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**SECURITIES      AND EXCHANGE COMMISSION **

**WASHINGTON,      D.C. 20549**

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**FORM      10-KSB**

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| **[                X ]** | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934.** |
|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------|

**                 **

**                 For the fiscal year ended December 31, 2006**

**OR**

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

**                 **

**                 For the transition period from _________ to _________**

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**GFR      PHARMACEUTICALS, INC.**

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**000-27959**

**NEVADA**

**99      Yan Xiang Road, Biosep Building, Xi An, Shaan Xi Province, P.R. China      710054**

**(8629)      8339-9676**

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*Table          of Contents*

**CAUTIONARY      STATEMENT REGARDING FORWARD LOOKING INFORMATION**

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| **TABLE                  OF CONTENTS** |
|----------------------------------------|
|                                   |
| Part                  I                |
|                                   |   |   |
| Item                                   |   | Page |
|                                   |   |   |
| 1.                                     | Description                  of Business | 4 |
| 2.                                     | Description                  of Property | 5 |
| 3.                                     | Legal                  Proceedings | 6 |
| 4.                                     | Submission                  of Matters to a Vote of Security Holders | 6 |
|                                   |   |   |
| Part                  II               |
|                                   |   |   |
| 5.                                     | Market                  for Common Equity and Related Stockholder | 6 |
| 6.                                     | Management’s                  Discussion and Analysis or Plan of Operation | 6 |
| 7.                                     | Financial                  Statements | 8 |
| 8.                                     | Changes                  in and Disagreements with Accountants on Accounting |   |
|                                   | and                  Financial Disclosure | 25 |
| 8A.                                    | Controls                  and Procedures | 25 |
| 8B.                                    | Other                  Information | 25 |
|                                   |   |   |
| Part                  III              |
|                                   |   |   |
| 9.                                     | Directors,                  Executive Officers, Promoters and Control Person; Compliance |   |
|                                   | with                  Section 16(a) of the Exchange Act | 26 |
| 10.                                    | Executive                  Compensation | 28 |
| 11.                                    | Security                  Ownership of Certain Beneficial Owners and Management |   |
|                                   | and                  Related Stockholder Matters | 28 |
| 12.                                    | Certain                  Relationships and Related Transactions | 29 |
| 13.                                    | Exhibits                  and Reports on Form 8-K | 29 |
| 14.                                    | Principal                  Accountant Fees and Services | 29 |
|                                   |   |   |
| Other                                  |
|                                   |   |   |
|                                   | Index                  to Exhibits | 31 |
|                                   | Signature                  Page | 32 |
|                                   |   |   |

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*Table          of Contents*

**PART      I**

**Item      1.**
**Description      of Business**

**History**

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*Table          of Contents*

**Description      of Business**

**Employees**

**Item      2.** **Description      of Property**

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*Table          of Contents*

**Item      3.** **Legal      Proceedings**

**Item      4.** **Submission      of Matters to a Vote of Security Holders**

**PART      II**

| **Item                5.** | **Market                for Common Equity and Related and                Stockholder** |
|----------------------------|----------------------------------------------------------------------------------------|

**Market      for Common Stock**

|                                            | High   | Low    |
|-------------------------------------------------|--------|--------|
| 2005                                            |   |   |
| Quarter                Ended March 31, 2005     | $0.42  | $0.25  |
| Quarter                Ended June 30, 2005      | $1.40  | $0.25  |
| Quarter                Ended September 30, 2005 | $2.40  | $1.05  |
| Quarter                Ended December 31, 2005  | $1.61  | $0.85  |
|                                            |   |   |
| 2006                                            |   |   |
| Quarter                Ended March 31, 2006     | $1.25  | $1.05  |
| Quarter                Ended June 30, 2006      | $1.51  | $0.60  |
| Quarter                Ended September 30, 2006 | $1.45  | $0.89  |
| Quarter                Ended December 31, 2006  | $1.03  | $0.31  |

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*Table          of Contents*

**Limited      Market for Common Stock**

**Dividends**

**Recent      Sales of Unregistered Securities**

**Item      6.** **Management’s      Discussion and Analysis or Plan of Operation**

**Introduction      and Plan of Operation**

**Year      Ended December 31, 2006 Compared to Year Ended December 31,      2005**

**Liquidity**

|  **Liquidity                Analysis**     |
|-------------------------------------------------|
|                                            |   |  December                31, 2006 |   |  December                31, 2005 |   |
|  Current                Assets             |   | $ | 724,905 |   | $ | 251,015 |   |
|  Working                Capital            |   | $ | (717,867 | ) | $ | 218,312 |   |
|  Stockholders’                Equity |   | $ | 4,163,083 |   | $ | 93,355 |   |
|  Total                Debt                 |   | $ | 1,612,733 |   | $ | 32,703 |   |

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*Table          of Contents*

**Item      7.**
**Financial      Statements**

**GFR      PHARMACEUTICAL**
**S      INC.**

**INDEX      TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                         | **Page**                   |
|----------------------------------------------------------------------------------------------|----------------------------|
|                                                                                         |                       |
| Report                of Independent Registered Public Accounting Firm                       | F-2                        |
|                                                                                         |                       |
| Consolidated                Balance                Sheets                                    | F-3                        |
|                                                                                         |                       |
| Consolidated                Statements                of Operations And Comprehensive Income | F-4                        |
|                                                                                         |                       |
| Consolidated                Statements                of Cash Flows                          | F-5                        |
|                                                                                         |                       |
| Consolidated                Statements                of Stockholders’ Equity          | F-6                        |
|                                                                                         |                       |
| Notes                to Consolidated Financial Statements                                    | F-7                to F-19 |

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*Table          of Contents*

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**GFR      Pharmaceuticals Inc.**

*/s/      Zhong Yi (Hong Kong) C.P.A. Company      Limited*

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*Table            of Contents*

|                                                                                                            **GFR PHARMACEUTICALS INC.****CONSOLIDATED                BALANCE SHEETS****AS                OF DECEMBER 31, 2006 AND 2005****(Currency                expressed in United States Dollars (“US$”), except for number of                shares)** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2006 |   | 2005 |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   | (restated) |   |
| Current                assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | 64,543 |   | $ | 6,225 |   |
| Accounts                receivable, trade                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 472,601 |   |   | - |   |
| Prepayments                and deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 187,761 |   |   | - |   |
| Due                from a stockholder                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | - |   |   | 244,790 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Total                current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 724,905 |   |   | 251,015 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Property,                plant and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 5,272,074 |   |   | 56,843 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **TOTAL                ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 5,996,979 |   | $ | 307,858 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| Current                liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Short-term                bank loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $ | 1,280,000 |   | $ | - |   |
| Other                payables and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 151,298 |   |   | 32,703 |   |
| Income                tax payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 11,474 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Total                current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 1,442,772 |   |   | 32,703 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Non-current                liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Amount                due to stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 169,961 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **TOTAL                LIABILITIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 1,612,733 |   |   | 32,703 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **MINORITY                INTEREST**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 221,163 |   |   | 181,800 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Stockholders’                equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Common                stock, $0.001 par value; 100,000,000 shares authorized; 41,079,940                and                40,000,000 shares issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 41,080 |   |   | 40,000 |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 3,413,120 |   |   | 3,414,200 |   |
| Receivable                from stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | - |   |   | (3,441,463 | ) |
| Accumulated                other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 89,578 |   |   | 80,880 |   |
| Statutory                reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 77,579 |   |   | - |   |
| Retained                earnings (accumulated deficits)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 541,726 |   |   | (262 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Total                stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 4,163,083 |   |   | 93,355 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $ | 5,996,979 |   | $ | 307,858 |   |

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*Table            of Contents*

| **GFR                PHARMACEUTICALS INC.****CONSOLIDATED                STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME****FOR                THE YEARS ENDED DECEMBER 31, 2006 AND 2005****(Currency                expressed in United States Dollars (“US$”), except for number of                shares)** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                          |   | 2006 |   | 2005 |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   | (restated) |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |
| **Revenue,                net**                                                                                                                                                                                                                                                                                               |   | $ | 1,543,064 |   | $ | - |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **Operating                expenses:**                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
| Consulting                and professional fees                                                                                                                                                                                                                                                                               |   |   | 172,793 |   |   | - |   |
| Depreciation                                                                                                                                                                                                                                                                                                                  |   |   | 427,835 |   |   | - |   |
| General                and administrative                                                                                                                                                                                                                                                                                     |   |   | 151,769 |   |   | 373 |   |
|  Total                operating expenses                                                                                                                                                                                                                                                                                 |   |   | 752,397 |   |   | 373 |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **Income                (loss) from operations**                                                                                                                                                                                                                                                                              |   |   | 790,667 |   |   | (373 | ) |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **Other                income (expense):**                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Interest                income                                                                                                                                                                                                                                                                                                |   |   | 516 |   |   | 126 |   |
| Interest                expense                                                                                                                                                                                                                                                                                               |   |   | (120,779 | ) |   | - |   |
|  Total                other expenses                                                                                                                                                                                                                                                                                     |   |   | (120,263 | ) |   | 126 |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **Income                (loss) before income taxes and minority interest**                                                                                                                                                                                                                                                    |   |   | 670,404 |   |   | (247 | ) |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Income                tax expenses                                                                                                                                                                                                                                                                                            |   |   | (11,474 | ) |   | - |   |
| Minority                interest                                                                                                                                                                                                                                                                                              |   |   | (39,363 | ) |   | - |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **NET                INCOME (LOSS)**                                                                                                                                                                                                                                                                                          |   | $ | 619,567 |   | $ | (247 | ) |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Other                comprehensive income:                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| -                Foreign currency translation gain                                                                                                                                                                                                                                                                            |   |   | 8,698 |   |   | 80,880 |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| **COMPREHENSIVE                INCOME**                                                                                                                                                                                                                                                                                       |   | $ | 628,265 |   | $ | 80,633 |   |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Net                income (loss) per share - Basic and diluted                                                                                                                                                                                                                                                                |   | $ | 0.02 |   | $ | (0.00 | ) |
|                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Weighted                average number of shares outstanding during the year - Basic and                diluted                                                                                                                                                                                                               |   |   | 40,047,997 |   |   | 40,000,000 |   |

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*Table            of Contents*

| **GFR                PHARMACEUTICALS INC.****CONSOLIDATED                STATEMENTS OF CASH FLOWS****FOR                THE YEAR ENDED DECEMBER 31, 2006 AND 2005****(Currency                expressed in United States Dollars (“US$”))** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                    |   |   |   |
|                                                                                                                                                                                                                                                    |   | For                the year ended December 31, |   |
|                                                                                                                                                                                                                                                    |   | 2006 |   | 2005 |   |
|                                                                                                                                                                                                                                                    |   |   |   | (restated) |   |
| **Cash                flows from operating activities:**                                                                                                                                                                                                |   |   |   |   |   |
| Net                income (loss)                                                                                                                                                                                                                        |   | $ | 619,567 |   | $ | (247 | ) |
| Adjustments                to reconcile net income (loss) to net cash provided by (used in)                operating                activities:                                                                                                         |   |   |   |   |   |   |   |
|                   Depreciation                                                                                                                                                                                                                |   |   | 427,835 |   |   | - |   |
|                   Minority interest                                                                                                                                                                                                           |   |   | 39,363 |   |   | - |   |
| (Increase)                decrease in operating assets and liabilities:                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Accounts                receivable, trade                                                                                                                                                                                                               |   |   | (472,601 | ) |   | - |   |
| Prepayments                and deposits                                                                                                                                                                                                                 |   |   | (187,761 | ) |   | - |   |
| Other                payables and accrued liabilities                                                                                                                                                                                                   |   |   | 155,445 |   |   | - |   |
| Income                tax payable                                                                                                                                                                                                                       |   |   | 11,474 |   |   | - |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Net                cash provided by (used in) operating activities                                                                                                                                                                                      |   |   | 593,322 |   |   | (247 | ) |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **Cash                flows from investing activities:**                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Cash                from consolidation of subsidiaries                                                                                                                                                                                                  |   |   | - |   |   | 2,202 |   |
| Purchase                of property, plant and equipment                                                                                                                                                                                                |   |   | (205,198 | ) |   | - |   |
|  Net                cash (used in) provided by investing activities                                                                                                                                                                                |   |   | (205,198 | ) |   | 2,202 |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **Cash                flows from financing activities:**                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Increase                (decrease) in contribution from stockholders                                                                                                                                                                                    |   |   | 196,771 |   |   | (87,301 | ) |
| Repayment                of short-term bank loan                                                                                                                                                                                                        |   |   | (535,275 | ) |   | - |   |
|  Net                cash used in financing activities                                                                                                                                                                                              |   |   | (338,504 | ) |   | (87,301 | ) |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **Foreign                currency translation adjustment**                                                                                                                                                                                              |   |   | 8,698 |   |   | 80,880 |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **NET                CHANGE IN CASH AND CASH EQUIVALENTS**                                                                                                                                                                                              |   |   | 58,318 |   |   | (4,466 | ) |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **CASH                AND CASH EQUIVALENTS, BEGINNING OF YEAR**                                                                                                                                                                                         |   |   | 6,225 |   |   | 10,691 |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **CASH                AND CASH EQUIVALENTS, END OF YEAR**                                                                                                                                                                                               |   | $ | 64,543 |   | $ | 6,225 |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURE OF CASH FLOW INFORMATION:**                                                                                                                                                                                    |
| Cash                paid for income taxes                                                                                                                                                                                                               |   | $ | - |   | $ | - |   |
| Cash                paid for interest expenses                                                                                                                                                                                                          |   | $ | 120,779 |   | $ | - |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURE OF NON-CASH TRANSACTIONS:**                                                                                                                                                                                    |   |   |   |
| Equipment                financed by minority interest in a subsidiary                                                                                                                                                                                  |   | $ | 181,130 |   | $ | - |   |
| Equipment                financed by stockholders                                                                                                                                                                                                       |   | $ | 3,441,463 |   | $ | - |   |

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*Table          of Contents*

| **GFR                PHARMACEUTICAL****S                INC.****CONSOLDIATED                STATEMENTS OF STOCKHOLDERS’ EQUITY****FOR                THE YEARS ENDED DECEMBER 31, 2006 AND 2005****(Currency                expressed in United States Dollars (“US$”))** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                        |   |   | Common                stock  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                        |   |   | No.                of share  |   |   | Amount |   |   | Additionalpaid-in                capital  |   |   | Receivablefrom                stockholders  |   |   | Accumulated                other                comprehensiveincome  |   |   | Statutory                reserve  |   |   | (Accumulated                deficits) retained    earnings  |   | TotalEquity  |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                as of January 1, 2005 (restated)                                                                                                                                                                                                                                     |   |   | 40,000,000 |   | $ | 40,000 |   | $ | 3,414,200 |   | $ | (3,441,463 | ) | $ | - |   | $ | - |   | $ | (15 | ) | $                12,722 |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss for the year                                                                                                                                                                                                                                                        |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (247 | ) | (247) |
| Foreign                currency translation adjustment                                                                                                                                                                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 80,880 |   |   | - |   |   | - |   | 80,880 |
|  Balance                as of December 31, 2005                                                                                                                                                                                                                                        |   |   | 40,000,000 |   | $ | 40,000 |   | $ | 3,414,200 |   | $ | (3,441,463 | ) | $ | 80,880 |   | $ | - |   | $ | (262 | ) | $                93,355 |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                issued to complete reverse acquisition                                                                                                                                                                                                                                |   |   | 1,079,940 |   |   | 1,080 |   |   | (1,080 | ) |   | - |   |   | - |   |   | - |   |   | - |   | - |
| Equipment                financed by stockholders                                                                                                                                                                                                                                           |   |   | - |   |   | - |   |   | - |   |   | 3,441,463 |   |   | - |   |   | - |   |   | - |   | 3,441,463 |
| Net                income for the year                                                                                                                                                                                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 619,567 |   | 619,567 |
| Transfer                from retained earnings to statutory reserve                                                                                                                                                                                                                         |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 77,579 |   |   | (77,579 | ) | - |
| Foreign                currency translation adjustment                                                                                                                                                                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 8,698 |   |   | - |   |   | - |   | 8,698 |
|  Balance                as of December 31, 2006                                                                                                                                                                                                                                        |   |   | 41,079,940 |   | $ | 41,080 |   | $ | 3,413,120 |   | $ | - |   | $ | 89,578 |   | $ | 77,579 |   | $ | 541,726 |   | $                4,163,083 |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

**1. **
**ORGANIZATION        AND BUSINESS BACKGROUND**

development stage company as      defined by Statement of Financial Accounting Standards (SFAS) No. 7 *“Accounting      and Reporting by Development Stage Enterprises”*.      The      principal activity of New Century is to lease the      diagnostic imaging medical      equipments to hospitals. The current operation commenced in March 2006. All      customers are located in the PRC. 

| 1.   | the                majority shareholder of GFRP delivered the 200,000 shares of common                stock                to New Century and/or its nominee in exchange for total payments                of                $325,000 in cash and; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | GFRP                issued to New Century’s owners an amount equal to 40,000,000 new                investment shares of common stock of GFRP pursuant to Regulation                S under                the Securities Act of 1933, as amended, in exchange for 95% of the                registered capital of New Century. The transaction was completed                through                Hua Long, which was become the legal owner of New Century in the                PRC. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.   | New                Century appointed one director to the board of directors of GFRP                and the                existing directors will all resign. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | GFRP                would settle all of its material liabilities as defined by U.S. Generally                Accepted Accounting Principles. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | All                of the shares of each of GFR Pharma, Inc., GFR Health, Inc., and                Nutritionals Direct, Inc. (collectively, the past “subsidiaries”) will be                sold to Richard Pierce, the former majority stockholders of GFRP,                or his                nominee. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | All                of the debt owed by the past subsidiaries to GFRP will be assigned                to                Richard Pierce or his nominee. The board of directors will approve                after                appropriate review (with Mr. Pierce abstaining) the settlement of                debt                with the past subsidiaries and will approve the acceptance of shares                of                the capital stock of GFR Pharma Ltd., as full payment of the debt. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | GFRP                will, for a period of eighteen months following the closing of the                exchange of shares, agree not to rollback, consolidate, or merge                its                common shares in any way that would effectively reduce the shareholdings                of existing shareholders. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | Mr.                Pierce will retain 370,000 shares of GFRP as an investment, of which                170,000 shares will be locked up and non-transferable for three months                after the closing and the remaining 200,000 shares will be locked                up and                non-transferable for twelve months after closing of the exchange                of                shares. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

**2.**
**SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES**

| l   | Basis                of presentation |
|---------------|--------------------------------------|

| l   | Use                of estimates |
|---------------|---------------------------------|

| l   | Basis                of consolidation |
|---------------|---------------------------------------|

| **l  ** | Revenue                recognition |
|-------------------|------------------------------------|

| a)   | Service                revenue |
|----------------|--------------------------------|

*“Reporting      Revenues Gross as a Principle versus Net as an Agent”*

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

| l   | Cost                of revenue |
|---------------|--------------------------------|

| l   | Cash                and cash equivalents |
|---------------|------------------------------------------|

| l   | Accounts                receivable |
|---------------|------------------------------------|

| l   | Property,                plant and equipment, net |
|---------------|---------------------------------------------------|

|                                            | Depreciable                life |   | Residual                value |
|-------------------------------------------------|---------------------------------|--------|-------------------------------|
| Buildings                                       | 20                years         |   | 5%                            |
| Medical                equipment                | 13                to 16 years   |   | 5%                            |
| Furniture,                fixture and equipment | 5                years          |   | 5%                            |

| l   | Construction                in progress |
|---------------|-----------------------------------------|

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*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

| l   | Impairment                of long lived assets |
|---------------|------------------------------------------------|

*“Accounting      for the impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed      of”*

| l   | Comprehensive                income |
|---------------|-------------------------------------|

*“Reporting      Comprehensive Income”*

| l   | Income                taxes |
|---------------|-----------------------------|

*“Accounting      for Income Taxes”*

| l   | Net                income (loss) per share |
|---------------|--------------------------------------------|

*“Earnings      per Share”*

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

| l   | Foreign                currencies translation |
|---------------|-----------------------------------------------|

| l   | Retirement                plan costs |
|---------------|--------------------------------------|

| l   | Related                parties |
|---------------|--------------------------------|

| l   | Segment                reporting |
|---------------|----------------------------------|

*“Disclosures      about Segments of an Enterprise and Related Information”*

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

| l   | Fair                value of financial instruments |
|---------------|----------------------------------------------------|

*Disclosures      about Fair Value of Financial Instruments*

| l   | Recently                issued accounting standards |
|---------------|-----------------------------------------------------|

*“Accounting      Changes and Error Corrections”*

*“Accounting      for Purchases and Sales of Inventory with the Same      Counterparty”*
*“Accounting      for Nonmonetary Transactions”*

*“Accounting      for Certain Hybrid Instruments-an amendment of FASB Statements 133 and      140”*

*“Accounting      for Uncertainty in Income Taxes—an Interpretation of FASB Statement No.      109”*

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

*“Considering      the Effects of Prior Year Misstatements when Quantifying Misstatements in      Current Year Financial Statements” *

*“Fair      Value Measurements”*

**3.        ACCOUNTS RECEIVABLE, TRADE**

**4.**
**PREPAYMENTS      AND DEPOSITS**

|                                 |   | 2006   |    | 2005       |   |
|--------------------------------------|--------|--------|---------|------------|--------|
|                                 |   |   |    | (restated) |   |
|                                 |   |   |    |       |   |
| Advances                to employees |   | $      | 17,923  |       | $      | - |   |
| Prepaid                expenses      |   |   | 42,324  |       |   | - |   |
| Deposits                             |   |   | 127,514 |       |   | - |   |
|                                 |   | $      | 187,761 |       | $      | - |   |

**5.**
**DUE      FROM A STOCKHOLDER**

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

**6.**
**PROPERTY,      PLANT AND EQUIPMENT, NET**

|                                              |   | 2006   |      | 2005       |   |
|---------------------------------------------------|--------|--------|-----------|------------|--------|
|                                              |   |   |      | (restated) |   |
|                                              |   |   |      |       |   |
| Buildings                                         |   | $      | 83,133    |       | $      | 82,158 |   |
| Medical                equipment                  |   |   | 5,437,868 |       |   | - |   |
| Furniture,                fixture and equipment   |   |   | 75,673    |       |   | - |   |
| Construction                in progress           |   |   | 245,412   |       |   | - |   |
|                                              |   |   | 5,725,224 |       |   | 82,158 |   |
| Less:                accumulated depreciation     |   |   | (453,150  | )          |   | (25,315 | ) |
| Property,                plant and equipment, net |   | $      | 5,272,074 |       | $      | 56,843 |   |

**7.**
**OTHER      PAYABLES AND ACCRUED LIABILITIES**

|                                   |   | 2006   |    | 2005       |   |
|----------------------------------------|--------|--------|---------|------------|--------|
|                                   |   |   |    | (restated) |   |
|                                   |   |   |    |       |   |
| Government                levy payable |   | $      | 96,997  |       | $      | - |   |
| Salaries                payable        |   |   | 11,128  |       |   | - |   |
| Accrued                expenses        |   |   | 43,173  |       |   | 32,703 |   |
|                                   |   | $      | 151,298 |       | $      | 32,703 |   |

**8.**
**INCOME      TAXES**

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

|                                                  |   |  2006   |    | 2005       |   |
|-------------------------------------------------------|--------|--------------|---------|------------|--------|
|                                                  |   |    |    | (restated) |   |
|                                                  |   |    |    |       |   |
| Loss                subject to U.S. operation         |   | $            | (94,100 | )          | $      | - |   |
| Income                (loss) subject to PRC operation |   |         | 764,504 |       |   | (247 | ) |
|                                                  |   |         |    |       |   |   |   |
| Income                (loss) before income taxes      |   | $            | 670,404 |       | $      | (247 | ) |

*United      States of America*

*The      PRC*

|                                                  |   | 2006   |     | 2005       |   |
|-------------------------------------------------------|--------|--------|----------|------------|--------|
|                                                  |   |   |     | (restated) |   |
|                                                  |   |   |     |       |   |
| Income                (loss) before income taxes      |   | $      | 764,504  |       | $      | (247 | ) |
| Statutory                income tax rate              |   |   | 33       | %          |   | 33 | % |
|                                                  |   |   | 252,286  |       |   | (82 | ) |
| Less:                items not subject to tax purpose |   |   |     |       |   |   |   |
| -                Adjusted taxable loss                |   |   | 3,663    |       |   | 82 |   |
| -                Tax holiday and concessions          |   |   | (244,475 | )          |   | - |   |
|                                                  |   |   |     |       |   |   |   |
| Income                tax expenses                    |   | $      | 11,474   |       | $      | - |   |

|                                              |   | 2006   |    | 2005       |   |
|---------------------------------------------------|--------|--------|---------|------------|--------|
|                                              |   |   |    | (restated) |   |
| Deferred                tax assets:               |   |   |    |       |   |
| -                Net operating loss carryforwards |   | $      | 32,935  |       | $      | 82 |   |
| Less:                valuation allowance          |   |   | (32,935 | )          |   | (82 | ) |
|                                              |   |   |    |       |   |   |   |
| Deferred                tax assets                |   | $      | -       |       | $      | - |   |

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

**9.**
**SHORT-TERM      BANK LOAN**

**10.**
**AMOUNT      DUE TO STOCKHOLDERS**

**11.**
**NET      INCOME (LOSS) PER SHARE **

|                                                                       |   |  2006   |       | 2005       |   |
|----------------------------------------------------------------------------|--------|--------------|------------|------------|--------|
|                                                                       |   |    |       | (restated) |   |
| Basis                and diluted net income (loss) per share calculation   |   |    |       |       |   |
| Numerator:                                                                 |   |    |       |       |   |
| -                Net income (loss) in computing basic net income per share |   | $            | 619,567    |       | $      | (247 | ) |
| Denominator:                                                               |   |         |       |       |   |   |   |
| -                Weighted average ordinary shares outstanding              |   |         | 40,047,997 |       |   | 40,000,000 |   |
|                                                                       |   |         |       |       |   |   |   |
| Basic                and diluted net income (loss) per share               |   | $            | 0.02       |       | $      | (0.00 | ) |

**12.**
**CAPITAL      TRANSACTIONS**

| 1)   | On                December                11, 2006,                GFRP completed a stock exchange transaction with the stockholders                of New                Century and GFRP                issued to New Century’s owners an amount equal to 40,000,000 new                investment shares of common stock of GFRP,                as more fully described in Note 1. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | As                a result, the total number of outstanding shares of GFRP’s common stock                was increased to 41,079,940. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

**13.**
**STOCK      BASED COMPENSATION**

----

*Table          of Contents*

**GFR        PHARMACEUTICAL**
**S        INC. **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE YEARS ENDED DECEMBER 31, 2006 AND 2005**

**(Currency        expressed in United States Dollars (“US$”))**

----

----

**14.**
**CHINA      CONTRIBUTION PLAN**

**15.**
**STATUTORY      RESERVES**

**16.**
**CONCENTRATION      AND RISK**

|  Customers           |   | Revenues |      |   |   |   |   | Accountsreceivable |   |
|---------------------------|--------|----------|-----------|--------|--------|--------|--------|--------------------|--------|
| Customer                A |   | $        | 1,543,064 |   |   | 100%   |   |               |   |   | $ | 472,601 |   |
|                      |   |     |      |   |   |   |   |               |   |   |   |   |   |
| Total:                    |   | $        | 1,543,064 |   |   | 100%   |   |               | Total: |   | $ | 472,601 |   |

**17.**
**COMMITMENT      AND CONTINGENCIES**

----

*Table          of Contents*

| **Item                8.** | **Changes                in and Disagreements with Accountants on Accounting and Financial                Disclosure** |
|----------------------------|------------------------------------------------------------------------------------------------------------------------|

**Item      8A.**
**Controls      and Procedures**

**Item        8B.**
**Other        Information**

----

*Table          of Contents*

**PART      III**

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

**Identification      of Directors and Executive Officers**

**DIRECTORS      AND OFFICERS**

**Name**
**Age**
**Position**
**Period      In Office**

*Mr.      Su*

----

*Table          of Contents*

*Mr.      Wang *

**Audit      Committee Financial Expert**

**Code      of Ethics**

| ·   | Honest                and ethical conduct, including the ethical handling of actual or                apparent                conflicts of interest between personal and professional                relationships. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Full,                fair, accurate, timely and understandable disclosure in reports and                documents that a small business issuer files with, or submits to,                the                Commission and in other public communications made by the small business                issuer. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Compliance                with applicable governmental laws, rules and                regulations. |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | The                prompt internal reporting of violations of the code to an appropriate                person or persons identified in the                code. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accountability                for adherence to the code. |
|--------------------|----------------------------------------------------------|

**Section      16(a) Beneficial Ownership Reporting Compliance**

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*Table          of Contents*

**Code      of Ethics**

**Item      10.** **Executive      Compensation**

| NameandPrincipalPosition                                            | Year         | Salary($) | Bonus($) | StockAwards($) | Option                Awards($) | Non-EquityIncentive                PlanCompensation($) | NonqualifiedDeferredCompensationEarnings($) | All                OtherCompensation($) | Total($) |
|---------------------------------------------------------------------|--------------|-----------|----------|----------------|---------------------------------|--------------------------------------------------------|---------------------------------------------|-----------------------------------------|----------|
| Mr.                Su, C.E.O.,President                and Director | 200620052004 | 15,000--  | ---      | ---            | ---                             | ---                                                    | ---                                         | ---                                     | ---      |

**Employment      Contracts**

**Stock      Option Awards**

**Item      11.**
**Security      Ownership of Certain Beneficial Owners and Management and Related Stockholder      Matters**

** **

| Name                and Address of Beneficial Owner (1)                           | Amount                and Natureof                Beneficial                Ownership (2)(3)  | Percentageof                Class (3)  |
|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|--------------------------------------------------|
| Li                An Guo  XinChengQuChangLeXiLu169HaoXi’An                ShanXi | 16,000,000                                                                                              | 38.0%                                            |
| Officers                and directors as a group (1 person)                                 |  16,000,000                                                                                        |  38.0%                                      |

*plus*

----

*Table          of Contents*

**Item      12.** **Certain      Relationships and Related Transactions**

**Item      13.**
**Exhibits      and Reports on Form 8-K**

| (1)   | On                December 12, 2006, the Company filed a current report on Form 8-K                to                announce the closing of Plan of Exchange with New Century, change                of                control and the appointment of new                management |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1)   | On                January 18, 2007, the Company filed a current report on Form 8-K                to                announce the change of its certifying accountant.                                                        |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)             | On                February 2, 2007, the Company filed an amendment to current report                on Form                8-K/A to amend the announcement regarding the change of its certifying                accountant. |
| (3)             | On                March 22, 2007, the Company filed a current report on Form 8-K to                announce                the acquisition of Hua Long.                                                                      |

**Item      14.**
**Principal      Accountant Fees and Services**

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*Table          of Contents*

| Year                Ended December 31,            |   | 2006                    |   | 2005     |   |
|---------------------------------------------------|--------|-------------------------|--------|----------|--------|
|                                              |   | Zhong                Yi |   | Robinson |   |
|                                              |   |                    |   |     |   |
| Audit                Fees (1)                     |   | $                       | 44,000 |     | $      | 14,770 |   |
| Audit-Related                Fees (2)             |   |                    | --     |     |   | -- |   |
| Tax                Fees (3)                       |   |                    | --     |     |   | 300 |   |
| All                Other Fees (4)                 |   |                    | --     |     |   | -- |   |
| Total                Accounting Fees and Services |   | $                       | 44,000 |     | $      | 15,070 |   |

**    ___________**

|   | (1) | *Audit                Fees*.                These are fees for professional services for the audit of our annual                financial statements, and for the review of the financial statements                included in our filings on Form 10-QSB, and for services that are                normally                provided in connection with statutory and regulatory filings or                engagements. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)  | *Audit-Related                Fees*.                These are fees for the assurance and related services reasonably                related                to the performance of the audit or the review of our financial                statements. |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | *Tax                Fees*.                These are fees for professional services with respect to tax compliance,                tax advice, and tax planning. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | *All                Other Fees*.                These are fees for permissible work that does not fall within any                of the                other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax                Fees. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Pre-Approval      Policy for Audit and Non-Audit Services**

----

*Table          of Contents*

**INDEX      TO EXHIBITS**

|  Exhibit                Number |  Description                                                                                                                                                                                |
|-------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  2.1                           |  Articles                of Incorporation as Amended **                                                                                                                                     |
|  3.1                           |  Bylaws**                                                                                                                                                                                   |
|  4.1                           |  See                Exhibits 3.1 and 3.2 for the provisions of our Articles of Incorporation                and Bylaws that define the rights of holders of our Common                Stock |
|  4.2                           |  Specimen                of Common Stock Certificate ****                                                                                                                                   |
|  16.1                          |  Letter                on Change in Certifying Accountant †                                                                                                                           |
|  17.1                          |  Plan                of Exchange and Letter of Intent ***                                                                                                                                   |
|  14.1                          |  Code                of Ethics *                                                                                                                                                            |
|  31.1                          |  Rule                13a-14(a)/15d-14(a) Certifications of Jie Su, Chief                Executive Officer *                                                                                 |
|  31.2                          |  Rule                13a-14(a)/15d-14(a) Certifications of Zhi Dong                Wang, Chief Financial Officer*                                                                           |
|  32.1                          |  Section                1350 Certifications of Jie Su, Chief Executive                Officer *                                                                                             |
|  32.2                          |  Section                1350 Certifications of Zhi Dong Wang, Chief                Financial Officer *                                                                                      |
|  99.1                          |  Cautionary                Statements for Purposes of the Safe Harbor                Provision of the Private Securities Litigation Reform Act of 1995                *                     |

| ** | Filed                as an Exhibit to our Form 10-SB12G, as filed with the Commission                on                November 5, 1999. |
|----|------------------------------------------------------------------------------------------------------------------------------------------|

| *** | Contained                in Form 8-K, as filed with the Commission on July 3,                2006. |
|-----|----------------------------------------------------------------------------------------------------|

| **** | Filed                as an Exhibit to the Company’s Annual Report on Form 10-KSB, as filed with                the Commission on April 21, 2006. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| † | Filed                as Exhibit to the Company’s Current Report on Form 8-K, as filed with the                Commission on February 2, 2007. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**SIGNATURES**

|   | **GFR                PHARMACEUTICALS, INC.**   |
|--------|------------------------------------------------|
|   |                                           |
| By:    | */s/                Jie Su*                    |
|   | Jie                Su, Chief Executive Officer |

| By:    | */s/                Zhi Dong Wang*                    |
|--------|-------------------------------------------------------|
|   | Zhi                Dong Wang, Chief Financial Officer |

| **Signature**                      | **Title** | **Date**                      |
|------------------------------------|-----------|-------------------------------|
|                               |      |                          |
| */s/                Li An Wang*    | Director  | April                12, 2007 |
| Wang,                Li An         |      |                          |
|                               |      |                          |
| */s/                Zhi Dong Wang* | Director  | April                12, 2007 |
| Zhi                Dong Wang       |      |                          |

----