UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549




FORM
10-Q




x
            QUARTERLY REPORT PURSUANT TO SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934




For
the quarterly period ended September 30, 2010




 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the transition period from _________________ to
_________________




Commission
File Number: 005-85603










FIRST CHINA PHARMACEUTICAL
GROUP, INC.


(Exact
name of registrant as specified in its charter)




Nevada
                
                74-3232809(State or other jurisdiction of
                  incorporation or organization)
                
                (I.R.S. Employer
                  Identification Number)





Number 504, West Ren Min
Road,


Kunming City, Yunnan
Province


People’s Republic of China,
650000


(Address
of principal executive offices)





852-2138-1668


(Registrant’s
telephone number, including area code)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes  x  No   ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes   ̈  No   ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “larger accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.  (Check one):




Large accelerated filer   ̈
                Accelerated filer   ̈Non-accelerated filer ̈(Do not check if a smaller reporting company)Smaller reporting company  x





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




The
number of shares outstanding of the registrant’s common stock at November 17,
2010 was 60,000,000.









INDEX




PageNumberPART
      I - FINANCIAL INFORMATIONITEM
      1.
                            FINANCIAL
      STATEMENTS
                            3Unaudited
      Consolidated Balance Sheets as of September 30, 2010 and March 31,
      2010
                            3Unaudited
      Consolidated Statements of Income and Comprehensive Income for the Three
      and Six Months Ended September 30, 2010 and 2009
                            4Unaudited
      Consolidated Statements of Shareholders’ Equity
                            5Unaudited
      Consolidated Statements of Cash Flows for the Six Months Ended September
      30, 2010 and 2009
                            6Notes
      to Unaudited Consolidated Financial Statements
                            7ITEM
      2.
                            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                            20ITEM
      3.
                            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                            26ITEM
      4T.
                            CONTROLS
      AND PROCEDURES
                            26PART
      II - OTHER INFORMATIONITEM
      1.
                            LEGAL
      PROCEEDINGS
                            28ITEM 1A.
                            RISK
      FACTORS
                            28ITEM
      2.
                            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
                            28ITEM
      3.
                            DEFAULTS
      UPON SENIOR SECURITIES
                            28ITEM
      4.
                            REMOVED
      AND RESERVED
                            28ITEM
      5.
                            OTHER
      INFORMATION
                            28ITEM
      6.
                            EXHIBITS
                            28SIGNATURES
                            29




i


Cautionary
Notice Regarding Forward-Looking Statements




In
this Quarterly Report on Form 10-Q, references to “dollars” and “$” are to
United States dollars and, unless otherwise indicated, references to “we,”
“our,” “us,” the “Company,” “FCPG” or the “Registrant” refer to First China
Pharmaceutical Group, Inc., a Nevada corporation and its wholly owned
subsidiaries, First China Pharmaceutical Group Limited, a Hong Kong company, and
Kun Ming Xin Yuan Tang Pharmacies Co. Ltd., a company organized under the laws
of the People’s Republic of China.





This
Quarterly Report contains certain forward-looking statements.  When
used in this Quarterly Report, statements which are not historical in nature,
including the words “anticipate,” “estimate,” “should,” “expect,” “believe,”
“intend,” “may,” “project,” “plan” or “continue,” and similar expressions are
intended to identify forward-looking statements.  They also include
statements containing anticipated business developments, a projection of
revenues, earnings or losses, capital expenditures, dividends, capital structure
or other financial terms.





The
forward-looking statements in this Quarterly Report are based upon management’s
beliefs, assumptions and expectations of our future operations and economic
performance, taking into account the information currently available to
them.  These statements are not statements of historical
fact.  Forward-looking statements involve risks and uncertainties,
some of which are not currently known to us that may cause our actual
results, performance or financial condition to be materially different from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements.  These forward-looking
statements are based on our current plans and expectations and are subject
to a number of uncertainties and risks that could significantly affect current
plans and expectations and our future financial condition and
results.





We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.  In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this filing might not
occur.  We qualify any and all of our forward-looking statements
entirely by these cautionary factors.  As a consequence, current
plans, anticipated actions and future financial conditions and results may
differ from those expressed in any forward-looking statements made by or on our
behalf.  You are cautioned not to unduly rely on such forward-looking
statements when evaluating the information presented herein.


2


PART
I. FINANCIAL INFORMATION




ITEM
1.        FINANCIAL
STATEMENTS




FIRST
CHINA PHARMACEUTICAL GROUP, INC.


CONSOLIDATED
BALANCE SHEETS AS OF SEPTEMBER 30, 2010 AND MARCH 31, 2010


(Stated
in US Dollars)


(Unaudited)





At
                  
                  
                  AtSeptember
                    30,
                  
                  
                  March 31,Notes
                  
                  
                  2010
                  
                  
                  2010$
                  
                  
                  
                  $ASSETSCurrent
      AssetsCash
      and cash equivalents
                  
                  
                  
                  
                  
                  41,659
                  
                  
                  
                  7,331Restricted
      Cash
                  
                  
                  
                  
                  
                  497,232
                  
                  
                  
                  -Due
      from a related party
                  
                  3
                  
                  
                  
                  16,752,110
                  
                  
                  
                  -Prepaid
      and deferred expenses
                  
                  
                  
                  
                  
                  17
                  
                  
                  
                  233Inventories
                  
                  4
                  
                  
                  
                  6,757,645
                  
                  
                  
                  -Total
      current assets
                  
                  
                  
                  
                  
                  24,048,663
                  
                  
                  
                  7,564Goodwill
                  
                  5
                  
                  
                  
                  7,616,646
                  
                  
                  
                  -Plant
      and equipment, net
                  
                  6
                  
                  
                  
                  2,501
                  
                  
                  
                  -Intangible
      assets, net
                  
                  7
                  
                  
                  
                  2,428
                  
                  
                  
                  -TOTAL
      ASSETS
                  
                  
                  
                  
                  
                  31,670,238
                  
                  
                  
                  7,564LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesShort-term
      borrowings
                  
                  8
                  
                  
                  
                  832,335
                  
                  
                  
                  -Notes
      Payable
                  
                  10
                  
                  
                  
                  1,239,657
                  
                  
                  
                  -Other
      payable and accrued liabilities
                  
                  9
                  
                  
                  
                  11,776,668
                  
                  
                  
                  14,663Due
      to a related party
                  
                  
                  
                  
                  
                  12,752
                  
                  
                  
                  11,512Income
      tax payable
                  
                  
                  
                  
                  
                  2,669,444
                  
                  
                  
                  -Total
      Current Liabilities
                  
                  
                  
                  
                  
                  16,530,856
                  
                  
                  
                  26,175TOTAL
      LIABILITIES
                  
                  
                  
                  
                  
                  16,530,856
                  
                  
                  
                  26,175COMMITMENTS
      AND CONTINGENCIES
                  
                  13
                  
                  
                  
                  -
                  
                  
                  
                  -STOCKHOLDERS’
      EQUITYCommon
      stockCommon
      stock, $0.001 par value; 200,000,000 shares
      authorized;  60,000,000 and 60,000,000 shares issued and
      outstanding, respectively
                  
                  11
                  
                  
                  
                  60,000
                  
                  
                  
                  45,000Additional
      paid-in capital
                  
                  
                  
                  
                  
                  14,990,000
                  
                  
                  
                  5,000Retained
      earnings
                  
                  
                  
                  
                  
                  55,041
                  
                  
                  
                  (68,611
                  )Accumulated
      other comprehensive income - foreign currency translation
      adjustments
                  
                  
                  
                  
                  
                  34,341
                  
                  
                  
                  -TOTAL
      STOCKHOLDER’S EQUITY
                  
                  
                  
                  
                  
                  15,139,382
                  
                  
                  
                  (18,611
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
                  
                  
                  
                  
                  31,670,238
                  
                  
                  
                  (7,564
                  )





See
accompanying notes to the financial statements


3


FIRST
CHINA PHARMACEUTICAL GROUP LIMITED


CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


FOR
THE THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Stated
in US Dollars)


(Unaudited)


Three months ended
                          
                          
                          Six months endedSeptember 30,
                          
                          
                          September 30,Notes
                          
                          
                          2010
                          
                          
                          2009
                          
                          
                          2010
                          
                          
                          2009$
                          
                          
                          
                          $
                          
                          
                          
                          $
                          
                          
                          
                          $Net
      sales
                          
                          
                          
                          
                          
                          1,020,558
                          
                          
                          
                          -
                          
                          
                          
                          1,020,558
                          
                          
                          
                          -Costs
      of sales
                          
                          
                          
                          
                          
                          (820,985
                          )
                          
                          
                          -
                          
                          
                          
                          (820,985
                          )
                          
                          
                          -Gross
      profit
                          
                          
                          
                          
                          
                          199,573
                          
                          
                          
                          -
                          
                          
                          
                          199,573
                          
                          
                          
                          -Legal
      and accounting
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          (3,250
                          )
                          
                          
                          -
                          
                          
                          
                          (5,500
                          )Administrative
      expenses
                          
                          
                          
                          
                          
                          (913
                          )
                          
                          
                          (1,582
                          )
                          
                          
                          (5,260
                          )
                          
                          
                          (2,183
                          )Depreciation
      and amortization
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Other
      operating expenses
                          
                          
                          
                          
                          
                          (10,672
                          )
                          
                          
                          -
                          
                          
                          
                          (10,672
                          )
                          
                          
                          -Income
      from operations
                          
                          
                          
                          
                          
                          187,988
                          
                          
                          
                          (4,832
                          )
                          
                          
                          183,641
                          
                          
                          
                          (7,683
                          )Interest
      income
                          
                          
                          
                          
                          
                          6
                          
                          
                          
                          -
                          
                          
                          
                          6
                          
                          
                          
                          -Interest
      expense
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Income
      before tax
                          
                          
                          
                          
                          
                          187,994
                          
                          
                          
                          (4,832
                          )
                          
                          
                          183,647
                          
                          
                          
                          (7,683
                          )Income
      tax
                          
                          12
                          
                          
                          
                          (59,995
                          )
                          
                          
                          -
                          
                          
                          
                          (59,995
                          )
                          
                          
                          -Net
      income
                          
                          
                          
                          
                          
                          127,999
                          
                          
                          
                          (4,832
                          )
                          
                          
                          123,652
                          
                          
                          
                          (7,683
                          )Other
      comprehensive income-
      foreign currency translationadjustments
                          
                          
                          
                          
                          
                          34,341
                          
                          
                          
                          -
                          
                          
                          
                          34,341
                          
                          
                          
                          -Comprehensive
      income
                          
                          
                          
                          
                          
                          162,340
                          
                          
                          
                          (4,832
                          )
                          
                          
                          157,993
                          
                          
                          
                          (7,683
                          )Earnings
      per share
                          
                          16Basic
                          
                          
                          
                          
                          
                          0.0028
                          
                          
                          
                          (0.0001
                          )
                          
                          
                          0.0026
                          
                          
                          
                          (0.0001
                          )Weighted
      average number of common shares outstanding
                          
                          
                          
                          
                          
                          47,445,652
                          
                          
                          
                          45,000,000
                          
                          
                          
                          46,229,508
                          
                          
                          
                          45,000,000





See
accompanying notes to the financial statements


4


FIRST
CHINA PHARMACEUTICAL GROUP LIMITED


STATEMENTS
OF SHAREHOLDERS’ EQUITY


(Stated
in US Dollars)


(Unaudited)


Common stock
                                  
                                  
                                  Additional
                                    paid-in
                                  
                                  
                                  Retained
                                  
                                  
                                  Accumulated
                                    other
                                    comprehensiveShares
                                  
                                  
                                  Amount
                                  
                                  
                                  capital
                                  
                                  
                                  earnings
                                  
                                  
                                  income
                                  
                                  
                                  Total$
                                  
                                  
                                  
                                  $
                                  
                                  
                                  
                                  $
                                  
                                  
                                  
                                  $
                                  
                                  
                                  
                                  $Balance,
      March 31, 2010
                                  
                                  
                                  45,000,000
                                  
                                  
                                  
                                  45,000
                                  
                                  
                                  
                                  5,000
                                  
                                  
                                  
                                  (68,611
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (18,611
                                  )Net
      income
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (4,347
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (4,347
                                  )Foreign
      currency translation adjustments
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Balance,
      June 30, 2010
                                  
                                  
                                  45,000,000
                                  
                                  
                                  
                                  45,000
                                  
                                  
                                  
                                  5,000
                                  
                                  
                                  
                                  (72,958
                                  )
                                  
                                  
                                  
                                  
                                  
                                  
                                  (22,958
                                  )New
      issue of common stock
                                  
                                  
                                  15,000,000
                                  
                                  
                                  
                                  15,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  15,000Increase
      in additional paid-in capital
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  14,985,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  14,985,000Net
      income
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  127,999
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  127,999Foreign
      currency translation adjustments
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  34,341
                                  
                                  
                                  
                                  34,341Balance,
      September 30, 2010
                                  
                                  
                                  60,000,000
                                  
                                  
                                  
                                  60,000
                                  
                                  
                                  
                                  14,990,000
                                  
                                  
                                  
                                  55,041
                                  
                                  
                                  
                                  34,341
                                  
                                  
                                  
                                  15,139,382




See
accompanying notes to the financial statements


5


FIRST
CHINA PHARMACEUTICAL GROUP LIMITED


CONSOLIDATED
STATEMENT OF CASH FLOWS


FOR
THE SIX MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Stated
in US Dollars)


(Unaudited)




Six months endedSeptember 30,2010
                
                
                2009$
                
                
                
                $Cash
      Flows from Operating ActivitiesNet
      income
                
                
                119,303
                
                
                
                (7,683
                )Adjustments
      to reconcile net income to net cash
                
                
                -provided
      by operating activities:Changes
      in operating assets and liabilities:(Increase)
      decrease in prepaid expenses
                
                
                -Due
      from a related party
                
                
                (303,089
                )
                
                
                538Due
      to a related party
                
                
                1,240
                
                
                
                -Inventories
                
                
                44,557
                
                
                
                -Increase
      (decrease) in other payable and accrued liabilities
                
                
                209,789
                
                
                
                4,257Prepaid
      expense
                
                
                216Notes
      payable
                
                
                (67,615
                )
                
                
                -Income
      tax payable
                
                
                (2,761
                )
                
                
                -Net
      cash used in operating activities
                
                
                1,640
                
                
                
                (2,888
                )Cash
      Flows from Investing ActivitiesCash
      received in acquire investments
                
                
                509,922
                
                
                
                -Net
      cash used in investing activities
                
                
                509,922
                
                
                
                -Cash
      flows from financing activitiesRepayment
      of borrowings
                
                
                (18,704
                )
                
                
                -Increase
      in due to stockholder
                
                
                -
                
                
                
                9,839Net
      cash provided by (used in) financing activities
                
                
                (18,704
                )
                
                
                9,839Effect
      of foreign currency translation on cash and cashequivalents
                
                
                38,702
                
                
                
                -Net
      decrease in cash and cash equivalents
                
                
                531,560
                
                
                
                6,951Cash
      and cash equivalents - beginning of period
                
                
                7,331
                
                
                
                7,681Cash
      and cash equivalents - end of period
                
                
                538,891
                
                
                
                14,632Supplemental
      disclosures for cash flow information:Cash
      paid for:Interest
                
                
                -
                
                
                
                -Income
      taxes
                
                
                -
                
                
                
                -





See
accompanying notes to the financial statements


6


FIRST
CHINA PHARMACEUTICAL GROUP LIMITED




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Stated
in US Dollars)


(Unaudited)





1.
            ORGANIZATION
      AND PRINCIPAL ACTIVITIES





First
China Pharmaceutical Group, Inc., (the “Company”) incorporated in Nevada on July
31, 2007, is a public reporting “shell company”, as defined in Rule 12b-2 of the
securities Exchange Act of 1934, as amended. On May 14, 2010, the Company
amended its Articles of Incorporation to change its name from “E-Dispatch Inc.”
to “First China Pharmaceutical Group, Inc.”.





First
China Pharmaceutical Group limited (the “FCPG HK”) was incorporated in Hong Kong
on April 29, 2010 under the Companies Ordinance of Hong Kong. FCPG HK acts as
the holding company.





Kun Ming
Xin Yuan Tang Pharmacies Co. Ltd. (“XYT”) was established under the laws of the
People’s Republic of China (“PRC”) on November 12, 2002 with a paid-in capital
of RMB 2,000,000 as of September 30, 2010. The head office and warehouse are
located at Number 304, West Ren Min Road, Kunming City, Yunnan Province,
PRC.





On June
25, 2010, FCPG HK acquired XYT, of which became FCPG HK’s wholly owned
subsidiary.





Pursuant
to a share sale agreement dated July 5, 2010, the sole shareholder of FCPG HK
Group, Mr. Douglas Billingsley sold all of his shares to Mr. Zhen Jiang Wang for
considerations. Mr. Zhen Jiang Wang became the sole shareholder of the FCPG HK
Group, among which are FCPG HK, and XYT.





On August
23, 2010, the Company entered into a voluntary share exchange agreement with
FCPG HK Group (Exchange Agreement). Accordingly, additional 15,000,000 shares of
the Company would be issued to Mr. Zhen Jiang Wang, the sole selling shareholder
of FCPG HK Group, in exchange for 100% of the issued and outstanding common
stock of FCPG HK Group. The newly issued shares would represent 25% of the
Company’s issued and outstanding common stock.





On
September 15, 2010, the closing date of the Exchange Agreement, Mr. Zhen Jiang
Wang owns 25% of the Company’s issued and outstanding common stock. FCPG HK and
XYT became the Company’s wholly owned subsidiaries, and the Company acquired the
business and operations of FCPG HK and XYT. However, the business and operations
of the group are conducted solely through XYT.





Later on,
as per a condition of closing the Exchange Agreement dated August 23, 2010, Mr.
Zhen Jiang Wang was appointed to the Company’s Board of Directors as Chairman,
Mr. Aidan Hwuang resigned as the Company’s President, Chief Financial Officer
and Secretary, and Mr. Roderick Macutay resigned from the Board of
Directors.





The
Company and the Subsidiaries (collectively the “Group”) are principally engaged
in drug logistics and distribution in Yunnan Province, China through drug
stores, medical clinics and hospitals.




7





2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





(a)
            Basis
      of Preparation and Presentation





On
September 15, 2010, FCPG US acquired FCPG HK and XYT.  The
consolidated statements of income and comprehensive income and conceded
statements of cash flows of the companies (including the Company and FCPG HK,
XYT) now comprising the group (the “Group”) have been prepared throughout the
periods for the three months ended and six months ended to September 30, 2010
and 2009. The pre-control profits of FCPG HK had been eliminated under US GAAP,
the post-control profits for the three months ended and six months ended
September 30, 2010 was generalize from XYT from September 16, 2010 to September
30, 2010.





The
consolidated balance sheets of the Group as at September 30, 2010 and March 31,
2010 have been prepared to present the position of the assets and liabilities of
the Group as at the respective dates.





The
Group’s consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America for
illustrative of interim conceded financial information.





This
basis of accounting differs in certain material respects from that used for the
preparation of the books of account of the Group, which are prepared in
accordance with the accounting principles and the relevant financial regulations
applicable to enterprises with limited liabilities established in the PRC (“PRC
GAAP”), the accounting standards used in the places of their
domicile.  The accompanying financial statements reflect necessary
adjustments not recorded in the books of account of the Company to present them
in conformity with US GAAP.





In the
opinion of the management of the Group, all adjustments, which are of a normal
recurring nature, necessary for a fair statement of the results for the
three-month periods have been made.  Results for the interim period
presented are not necessarily indicative of the results that might be expected
for the entire fiscal year.





(b)
            Use
      of Estimates





In
preparing of the financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting periods.  These accounts and estimates include, but are not
limited to, the valuation of due from a related party, inventories and the
estimation on useful lives of plant and machinery and intangible assets. Actual
results could differ from those estimates.


8


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(c)
            Concentration
      of Credit Risk





Financial
instruments that potentially expose the Group to concentrations of credit risk
consist primarily of cash and cash equivalents, other receivable, restricted
cash and due from a related party. The Company places its cash with financial
institutions with high-credit ratings and quality. The Company conducts periodic
reviews of the related party financial conditions and payment
practices.





No single
external customer exceeded 10% of the Group’s total revenue for the periods
presented.





The
Company relies on supplies from numerous vendors. The Company had one vendor
that accounted for approximately 25% of total purchases for the six months ended
September 30, 2010.





(d)
            Risk
      Factors and Liquidity Section





The
Company can utilize the retained earnings to pay for dividends to its parent
company outside of the PRC provided it fulfills the relevant foreign exchange
regulations as promulgated by State Administration of Foreign Exchange
(SAFE).





The
domestic wages and salaries of foreign employees outside of the PRC as well as
other rightful earnings (dividends, bonus and profits, etc.) of shareholders
outside of the PRC may be remitted freely out of the PRC after taxes have been
paid in accordance with the provisions of the Chinese tax law with a tax
certificates.





Since the
Company does not have any debt that is generated outside the PRC and does not
have any employees located outside the PRC, the management is not aware of any
risk of paying in foreign currency in respect of those employee-related and
debt-settlement amount due to any other party located outside the
PRC.





According
to the Bankruptcy law of the PRC, XYT, as a WFOE, needs to have the debt and
creditors be settled in priority as set out by the relevant Bankruptcy law of
the PRC and its immediate equity holder, FCPG HK, located in Hong Kong, would be
last one to be entitled to any residual interest of the entity.  Such
priority of payment and distribution in case of liquidating XYT does not have
any different priority in respect of PRC nationals or foreigners. The priority
is based on the status of being creditors and other requirements as set out in
the Bankruptcy law of the PRC which does not have any discrimination or
preference in respect to whether the parties are PRC nationals or
foreigners.





(e)
            Cash
      and Cash Equivalents





The Group
considers all highly liquid investments with initial maturities of six months or
less to be cash equivalents.





(f)
            Restricted
      Cash





Deposits
in banks for securities of notes payable that are restricted in use are
classified as restricted cash under current assets.





(g)
            Trade
      and Other Receivables





Trade and
other receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less allowance
for impairment. An allowance for impairment of trade and other receivables is
established when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of receivables. The
amount of the allowance is the difference between the receivable’s carrying
amount and the present value of estimated future cash flows, discounted at the
effective interest rate computed at initial recognition. The amount of the
allowance is recognised in the statement of income and comprehensive
income.


9


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(h)
            Inventories





Inventories
are stated at the lower of cost and net realisable value. Cost is determined
using the weighted average basis. The cost of inventories, principally
comprising purchase cost and other costs incurred in bringing the inventories to
their present location and condition. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.





During
the reporting periods, the Group did not make any allowance for slow-moving or
defective inventories.





(i)
            Plant
      and Equipment





Plant and
equipment are stated at cost less depreciation and accumulated impairment loss.
Cost represents the purchase price of the asset and other costs incurred to
bring the asset into its existing use. Maintenance, repairs and betterments,
including replacement of minor items, are charged to expense; major additions to
physical properties are capitalized.





Depreciation
of plant and equipment is calculated to written off the cost, less their
estimated residual value, if any, using the straight-line method over their
estimated useful lives. The principal annual rates are as follows:





Office
      equipment
                    
                    
                    33
      1/3
                    %Other
      equipment
                    
                    
                    20
                    %Motor
      vehicles
                    
                    
                    25
                    %





(j)
            Intangible
      Assets





Intangible
assets are stated at cost less amortization and accumulated impairment loss. The
intangible assets of the Group represent software in used.  The
intangible assets are amortized over their estimated useful lives of 10 years
using the straight-line method.





(k)
            Impairment
      of Long-lived Assets





Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be recoverable. The
Company recognizes impairment of long-lived assets in the event that the net
book values of such assets exceed the future undiscounted cashflows attributable
to such assets. No impairment of long-lived assets was recognized for any of the
periods presented.





(l)
            Revenue
      Recognition





Revenue
from sales of the Group’s products is recognized when the significant risks and
rewards of ownership have been transferred to the buyer at the time of delivery
and the sales price is fixed or determinable and collection is reasonably
assured.


10


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(m)
            Advertising
      expenses





Advertising
expenses are charged to expense as incurred. No advertising expenses were
incurred during the three months and six months ended September 30, 2010 and
2009.





(n)
            Income
      taxes





The Group
uses the asset and liability method of accounting for income taxes pursuant to
SFAS No. 109 “Accounting for Income Taxes”.  Under the asset and
liability method of SFAS 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences between
the financial statements carrying amounts of existing assets and liabilities and
loss carryforwards and their respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.





(o)
            Comprehensive
      Income





Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners.  Among other
disclosures, all items that are required to be recognized under current
accounting standards as components of comprehensive income are required to be
reported in a financial statement that is presented with the same prominence as
other financial statements. The Group’s current component of other comprehensive
income is the foreign currency translation adjustments.





11


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(p)
            Foreign
      Currency Translation





The Group
maintains its financial statements in the functional currency. The functional
currency of the Company is US dollar (“USD”), the functional currency of FCPG HK
is Hong Kong dollar (“ HKD”), and the functional currency of Xin Yuan Tang is
the Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies
other than the functional currency are translated into the functional currency
at rates of exchange prevailing at the balance sheet dates. Transactions
denominated in currencies other than the functional currency are translated into
the functional currency at the exchanges rates prevailing at the dates of the
transaction. Exchange gains or losses arising from foreign currency transactions
are included in the determination of net income for the respective
periods.





For
financial reporting purposes, the financial statements of the Company, FCPG HK
and Xin Yuan Tang which are prepared using the functional currency have been
translated into United States dollars (“USD”). Assets and liabilities are
translated at the exchange rates at the balance sheet dates and revenue and
expenses are translated at the average exchange rates and stockholders’ equity
is translated at historical exchange rates. Any translation adjustments
resulting are not included in determining net income but are included in foreign
exchange adjustment to other comprehensive income, a component of stockholders’
equity.





Exchange
rates applied for the foreign currency translation during the period are as
follows:





USD to
RMB





September 30, 2010
                    
                    
                    March 31, 2010Closing
      rate
                    
                    
                    6.7011
                    
                    
                    
                    6.8263Three Months to
                      September 30, 2010
                    
                    
                    Six Months to
                      September 30,2010Average
      rate
                    
                    
                    6.7435
                    
                    
                    
                    6.7636





USD to
HKD





September 30, 2010
                  
                  
                  March 31, 2010Closing
      rate
                  
                  
                  7.7603
                  
                  
                  
                  7.7638Three Months to
                    September 30,2010
                  
                  
                  Six Months to
                    September 30, 2010Average
      rate
                  
                  
                  7.7745
                  
                  
                  
                  7.7623





HK$ is
pegged to US$ and hence there is no significant translation adjustment impact on
these financial statements.


12





RMB is
not freely convertible into foreign currency and all foreign exchange
transactions must take place through authorized institutions. No representation
is made that the RMB amounts could have been, or could be, converted into US$ at
the rates used in translation.





(q)
            Financial
      instruments





The
carrying amounts of all financial instruments approximate fair value. The
carrying amounts of cash and cash equivalents, restricted cash, due from (to) a
related party, notes payable, other payable and accrued liabilities and income
tax payable approximate their fair values due to the short-term nature of these
items. The carrying amounts of short-term borrowings approximate the fair value
based on the Company’s expected borrowing rate for debt with similar remaining
maturities and comparable risk.





It is
management’s opinion that the Company is not exposed to significant interest,
price or credit risks arising from these financial instruments.





(r)
            Recent
      Accounting Pronouncements





In April
2009, the FASB issued FSP 157-4 “Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly”. FSP 157-4 provides additional
guidance for estimating fair value in accordance with SFAS 157 when the volume
and level of activity for the asset or liability have significantly decreased.
FSP 157-4 also includes guidance on identifying circumstances that indicate a
transaction is not orderly. FSP 157-4 is effective for interim and annual
reporting periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. FSP 157-4 does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, FSP 157-4 requires comparative disclosures only
for periods ending after initial adoption.





In May
2009, the FASB issued FSP SFAS 165 “Subsequent Events”. The objective of this
Statement is to establish general standards of accounting for and disclosures of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. SFAS 165 is effective for the interim
and annual periods ending after June 15, 2009, which is now codified as FASB ASC
855 “Subsequent Events”. The adoption of FASB ASC 855 did not have a material
impact on the Company’s financial position, results of operations and cash
flows. Effective February 24, 2010, the Company adopted Accounting Standards
Update (“ASU”) No. 2010-09, “Subsequent Events (Topic 855): Amendments to
Certain Recognition and Disclosure Requirements”, which removes the requirement
to disclose the date through which subsequent events have been
evaluated.





In June
2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets
– an amendment of FASB Statement No. 140”. This statement is intended to improve
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial reports about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement in transferred financial assets. This Statement must be applied as
of the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009, and is required to be adopted by the Company in
the first quarter of fiscal year 2011. Earlier application is prohibited. This
Statement must be applied to transfers occurring on or after the effective
date.


13


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(r)
            Recent
      Accounting Pronouncements (cont’d)





In June
2009, the FASB issued SFAS No.167, “Amendments to FASB Interpretation No.46(R)”,
which is codified as ASC 810. ASC 810 amends FASB Interpretation No.46(R),
“Variable Interest Entities” for determining whether an entity is a variable
interest entity (“VIE”) and requires an enterprise to perform an analysis to
determine whether the enterprise’s variable interest or interests give it a
controlling financial interest in a VIE. Under ASC 810, an enterprise has a
controlling financial interest when it has a) the power to direct the activities
of a VIE that most significantly impact the entity’s economic performance and b)
the obligation to absorb losses of the entity or the right to receive benefits
from the entity that could potentially be significant to the VIE. ASC 810 also
requires an enterprise to assess whether it has an implicit financial
responsibility to ensure that a VIE operates as designed when determining
whether it has power to direct the activities of the VIE that most significantly
impact the entity’s economic performance.





ASC 810
also requires ongoing assessments of whether an enterprise is the primary
beneficiary of a VIE, requires enhanced disclosures and eliminates the scope
exclusion for qualifying special-purpose entities. ASC 810 shall be effective as
of the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter.
Earlier application is prohibited. ASC 810 is effective for the Company in the
first quarter of fiscal 2011.





In June
2009, the FASB issued SFAS 168, “The FASB Accounting Standards CodificationTM and the
Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB
Statement No 162”, which supersedes all existing non-SEC accounting and
reporting standards. The codification does not change GAAP but rather organizes
it into a new hierarchy with two levels: authoritative and non-authoritative.
All authoritative GAAP carries equal weight and is organized in a topical
structure.





In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05,
“Measuring Liabilities at Fair Value”, which is codified as ASC 820, “Fair Value
Measurements and Disclosures”. This Update provides amendments to ASC 820-10,
Fair Value Measurements and Disclosures –Overall, for the fair value measurement
of liabilities. This Update provides clarification that in circumstances in
which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using a
valuation technique that uses the quoted price of the identical liability when
traded as an asset, quoted prices for similar liabilities or similar liabilities
when traded as assets, or that is consistent with the principles of ASC 820. The
amendments in this Update also clarify that when estimating the fair value of a
liability, a reporting entity is not required to include a separate input or
adjustment to other inputs relating to the existence of a restriction that
prevents transfer of the liability.


14


2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONT’D)





(r)
            Recent
      Accounting Pronouncements (cont’d)





The
amendments in this Update also clarify that both a quoted price in an active
market for the identical liability at the measurement date and the quoted price
for the identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the assets are required are Level 1 fair
value measurements. ASC 820 is effective for the first reporting period
(including interim periods) beginning after August 28, 2009.





In
September 2009, the FASB issued ASU No. 2009-06, “Income Taxes (Topic
740)—Implementation Guidance on Accounting for Uncertainty in Income Taxes and
Disclosure Amendments for Nonpublic Entities”, and it provides implementation
guidance on accounting for uncertainty in income taxes effective for interim and
annual reporting period ending on or after September 15, 2009.





In
December 2009, the FASB issued ASU No. 2009-17, “Improvements to Financial
Reporting by Enterprises Involved with Variable Interest Entities (“ASU
2009-17”)”. ASU 2009-17 amends the variable-interest entity guidance in FASB ASC
810-10-05-8 to clarify the accounting treatment for legal entities in which
equity investors do not have sufficient equity at risk for the entity to finance
its activities without financial support. ASU 2009-17 shall be effective as of
the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009. ASU 2009-17 is effective for the Company in the
first quarter of fiscal 2011.





The
Company does not anticipate that the adoption of the above recent accounting
pronouncements will have a material impact on these financial
statements.





3.
            DUE
      FROM A RELATED PARTY





The
amount due from a related party, Mr. Zhen Jiang Wang who is the major equity
holder of the Company as of September 30, 2010, is interest free, unsecured and
repayable on demand.





We have
referred to SAB Topics 4E and 4G and find that the scenario and background
described therein, which is related to capital contribution or unpaid equity of
an enterprise, is not applicable in the item as presented under “Amount due from
shareholder” as presented in the financial statements due to the different
nature and background that gives rise to such amount.  The amount as
appears in “Amount due from shareholder” herein, in fact, represents a situation
where the shareholder of the Company, Mr. Wang, has collected certain trade
receivables on behalf of the subsidiary of the Company, XYT, while XYT conducts
business in China, whereas Mr. Wang would settle on behalf of the Company, for
certain trade payables. Therefore, we suppose the situation is not the same as
any capital contribution commitment or unpaid subscription as outlined by SAB 4E
or 4G.





In such
circumstances, we would include an enhanced disclosure note in the financial
statements to describe in detail the nature, amount and origin of such
amount.  Of course, the Company would have the control measures to
manage and eliminate such amount being owed by a shareholder to the Company as
part of corporate governance.





The
Company will settle such “Amount due from shareholder” by dividend payable or
authorize Mr. Wang to make prepayment to the suppliers.


15





4.
            INVENTORY





At
                              
                              
                              AtSeptember 30,
                              
                              
                              March 31,2010
                              
                              
                              2010$
                              
                              
                              $Finished
      goods
                              
                              
                              6,757,645
                              
                              
                              
                              -





5.
            GOODWILL





Goodwill
was initially recognized from the premium paid over the value of net asset of
the FCPG HK (XYT) as at the acquisition date, September 15, 2010.





In
accordance to the Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets, or SFAS No. 142, it requires goodwill to be
subsequently tested for impairment on an annual basis and between annual tests
in certain circumstances, and written down when impaired.





The
impairment test for goodwill has been performed and there is no indication of
impairments post acquisition date.





AtSeptember 302010$Goodwill
                  
                  
                  7,616,646Goodwill
      Impairment
                  
                  
                  -Goodwill
      net
                  
                  
                  7,616,646





6.
            PLANT
      AND EQUIPMENT, NET





At
                    
                    
                    AtSeptember 30,
                    
                    
                    March 31,2010
                    
                    
                    2010$
                    
                    
                    $CostOffice
      equipment
                    
                    
                    11,317
                    
                    
                    
                    -Other
      equipment
                    
                    
                    30,274
                    
                    
                    
                    -Motor
      vehicles
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    
                    41,591
                    
                    
                    
                    -Accumulated
      depreciation
                    
                    
                    (39,090
                    )
                    
                    
                    -Property,
      plant and equipment, net
                    
                    
                    2,501
                    
                    
                    
                    -




16




7.
            INTANGIBLE
      ASSET, NET





At
                  
                  
                  AtSeptember 30,
                  
                  
                  March 31,2010
                  
                  
                  2010$
                  
                  
                  $Cost
                  
                  
                  8,327
                  
                  
                  
                  -Accumulated
      amortization
                  
                  
                  (5,989
                  )
                  
                  
                  --Intangible
      asset, net
                  
                  
                  2,428
                  
                  
                  
                  -





The
estimated aggregate amortization expenses for each of the five succeeding years
are as follows:





Twelve months ending September 30
                  
                  $2011
                  
                  
                  8332012
                  
                  
                  8332013
                  
                  
                  5402014
                  
                  
                  1242015
      and thereafter
                  
                  
                  982,428





8.
            SHORT-TERM
      BORROWINGS





The
details of short-term borrowings as of September 30, 2010 are as
follows:





Nature
                            
                            Annual
                              Interest
                              Rate
                            
                            Period
                            
                            Outstanding
                              loan
                              amount
                            
                            
                            Collateral$Bank
      loan
                            
                            
                            7.97
                            %
                            27/04/2010
      – 26/04/2011
                            
                            
                            88,243
                            
                            
                            N/ABank
      loan
                            
                            
                            5.31
                            %
                            07/12/2009
      – 06/12/2010
                            
                            
                            744,092
                            
                            
                            N/A832,335




17




9.
            OTHER
      PAYABLE AND ACCRUED LIABILITIES





At
                  
                  
                  AtSeptember 30,
                  
                  
                  March 31,2010
                  
                  
                  2010$
                  
                  
                  $Rental
      payable
                  
                  
                  59,692
                  
                  
                  
                  -Other
      payables
                  
                  
                  446,098
                  
                  
                  
                  -Staff
      costs payables
                  
                  
                  31,720
                  
                  
                  
                  -Value
      added tax payable
                  
                  
                  11,049,105
                  
                  
                  
                  -Other
      accrued expenses
                  
                  
                  190,053
                  
                  
                  
                  -11,776,668
                  
                  
                  
                  -





10.
            NOTES
      PAYABLE





The notes
payable which were issued by the Company with bank guarantees are secured by the
restricted cash.





11.
            COMMON
      STOCK





For the
six months ended September 30, 2010, there were 200,000,000 shares authorized;
60,000,000 and 60,000,000 shares issued and outstanding
respectively.





The
market share price for FCPG on September 15, 2010 was $0.99 per share and the
quoted market price is from the OTCBB Market.





12.
            INCOME
      TAX





Income
tax expense for the three months and six months ended September 30, 2010 and
2009 represents the provision for current income tax expenses in the
PRC.





A
reconciliation of the tax expense applicable to income before tax using the
statutory rate of 25% to the tax expense at the effective tax rate is as
follows:





Six months endedSeptember 30,2010
                  
                  
                  2009$
                  
                  
                  $Income
      before tax
                  
                  
                  239,978
                  
                  
                  
                  -Tax
      at the statutory rate
                  
                  
                  59,995
                  
                  
                  
                  -Effective
      income tax expenses
                  
                  
                  59,995
                  
                  
                  
                  -




18




No
provision for Hong Kong profits tax has been made as the Company did not
generate any assessable profits arising in Hong Kong during the
periods.





There was no deferred tax during the
periods and as at the balance sheet dates.





13.
            COMMITMENTS
      AND CONTINGENCIES





XYT
leases the office and warehouse under non-cancelable operating lease agreement
that expires in 2018.





14.
            RELATED
      PARTY TRANSACTIONS





Apart
from the transactions and balances disclosed elsewhere in the financial
statements, the Company had no material transactions with its related parties
during the periods presented.





15.
            SEGMENT
      INFORMATION





No
segment information is disclosed as the Company is engaged in the sales of
Chinese patent drug, antibiotics, bio-chemicals, chemical preparations and
biological. The nature of the products, the type of their customers and their
distribution methods are substantially similar. The Company operates in a single
segment in the PRC.  All of long-lived assets are located in the
PRC.





16.
            EARNINGS
      PER SHARE





The
Company reports basic earnings per share in accordance with ASC Topic 260,
“Earnings Per Share”.  Basic earnings/(loss) per share is computed by
dividing net income/ (loss) by weighted average number of shares of common stock
outstanding during the period. Diluted earnings per share is computed by
dividing net income by the weighted average number of shares of common stock,
common stock equivalents and potentially dilutive securities outstanding during
the period. Common equivalent shares are excluded from the computation in
periods for which they have an anti-dilutive effect. Stock options for which the
exercise price exceeds the average market price over the period are
anti-dilutive and, accordingly, are excluded from the calculation.  At
September 30, 2010, the Company had 200,000,000 common shares authorized;
60,000,000 and 60,000,000 common shares issued and outstanding
respectively.




19


ITEM
2.         MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited consolidated
financial statements and related notes appearing elsewhere in this Quarterly
Report.  In addition to historical financial information, the
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs.  We use words such as “anticipate,” “estimate,”
“plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,”
“may,” “will,” “should,” “could,” and similar expressions to identify
forward-looking statements.  Our actual results could differ
materially from those discussed in the forward-looking
statements.  Factors that could cause or contribute to these
differences include those discussed below and elsewhere in this Quarterly
Report.  See also Risk Factors in  our Current Report on
Form 8-K filed September 21, 2010.





Overview




First
China Pharmaceutical Group, Inc. (“FCPG” or the “Company”), formerly known as
E-Dispatch Inc., was incorporated under the laws of the State of Nevada on July
31, 2007.  On September 15, 2010, we closed a voluntary share exchange
transaction pursuant to a Share Exchange Agreement, dated August 23, 2010 (the
“Exchange Transaction”), by and among FCPG, First China Pharmaceutical Group
Limited, a Hong Kong company (“FCPG HK”), and Kun Ming Xin Yuan Tang Pharmacies
Co. Ltd., a company organized under the laws of the People’s Republic of China
(“PRC”) and wholly owned subsidiary of FCPG HK (“XYT”).  Prior to the
Exchange Transaction, we were a development stage company engaged in developing
a cell phone-based taxi dispatch system, and a public reporting “shell company,”
as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended.  As a result of the Exchange Transaction, the FCPG HK
stockholder acquired approximately 25% of our issued and outstanding common
stock, FCPG HK and XYT became our wholly-owned subsidiaries, and we acquired the
business and operations of FCPG HK and XYT.




Through
our wholly-owned subsidiary, XYT, we are now engaged in drug logistics and
distribution in Yunnan Province, China through drug stores, medical clinics and
hospitals, as well as the wholesale distribution of medicine products, chemical
agents, antibiotics, biochemistry drugs and biological preparations to hospitals
and XYT stores.  XYT was founded in November 2002 and is a provincial
pharmaceutical distributor that offers approximately 5,000 drugs, of which
approximately 1,000 are over-the-counter drugs, approximately 1,000 are
prescription drugs, approximately 2,000 are prepared Chinese medicines and
approximately 1,000 are supplements.  Currently, XYT has over 4,700
customers and supplies approximately 10% of such customers’
inventories.  It is one of few companies with government approval to
accept orders over the internet.  Our continuing strategy is to build
a nationwide pharmaceutical distribution network throughout China.




Key
factors affecting our results of operations include revenues, cost of revenues,
operating expenses and income and taxation.





Comparison
of the Six Months Ended September 30, 2010 and 2009




The
following table sets forth certain information regarding our results of
operation.




Six Months Ended September 302010
                    
                    
                    2009Statements
      of Operations DataSales
                    
                    $
                    1,020,558
                    
                    
                    $
                    -Cost
      of Sales
                    
                    
                    (820,985)
                    
                    
                    
                    -Gross
      Profit
                    
                    
                    199,573
                    
                    
                    
                    -Selling,
      general and administrative expenses, and others
                    
                    
                    (15,932)
                    
                    
                    
                    (7,683)Effects
      of foreign currency translation conversion
                    
                    
                    34,341
                    
                    
                    
                    -Comprehensive
      income
                    
                    
                    157,993
                    
                    
                    
                    (7,683)Net
      Income
                    
                    
                    123,652
                    
                    
                    
                    (7,683)




20




Sales





Our sales
of Chinese patent drugs, antibiotics, bio-chemicals, chemical preparations and
biologicals for the six months ended September 30, 2010 totaled US$1,020,558, an
increase of 100% from US$0 for the six months ended September 30,
2009.  This increase in sales was due to our acquisition of
XYT.




Cost
of sales




Cost of
sales for the six months ended September 30, 2010 was US$820,985 and consisted
primarily of material cost, labor cost, and related expenses which are directly
attributable to the selling of pharmaceutical products.  Cost of sales
increased US$820,985, or 100%, from the six months ended September 30, 2009, and
is consistent with the percentage increase in sales as described
above.





Gross
profit




Gross
profit for the six months ended September 30, 2010 was US$199,573, an
increase  of US$199,573, or 100%, from US$0 for the six months ended
September 30, 2009.  The increase in gross profit reflects increased
overall sales as described above.




Selling,
general and administrative expenses, and others




Our
selling, general and administrative expenses for the six months ended September
30, 2010 increased by US$8,249, or 107%, from the comparable prior period to
US$15,932.  This percentage increase/decrease reflects the growth of
our business as compared to the same period in 2009 and the corresponding
increases in administrative and operating expenses.




Net
income




Net
income increased to US$123,652 for the six months ended September 30, 2010 from
US$(7,683) for the six months ended September 30, 2009, an increase of
US$131,335, or 1,709%.  This increase was primarily due to the
increase in sales described above.




Effects
of foreign currency translation conversion




We
recognized a gain of US$34,341 on the effects of foreign currency conversion for
the six months ended September 30, 2010.  We did not have any
operations involving a foreign currency during the six months ended September
30, 2009.  Accordingly, we recognized a gain of US$0 on the effects of
foreign currency conversion for the six months ended September 30,
2009.




Comprehensive
income




Our
comprehensive income increased by 2,156% from US$(7,683) for the six month
period ended September 30, 2009 to US$157,993 for the six months ended September
30, 2010.  The increase is attributable to the above-mentioned
increases in sales and gross profits, in addition to the gain recognized on the
effects of foreign currency conversion.





Interest
expense




Interest
expenses were US$0 for both the six months ended September 30, 2010 and
September 30, 2009.




Interest
income




Interest
income was US$6 for the six months ended September 30, 2010 compared to $0 for
the six months ended September 30, 2009.




Income
tax expense




Income
tax expense for the six months ended September 30, 2010 was US$59,995 compared
to income tax expense of US$0 for the six months ended September 30,
2009.  We did not incur any income tax expense for the six months
ended September 30, 2009 as we did not have taxable income during such
period.


21




Comparison
of the Three Months Ended September 30, 2010 and 2009





The
following table sets forth certain information regarding our results of
operation.





Three Months Ended September 302010
                    
                    
                    2009Statements
      of Operations DataSales
                    
                    $
                    1,020,558
                    
                    
                    $
                    -Cost
      of Sales
                    
                    
                    820,985
                    
                    
                    
                    -Gross
      Profit
                    
                    
                    199,573
                    
                    
                    
                    -Selling,
      general and administrative expenses, and others
                    
                    
                    (11,585)
                    
                    
                    
                    (4,832)Effects
      of foreign currency translation conversion
                    
                    
                    34,341
                    
                    
                    
                    -Comprehensive
      income
                    
                    
                    162,340
                    
                    
                    
                    (4,832)Net
      Income
                    
                    
                    127,999
                    
                    
                    
                    (4,832)




Sales




Our sales
of Chinese patent drugs, antibiotics, bio-chemicals, chemical preparations and
biologicals for the three months ended September 30, 2010 totaled US$1,020,558,
an increase of 100% from US$0 for the three months ended September 30,
2009.  This increase in sales was due to our acquisition of
XYT.




Cost
of sales




Cost of
sales for the three months ended September 30, 2010 was US$820,985 and consisted
primarily of material cost, labor cost, and related expenses which are directly
attributable to the selling of pharmaceutical products.  Cost of sales
increased US$820,985, or 100%, from the three months ended September 30, 2009,
and is consistent with the percentage increase in sales as described
above.





Gross
profit




Gross
profit for the three months ended September 30, 2010 was US$199,573, an increase
of US$199,573, or 100%, from US$0 for the three months ended September 30,
2009.  The increase in gross profit reflects increased overall sales
as described above.




Selling,
general and administrative expenses, and others




Our
selling, general and administrative expenses for the three months ended
September 30, 2010 increased by US$6,753, or 140%, from the comparable prior
period to US$11,585.  This percentage increase reflects the growth of
our business as compared to the same period in 2009 and the corresponding
increases in administrative and operating expenses.




Net
income




Net
income increased to US$127,999 for the three months ended September 30, 2010
from US$(4,832) for the three months ended September 30, 2009, an increase of
US$132,831, or 2,749%.  This increase was primarily due to the
increase in sales described above.




Effects
of foreign currency translation conversion




We
recognized a gain of US$34,341 on the effects of foreign currency conversion for
the three months ended September 30, 2010.  We did not have any
operations involving a foreign currency during the three months ended September
30, 2009.  Accordingly, we recognized a gain of US$0 on the effects of
foreign currency conversion for the three months ended September 30,
2009.




Comprehensive
income




Our
comprehensive income increased by 3,460% from US$(4,832) for the three month
period ended September 30, 2009 to US$162,340 for the three months ended
September 30, 2010.  The increase is attributable to the
above-mentioned increases in sales and gross profits, in addition to the
increase in gain recognized on the effects of foreign currency
conversion.


22




Interest
expense





Interest
expenses were US$0 for both the three months ended September 30, 2010 and
September 30, 2009.




Interest
income




Interest
income was US$6 for the three months ended September 30, 2010 compared to $0 for
the three months ended September 30, 2009.




Income
tax expense




Income
tax expense for the three months ended September 30, 2010 was US$59,995 compared
to income tax expense of US$0 for the three months ended September 30,
2009.  We did not incur any income tax expense for the three months
ended September 30, 2009 as we did not have taxable income during such
period.




Liquidity
and Capital Resources




Overview




As of
September 30, 2010, we had cash and equivalents on hand of US$41,659, and
working capital of US$7,517,807.  We believe that our cash on hand and
working capital will be sufficient to meet our operational cash requirements
through March 31, 2010.  However, to expand our operations and
distribution network aggressively, we will have to raise additional capital
through equity or debt offerings.  There are no assurances that we
will be able to raise any capital or that if we do, on terms satisfactory to us.
Additionally, if we do not meet our revenue objectives over the short term, we
may need to sell additional equity securities, which could result in further
dilution to current stockholders, or seek additional loans.  The
incurrence of indebtedness would result in increased debt service obligations
and could require us to agree to operating and financial covenants that would
restrict our operations.  Any failure by us to raise additional funds
on terms favorable to us, or at all, could limit our ability to expand our
business operations and could harm our overall business prospects.





Substantially
all of our revenues are earned by our PRC subsidiary.  However, PRC
regulations restrict the ability of our PRC subsidiary to make dividends and
other payments to their offshore parent company.  Pursuant to the law
of PRC on foreign-capital enterprises, when XYT decides to distribute profits,
reserve funds and bonus and welfare funds for workers and staff members shall be
withdrawn from the profits after a foreign-capital enterprise has paid income
tax in accordance with the provisions of the Chinese tax law. The proportion of
reserve funds to be withdrawn shall not be lower than 10% of the total amount of
profits after payment of tax; the withdrawal of reserve funds may be stopped
when the total cumulative reserve has reached 50% of the registered
capital.  The proportion of bonus and welfare funds for workers and
staff members to be withdrawn shall be determined by the foreign-capital
enterprise of its own accord. Companies may be subject to a fine up to 5,000 RMB
as a result of non-compliance of such rules.  The registered capital
of XYT is US$260,100.  Shareholders of XYT have not determined the
proportion of reserve funds and bonus and welfare funds for workers and staff
members, and XYT has not distributed any profits previously.  If
we decide to distribute profits in the future, XYT will comply with the relevant
rules to withdraw statutory reserve funds which will be no lower than 10% of the
total amount of profits after payment of tax.





Our cash
needs are primarily for working capital to support our operations, the purchase
of inventory and future strategic acquisitions.  We presently finance our
operations through revenue from the sale of our products and services, and the
private placement of equity and debt securities.  We believe that our
existing capital resources are sufficient to meet our current obligations and
operating requirements, but will not be sufficient to meet our more aggressive
growth and acquisition plans and that we will need to raise additional capital
in the next 12 months.  In order to meet our planned strategic
acquisitions, we estimate requiring $6 million in capital.  We will
consider debt or equity offerings or institutional borrowing as potential means
of financing, however, there are no assurances that we will be successful or
that we will obtain terms that are favorable to us.




Net
cash provided by (used in) operating activities




Net cash
provided by operating activities for the six months ended September 30, 2010 was
US$1,640, compared to net cash used in operating activities of US$2,888 for the
six months ended September 30, 2009.  This increase in cash provided
by operating activities was primarily due to increases in net income from
US$7,683 to US$119,303 from the comparable prior year period, and increase in
others payable and accrued liabilities of US$209,789 partially offset by the
increase of amounts due from a related party of US$303,089.


23




Net
cash provided by (used in) investing activities




Net
cash provided by  investing activities was US$509,922 for the six
months ended September 30, 2010 generated from the acquisition of
XYT.  The Company under took no investing activities during the six
months ended September 30, 2009.




Net
cash provided by (used in) financing activities




Net cash
useed in financing activities was US$18,704 for the six months ended September
30, 2010 and was comprised of repayment of borrowings from Kunming Wuhua Branch
of Fudian Bank.  Net cash provided by financing activities during the
six months ended September 30, 2009 was US$9,839.




Off-Balance
Sheet Arrangements





We have
not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties.  We have not
entered into any derivative contracts that are indexed to our shares and
classified as shareholder’s equity or that are not reflected in our consolidated
financial statements.  Furthermore, we do not have any retained or
contingent interest in assets transferred to an unconsolidated entity that
serves as credit, liquidity or market risk support to such entity.  We
do not have any variable interest in any unconsolidated entity that provides
financing, liquidity, market risk or credit support to us or engages in leasing,
hedging or research and development services with us.




Critical
Accounting Policies and Estimates





Our
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America (“US
GAAP”), and this requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the related disclosure
of contingent assets and liabilities at the dates of the consolidated financial
statements as well as the reported amounts of revenues and expenses during the
reporting periods.  We base our estimates on historical experience and
on various other assumptions that are believed to be reasonable under the
circumstances.  Accordingly, actual results may differ significantly
from these estimates under different assumptions or
conditions.  Significant estimates include:




Valuation
of accounts receivable




An
allowance for impairment of trade and other receivables is established when
there is objective evidence that we will not be able to collect all amounts due
according to the original terms of receivables.  The amount of the
allowance is the difference between the receivables’ carrying amount and the
present value of estimated future cash flows, discounted at the effective
interest rate computed at initial recognition.  The amount of the
allowance is recognized in the income statement.




Inventories




Net
realizable value of inventories is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and the estimated
costs necessary to make the sale.  For the years ended March 31, 2009
and 2008, the Company recorded no allowance for slow-moving and obsolete
inventories.




Deferred
income taxes




Income
taxes are accounted for under the asset and liability
method.  Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carry-forwards.  Deferred tax assets are reduced by a valuation
allowance to the extent management concludes it is more likely than not that the
assets will not be realized.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statements of income and comprehensive
income in the periods that includes the enactment date.


24




Useful
lives of plant and machinery





Depreciation
of property, plant and equipment is calculated to write off the cost, less their
estimated residual value, if any, using the straight-line method over their
estimated useful lives.  The principal annual rates are as
follows:




Machinery
              5
      yearsMotor
      Vehicles
              4
      yearsOffice
      equipment
              3
      years





Recently
Issued Accounting Pronouncements





In April
2009, the FASB issued FSP 157-4, Determining Fair Value When The Volume And
Level Of Activity For The Asset Or Liability Have Significantly Decreased And
Identifying Transactions That Are Not Orderly (“FSP 157-4”).  FSP
157-4 provides additional guidance for estimating fair value in accordance with
SFAS 157 when the volume and level of activity for the asset or liability have
significantly decreased.  FSP 157-4 also includes guidance on
identifying circumstances that indicate a transaction is not
orderly.  FSP 157-4 is effective for interim and annual reporting
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009.  FSP 157-4 does not require disclosures
for earlier periods presented for comparative purposes at initial
adoption.  In periods after initial adoption, FSP 157-4 requires
comparative disclosures only for periods ending after initial
adoption.  The adoption of the provisions of FSP 157-4 is not
anticipated to materially impact on the Company’s results of operations or the
fair values of its assets and liabilities.




In May
2009, the FASB issued FSP SFAS 165 “Subsequent Events.”  The objective
of this Statement is to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. SFAS 165 is
effective for the interim and annual periods ending after June 15, 2009, which
is now codified as FASB ASC 855 “Subsequent Events.”  The adoption of
FASB ASC 855 did not have a material impact on the Company’s financial position,
results of operations and cash flows.  Effective February 24, 2010,
the Company adopted Accounting Standards Update (“ASU”) No. 2010-09, “Subsequent
Events (Topic 855): Amendments to Certain Recognition and Disclosure
Requirements,” which removes the requirement to disclose the date through which
subsequent events have been evaluated.  The adoption of the ASU did
not have a material impact on the Company’s financial position, results of
operations and cash flows.




In June
2009, the FASB issued SFAS No. 166 Accounting For Transfers Of Financial Assets
(“SFAS 166”).  This statement is intended to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial reports about a transfer of financial
assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor’s continuing involvement in
transferred financial assets.  This Statement must be applied as of
the beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009, and is required to be adopted by the Company in
the first quarter of fiscal year 2011.  Earlier application is
prohibited.  This Statement must be applied to transfers occurring on
or after the effective date.  The Company does not expect the adoption
of SFAS 166 to have a material impact on its financial position, results of
operations and cash flows.




In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R),” which is codified as ASC 810.  ASC 810 amends FASB
Interpretation No. 46(R), “Variable Interest Entities” for determining
whether an entity is a variable interest entity (“VIE”) and requires an
enterprise to perform an analysis to determine whether the enterprise’s variable
interest or interests give it a controlling financial interest in a
VIE.  Under ASC 810, an enterprise has a controlling financial
interest when it has a) the power to direct the activities of a VIE that most
significantly impact the entity’s economic performance and b) the obligation to
absorb losses of the entity or the right to receive benefits from the entity
that could potentially be significant to the VIE.  ASC 810 also
requires an enterprise to assess whether it has an implicit financial
responsibility to ensure that a VIE operates as designed when determining
whether it has power to direct the activities of the VIE that most significantly
impact the entity’s economic performance.




ASC 810
also requires ongoing assessments of whether an enterprise is the primary
beneficiary of a VIE, requires enhanced disclosures and eliminates the scope
exclusion for qualifying special-purpose entities.  ASC 810 shall be
effective as of the beginning of each reporting entity’s first annual reporting
period that begins after November 15, 2009, for interim periods within that
first annual reporting period, and for interim and annual reporting periods
thereafter.  Earlier application is prohibited.  ASC 810 is
effective for the Company in the first quarter of fiscal 2011.  The
Company is currently evaluating the effect of ASC 810 on its financial
statements and results of operation and is currently not yet in a position to
determine such effects.




25


In June
2009, the FASB issued SPAS 168, “The FASB Accounting Standards CodificationTM and
the Hierarchy of Generally Accepted Accounting Principles - a replacement of
FASB Statement No 162,” which supersedes all existing non-SEC accounting and
reporting standards.  The codification does not change GAAP but rather
organizes it into a new hierarchy with two levels; authoritative and
non-authoritative.  All authoritative GAAP carries equal weight and is
organized in a topical structure.  The adoption of SPAS 168 did not
have a material impact on the Company’s financial position, results of
operations and cash flows.




In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05,
“Measuring Liabilities at Fair Value,” which is codified as ASC 820, “Fair Value
Measurements and Disclosures.”  This Update provides amendments to ASC
820-10, Fair Value Measurements and Disclosures –Overall, for the fair value
measurement of liabilities.  This Update provides clarification that
in circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using a valuation technique that uses the quoted price of the identical
liability when traded as an asset, quoted prices for similar liabilities or
similar liabilities when traded as assets, or that is consistent with the
principles of ASC 820.  The amendments in this Update also clarify
that when estimating the fair value of a liability, a reporting entity is not
required to include a separate input or adjustment to other inputs relating to
the existence of a restriction that prevents transfer of the
liability.




The
amendments in this Update also clarify that both a quoted price in an active
market for the identical liability at the measurement date and the quoted price
for the identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the assets are required are Level 1 fair
value measurements. ASC 820 is effective for the first reporting period
(including interim periods) beginning after August 28, 2009.  The
adoption of this Update did not have a significant impact to the Company’s
financial statements.




In
September 2009, the FASB issued ASU No. 2009-06, “Income Taxes (Topic
740)—Implementation Guidance on Accounting for Uncertainty in Income Taxes and
Disclosure Amendments for Nonpublic Entities,” and it provides implementation
guidance on accounting for uncertainty in income taxes effective for interim and
annual reporting period ending on or after September 15, 2009.  The
adoption of ASU No. 2009-06 did not have any impact on the Company’s financial
position, results of operations and cash flows.




In
December 2009, the FASB issued ASU No. 2009-17, “Improvements to Financial
Reporting by Enterprises Involved with Variable Interest Entities (“ASU
2009-17”).”  ASU 2009-17 amends the variable-interest entity guidance
in FASB ASC 810-10-05-8 to clarify the accounting treatment for legal entities
in which equity investors do not have sufficient equity at risk for the entity
to finance its activities without financial support.  ASU 2009-17
shall be effective as of the beginning of each reporting entity’s first annual
reporting period that begins after November 15, 2009.  ASU 2009-17 is
effective for the Company in the first quarter of fiscal 2011.  The
Company is currently evaluating the effect of ASU 2009-17 on its consolidated
financial statements and results of operation and is currently not yet in a
position to determine such effects.




None of
the above new pronouncements has current application to us, but may be
applicable to our future financial reporting.





ITEM
      3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS




Not
Applicable.




ITEM
      4.
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures




We
carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer along with our Chief
Financial Officer, of the effectiveness of the design of our disclosure controls
and procedures (as defined by Exchange Act Rule 13a-15(e) and 15a-15(e)) as of
September 30, 2010 pursuant to Exchange Act Rule 13a-15.  Based upon
that evaluation, our Principal Executive Officer along with our Principal
Financial Officer concluded that our disclosure controls and procedures are not
effective as of the end of the period covered by this report in ensuring that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and
forms.





This
conclusion is based on findings that constituted material
weaknesses.  A material weakness is a deficiency, or a combination of
control deficiencies, in internal control over financial reporting such that
there is a reasonable possibility that a material misstatement of the Company’s
interim financial statements will not be prevented or detected on a timely
basis.  These material weaknesses include the following:




26




i)
            We lack personnel with the
      experience to properly analyze and record complex transactions in
      accordance with U.S. GAAP.





ii)
            We have insufficient quantity of
      dedicated resources and experienced personnel involved in reviewing and
      designing internal controls.  As a result, a material
      misstatement of the interim and annual financial statements could occur
      and not be prevented or detected on a timely
  basis.





iii)
            We have not achieved the optimal
      level of segregation of duties relative to key financial reporting
      functions.





iv)
            We do not have an audit committee
      or an independent audit committee financial expert.  While not
      being legally obligated to have an audit committee or independent audit
      committee financial expert, it is the management’s view that to have an
      audit committee, comprised of independent board members, and an
      independent audit committee financial expert is an important entity-level
      control over our financial
statements.





v)
            We did not perform an entity
      level risk assessment to evaluate the implication of relevant risks on
      financial reporting, including the impact of potential fraud related risks
      and the risks related to non-routine transactions, if any, on our internal
      control over financial reporting.  Lack of an entity-level risk
      assessment constituted an internal control design deficiency which
      resulted in more than a remote likelihood that a material error would not
      have been prevented or detected, and constituted a material
      weakness.




We are
currently reviewing our disclosure controls and procedures related to these
material weaknesses and expect to implement changes in the near term, including
identifying specific areas within our governance, accounting and financial
reporting processes to add adequate resources and personnel to potentially
mitigate these material weaknesses.




Changes
in Internal Control Over Financial Reporting




There
were no changes in our internal controls over financial reporting that occurred
during the quarterly period ended September 30, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.  We believe that a control system, no matter
how well designed and operated, cannot provide absolute assurance that the
objectives of the control system are met, and no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within any company have been detected.




27


PART
II - OTHER INFORMATION




ITEM
      1.
            LEGAL
      PROCEEDINGS




To the
best of management’s knowledge, there are no material legal proceedings pending
against the Company.




ITEM
      1A.
            RISK
      FACTORS




Not
Applicable.




ITEM
      2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS




None.





ITEM
      3.
            DEFAULTS
      UPON SENIOR SECURITIES




None.




ITEM
      4.
            REMOVED
      AND RESERVED




ITEM
      5.
            OTHER
      INFORMATION




None.




ITEM
      6.
              EXHIBITS





The
following exhibits are included as part of this report by
reference:





Exhibit
                  Number
                
                Description2.1
                
                Share
      Exchange Agreement, dated August 23, 2010 (incorporated by reference to
      Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed on August
      24, 2010).3.1
                
                Articles
      of Incorporation of the Registrant, dated July 31, 2007, including all
      amendments to date (incorporated by reference to Exhibit 3.1 of the
      Registrant’s Current Report on Form 8-K filed September 21,
      2010).3.2
                
                Amended
      and Restated Bylaws of the Registrant, as amended, dated June 1, 2010
      (incorporated by reference to Exhibit 3.2 of the Registrant’s Current
      Report on Form 8-K filed on June 30, 2010).4.1
                
                Form
      of Stock Specimen (incorporated by reference to Exhibit 4.1 of the
      Registrant’s Registration Statement on Form S-1 filed on May 28,
      2008).31.1
                
                Certification
      of Principal Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.*31.2
                
                Certification
      of Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.*32.1
                
                Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.*32.2
                
                Certification
      of Principal Financial and Accounting Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002 *





* Filed
herewith


28




SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.




FIRST
      CHINA PHARMACEUTICAL GROUP, INC.Date:  November
      17, 2010
                  /s/ Yi Jia LiName:  Yi
      Jia LiTitle:  Chief
      Financial Officer(Principal
      Financial Officer and Principal Accounting
  Officer)




29