provides
guidance on the consideration of the effects of prior year misstatements in
quantifying current year misstatements for the purpose of a materiality
assessment. SAB 108 establishes an approach that requires quantification of
financial statement errors based on the effects of each on a company's balance
sheet and statement of operations and the related financial statement
disclosures. Early application of the guidance in SAB 108 is encouraged in any
report for an interim period of the first fiscal year ending after November 15,
2006. We do not expect the adoption of SAB 108 to have a material impact on our
consolidated results of operations and financial condition.

In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("SFAS 157"), which provides enhanced
guidance for using fair value to measure assets and liabilities. This standard
also responds to investors' requests for expanded information about the extent
to which companies measure assets and liabilities at fair value, the information
used to measure fair value, and the effect of fair value measurements on
earnings. The standard applies whenever other standards require (or permit)
assets or liabilities to be measured at fair value. The standard does not expand
the use of fair value in any new circumstances. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 12, 2007,
and interim periods within those fiscal years. Early adoption is permitted. We
are currently evaluating whether the adoption of SFAS157 will have a material
effect on our consolidated results of operations and financial condition.

                                      F-13
<PAGE>
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 158, "Employer's Accounting for Defined Benefit Pension and Other
Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and
132(R)" ("SFAS 158"). SFAS 158 requires an employer to recognize the overfunded
or underfunded status of a defined benefit postretirement plan (other than a
multiemployer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the
changes occur through comprehensive income of a business entity or changes in
unrestricted net assets of a not-for-profit organization. The standard also
requires an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. An
employer with publicly traded equity securities is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures as of the end of the fiscal year ending after
December 15, 2006. An employer without publicly traded equity securities is
required to recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after June 15, 2007. We do not expect the adoption of SFAS 158 to have a
material impact on our consolidated results of operations and financial
condition.

16. GAIN CONTINGENCY

In late December 2006, the Company made a settlement based on a patent dispute.
This dispute occurred as a result of the transfer of a patent to the Company by
13 individual shareholders. The shareholders originally transferred a patent to
the Company in exchange for shares. The patent later proved to be worthless. To
settle this issue, the shareholders have agreed to open brokerage accounts in
the U.S. and sell an aggregate total of 93,750 Company shares they individually
own. The net proceeds of the sale of the shares will be paid to the Company to
settle the dispute. Due to clerical issues in setting up overseas accounts, the
shares had not yet been sold by the end of the first quarter 2007. The Company
expects the shares to be sold by the end of the second quarter of 2007, netting
approximately $90,000.

17. OTHER RECEIVABLE AND PREPAYMENT

Other receivables and prepayment consists largely of short term advances made to
customers, suppliers and other entities which the company has or expects to
conduct business.

18. SUBSEQUENT EVENTS

None.

                                      F-14