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, 2005

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

              For the transition period from _________ to _________

                          COMMISSION FILE NO. 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 checkmark 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, 2005 were
$3,085,175

     The aggregate market value of the registrant's common stock held by
non-affiliates as of March 28, 2006 was $30.147 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, 2006
----------------------------------------               --------------------
Common Stock, par value $0.0001 per share                   18,247,935
Preferred Stock, par value $0.0001 per share                   None

                       DOCUMENTS INCORPORATED BY REFERENCE

     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.....................................  6
     ITEM 3.  Legal Proceedings.............................................  6
     ITEM 4.  Submission Of Matters To A Vote Of Security Holders...........  7

PART II ....................................................................  7

     ITEM 5.  Market For Common Equity and Related Stockholder Matters......  7
     ITEM 6.  Management Discussion and Analysis............................  8
     ITEM 7.  Financial Statements.......................................... 20
     ITEM 8.  Changes In And Disagreements With Accountants On Accounting
               And Financial Disclosures.................................... 20
     ITEM 8A. Controls and Procedures....................................... 21

PART III ................................................................... 22

     ITEM 9.  Directors, Executive Officers, Promoters And Control Persons,
               Compliance With Section 16(A) Of The Exchange Act............ 22
     ITEM 10. Executive Compensation........................................ 24
     ITEM 11. Security Ownership of Certain Beneficial Owners and
               Management .................................................. 26
     ITEM 12. Certain Relationships and Related Transactions................ 27
     ITEM 13. Exhibits List and Reports on Form 8-K......................... 27
     ITEM 14. Principal Accounting Fees and Services........................ 28
<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 US$1.00 to RMB 8.07 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.

     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.

                                       1
<PAGE>
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 90 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):

     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.

                                       2
<PAGE>
     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 14,533-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.

     We believe we are in material compliance with all Chinese environmental
laws. In each of 2002 and 2004, we spent approximately US$140,000 to purchase
equipment for processing production wastes, and we spend approximately US$78,000
annually on maintenance and other compliance expenses.

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
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.

                                       3
<PAGE>
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

                                       4
<PAGE>
     *    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,
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

                                       5
<PAGE>
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$508,405 for 2005 and US$507,578 for
2004.

     We currently have 26 patents and 15 trademarks, and are not a party to any
license, royalty or franchise contracts.

     We are currently focusing our development efforts on two proposed drugs:
     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. After
SFDA review and evaluation, the product was approved by the Chinese government
in the first quarter of 2006.

     HLB TABLET (HUO-LI-BAO) is composed of drug substances extracted from
American ginseng and ECHINACEA PURPUREA. Based on data from previous preclinical
and clinical studies, HLB could enhance human immunity, and may have efficacy in
combating fatigue. Approval of this product by the Chinese government is
expected in the latter half of 2006.

     Additionally, we have at least 15 drugs that have been approved for
clinical trial.

     We conduct research and development of products by a variety of means,
including two methods we believe are used exclusively by us. The first is a
method of analyzing the components of Traditional Chinese Medicines in a serum
to determine the chemical structure and bioactivity of the effective compounds
absorbed into the blood. The second method is analyzing the chemical structure
of polypeptides, or specialized proteins, of Traditional Chinese Medicine in
animals, and using bioengineering methods to produce polypeptide preparations.

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.

                                       6
<PAGE>
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 in the Pink Sheets 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 (through March 15, 2006)           2.50        1.45

     As of December 28, 2005, 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 2005, the Company issued 1,129,183 shares of common stock for net
proceeds of $1,264,223. The shares have not been and will not be registered
under the Securities Act of 1933, and, if in the future the shareholder decides
to offer, resell, pledge or otherwise transfer any of these shares, they may be
offered, resold, pledged or otherwise transferred only (a) pursuant to an
effective registration statement filed under the Securities Act, (b) to non-U.S.
persons in an offshore transaction in accordance with Rule 903 or Rule 904 of
Regulation S under the Securities Act, (c) pursuant to the resale limitations
of, and otherwise in compliance with, Rule 905 of Regulation S under the
Securities Act, or (d) pursuant to an exemption from registration under the
Securities Act provided by Rule 144. The net proceeds from this issuance will be
used for working capital and general corporate purposes.

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

                                       7
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS 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.

                                       8
<PAGE>
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 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 license our patents and technologies
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 Jilin Mai Di Xing Medication Development Co., Ltd. ("MDX") (Update
for the sale of MDX and the purchase of XD.). 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.

                                       9
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     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.

     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.

     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, 2005

     REVENUE. Sales for the current year were $3,085,175, an increase of
$1,529,505, or 98%, compared with revenue in the same period of 2004. These
revenues were derived as follows: revenue from goods sold was $1,694,000,
contract revenue earned from the transfer of technology was $1,150,000, and
revenue derived from experiments, research and related ancillary services was
$241,000.

     Sales of goods principally increased from YCT, which attained its GMP
attestation from the Chinese government in the middle of 2004, and increased its
operations in the beginning of 2005. For the year ended December 31, 2005,
revenue from goods sold from YCT increased $520,002, or 86%, compared with
revenue from YCT goods sold in the same period of 2004, which totaled $603,802.
For all our subsidiaries for the period, revenue from goods sold increased
$752,000, or 80%, compared with the same period of 2004, which totaled $942,000.
Contributing to the increase was an increase in the number of products offered
by YCT during 2005.

     Contract revenue earned from the transfer of technology increased $674,000
or 142%, compared with contract revenue in the same period of 2004, which
totaled $476,000. One of the principal reasons for the increase was a major
technology agreement signed with an unrelated Changchun, China company in 2005.

     COST OF SALES. Cost of sales for the year ended December 31, 2005 was
$1,400,014, an increase of 162% from $533,770 for 2004. The increase is directly
associated with the corresponding increase 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, 2005 was
$1,685,161, an increase of 65% from $1,021,900 for the corresponding period of
2004. Gross profit percentage for the year ended December 31, 2005 was 55%,
compared to 66% for the same period of 2004. The decrease is due to the larger
proportion of revenues from the sale of goods in 2005. This is a lower profit
activity compared to research services, which accounted for a greater proportion
of revenues in 2004.

     ADVERTISING EXPENSES. Advertising expenses increased substantially, to
$173,828 for the year ended December 31, 2005, compared to $17,802 for 2004. The
increase was due to a major promotional campaign launched by BCT to increase
sales and product awareness.

                                       10
<PAGE>
     SELLING EXPENSES. Selling expenses were $91,980, for the year ended
December 31, 2005, as compared to $40,832 for the corresponding period of 2004,
an increase of 125%. The increase in selling expenses was principally due to the
increase in employees on the sales team, as the company develops additional
sales channels.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the year ended December 31, 2005 increased $403,525 or 46%, over such
expenses for the same period of 2004, due principally to expenses associated
with becoming a U.S. public company.

     RESEARCH AND DEVELOPMENT EXPENSES. Research and development (R&D) expenses
remained flat in 2005 at $508,405. These expenses were essentially unchanged
from 2004 expenses of $507,578 as the Company continued to invest 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.

     OTHER INCOME. Other income is principally government grants. 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. In 2005, government grants totaled $695,160, down
22% from 2004's total $892,845.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2005, we had cash of $690,835 and working capital of
$3,861,468, and for the year we earned net income of $200,695. During 2005 we
used cash of $1,860,329 in our operating activities. The significant reasons for
the use of cash are:

     *    an increase in accounts receivable of $1,114,427;

     *    an increase in related party receivables of $581,302;

     *    an increase in other receivables of $409,389;

     *    an increase in accounts payable and accrued expenses of $26,645;

     *    a decrease in advances from customers of $48,257;

     During the year ended December 31, 2005, we invested cash of $363,431
towards the purchase of fixed assets, with the main payment being for a building
for YCT. We borrowed two long-term loans from two separate banks totaling
$2,583,315. We also issued 1,129,183 shares of common stock raising net proceeds
of $1,264,110.

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

                                       11
<PAGE>
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 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 believe
that we will make a profit in 2006, but 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

                                       12
<PAGE>
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
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

                                       13
<PAGE>
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.

                                       14
<PAGE>
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
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:

                                       15
<PAGE>
     *    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,
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.

                                       16
<PAGE>
     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

                                       17
<PAGE>
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.

     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.

                                       18
<PAGE>
     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
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.

                                       19
<PAGE>
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.

     MANAGEMENT MAY APPLY THE PROCEEDS OF THIS OFFERING TO USES FOR WHICH YOU
MAY DISAGREE. Our management will have considerable discretion in using the
proceeds of this Offering, and you will not have an opportunity, as part of your
investment decision, to assess whether the proceeds are being used
appropriately. The proceeds may be used for corporate purposes with which you
may disagree.

ITEM 7. FINANCIAL STATEMENTS

     Our Financial Statements together with the independent auditor's report
thereon are included on pages F-1 through F-6 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.

                                       20
<PAGE>
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.

     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

                                       21
<PAGE>
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, 2005. Based upon their evaluation and subject to
the foregoing, the Chief Executive Officer and Chief Financial Officer concluded
that as of December 31, 2005, 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, 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 as of January 1, 2006:

   Name                  Age                  Position
   ----                  ---                  --------
Lianqin Qu               50     Chairwoman of the Board of Directors
Xiaobo Sun               48     President, Chief Executive Officer and Director
Tom Du                   50     Director and Chief Technology Officer
Joseph J. Levinson       29     Chief Financial Officer

     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
<PAGE>
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 (Sticker symbol: 8067) and
Chairwoman of Dongyuan Investment Consultancy (H.K.) Limited. She received her
MBA degree from Asia International Open University (Macau).

     XIAOBO SUN, PH.D., is the President of Natural Pharmatech (Jilin China)
Co., Ltd. From 2002 to May 2004, Dr. Sun worked as a Senior Director, R&D,
Hutchison Medipharma - a Hutchison Whampoa Company. From 1999 to 2002, Dr. Sun
was the President of the JATCM, a Traditional Chinese Medicine research
institute with over 700 scientists, physicians and employees. Dr. Sun has
extensive experience in the Chinese pharmaceutical industry and medical
community, and has worked as an expert consultant for the State Food and Drug
Administration (SFDA), Chinese regulatory authority. Dr. Sun is also a member of
various national scientific and technology committees. In addition, Dr. Sun has
published five books and over 90 articles in national scientific journals in
China and Dr. Sun is an associate editor of several Chinese medical journals.

     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 1990s, 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.

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

                                       23
<PAGE>
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.

ITEM 10. EXECUTIVE COMPENSATION

     The following summary compensation table sets forth the aggregate
compensation awarded to, earned by or paid to the chief executive officer during
2005. No executive officer's annual cash compensation exceeded $100,000 in
either of the fiscal years ended December 31, 2005 and 2004.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                            Annual Compensation          Long Term Compensation    Awards      Payouts
                      -------------------------------   -----------------------    ------      -------
Name and                                     Other      Restricted   Securities                  All
Principal                                   Annual        Stock      Underlying     LTIP        Other
Position       Year    Salary    Bonus   Compensation    Award(s)      Options     Payouts   Compensation
--------       ----    ------    -----   ------------    --------      -------     -------   ------------
<S>            <C>     <C>       <C>        <C>            <C>          <C>        <C>         <C>
                        ($)       ($)        ($)            (#)          (#)        ($)         ($)
Xiaobo Sun(1)  2005   $60,000     --         --             --            --        --           --
</TABLE>

----------
(1) Mr. Sun joined the Company on June 24, 2004.

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.

                                       24
<PAGE>
     On February 8, 2005, the Company entered into an Executive Employment
Contract with Xiaobo Sun, pursuant to which Xiaobo Sun has agreed to act as the
Company's Chief Executive Officer, President and as a member of the Company's
Board of Directors. Xiaobo Sun's salary under the Executive Employment Contract
is US$5,000 per month. In addition, the Company agreed to grant Xiaobo Sun an
option to purchase 200,000 shares of the Company's common stock upon the
achievement of working goals as determined by the Board. During his term of
employment, unless the relevant competition is made known to the public and (if
required) approved by relevant regulatory authorities, Xiaobo Sun 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. Xiaobo Sun 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) Xiaobo Sun 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) Xiaobo Sun is unable to perform his duties for a period of
three months due to health reasons; (c) Xiaobo Sun commits a material breach
and/or repeated and/or continual breach of his obligations under the Executive
Employment Contract; (d) Xiaobo Sun is guilty of any serious misconduct or
serious neglect in the discharge of his duties; (e) Xiaobo Sun'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) Xiaobo Sun is or
becomes of unsound mind or becomes a patient for the purpose of any laws
relating to mental health; (g) Xiaobo Sun 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) Xiaobo Sun is removed from his position by the Board of Directors; (i)
Xiaobo Sun leaves the service of the Company in accordance with the Company's
Certificate of Incorporation; or (j) Xiaobo Sun fails to attend three
consecutive meetings of the Board of Directors. There is no expiration date of
the Executive Employment 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, 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

                                       25
<PAGE>
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.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of December 28, 2005, 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.

<TABLE>
<CAPTION>
                                                            Number of           % of Common
                                                              Shares               Stock
                                                           Beneficially         Beneficially
Name and Address of Beneficial Owner (1)                     Owned (2)            Owned (3)
----------------------------------------                     ---------            ---------
<S>                                                        <C>                  <C>
Lianqin Qu (4)                                             13,712,176 (5)           75.1
Xiaobo Sun                                                          0                  0
Tom Du                                                              0                  0
Joseph J. Levinson                                                  0                  0
Yuqi Li                                                     1,125,000 (6)            6.2
Dongyuan Investment Consultancy, H.K. Limited (7)           1,024,687                5.6
Donghai Zhang                                               1,024,686 (6)            5.6
Dachun Xu                                                     937,500 (6)           5.14
Yunpeng Min                                                   937,500 (6)           5.14
Yingli Di                                                     937,500 (6)           5.14
All officers and directors as a group (four persons)        1,024,687               5.6
</TABLE>

                                       26
<PAGE>
----------
(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 18,247,935 shares outstanding.
(4)  Shares are owned by Donguyan Investment Consultancy, H.K. Limited, of which
     Lianqin Qu is a control person.
(5)  Includes 12,687,489 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.
(6)  This person has given Lianqin Qu an irrevocable proxy to vote these shares.
(7)  Lianqin Qu is a control person of Donguyan Investment Consultancy, H.K.
     Limited.
(8)  Yuqi Li is the spouse of Lianqin Qu.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Not applicable

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.*

                                       27
<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.*

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

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

AUDIT FEES

     The Company incurred expenses of $65,432 for auditing services during 2005.

                                       28
<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: March 28, 2006                By: /s/ Xiaobo Sun
                                       -----------------------------------------
                                    Name:  Xiaobo Sun
                                    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.

     SIGNATURE                          TITLE                            DATE
     ---------                          -----                            ----

/s/ Lianqin Qu             Director and Chairman of the Board     March 28, 2006
-----------------------


/s/ Xiaobo Sun             Director, Chief Executive Officer      March 28, 2006
-----------------------    and President

                                       29
<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, 2005 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. 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, 2005 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
January 26, 2006, except for Note 17,
as to which the date is March 24, 2006

                                      F-2
<PAGE>
                     GLOBAL PHARMATECH, INC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2005

CURRENT ASSETS
Cash                                                               $    690,835
Accounts Receivable, net                                              1,775,404
Related Party Receivable                                                660,353
Inventories                                                           1,114,158
Other Current Assets                                                    995,958
Prepaid Expenses                                                         42,847
                                                                   ------------
TOTAL CURRENT ASSETS                                                  5,279,555
                                                                   ------------

PROPERTY PLANT & EQUIPMENT, NET                                       6,277,282

LAND LEASE, NET                                                         453,140

INTANGIBLE ASSETS                                                       165,631
                                                                   ------------

TOTAL ASSETS                                                       $ 12,175,608
                                                                   ============

CURRENT LIABILITIES
Current portion of long-term debt                                  $     49,566
Accounts payable and accrued expenses                                   553,810
Related party payable                                                    69,166
Advance from customers                                                   66,245
Other payables and accruals                                             584,041
Taxes payable                                                            34,239
Other current liabilities                                                61,020
                                                                   ------------
TOTAL CURRENT LIABILITIES                                             1,418,087
                                                                   ------------

LONG TERM DEBT                                                        2,534,077

MINORITY INTEREST                                                       976,039

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, 18,247,935 issued and outstanding                            1,825
Additional paid-in capital                                            6,749,800

Appropriated Retained Earnings                                           20,642

Unappropriated Retained Earnings                                        490,138
Subscription receivable                                                 (15,000)
                                                                   ------------
TOTAL STOCKHOLDERS' EQUITY                                            7,247,405

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 12,175,608
                                                                   ============

           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, 2005 AND 2004

                                                  2005                 2004
                                              ------------         ------------

Sales                                         $  3,085,175         $  1,555,670
Cost of Sales                                    1,400,014              533,770
                                              ------------         ------------

Gross Profit                                     1,685,161            1,021,900
                                              ------------         ------------
Operating Expenses
Advertising                                        173,828               17,802
Research and Development                           508,405              507,578
Selling Expenses                                    91,980               40,832
General and Administrative                       1,290,053              886,528
                                              ------------         ------------
                                                 2,064,266            1,452,740
                                              ------------         ------------

(Loss) from Operations                            (379,105)            (430,840)
                                              ------------         ------------
Other Income (Expenses)
Government Grants                                  695,160              892,845
Interest Expense                                  (187,530)            (129,609)
                                              ------------         ------------
                                                   507,630              763,236
                                              ------------         ------------
Income before Income Taxes and
 Minority Interest                                 128,525              332,396
                                              ------------         ------------
Provision for Income Taxes
Current                                              1,162               17,776
Deferred                                                 0                    0
                                              ------------         ------------

Income Before Minority Interest                    127,363              314,620

Minority Interest                                   73,332               (4,535)
                                              ------------         ------------

Net Income                                    $    200,695         $    310,085
                                              ============         ============
Earnings Per Common Share
Basic and Diluted                             $       0.01         $       0.02
                                              ============         ============

Weighted Average Common Shares Outstanding      17,658,543           17,118,752
                                              ============         ============

           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, 2005 AND 2004

<TABLE>
<CAPTION>
                                                          Common Stock
                                                    -------------------------            Paid-in        Comprehensive
                                                    Shares             Amount            Capital           Income
                                                    ------             ------            -------           ------
<S>                                             <C>                   <C>             <C>              <C>
Balance at December 31, 2003                      34,156,195            3,416           1,046,450

Reverse 10:1 split                               (30,740,568)          (3,074)              3,074

Issuance of common stock in reverse merger        13,703,125            1,370           5,230,897

Accumulated deficit acquired in reverse merger                                         (1,072,521)

Reimbursed dividend paid in 2002
through additional paid-in capital                                                        262,790

Net income                                                                                                 310,085

Earnings appropriated in
accordance with Chinese law
                                                 -----------           ------           ---------          -------
Balance at December 31, 2004                      17,118,752            1,712           5,470,690          310,085
                                                 -----------           ------           ---------          -------

Common stock issued for cash                       1,114,183              111           1,264,110

Common stock issued, not paid for                     15,000                2              15,000

Stock subscription receivable

Net income for the period                                                                                  200,695

                                                 -----------           ------           ---------          -------
Balance at December 31, 2005                      18,247,935            1,825           6,749,800          200,695
                                                 ===========           ======           =========          =======

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

Balance at December 31, 2003                                        (1,072,521)                            (22,655)

Reverse 10:1 split                                                                                               0

Issuance of common stock in reverse merger          392,866             73,441                           5,698,574

Accumulated deficit acquired in reverse merger                       1,072,521                                   0

Reimbursed dividend paid in 2002
through additional paid-in capital                                    (262,790)                                  0

Net income                                                             310,085                             310,085

Earnings appropriated in
accordance with Chinese law                        (392,866)           189,349                            (203,517)
                                                 ----------           --------           ----------      ---------
Balance at December 31, 2004                              0            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
                                                 ==========           ========           ==========      =========
</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,

<TABLE>
<CAPTION>
                                                              2005                  2004
                                                          -----------           -----------
<S>                                                       <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                $   200,695           $   310,085
Adjustments to reconcile net income to net
 cash used by operating activities
Minority interest                                             (73,332)                4,535
Depreciation                                                  503,093               394,607
Amortization of land lease and intangible assets               27,077                22,027
Grant of fixed assets                                                              (567,187)
Grant of land lease                                                                 (60,139)

DECREASE (INCREASE) IN OPERATING ASSETS
Accounts receivable                                        (1,114,427)             (154,496)
Related party receivable                                     (581,302)              151,130
Inventories                                                   (48,576)             (463,091)
Other receivables                                            (409,389)              860,063
Prepaid expenses                                               17,058                12,116

INCREASE (DECREASE) IN OPERATING LIABILITIES
Accounts payable and accrued expenses                          26,645               341,002
Related party advance                                        (244,108)              280,852
Advance from customers                                        (48,257)               27,420
Other payables and accruals                                   (91,164)               50,286
Income taxes payable                                          (27,673)              (48,405)
Other liabilities                                               3,331                 8,177
                                                          -----------           -----------

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES           (1,860,329)            1,168,982
                                                          -----------           -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets                                     (363,431)             (978,697)
Purchase of intangible assets                                 (17,896)
                                                          -----------           -----------

NET CASH (USED) BY INVESTING ACTIVITIES                      (381,327)             (978,697)
                                                          -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short term borrowings                        (1,362,900)             (465,080)
Net change in long term borrowing                           2,583,315
Contributions from minority interest                          247,800               297,671
Sales of common stock                                       1,264,110                   500
                                                          -----------           -----------

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES            2,732,325              (166,909)
                                                          -----------           -----------
Effect of exchange rate changes on cash                         7,176                     0
NET INCREASE IN CASH                                      $   497,845           $    23,376

CASH AT BEGINNING OF YEAR                                 $   192,924           $   169,548
                                                          -----------           -----------
CASH AT END OF YEAR                                       $   690,769           $   192,924
                                                          ===========           ===========
Supplemental Data
Cash paid during the year for:
Interest                                                  $   187,530           $   129,609
                                                          ===========           ===========
Income taxes                                              $   172,005           $    17,776
                                                          ===========           ===========
</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, 2005;
for the year then ended, the accounts include Natural and its majority-owned
subsidiaries for the whole period and Global from February 9, 2005, the date of
Global's acquisition of the subsidiaries. The comparative consolidated financial
statements for the year ended December 31, 2004 are those of Natural Pharmatech
China and its subsidiaries. All significant inter-company balances and
transactions have been eliminated in consolidation.

                                      F-7
<PAGE>
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, 2005 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.

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 $1,150,000 and $476,000 for the years ended December 31, 2005
and 2004, respectively.

Revenue derived from experiments, research and related ancillary services is
recognized when the customer accepts the service. Such revenues were
approximately $241,000 and $137,000 for the years ended December 31, 2005 and
2004, 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
$1,694,000 and $942,000 for the years ended December 31, 2005 and 2004,
respectively.

                                      F-8
<PAGE>
Government grants are recognized as other income upon receipt. Such revenues
were $695,160 and $892,000 for the years ended 2005 and 2004, 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
translation gains and losses were immaterial for the years ended December 31,
2005 and 2004.

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. These transactions are deemed immaterial for the years presented

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.

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.

                                      F-9
<PAGE>
L. ADVERTISING COSTS

Advertising costs are charged to operations when incurred. Advertising costs for
each of the years ended December 31, 2005 and 2004 are approximately $173,800
and $17,800, 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, 2005 and 2004, there were no common stock equivalents.

N. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company recognizes an allowance for doubtful accounts to ensure accounts
receivable 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, 2005, the allowance for doubtful accounts
was $0.

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, 2005,
had a $20,642 balance.

                                      F-10
<PAGE>
3. INVENTORY

Inventory is comprised of the following:

                            December 31, 2005
                            -----------------
     Raw materials             $  279,340

     Work in progress             654,955

     Finished goods               179,863
                               ----------

     Total                     $1,114,158
                               ==========

4. OTHER CURRENT LIABILITIES

Other current liabilities consist of approximately $30,400 of salaries payable,
$22,300 of benefits payable and $8,300 of deferred Chinese taxes.

5. PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

                                                     December 31, 2005
                                                     -----------------
     Office equipment                                   $  153,567
     Machinery and Equipment                             1,879,256
     Furniture and Fixtures                                631,622
     Computer equipment                                     58,805
     Vehicles                                               43,804
     Buildings and improvements                          2,235,909
     Buildings pledged as security to creditor           2,708,167
     TOTAL AT COST                                       7,711,130
                                                        ----------
     ACCUMULATED DEPRECIATION AND AMORTIZATION           1,433,848
                                                        ----------

     NET                                                $6,277,282
                                                        ==========

Depreciation and amortization expense for the years ended December 31, 2005 and
2004 was approximately $503,000 and $392,000, respectively.

Depreciation and amortization expenses included in research and development, and
general and administrative expenses were approximately $410,000 and $93,000,
respectively, for 2005. For 2004, such expenses were approximately $326,000, and
$66,000, respectively.

                                      F-11
<PAGE>
6. INCOME TAXES

The deferred tax liability as of December 31, 2005 is immaterial and is included
with other liabilities.

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

                                                      2005             2004
                                                    --------         --------
     Income tax on pretax income
      at statutory rate                             $ 30,020         $ 49,900

     Effect of  income tax exemption                $(28,858)        $(32,124)

     Effect of subsidiary losses not
      consolidated for income tax purposes

     Income tax at effective rate                   $  1,162         $ 17,776

As at December 31, 2005 and 2004, the Company had accumulated net operating loss
carryforwards for United States federal tax purposes of $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
$361,000 associated with the net operating loss carryforwards to zero at
December 31, 2005.

Additionally, as of December 31, 2005 and 2004, the Company had accumulated net
operating loss carryforwards for Chinese tax purposes of approximately $447,000
and $118,500, 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
allowance to reduce the deferred tax associated with the net operating loss
carryforwards to zero at December 31, 2005. These tax losses yield deferred tax
assets of approximately $67,000 and $18,000, respectively, as of December 31,
2005 and 2004. Valuation allowance of an equal amount has been recorded as of
December 31, 2005.The valuation allowance has increased approximately $49,000
from 2004 to 2005.

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%.

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<PAGE>
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.

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, 2005, the Company has a credit risk exposure of uninsured cash
in banks of approximately $690,800. 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, 2005, three customers accounted for $ 854,701
(28%), $277,045 (9%) and $275,799 (9%) of total sales, respectively. For 2004,
three customers accounted for $513,000 (31%), $338,000 (20%) and $175,000 (11%)
of total sales, respectively.

8. LONG-TERM DEBT

The Company had two long-term loans from two separate financial institutions
totaling approximately $2,583,600 at December 31, 2005. The weighted average
interest rate of these loans at December 31, 2005 was approximately 6.18
percent. One loan, secured by Natural Pharmatech China's office building, is for
approximately $2,230,500 and matures in one lump sum payment on November 15,
2008. The other loan is for approximately $353,200. Total annual principal
payments on both loans for the years ending December 31are as follows:

                   Amounts Due
                   -----------
      2006          $   49,566
      2007              68,154
      2008           2,323,420
      2009             142,503
                    ----------
     Total          $2,583,643
                    ==========

Interest expense and related service charges were $187,530 and $129,609 for the
years ended December 31, 2005 and 2004, respectively.

                                      F-13
<PAGE>
9. RELATED PARTY TRANSACTIONS

As of December 31, 2005, the Company has the following amounts due from and to
related parties:

     ADVANCES DUE FROM RELATED PARTIES
     BCT Global Development Limited             $ 18,277
     Dong Yuan Investment (HK) Limited           598,848
     STOCKHOLDERS
     Wang Ben Ji                                  37,206
     Min Yun Peng                                  6,022
                                                --------
     TOTAL                                      $660,353
                                                ========
     ADVANCES DUE TO RELATED PARTIES
     BCT Global Development Limited             $ 29,946

     STOCKHOLDERS
     Donghai Zhang                              $ 39,220
                                                --------

     TOTAL                                      $ 69,166
                                                ========

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

Dong Yuan Investment (HK) Limited ("DYI") is a British Virgin Island company.
Lianqin Qu, Chair of the Company's Board of Directors, is the chairperson of
both DYI and Natural Pharmatech China, and majority shareholder of DYI. DYI does
not hold any shares of Natural Pharmatech China; neither does Natural Pharmatech
China hold any shares of DYI.

BCT Global Development Limited ("BCT Global") owns 25% of Natural Pharmatech
China's subsidiary BCT. Lianqin Qu is the chairperson of BCT Global.

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

10. MINORITY INTEREST

In March 2004 and May 2004, respectively, Natural Pharmatech China terminated
its investments in Hainan Gong An Detoxification and Rehabilitation Center
("HGAR") and Hainan Gong An Health-care Products Co., Ltd. ("HGA"), each
effective as of January 1, 2004. These terminations resulted in a decrease in
minority interest of approximately $162,000.

11. UNREGISTERED SALES OF EQUITY SECURITIES

During the year, the company issued 1,129,183 shares for aggregate net proceeds
of $1,264,110. These share have not been and will not be registered under the
Securities Act of 1933, and, if in the future a shareholder decides to offer,
resell, pledge or otherwise transfer any of these shares, they may be offered,

                                      F-14
<PAGE>
resold, pledged or otherwise transferred only (a) pursuant to an effective
registration statement filed under the Securities Act, (b) to non-U.S. persons
in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation
S under the Securities Act, (c) pursuant to the resale limitations of, and
otherwise in compliance with, Rule 905 of Regulation S under the Securities Act,
or (d) pursuant to an exemption from registration under the Securities Act
provided by Rule 144. The net proceeds from this issuance are being used for
working capital and general corporate purposes.

12. DISPOSITION OF SUBSIDIARY

On December 11, 2005, the Company sold its interest in MDX for approximately
$63,000, the same amount as its book value.

13. INTANGIBLE ASSETS

The Company's intangible assets of approximately $212,600 consist primarily of
purchased technology of $130,000 and self-developed patents of $82,600. 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 $18,300 and $13,400 for 2005 and
2004, respectively.

At December 31, 2005 the accumulated amortization was approximately $35,800 and
$11,200 for the purchased technology and self-developed patents, respectively.
Amortization for each of the next five years is estimated to be $18,300 each
year.

14. 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, 2005 and 2004 was approximately $32,000 and
$16,400, respectively.

15. INVESTMENT IN LAND LEASE

As of December 31, 2005 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 $8,650 for the year
ended December 31, 2005 and $8,600 for the year ended December 31, 2004.
Accumulated amortization at December 31, 2005 was approximately $45,000. The
estimated amount of amortization expense for each of the five succeeding fiscal
years is $8,650 annually.

16. NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment, an
Amendment of SFAS No. 123." SFAS No. 123R requires companies to recognize in the
statement of operations the grant-date fair value of stock options and other
equity-based compensation issued to employees. SFAS No. 123R is effective for
the Group for the year ending December 31, 2006. The adoption of SFAS No. 123R
is expected to have no material impact on the Group's consolidated financial
statements.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets." The Statement is an amendment of APB Opinion No. 29. SFAS No. 153

                                      F-15
<PAGE>
eliminates the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. SFAS No. 153 is effective for the year
ending December 31, 2006. The adoption of SFAS No. 153 is expected to have no
material impact on the Group's consolidated financial statements.

17. SUBSEQUENT EVENTS

In March 2006, the Company entered into an agreement with one of its major
customers in 2005 to transfer real property to the Company to settle an account
receivable as of December 31, 2005 of approximately $619,500.

According to an independent valuation completed on the building in March 2006,
the appraised value of the building exceeds the receivable owed to the Company
by the customer.

Additionally, in January 2006, the Company advanced a short-term loan of
approximately $124,000 to an unrelated third party.

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