UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D. C. 20549




FORM
10-K




x     
      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIESEXCHANGE ACT OF
      1934For the fiscal year ended
      October 31, 2008OR ̈TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIESEXCHANGE ACT OF
      1934




Commission file number 000-53051




GEOSTAR
MINERALS CORPORATION


(Exact
name of registrant as specified in its charter)




Nevada


(State or
other jurisdiction of incorporation or organization)




18
Lake Ridge Drive


Middletown,
NY 10940


(Address
of principal executive offices, including zip code.)




(718)
766-7898


(Registrant's
telephone number, including area code)




The
Company is a Shell company:  Yes  ̈   
No x




Securities
registered pursuant to Section 12(b) of the Act: None




Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $0.00001 par
value




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.    Yes  ̈     No  x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.    Yes  ̈    No  x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 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.  YESxNO ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.     ̈




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




Large
      accelerated filer
                 ̈
                Accelerated
      filer   ̈Non-accelerated
      filer
                 ̈
                Smaller
      reporting company  x




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




There was
no active public trading market as of the last business day of the Company’s
second fiscal quarter.




As of
February 13, 2009, there are 5,511,400 shares of common stock
outstanding.









TABLE
OF CONTENTS




PageSpecial
      Note Regarding Forward Looking Statements
                        
                        
                        3PART
      IItem
      1. Business
                        
                        
                        4Item
      1A. Risk Factors
                        
                        
                        12Item
      1B. Unresolved Staff Comments
                        
                        
                        20Item
      2. Properties
                        
                        
                        20Item
      3. Legal Proceedings
                        
                        
                        20Item
      4. Submission of Matters to a Vote of Security Holders
                        
                        
                        20PART
      IIItem
      5. Market for Common Stock and Related Stockholder Matters
                        
                        
                        20Item
      6. Selected Financial Data
                        
                        
                        22Item
      7. Management’s Discussion and Analysis of Financial Condition and ResultsOf Operations
                        
                        
                        22Item
      7A. Quantitative and Qualitative Disclosures about Market
    Risk
                        
                        
                        28Item
      8. Financial Statements and Supplementary Data
                        
                        
                        29Item
      9. Changes In and Disagreements With Accountants on Accounting and
      FinancialDisclosure
                        
                        
                        30Item
      9A. Controls and Procedures
                        
                        
                        30Item
      9B. Other InformationPART
      IIIItem
      10. Directors, Executive Officers, Promoters and Control Persons;
      ComplianceWith Section 16(a) of the Exchange
    Act
                        
                        
                        32Item
      11. Executive Compensation
                        
                        
                        35Item
      12. Security Ownership of Certain Beneficial Owners and
      Management
                        
                        
                        37Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
                        
                        
                        38Item
      14. Principal Accountant Fees and Services
                        
                        
                        38Item
      15. Exhibits, Financial Statement Schedules
                        
                        
                        40


2




SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS




Except for statements of historical
fact, certain information contained herein constitutes “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward looking statements are usually identified by our use of certain
terminology, including “will”, “believes”, “may”, “expects”, “should”, “seeks”,
“anticipates” or “intends” or by discussions of strategy or intentions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results or achievements to be
materially different from any future results or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
our history of operating losses and uncertainty of future profitability; our
lack of working capital and uncertainty regarding our ability to continue as a
going concern; uncertainty of access to additional capital; risks inherent in
mineral exploration; environmental liability claims and insurance; dependence on
consultants and third parties as well as those factors discussed in the section
entitled “Risk Factors”, “Business” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”.




If
one or more of these risks or uncertainties materializes, or if underlying
assumptions prove incorrect, our actual results may vary materially from those
expected, estimated or projected. Forward looking statements in this document
are not a prediction of future events or circumstances, and those future events
or circumstances may not occur. Given these uncertainties, users of the
information included herein, including investors and prospective investors are
cautioned not to place undue reliance on such forward-looking statements. We do
not assume responsibility for the accuracy and completeness of these
statements.




The
United States Securities and Exchange Commission permits U.S. mining companies,
in their filings with the SEC, to disclose only those mineral deposits that a
company can economically and legally extract or produce. The Company is an
exploration stage company and its properties have no known body of ore. U.S.
investors are cautioned not to assume that the Company has any mineralization
that is economically or legally mineable.




All
references in this Report on Form 10-K to the terms “we”, “our”, “us”, and “the
Company” refer to Geostar Mineral Corporation.


3




ITEM
1.      BUSINESS




Organizational
History




We were
incorporated in the State of Nevada on September 12, 2006. We maintain our
statutory registered agent's office at The Corporation Trust Company of Nevada,
6100 Neil Road, Suite 500, Reno, Nevada 89511, and our business office is
located at 18 Lake Ridge Drive, Middletown, NY 10940.





Prior to
December 31, 2008 the Company has only nominal operations and
assets.





On
October 1, 2008, Andriy Protskiv (the "Affiliate Seller"), a major shareholder
and affiliate of the Company, consummated one Affiliate Stock Purchase Agreement
with Chi Ming YU (the "Buyer"). Pursuant to the Affiliate Stock Purchase
Agreement, the Buyer acquired from the Affiliate Seller a total of 5,000,000
shares of common stock of the Registrant for a total price of Five Thousand
Dollars ($5,000).




Also on
October 1, 2008, Roman Bilinski, a shareholder and affiliate of the Company,
consummated one Share Purchase Agreement with Chi Ming YU. Pursuant to the Share
Purchase Agreement, Chi Ming YU acquired from Mr. Bilinski a total 1,000 shares
of common stock of the Registrant for a total price of Three Thousand Seven
Hundred Twenty Dollars ($3,720).




As a
result, under the terms and conditions of the Affiliate Stock Purchase Agreement
and the Share Purchase Agreement, Buyer Chi Ming YU acquired from Affiliate
Seller and Bilinski a total 5,001,000 shares of common stock of the Company,
representing approximately 90.74% of the total issued and outstanding shares of
the Registrant.




Following
the acquisition of shares by Chi Ming YU, the Company entered into a Share
Exchange Agreement  and Chi Ming YU entered into an Affiliate
Agreement resulting in a change of control of Registrant whereby WANG Hui
obtained a total of three million three thousand six hundred eighty two
(3,003,682)  shares representing approximately fifty four percent
(54%) of the Company’s issued and outstanding common stock, and Titan Technology
Development Ltd. (“Titan”) obtained a total of one million four hundred eighty
four thousand five hundred sixty eight (1,484,568) shares representing
approximately twenty six and seven tenths percent (26.7%) of the Company’s
issued and outstanding common stock.




Pursuant
to the Share Exchange Agreement the Company issued 50,000 shares of its common
stock, par value $0.00001, to Titan, a limited liability company organized under
the laws of Hong Kong, and WANG Hui, an individual, [Titan and WANG Hui being
the sole shareholders of Masterise Holdings Ltd (“Masterise”)] in exchange for
100% of  the voting common stock of Masterise. The physical
transfer of certificates is currently in process and will be completed as soon
as practicable.  As of the date of the Share Exchange Agreement,
Masterise owned seventy percent (70%) of the issued and outstanding equity or
voting interests in Shenzhen Changhua Biomedical Engineering Company Limited
(“Shenzhen Changhua”). Shenzhen Changhua is duly organized, validly existing and
in good standing under the laws of the Peoples Republic of China
(“PRC”).





Also on
December 31, 2008, Chi Ming YU, a shareholder and affiliate of the Company,
consummated one Affiliate Stock Purchase Agreement,  (the “Affiliate
Agreement”) with thirteen (13) individuals including Titan and WANG
Hui.  Pursuant to the Affiliate Agreement, Chi Ming YU sold a total of
5,001,000 shares of the Company’s common stock for a total aggregate price of
$5,000, including 2,972,182 shares to WANG Hui and 1,466,068 shares to
Titan.





The
shares of the Company’s common stock obtained by Titan and WANG Hui pursuant to
the Share Exchange Agreement and the Affiliate Agreement resulted in a change of
control of the Registrant, whereby WANG Hui obtained a total of three million
three thousand six hundred eighty two (3,003,682)  shares representing
approximately fifty four percent (54%) of the Company’s issued and outstanding
common stock, and Titan obtained a total of one million four hundred eighty four
thousand five hundred sixty eight (1,484,568) shares representing approximately
twenty six and seven tenths percent (26.7 %) of the Company’s issued and
outstanding common stock.




4





As a
result of the Share Exchange Agreement and the Affiliate Agreement, Masterise
became the Company’s direct wholly-owned subsidiary.   Masterise
owns seventy percent (70%) of the issued and outstanding equity or voting
interests in Shenzhen Changhua.


Following
our acquisition of Masterise as described above, as set forth in the following
diagram, Masterise becomes our direct, wholly-owned subsidiary and Shenzhen
Changhua remains a subsidiary of Masterise.










Shenzhen
Changhua does not have any subsidiary.





Upon
the acquisition of Masterise and its subsidiary in China, our primary business
is carried out by Masterise through Shenzhen Changhua. Therefore, in the
remainder of this Annual Report on Form 10-K and its exhibits, “we, us or our”
refers to Geostar Mineral Corporation, Masterise and Shenzhen Changhua,
collectively.





Organizational
History of Masterise and Shenzhen Changhua





Masterise
is a limited liability company which was organized under the laws of British
Virgin Islands (“BVI”) on May 31, 2007.





Shenzhen
Changhua is a limited liability company which was organized under the laws of
PRC on September 25, 2002.





On
January 29, 2008, Masterise acquired 70% of the capital stock of Shenzhen
Changhua and this caused Shenzhen Changhua to become its
subsidiary.





Since
their founding, Shenzhen Changhua has been involved in the development of
self-reinforced, absorbable degradable screws, rods and binding ties for
fixation on human fractured bones. The Company is currently involved in
conducting clinical trials on its products and intends to raise additional
capital to produce and market its products commercially pending approval of its
products by the State Food and Drug Administration (“SFDA”) of the
PRC.





The
Company, through its subsidiaries, is now engaged in the business of developing,
manufacturing and marketing self-reinforced, absorbable degradable Polyamide
(“PA”) screws, rods and binding ties for fixation on human fractured
bones.





Primary
Products





Our
primary products include Absorbable PA Osteosynthesis Devices: Bone bolt and
screw/Holding bars/Binding bundles, etc.


5


Product
Characteristics:





The
theory of Brady-degradable polyamide absorbable material is based on water
dissolution – the material is degraded by body fluid. When bone fracture is
healed, it can be degraded from outer to inner layer, and induce new bone
generation in the gap of the materials. Eventually it will occupy all the space
made by degradable implant and form new bone.


Brady-degradable
polyamide absorbable materials consist of enhanced fiber and high molecular
polymers. It has high tensile, bending and shear strength. It is more suitable
for fracture patients with bad conditions, i.e. with light osteoporosis, severe
soft tissue injury or bad blood supply etc.


The
Company’s product range covers the “Self-Reinforced, re-absorbable, degradable
PA Macromolecule Polymer Materials for Human Body Implantation”. This innovation
aims to:





1. Save costs on all patient medical
care;


2. Avoid the secondary
surgery;


3. Enhance the performance of
materials;


4. Improve biological activity of
materials;


5. Effectively control the degeneration
speed.





The
Company has developed six proprietary re-absorbable polymer fixation implant
product lines, including screws, pins, tacks, rods and binding ties, which
provide an alternative to metal implants and overcome the limitations of first
generation re-absorbable fixation devices. By modifying well-characterized
re-absorbable polymers through the use of several proprietary manufacturing and
processing techniques, the Company is able to create Self-Reinforced,
re-absorbable implants.





Industry
Development





The
fracture fixation industry has developed through three generations of materials
science:





The
first generation internal-fracture fixation material:


The first
generation internal-fracture-fixer components are usually made of stainless
steel, titanium and alloy. Due to their high intensity, low costs and easy
machining character, these components have achieved huge success in fracture
treatment and remain the most widely used internal-fracture-fixer material.
However, their prominent flaws are the huge difference between metal’s
elasticity co-efficient, easily causing second-time bone fracture. The metallic
ion can also cause tissue inflammation, and the need of a secondary surgery to
have them taken out. These flaws stimulated the development of the degradable
macromolecule material.





The
second generation fracture fixation material:


The
second generation bone-fracture-fixed components are made of degradable
macromolecule material, such as PLLA, PGA and PDS, etc.  The
disadvantage of these components is  rapid self-degeneration in early
stages after the initial implant.  For example, the strength of
SR-PLLA decrease  to 10-20Mpa after 4 weeks of
implantation.  Therefore, the second generation bone-fracture-fixed
components can be only used to treat substantial spongiosa bone
fractures.





The
third generation fracture fixation material:


The third
generation fracture fixation material, biodegradable fracture fixation
components are currently under research by developed countries.  There
are many technical challenges to research in the third generation fracture
fixation material field; for example, the materials must have a high degree of
bio-compatibility and mechanical compatibility.  They also must be of
high biological activity, self absorbable, and degeneration
controllable.





Product
Development


Our
company chose the biodegradable screw as their starting point.  In
order to replace the wildly used metal material, the new materials must meet
bio-consistency and mechanics-consistency requirements. Furthermore, they must
also meet certain requirements in terms of bio-activities, degradability and
controllable degrading speed. Although many macromolecule materials are
degradable inside human body, only a few of them have the physical characters
required for fracture fixation.


6


The first
step was to choose the macromolecule materials that have certain physical
characters, for example, Polyamide (“PA”). In order to achieve the desired
mechanical performance and degrading speed, we used chemical and physical
methods to modify the bio-degradable PA so as to synthesize new bio-degradable
material, also the selection of monomer class, polymerization conditions; the
mensuration of polymer molecular weight, hydrophile capability, crystal
capability; the mensuration and controlled degrading speed of the polymer; the
mensuration and control of the mechanical performance of the
polymer.





The
second step was to choose the suitable bio-active inorganic material, and to
optimize the compound and technique conditions. To ensure the bio-activities of
the implanted fixture material, we used high grade and mature phosphate type
bio-active materials, based on the preparation of the compound material and the
surface character requirements to the finished products. We also improved
current technical parameters by modifying the surface character and achieved
control over the desired grain size and surface activities.





The third
step was to specially prepare and utilize the selected, technically treated and
character modified degradable polymer material with bio-active material.
Hydronium bombardment to the surface with spread & cover techniques are used
during the compound process. This is to create a well-knit bio-active membrane
on the degradable polymer’s surface, or to embed a bio-active core inside the
degradable polymer stick so as to form the bio-active degradable compound
material.





The
fourth step was to strengthen and sharpen the processed compound by using
directional extrusion and moulding.  Degradable acantha inoculators,
fixation screws, orthopaedics stuffing, enlace strings; anti-conglutination
membrane can all be made according to needs.





Our
company has studied and researched Polyamide, changing its chemical and physical
properties to meet the above requirements.  As a result of our
research we have:





1.
            Increased
      mechanical strength to 170Mpa


2.
            Increased
      biological activities to accelerate bone cell
  substitution.


3.
            Extended
      the degeneration period during the implant. While the PA is degenerating
      layer by layer, the bone cells grow and take its
  place.





Product
Analysis





1.
            Our
      Company is researching and currently developing the capability of
      manufacturing several different kinds of human implant products including
      artificial hip and joints and PA products.  Currently the
      company has two production lines certified by the GMP
      regulations.





2.
            Our
      Company is analyzing the market for its products and two of the
      company’sproducts
      are currently pending SFDA
approval.





Overview
of PA Devices and Market in China and Nationwide





The
demand for medical device equipment has rapidly increased during the last
decade. Total market sales have increased more than 15% each
year.  There are in excess of 5 million cases of bone fractures in the
world every year, among which there are over 1 million cases in
China.  The figures show that about 4 million bone bolts/screws are
needed each year.  In the past 5 years, the total world-wide sales of
clinical equipments and materials are over 2 trillion USD, and more than 50% of
the sales are related to bio-materials.


7





China Market Size (Estimated)
    :
                  
                  PA Screw
                  
                  
                  PA wire (in roll of
                    65cm)Hospitals
      (Orthopaedics):
                  
                  
                  3000
                  
                  
                  
                  3000Potential
      Hospitals (50%):
                  
                  
                  1500
                  
                  
                  
                  1500Monthly
      consumption:
                  
                  
                  200
                  
                  
                  
                  400Month
                  
                  
                  12
                  
                  
                  
                  12Sales
      price:
                  
                  
                  US$150.00
                  
                  
                  
                  US$50.00Total
      National Market Size:
                  
                  
                  US$540,000,000.00
                  
                  
                  
                  US$360,000,000.00





The
orthopedic biomaterials market is an evolving arena in the development, adoption
and /or evolving use of bone, bone substitutes, polymers, ceramics, bone growth
factors, sealants/glues, anti-adhesion, tissue engineering and other
products.  We expect the resulting $5 billion current orthopedic
biomaterials market to grow to nearly $10 billion by 2011.





Technological
advancements and potential within Asia, are the biggest factors driving
significant growth within the global orthopedic devices
market.  Another major factor positively influencing this market is
the increasingly active lifestyle of aging baby boomers who represent a large
portion of the population.  There is substantial research and
development (R&D) activity in the market and this also indicates a favorable
growth trend.  While revenues for pure-play participants registered a
compound annual growth rate (CAGR) of 17.4 percent for the period 2002-2006,
R&D expenditure for the same period recorded a higher growth of 18.4
percent.  Increasing R&D expenditure is considered a key indicator
of the future direction of the orthopedic market as it points to sustained
technological development and innovation.





The
Company believes that Asia holds tremendous growth potential for orthopedic
device manufacturers due to its fundamental population
advantage.  Asia accounts for more than 50 percent of the worlds’
“graying” population, but its share of the global orthopedic devices market is
comparatively low at approximately 10 percent.  Within the region,
Japan contributes to a majority of market revenues, indicating large potential
for growth in relatively under-penetrated countries such as China and
India.





Improved
health care services and changing demographics are driving Latin American
orthopedic device market. These factors are expected to stimulate growth in the
reconstructive and spinal implant segments. Poor road conditions and inadequate
safety regulations -- leading to automobile accidents -- are the primary drivers
behind growth in the trauma fixation device segment. According to a new report
entitled Latin American Markets for Orthopedic Devices 2006, the Latin American
orthopedic device market which comprises Argentina, Brazil, Colombia, and Mexico
generated over $290 million in 2005 and will increase at a compound annual
growth rate of over 10% over the next five years.





An
analysis of the geographical revenues of leading pure-play orthopedic
participants indicates that while revenues from the Americas demonstrated an
increase of 15.7 percent for the period 2001-2006, Asia Pacific grew at a faster
pace, recording an annual growth rate of 19.3 percent for the same period. With
rising incomes and increased spending on healthcare, Asia is expected to
continue to demonstrate strong growth in the future as well.


8


Goal
for The Company through year 2015-Estimated




PA
      Screw
                                        
                                        Achieved by year 2010
                                          (*)
                                        
                                        
                                        Achieved by year 2012
                                        
                                        
                                        Achieved by year 2015Hospitals
      (Orthopaedics):
                                        
                                        
                                        100
                                        
                                        
                                        
                                        200
                                        
                                        
                                        
                                        500Monthly
      consumption:
                                        
                                        
                                        300
                                        
                                        
                                        
                                        300
                                        
                                        
                                        
                                        400Month
                                        
                                        
                                        12
                                        
                                        
                                        
                                        12
                                        
                                        
                                        
                                        12Changhua
      sells to agent
                                        
                                        
                                        US$150.00
                                        
                                        
                                        
                                        US$150.00
                                        
                                        
                                        
                                        US$150.00Gross
      turnover per year:
                                        
                                        
                                        US$54,000,000.00
                                        
                                        
                                        
                                        US$108,000,000.00
                                        
                                        
                                        
                                        US$360,000,000.00PA
      Wire
                                        
                                        Achieved by year 2010
                                          (*)
                                        
                                        
                                        Achieved by year 2012
                                        
                                        
                                        Achieved by year 2015Hospitals
      (Orthopaedics):
                                        
                                        
                                        100
                                        
                                        
                                        
                                        200
                                        
                                        
                                        
                                        500Monthly
      consumption:
                                        
                                        
                                        600
                                        
                                        
                                        
                                        600
                                        
                                        
                                        
                                        800Month
                                        
                                        
                                        12
                                        
                                        
                                        
                                        12
                                        
                                        
                                        
                                        12Changhua
      sells to agent
                                        
                                        
                                        US$50.00
                                        
                                        
                                        
                                        US$50.00
                                        
                                        
                                        
                                        US$50.00Gross
      turnover per year:
                                        
                                        
                                        US$36,000,000.00
                                        
                                        
                                        
                                        US$72,000,000.00
                                        
                                        
                                        
                                        US$240,000,000.00Total:
                                        
                                        
                                        US$90,000,000.00
                                        
                                        
                                        
                                        US$180,000,000.00
                                        
                                        
                                        
                                        US$600,000,000.00Gross
      Profit:
                                        
                                        
                                        US$72,000,000.00
                                        
                                        
                                        
                                        US$144,000,000.00
                                        
                                        
                                        
                                        US$480,000,000.00





* Funds
needed on continuing clinical trials of new PA products for SFDA
approval


*
Potential market in China for PA Screw /Wire is est. at $900M per
year.





China’s
Market for PA Devices





China’s
market for PA devices depends on 3 major conditions:





-
            patients


-
            advanced
      technology level


-
            performance
      and price of the materials.





In the
next 10 years, China will have a booming aging population, and the population in
China will continually increase.  New and improved medical technology
will continue to grow rapidly throughout hospitals in China, and material
optimization and product pricing is expected to directly stimulate increased
sales.




Competitive
Factors




Our
Company is the only patent holder of PA technologies in China and we are the
only company who is carrying out Clinical Trials on PA products. There currently
are no similar products or competitors in the market.


9


Our main
competition comes from Metal, Titanium and PLLA products marketed by several
foreign and domestic companies.  Such competitors include many key and
niche players worldwide such as Acumed, Biomet Inc., Conmed Corp., Encore
Orthopedics, Exactech, Inc., DePuy, Inc. (a Johnson & Johnson company),
Medtronic Sofamor Danek, Inc., Orthofix International N.V., Smith and Nephew
Plc, Stryker Corp., Synthes, Inion Ltd. and others, many of which have
substantially greater sales and financial resources than we do.





Product
advantage and Market Opportunity:





-
            There
      are no similar patent registrations in
China.


-
            We
      are the only company qualified and permitted to take clinical trials by
      SFDA


-
            We
      have a timing advantage over other companies in China which would have to
      go through the preclinical testing for the SFDA permit on Clinical
      Trials.


-
            Under
      existing regulation by SFDA, it will take at least 3 years for Clinical
      Trials.





Intellectual
Property





The
Company has been granted one patent for its material by the Chinese Intellectual
Property Rights Bureau: Patent no. ZL97119073.9, PRC.





Chinese
Patent





Title: High
      molecular human body embedding article and its preparing process product
      and useApplication
      Number:
                                      
                                      97119073
                                      
                                      Application
      Date:
                                      
                                      
                                      1997.10.22Publication
      Number:
                                      
                                      1214939
                                      
                                      Publication
      Date:
                                      
                                      
                                      1999.04.28Approval Pub.
      Date:
                                      
                                      
                                      
                                      
                                      Granted Pub.
      Date:
                                      
                                      
                                      2002.08.14International
      Classification:
                                      
                                      A61F2/02,A61L27/00,C08L33/00Applicant(s)
      Name:
                                      
                                      Liu
      JianyuAddress:
                                      
                                      518111Inventor(s)
      Name:Attorney &
      Agent:
                                      
                                      Li
      Zhining





Abstract





The present invention discloses a macromolecular implant for human body and its
preparation process, and relates to the products made up by using said
macromolecular implant and their application. Said invented product is made up
by using resin fibre through hot-pressing treatment according to the formula
provided by said invention, and its strength is high, tenacity is good and its
shape can be processed according to the requirement in the period of bone union
after implantation, and said implant can be made into the fixation block,
eurymeric block, fastening piece and suture for reduction of fracture, and can
be started to be degraded from twenty-fourth week after implantation, and can be
completely absorbed by human body after 1.5-2 years, and its cost is
low.


10


Employees





As of
October 31, 2008, we had 17 employees, with 10 employees in R&D and
Clinical, Regulatory, including 4 part-time employees, 5 employees in
General and Administrative, 2 employees in Accounting including 1 part-time
employee. There are no employees in sales, marketing, and manufacture
because we are in the Clinical trial stage.





We
believe that our future success will depend in part on our continued ability to
attract, hire and retain qualified personnel. None of our employees are
represented by a labor union, and we believe our employee relations are
good.





The
Company address is Block A, Long Cheng Te Fa Industrial park, Long Gang,
Shenzhen, China.





Availability
of new qualified employees





Shenzhen
is located in the southern part of the Guangdong Province, on the eastern shore
of the Pearl River Delta. Neighboring the Pearl River Delta and Hong Kong,
Shenzhen's location gives it a geographical advantage for economic
development.





Shenzhen’s
well-built market economy and diversified culture of migration have helped to
create the best-developed and most dynamic market economy in China. Shenzhen is
China’s first special economic zone.  After more than 20 years of
development, Shenzhen has grown into a powerful city boasting the highest per
capita GDP in China’s mainland. Its comprehensive economic capacity ranks among
the top of the country’s big cities.  The combined value of imports
and exports has remained No.1 for 12 years in China’s foreign
trade.





Since
1997, China has accelerated the development of higher education and increased
enrollment in regular universities and colleges. In 2002, the number of
registered students has increased by 105.2% from 24.9 to 51.1 per 10,000
people.  The gross enrollment rate of higher education increased from
8% in 1998 to 15.3% in 2002, approaching the target of 16% by 2005 proposed by
the provincial "Tenth Five-Year Plan".





Guangdong
has entered a transition period from an elite education to a popularized higher
education.  The total number of registered students has experienced an
annual growth rate of 25%. There are 28 universities in Guangdong province with
over 247,000 students graduated in 2007. Combined with 150,000 new graduates
from other parts of China, there are total of nearly 420,000 new graduates alone
in Guangdong in 2007.





Insurance





While we
are carrying out the Clinical Trials, we do not have any Product Liability
Insurance coverage for the use of our proposed products.  We intend to
obtain Product Liability Insurance coverage for commercial sale of our
products.





Government
Regulations




Our
primary target market is the medical community of the Peoples Republic of China
(PRC).  Medical devices manufactured by the Company in China are
subject to regulation by the State Food and Drug Administration (“SFDA”) of PRC.
The manufacturing facilities are also required to meet China’s Good
Manufacturing Practices (“GMP”) standards.





The
Company’s production facilities are fully compliant with GMP
requirements.  While the Company has not yet received SFDA approval
for its products, we expect to obtain SFDA approval.  We are in
progress of achieving this goal.


11




Item
1A.  Risk Factors




An
investment in our common stock is speculative and involves a high degree of risk
and uncertainty. You should carefully consider the risks described below,
together with the other information contained in this form 8-K, including the
consolidated financial statements and notes thereto of our Company, before
deciding to invest in our common stock. The risks described below are not the
only ones facing our Company. Additional risks not presently known to us or that
we presently consider immaterial may also adversely affect our Company. If any
of the following risks occur, our business, financial condition and results of
operations and the value of our common stock could be materially and adversely
affected.




Risks
Related to Our Business





We must obtain
governmental approvals or clearances before we can sell our
products.


Our
products are considered to be medical devices and are subject to governmental
regulation. These regulations are wide ranging and govern, among other
things:





· Product
design and development;


· Product
testing;


· Product
labeling;


· Product
storage;


·
Pre-market clearance and approval;


·
Advertising and promotion; and


· Product
sales and distribution




Our
primary target market is the medical community of the Peoples Republic of China
(PRC).  Medical devices manufactured by the Company in China are
subject to regulation by the State Food and Drug Administration (“SFDA”) of PRC.
The manufacturing facilities are also required to meet China’s Good
Manufacturing Practices (“GMP”) standards.





While the
Company’s facilities are currently compliant with GMP requirements, the Company
has not yet received SFDA approval for its products.   There can
be no assurance that the Company will be able to obtain SFDA approval to market
its products, or that such approval will be obtained on a timely basis. Delays
in the receipt of or the failure to obtain such approvals, the need for
additional approvals, or the failure to comply with existing or future
regulatory requirements could have a material adverse effect on the Company's
business, financial condition and results of operations.





We intend
to test and market our products in the United States and
world-wide.  In order to market our products in the United States we
must first obtain US FDA approval. We currently have not begun the process of
obtaining approval by the US FDA, and there is no guaranty that we will be able
to obtain such approval.  We also have not begun the process of
obtaining approval by governmental agencies in other countries in which we plan
to market our products.  Failure to obtain such approvals will have a
negative impact on our business plans.





Pre-clinical
and clinical trials are inherently unpredictable. If we do not successfully
conduct these trials, we may be unable to market or sell our
products.




Through
pre-clinical studies and clinical trials, we must demonstrate that our products
are safe and effective for their indicated uses. Results from pre-clinical
studies and early clinical trials may not allow us to predict results in
later-stage testing. No assurance can be given that, even if we are able to
afford to conduct future clinical trials, those trials will demonstrate the
safety and effectiveness of any of our products or will result in regulatory
approval to market our products. We may never meet our development schedule for
any of our products in development. Even if a product is successfully developed
and clinically tested, we cannot be certain that it will be approved by the
appropriate regulatory agency on a timely basis or at all. If the appropriate
regulatory agency does not approve our products for commercial sales, our
business will be harmed.


12


Current
or future clinical trials our products will require substantial financial and
management resources. In addition, the clinical trials may identify significant
technical or other obstacles that we will need to overcome before obtaining the
necessary regulatory approvals or market acceptance. Our failure to complete our
clinical trials, demonstrate product safety and clinical effectiveness, or
obtain regulatory approval for the use of our products would have a material
adverse effect on our business, financial condition and results of
operations.




Delays
in enrolling patients in our clinical trials could increase our expenses and
harm our business.




The rate
at which we may complete our pre-clinical and clinical trials is dependent upon,
among other things, the rate of patient enrollment. Patient enrollment depends
on many factors, including the size of the patient population, the nature of the
procedure, the proximity of patients’ residences to clinical sites, the
eligibility criteria for the study and impact of other clinical studies
competing for the same patient population and/or the same physicians’ time and
research efforts. Delays in planned patient enrollment may result in increased
costs and delays, which could cause our business results to suffer.




We
rely on multiple third parties to conduct and collect data for the clinical
trials of our products. If we are unable to access this data the
commercialization of our products will be delayed and our business will be
harmed.




We often
rely on multiple third parties, such as hospitals and universities, to conduct
and collect data for our clinical trials. We depend on these third parties to
provide access to data and cooperate with us in completing regulatory filings
for the approval or clearance of our products. In order for regulatory agencies
to accept and rely on the data of a filing, the data collection, analysis and
summarization must meet certain standards. We cannot be certain that the
clinical data collected by the third parties meet the standards of the
regulatory agencies. If we are unable to rely on the clinical data collected by
third parties, or if these third parties do not perform their contractual
obligations, the regulatory agencies may require us to gather additional
clinical data. This could significantly delay commercialization of our products,
require us to spend additional capital on our clinical trials and harm our
business.





We
cannot assure the safety or effectiveness of our products.




To obtain
and maintain required regulatory approvals and secure the confidence of
physicians and others whose acceptance is needed for our products, we will need
to demonstrate that our products are safe and effective. We cannot assure that
our products will be deemed safe and effective. Our products have not been used
or tested to a sufficient extent to permit us to predict their safety and
effectiveness. In addition, our products include components and materials
supplied by third parties, whose safety and reliability we cannot guarantee. The
perceived safety and effectiveness of our products can also depend on their
manner of use by physicians and other third parties, which we cannot control. If
safety and effectiveness issues arise with any of our products in the future, we
may incur liabilities to third parties, lose any regulatory approvals for the
applicable product, or be required to redesign the product. These issues will
reduce our sales and increase our expenses, possibly substantially.




Our
Patent and Proprietary Rights May Not Provide Us with Significant Competitive
Advantage




Our
success may depend heavily on our ability to obtain and retain patent protection
for our internal fracture fixation technology and product candidates, to
preserve our trade secrets and to operate without infringing the
proprietary rights of third parties. We own one Chinese patent relating to
our technology.  We may file additional patent applications in other
countries. Claims in the pending patent applications may not issue as patents,
and issued patents may not provide us with meaningful competitive advantages. In
addition, challenges may be instituted against the validity or enforceability of
any patent owned or licensed by us. Furthermore, others may
independently develop similar or superior technologies, duplicate our
technologies or design around the patented aspects of our technologies. We may
also infringe upon prior or future patents owned by others, and may be forced to
acquire licenses under patents belonging to others for technology potentially
useful or necessary to our business. These licenses may not be available on
terms acceptable to us, if at all. Moreover, patents issued to or licensed by us
may be infringed by others. The cost of litigation involving patents, whether
brought by or against us, can be substantial, and can result in adverse
determinations to us, including declaration of our patents as
invalid.


13


We seek
to protect our trade secrets and proprietary know-how, in part, through
confidentiality agreements with our employees, consultants, advisors,
collaborators and others. These agreements may be violated by the other parties,
we may not have adequate remedies for any breach and our trade secrets may
otherwise become known or be independently developed by competitors. To the
extent that consultants, key employees, third parties involved in our projects
or others independently develop technological information, disputes may arise as
to the proprietary rights to such information, which may not be resolved in our
favor.





Our
Proposed Products May Never Achieve a Satisfactory Level of Market
Acceptance




Our
future growth and profitability will depend, in large part, on the
acceptance by the medical community of our proposed products. This
acceptance will be substantially dependent on educating the
medical community as to the full capabilities, distinctive characteristics,
perceived benefits and clinical efficacy of the proposed products. It is
also important to the commercial success of our proposed products that our
independent distributors and agents succeed in training a sufficient number of
surgeons and in providing them adequate instruction in the use of our products.
This training requires a commitment of time and money by surgeons that they may
be unwilling to give. Even if surgeons are willing, if they are not properly
trained, they may misuse or ineffectively use our products. This may result in
unsatisfactory patient outcomes, patient injury, negative publicity or lawsuits
against us, any of which could damage our business and reduce product
sales.





We
May Not Be Able To Compete Successfully Against Our Competitors




We are
engaged in rapidly evolving and highly competitive fields. Competition from
biotechnology companies, medical device manufacturers, pharmaceutical and
chemical companies and other competitors is intense. Academic
institutions, hospitals, governmental agencies and other public and private
research organizations are also conducting research and seeking patent
protection and may develop competing products or technologies on their own
or through joint ventures. Our products could be rendered noncompetitive or
obsolete by these and other competitors’ technological advances. We may be
unable to respond to technological advances through the development and
introduction of new products. Moreover, many of our existing and potential
competitors have substantially greater financial, marketing, sales,
distribution, manufacturing and technological resources than our company. These
competitors may be in the process of seeking FDA or other regulatory approvals
or clearances, or patent protection, for competitive products. Our competitors
could, therefore, commercialize competing products in advance of our products.
They may also enjoy substantial advantages over us in terms of:





-
            
            research
      and development expertise;




-
            
            experience
      in conducting clinical trials;




-
            
            experience
      in regulatory matters;




-
            
            manufacturing
      efficiency;




14




-
            
            name
      recognition;




-
            
            sales
      and marketing expertise;




-
            
            established
      distribution channels; and




-
            
            established
      relationships with health care providers and
  payors.




These
advantages may limit the demand for, and market acceptance of, our
products.




Difficulties
of Operating in International Markets May Harm Sales of Our
Products




We intend
to eventually market our products in Europe and the United States. We anticipate
that the international nature of our business will subject us and our foreign
distributors to the laws and regulations of the jurisdictions in which they
operate, and in which our products would be sold. The types of risks that we
face in international operations include:




-
            
            the
      imposition of governmental
controls;





-
            
            logistical
      difficulties in managing international operations;
  and




-
            
            fluctuations
      in foreign currency exchange rates.




Our
international sales and operations, if any, may be limited or disrupted if we
cannot successfully meet the challenges of operating
internationally.




Use
of Hazardous Materials in Our Business May Expose us to Expensive
Claims




Medical
and biopharmaceutical research and development involves the controlled use
of hazardous materials. We and any contract manufacturers we may utilize are
subject to federal, state and local laws and regulations governing the
use, manufacture, storage, handling and disposal of such materials and
certain waste products. Although we believe that all of our current
contractors comply and future contractors will comply with safety
procedures for handling and disposing of such materials under the standards
prescribed by federal, state and local regulations, we may be exposed to
fines and penalties for improper compliance with such standards. Moreover, the
risk of accidental contamination or injury from those materials cannot be
completely eliminated. In the event of such an accident, we could be held liable
for any damages that result and any such liability could be in excess of
insured amounts and exceed the resources of our company.




If
we Lose or Are Unable to Hire and Retain Qualified Personnel, we May Not Be Able
to Successfully Implement Our Plan of Operations




We are
dependent upon a limited number of key management, scientific and technical
personnel and consultants. In addition, our future success will depend in
part upon our ability to attract and retain highly qualified personnel. We
compete for such personnel with other companies, academic institutions,
government entities and other organizations. We may not be successful in
hiring or retaining qualified personnel. Loss of key personnel or the
inability to hire or retain qualified personnel could hurt our ability to
successfully implement our plan of operation.






We
May Rely on Consultants For Certain Strategic Activities, Which Results in Less
Control Over Such Activities




We may
rely upon consultants and advisors to assist in formulating research and
development strategies, testing and manufacturing and marketing-related
issues. We have less control over the activities of our consultants than we do
over our employees, which may reflect negatively in the time and effort devoted
to such activities. Consultants and advisors may be employed outside of our
company and may have commitments or consulting or advisory contracts with
other entities that could conflict with their service to our
company.


15


We
May Be Exposed to Large Product Liability Claims




Our
business exposes us to potential liability risks that are inherent in the
testing, manufacturing and marketing of medical products. The use of our
proposed products in clinical trials may expose us to product liability
claims and possible adverse publicity. These risks also exist with respect
to our proposed products, if any, that receive regulatory approval for
commercial sale. We do not have Product Liability Insurance coverage for
the use of our proposed products in clinical trials.  We
anticipate obtaining Product Liability Insurance coverage for commercial sale of
our Products.   Any product liability claim brought against us,
with or without merit, could result in the increase in Product Liability
Insurance rates or the inability to secure coverage in the future. In addition,
we would have to pay any amount awarded by a court in excess of policy limits. A
product liability or other judgment against our company in excess of
insured amounts or not covered by insurance could have a material adverse
effect upon our financial condition.




We
depend on our senior management’s experience and knowledge of the industry and
would be adversely affected by the loss of any of our senior
managers.




We are
dependent on the continued efforts of our senior management team. We do not
currently have employment contracts with our senior executives, though we are
under effort to establish contractual relationship therewith. If, for any
reason, our senior executives do not continue to be active in management, our
business, or the financial condition of our Company, our results of operations
could be adversely affected. In addition, we do not maintain life or key-man
insurance on our senior executives and other key employees.




Our
inability to fund our capital expenditure requirements may adversely affect our
growth and profitability.




Our
success is dependent upon our ability to raise capital from outside sources. In
the future we may be unable to obtain the necessary financing on a timely basis
and on acceptable terms, and our failure to do so may adversely affect our
financial position, competitive position, growth and profitability. Our ability
to obtain acceptable financing at any time may depend on a number of factors,
including: our financial condition and results of operations, the condition
of the economy in the Peoples Republic of China (“PRC”), and conditions in
relevant financial markets in the United States, the PRC and elsewhere in the
world.




Risks
Related to the People’s Republic of China




Economic
policies of the PRC could affect our business.




Substantially
all of our assets are located in China and substantially all of our revenue is
derived from our operations in China. Accordingly, our results of operations and
prospects are subject, to a significant extent, to the economic, political and
legal developments in China.





While
China’s economy has experienced significant growth in the past twenty years,
growth has been irregular, both geographically and among various sectors of the
economy. The Chinese government has implemented various measures to encourage
economic growth and guide the allocation of resources. Some of these measures
benefit the overall economy of China, but may also have a negative effect on us.
For example, our operating results and financial condition may be adversely
affected by the government control over capital investments or changes in tax
regulations.




16




Capital
outflow policies in the People’s Republic of China may hamper our ability to
remit income to the United States.




The PRC
government imposes controls on the convertibility of Renminbi into foreign
currencies and, in certain cases, the remittance of currency outside of the PRC.
We receive substantially all of our revenues in Renminbi.  Under
existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and expenditures from
trade-related transactions, can be made in foreign currencies without prior
approval from the PRC State Administration of Foreign Exchange by complying with
certain procedural requirements. However, approval from appropriate government
authorities is required in those cases in which Renminbi is to be converted into
foreign currency and remitted out of the PRC to pay capital expenses, such as
the repayment of bank loans denominated in foreign currencies. The PRC
government also may at its discretion restrict access in the future to foreign
currencies for current account transactions. If the foreign exchange control
system prevents us from obtaining sufficient foreign currency to satisfy our
currency demands, we may not be able to pay dividends in foreign currencies to
our shareholders.




Although
we do not import goods into or export goods out of the People’s Republic of
China, fluctuation of the RMB may indirectly affect our financial condition by
affecting the volume of cross-border money flow.




The value
of the RMB fluctuates and is subject to change.  Since July 2005, the
conversion of RMB into foreign currencies, including USD, has been based on
rates set by the People’s Bank of China which are set based upon the interbank
foreign exchange market rates and current exchange rates of a basket of
currencies on the world financial markets.




We
may have difficulty establishing adequate management, legal and financial
controls in The People’s Republic of China.




The
People’s Republic of China historically has been deficient in Western style
management and financial reporting concepts and practices, as well as in modern
banking, computer and other control systems. We may have difficulty in hiring
and retaining a sufficient number of qualified employees to work in The People’s
Republic of China. As a result of these factors, we may experience difficulty in
establishing management, legal and financial controls, collecting financial data
and preparing financial statements, books of account and corporate records and
instituting business practices that meet Western standards.




Because
our assets and operations are located in China, you may have difficulty
enforcing any civil liabilities against us under the securities and other laws
of the United States or any state.




We are a
holding company, and all of our assets are located in the Republic of China. In
addition, our directors and officers are non-residents of the United States, and
all or a substantial portion of the assets of these non-residents are located
outside the United States. As a result, it may be difficult for investors to
effect service of process within the United States upon these non-residents, or
to enforce against them judgments obtained in United States courts, including
judgments based upon the civil liability provisions of the securities laws of
the United States or any state.




There is
uncertainty as to whether courts of the Republic of China would enforce:
Judgments of United States courts obtained against us or these non-residents
based on the civil liability provisions of the securities laws of the United
States or any state; or




In
original actions brought in the Republic of China, liabilities against us or
non-residents predicated upon the securities laws of the United States or any
state. Enforcement of a foreign judgment in the Republic of China also may be
limited or otherwise affected by applicable bankruptcy, insolvency, liquidation,
arrangement, moratorium or similar laws relating to or affecting creditors’
rights generally and will be subject to a statutory limitation of time within
which proceedings may be brought.


17


The
PRC legal system embodies uncertainties, which could limit law enforcement
availability.




The PRC
legal system is a civil law system based on written statutes. Unlike common law
systems, decided legal cases have little precedence. In 1979, the PRC government
began to promulgate a comprehensive system of laws and regulations governing
economic matters in general. The overall effect of legislation over the past 27
years has significantly enhanced the protections afforded to various forms of
foreign investment in China. Our PRC operating subsidiary is subject to PRC laws
and regulations. However, these laws and regulations change frequently and the
interpretation and enforcement involve uncertainties. For instance, we may have
to resort to administrative and court proceedings to enforce the legal
protection that we are entitled to by law or contract. However, since PRC
administrative and court authorities have significant discretion in interpreting
statutory and contractual terms, it may be difficult to evaluate the outcome of
administrative court proceedings and the level of law enforcement that we would
receive in more developed legal systems. Such uncertainties, including the
inability to enforce our contracts, could affect our business and operation. In
addition, intellectual property rights and confidentiality protections in China
may not be as effective as in the United States or other countries. Accordingly,
we cannot predict the effect of future developments in the PRC legal system,
particularly with regard to the industries in which we operate, including the
promulgation of new laws. This may include changes to existing laws or the
interpretation or enforcement thereof, or the preemption of local regulations by
national laws. These uncertainties could limit the availability of law
enforcement, including our ability to enforce our agreements with the government
entities and other foreign investors.




PRC
laws and regulations governing our businesses and the validity of certain of our
contractual arrangements are uncertain.




There are
substantial uncertainties regarding the interpretation and application of PRC
laws and regulations, including, but not limited to, the laws and regulations
governing our business. We are considered a foreign person or foreign invested
enterprise under PRC law. As a result, we are subject to PRC law limitations on
foreign ownership of Chinese companies. These laws and regulations are
relatively new and may be subject to change, and their official interpretation
and enforcement may involve substantial uncertainty. The effectiveness of newly
enacted laws, regulations or amendments may be delayed, resulting in detrimental
reliance by foreign investors. New laws and regulations that affect existing and
proposed future businesses may also be applied retroactively.




The PRC
government has broad discretion in dealing with violations of laws and
regulations, including levying fines, revoking business and other licenses and
requiring actions necessary for compliance. In particular, licenses and permits
issued or granted to us by relevant governmental bodies may be revoked at a
later time by higher regulatory bodies. We cannot predict the effect of the
interpretation of existing or new PRC laws or regulations on our businesses. We
cannot assure that our current ownership and operating structure would not be
found in violation of any current or future PRC laws or regulations. As a
result, we may be subject to sanctions, including fines, and could be required
to restructure our operations or cease to provide certain services. Any of these
or similar actions could significantly disrupt our business operations or
restrict us from conducting a substantial portion of our business operations,
which could materially and adversely affect our business, financial condition
and results of operations.




Risks
related to our common stock




The
market price for our common stock may be volatile.





The
market price for our common stock is likely to be highly volatile and
subject to wide fluctuations in response to factors including the
following:




-
            actual
      or anticipated fluctuations in our quarterly operating
      results,




18





-
            announcements
      of new products by us or our
competitors,




-
            changes
      in financial estimates by securities
analysts,




-
            changes
       in the  economic  performance  or market
       valuations  of other  companies involved in the same
      industry,




-
            announcements
      by our competitors of significant acquisitions, strategic
       partnerships, joint ventures or capital
  commitments,




-
            additions
      or departures of key personnel,




-
            potential
      litigation, or




-
            conditions
      in the market.




In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are not related to the operating performance
of particular companies.   These market fluctuations may also
materially and adversely affect the market price of our common
stock.




Shareholders
could experience substantial dilution.




We may
seek funding through the issuance of convertible notes and warrants, private
placements, convertible debentures and other issuances of our capital
stock.  If we issue additional shares of our capital stock, our
shareholders will experience dilution in their respective percentage ownership
in the company.




We
have no present intention to pay dividends.




We have
never paid dividends or make other cash distributions on our common stock, and
we do not expect to declare or pay any dividends in the foreseeable future. We
intend to retain any future earnings for working capital and to finance current
operations and expansion of our business.




A
 large  portion  of our  common  stock  is
 controlled  by a small  number  of
shareholders.




A large
portion of our common stock is held by a small number of shareholders. As a
result, these shareholders are able to influence the outcome of shareholder
votes on various matters, including the election of directors and extraordinary
corporate transactions including business combinations. In addition, the
occurrence of sales of a large number of shares of our common stock, or the
perception that these sales could occur, may affect our stock price and could
impair our ability to obtain capital through an offering of equity securities.
Furthermore, the current ratios of ownership of our common stock reduce the
public float and liquidity of our common stock which can in turn affect the
market price of our common stock.





We
may be subject to "penny stock" regulations.





The
Securities and Exchange Commission, or SEC, has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). Penny stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from those rules, to deliver a standardized
risk disclosure document prepared by the SEC, which specifies information about
penny stocks and the nature and significance of risks of the penny stock market.
A broker-dealer must also provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer, and our sales person in
the transaction, and monthly account statements indicating the market value of
each penny stock held in the customer's account. In addition, the penny stock
rules require that, prior to a transaction in a penny stock not otherwise exempt
from those rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the trading activity in the secondary market for
stock that becomes subject to those penny stock rules. These additional sales
practice and disclosure requirements could impede the sale of our securities.
Whenever any of our securities become subject to the penny stock rules, holders
of those securities may have difficulty in selling those
securities.


19




ITEM
1B.  UNRESOLVED STAFF COMMENTS




There are
no unresolved comments from the SEC.




ITEM
2.      DESCRIPTION OF PROPERTIES




None.




ITEM 3.     
LEGAL PROCEEDINGS




We are not presently a party to any litigation.




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




During the fourth quarter, there were no matters submitted to a vote of our
shareholders.




ITEM
5.      MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER
MATTERS




Only
a limited market exists for our securities. There is no assurance that a regular
trading market will develop, or if developed, that it will be sustained.
Therefore, a shareholder in all likelihood will be unable to resell his
securities in our company. Furthermore, it is unlikely that a lending
institution will accept our securities as pledged collateral for loans unless a
regular trading market develops.




Our
company's securities are traded over-the-counter on the Bulletin Board operated
by the Financial Industry Regulatory Authority (FINRA) under the symbol
“GEOS”.




Fiscal
      Quarter
                        
                        High Bid
                        
                        
                        Low Bid2008Fourth
      Quarter 08-01-08 to 10-31-08
                        
                        $
                        0.00
                        
                        
                        $
                        0.00Third
      Quarter 05-01-08 to 07-31-08
                        
                        $
                        0.00
                        
                        
                        $
                        0.00Second
      Quarter 02-01-08 to 04-30-08
                        
                        $
                        0.00
                        
                        
                        $
                        0.00First
      Quarter 11-01-07 to 01-31-08
                        
                        $
                        0.00
                        
                        
                        $
                        0.00Fiscal
      Quarter
                        
                        High Bid
                        
                        
                        Low Bid2007Fourth
      Quarter 08-01-07 to 10-31-07
                        
                        $
                        0.00
                        
                        
                        $
                        0.00Third
      Quarter 05-01-07 to 07-31-07
                        
                        $
                        0.00
                        
                        
                        $
                        0.00Second
      Quarter 02-01-07 to 04-30-07
                        
                        $
                        0.00
                        
                        
                        $
                        0.00First
      Quarter 11-01-06 to 01-31-07
                        
                        $
                        0.00
                        
                        
                        $
                        0.00


20




Shareholders




At
October 31, 2008, we had 11 shareholders of record of our common stock,
including shares held by brokerage clearing houses, depositories or otherwise in
unregistered form. We have no outstanding options or warrants, or other
securities convertible into, common equity.




Dividend
Policy




We
have not declared any cash dividends. We do not intend to pay dividends in the
foreseeable future, but rather to reinvest earnings, if any, in our business
operations.




Section
15(g) of the Securities Exchange Act of 1934




Our
shares are covered by section 15(g) of the Securities Exchange Act of 1934, as
amended that imposes additional sales practice requirements on broker/dealers
who sell such securities to persons other than established customers and
accredited investors (generally institutions with assets in excess of $5,000,000
or individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouses). For transactions covered by
the Rule, the broker/dealer must make a special suitability determination for
the purchase and have received the purchaser's written agreement to the
transaction prior to the sale. Consequently, the Rule may affect the ability of
broker/dealers to sell our securities and also may affect your ability to sell
your shares in the secondary market.




Section
15(g) also imposes additional sales practice requirements on broker/dealers who
sell penny securities. These rules require a one page summary of certain
essential items. The items include the risk of investing in penny stocks in both
public offerings and secondary marketing; terms important to in understanding of
the function of the penny stock market, such as “bid” and “offer” quotes, a
dealers “spread” and broker/dealer compensation; the broker/dealer compensation,
the broker/dealers duties to its customers, including the disclosures required
by any other penny stock disclosure rules; the customers rights and remedies in
causes of fraud in penny stock transactions; and, the FINRA's toll free
telephone number and the central number of the North American Administrators
Association, for information on the disciplinary history of broker/dealers and
their associated persons.




Securities
authorized for issuance under equity compensation plans




We
have no equity compensation plans and accordingly we have no shares authorized
for issuance under an equity compensation plan.




Status
of our public offering




On February 2, 2007, the Securities and Exchange Commission declared our Form
SB-2 Registration Statement effective, file number 333-139986, permitting us to
offer up to 2,000,000 shares of common stock at $0.10 per share. There was no
underwriter involved in our public offering.


21




On
April 30, 2007, we completed our public offering by raising $51,140. We sold
511,400 shares of our common stock at an offering price of $0.10 per share to 51
persons.




Use
of Proceeds




Since the
time of raising money by offering shares of our stock, we have proceeds of
$51,140.  We have used the proceeds as follows:




Accounting
      & legal expense
                  
                  $
                  30,376Mining
      exploration expense
                  
                  $
                  5,000General
      & administrative expense
                  
                  $
                  15,725.49Bank
      balance at October 31, 2008
                  
                  $
                  38.51Total
                  
                  $
                  51,140




ITEM 6.  SELECTED FINANCIAL
DATA




We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information under this item.




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS




This
section of the report includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this annual report. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.




Overview




The
following discussion is an overview of the important factors that management
focuses on in evaluating our businesses, financial condition and operating
performance and should be read in conjunction with the financial statements
included in this Annual Report on Form 10-K.  This discussion contains
forward-looking statements that involve risks and
uncertainties.  Actual results could differ materially from those
anticipated in these forward looking statements as a result of any number of
factors, including those set forth under the section entitled “Risk Factors” and
elsewhere in this Annual Report on Form 10-K.




Factors
that may cause actual results, our performance or achievements, or industry
results to differ materially from those contemplated by such forward-looking
statements include without limitation:




1.  The company's lack of funds in
new R&D, especially in clinical testing.




2.  The company's lack of funds in
new equipment and the utilization of the production process after SFDA
approval.


22


3. The Company may need to seek funding
through such vehicles as convertible notes and warrants, private placements,
and/or convertible debentures.




4.  The company needs funding for
marketing and network build-up.




5.  The company plans to seek
approval for clinical testing and marketing on a worldwide basis, including US
FDA approval for testing and marketing in the United States of
America.




6.  The company currently holds an
international patent originating in China.  However, due to time
restrictions, the company is unsure of the validity of the patent in other
countries.  We are confident that because of specific trade secrets that
are involved in the manufacturing of our product, reverse engineering would be
virtually impossible to accomplish by any competitors.  Additionally, all
machinery that is used to manufacture our products are patented and
protected.




The
Company is subject to a number of risks similar to other companies in the
medical device industry. These risks include rapid technological change,
uncertainty of market acceptance of our products, uncertainty of regulatory
approval, competition from substitute products and larger companies, the need to
obtain additional financing, compliance with government regulation, protection
of proprietary technology, product liability, and the dependence on key
individuals.




All
written and oral forward-looking statements made in connection with this Form
10-K that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements.  Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.




Our
Business




We are
engaged in the business of developing, manufacturing and marketing
self-reinforced, absorbable degradable PA screws, rods and binding ties for
fixation on human fractured bones.




Results
of Operations




The
“Results of Operations” discussed in this section merely reflect the information
and results of Masterise and Shenzhen Changhua for the period from September 25,
2002 (Shenzhen Changhua’s date of inception) to October 31, 2008.




Revenues




We are in
Clinical Trial phase and do not have a SFDA permit to produce, market or sell in
China. We therefore do not have any revenue from inception to October 31,
2008.


23




Finance
Costs





As of
October 31, 2008, a stockholder and a related party had loaned a total of
$246,709 to the Company as unsecured loans repayable on demand and imputed
interest is computed at 7% per annum on the amount due. As of October 31, 2008,
a director and a related company had loaned a total of $641,380 to the Company
as an unsecured loan repayable on demand and imputed interest is computed at 5%
per annum on the amount due. Total imputed interest expenses recorded as
additional paid-in capital amounted to $27,764, $31,032 and $117,072 for the ten
months ended October 31, 2008 and 2007 and for the period from September 25,
2002 (inception) through October 31, 2008, respectively.




Income
Tax




There is
no income tax to pay as the Company is waiting for SFDA approval and there is no
business activity.




Net Loss




The net
loss for the ten months ended October 31, 2008 and 2007 and for the period from
September 25, 2002 (inception) through October 31, 2008 are $227,038, $163,742
and $1,060,813 respectively. We are in Clinical Trial phase and do not have a
SFDA permit to produce, market or sell in China. We therefore do not have any
revenue from inception to October 31, 2008 but have to incur operating expenses
for the upkeep of the Company and the clinical trials.




Liquidity and Capital
Resources




For the
ten months ended October 31, 2008, our cash and cash equivalents increased by
$38,876 to $78,876. The increase in cash was due primarily from increased loans
provided by a stockholder, a director, a related company and a related party. As
at October 31, 2008, our cash resources were such that we had a negative working
capital position of $831,167.





As of
October 31, 2008, a stockholder and a related party had loaned a total of
$246,709 to the Company as unsecured loans repayable on demand and imputed
interest is computed at 7% per annum on the amount due. As of October 31, 2008,
a director and a related company had loaned a total of $641,380 to the Company
as an unsecured loan repayable on demand and imputed interest is computed at 5%
per annum on the amount due. Total imputed interest expenses recorded as
additional paid-in capital amounted to $27,764, $31,032 and $117,072 for the ten
months ended October 31, 2008 and 2007 and for the period from September 25,
2002 (inception) through October 31, 2008, respectively.





As
reflected in the accompanying financial statements, the Company has a total
stockholder's deficit of $750,424 at October 31, 2008. The Company's current
liabilities also exceed its current assets by $831,167 and the Company used cash
in operations of $171,845.





These
factors raise substantial doubt about our ability to continue as a going
concern. In view of the matters described above, recoverability of a major
portion of the recorded asset amounts shown in the accompanying balance sheet is
dependent upon continued operations of the Company, which in turn is dependent
up the Company's ability to raise additional capital, obtain financing and
succeed in its future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.





Management
has taken steps to revise its operating and financial requirements, which it
believes are sufficient to provide the Company with the ability to continue as a
going concern. The Company is now pursuing additional funding and potential
merger or acquisition candidates, which would enhance stockholders' investment.
Management believes that the above actions will allow the Company to continue
operations through the next fiscal year.


24


During
the ten months period ended October 31, 2008, loans from Company's Stockholders,
a director, a related company and a related party totaling $246,571 were
provided to us for use as working capital. Management believes that such
financing will allow us to continue operations through the next fiscal year. The
Company is also actively pursuing a number of private placement funding which
would ensure continued operations.





OFF-BALANCE
SHEET ARRANGEMENTS





We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to our
investors.





CRITICAL
ACCOUNTING POLICIES





The
preparation of our financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an
ongoing basis, we evaluate our estimates, including but not limited to those
related to income taxes and impairment of long-lived assets. We base our
estimates on historical experience and on various other assumptions and factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Based on our
ongoing review, we plan to adjust to our judgments and estimates where facts and
circumstances dictate. Actual results could differ from our
estimates.





We
believe the following critical accounting policies are important to the
portrayal of our financial condition and results and require our management's
most difficult, subjective or complex judgments, often because of the need to
make estimates about the effect of


matters
that are inherently uncertain.





1.
            Property
      and equipment





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





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





Plant
      and machinery
            
            5
      YearsMotor
      vehicles
            
            5
      YearsOffice
      equipment
            
            5
      YearsOffice
      Improvement
            
            5
      Years





2.
            Long-lived
      assets





In
accordance with SFAS No. 144, “Accounting for the impairment or disposal of
Long-Lived Assets", long-lived assets and certain identifiable intangible assets
held and used by the Company are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. For purposes of evaluating the recoverability of long-lived
assets, the recoverability test is performed using undiscounted net cash flows
related to the long- lived assets. The Company reviews long-lived assets to
determine that carrying values are not impaired.


25


3.          Fair
value of financial instruments





SFAS No.
107, "Disclosure About Fair Value of Financial Instruments," requires certain
disclosures regarding the fair value of financial instruments. The carrying
amounts of other receivables, prepaid expenses, due from related parties, other
payables and accrued liabilities and due to related parties approximate their
fair values because of the short-term nature of the instruments. The management
of the Company is of the opinion that the Company is not exposed to significant
interest or credit risks arising from these financial statements.





4.
            Government  grant





Government
grant represents a subsidy from the local government and is unconditional. The
Company recognizes the grant upon receipt from the local government and is
accounted for as an offset of research and development expenses.





5.
            Income
      taxes





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





6.
            Research
      and Development





Research
and development costs related to both present and future products are expensed
as incurred.





7.
            Foreign
      currency translation





The
financial statements of the Company’s subsidiary denominated in currencies other
than US $ are translated into US $ using the closing rate method.  The
balance sheet items are translated into US $ using the exchange rates at the
respective balance sheet dates.  The capital and various reserves are
translated at historical exchange rates prevailing at the time of the
transactions while income and expenses items are translated at the average
exchange rate for the year.  All exchange differences are recorded
within equity.





RECENT
ACCOUNTING PRONOUNCEMENTS





In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. SFAS 141R also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business combination.
This statement is effective for us beginning January 1, 2009. The Company
does not expect the adoption of SFAS 141R to have a material impact on our
financial position and results of operations.


26


In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51”.  This
statement improves the relevance, comparability, and transparency of the
financial information that a reporting entity provides in its consolidated
financial statements by establishing accounting and reporting standards that
require; the ownership interests in subsidiaries held by parties other than the
parent and the amount of consolidated net income attributable to the parent and
to the non-controlling interest be clearly identified and presented on the face
of the consolidated statement of income, changes in a parent’s ownership
interest while the parent retains its controlling financial interest in its
subsidiary be accounted for consistently, when a subsidiary is deconsolidated,
any retained non-controlling equity investment in the former subsidiary be
initially measured at fair value, entities provide sufficient disclosures that
clearly identify and distinguish between the interests of the parent and the
interests of the non-controlling owners.  SFAS No. 160 affects those
entities that have an outstanding non-controlling interest in one or more
subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS  161). This statement is intended to improve transparency in
financial reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows.  SFAS  161
applies to all derivative instruments within the scope of SFAS 133, “Accounting
for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related
hedged items, bifurcated derivatives, and non-derivative instruments that are
designated and qualify as hedging instruments. Entities with instruments subject
to SFAS  161 must provide more robust qualitative disclosures and
expanded quantitative disclosures.  SFAS 161 is effective
prospectively for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application
permitted. The adoption of this statement is not expected to have a material
effect on the Company's financial statements.





In
May 2008, the FASB released SFAS No. 162, “The Hierarchy of Generally
Accepted Accounting Principles.”   SFAS No. 162 identifies the sources
of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of nongovernmental entities that
presented in conformity with generally accepted accounting principles in the
United States of America. SFAS No. 162 will be effective 60 days following the
SEC’s approval of the PCAOB amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.  The
Company does not expect SFAS 162 will have a significant impact on the Company’s
consolidated financial statements.





In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of
this Statement is limited to financial guarantee insurance (and reinsurance)
contracts, as described in this Statement, issued by enterprises included within
the scope of Statement 60. Accordingly, this Statement does not apply to
financial guarantee contracts issued by enterprises excluded from the scope of
Statement 60 or to some insurance contracts that seem similar to financial
guarantee insurance contracts issued by insurance enterprises (such as mortgage
guaranty insurance or credit insurance on trade receivables). This Statement
also does not apply to financial guarantee insurance contracts that are
derivative instruments included within the scope of FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities.” The Company does
not believe SFAS 163 will have a significant impact on the Company’s
consolidated financial statements.


27


In
October 2008, FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active”, to clarify
guidance on determining the fair value of a financial asset under SFAS No. 157
in a market that is not active. FSP FAS 157-3 was effective upon issuance,
including prior periods for which financial statements had not been issued. The
adoption of this statement effective September 30, 2008 did not have a material
impact on our financial position or results of operations.





In
November 2008, the Emerging Issues Task Force issued EITF No. 08 – 7,
“Accounting for Defensive Intangible Assets” (“EITF 08 -7”) that clarifies
accounting for defensive intangible assets subsequent to initial measurement.
EITF 08 – 7 applies to acquired intangible assets which an entity has no
intention of actively using, or intends to discontinue use of, the intangible
asset but holds it (locks up) to prevent others from obtaining access to it
(i.e., a defensive intangible asset). Under EITF 08 – 7, the Task Force reached
a consensus that an acquired defensive asset should be accounted for as a
separate unit of accounting (i.e., an asset separate from other assets of the
acquirer); and the useful life assigned to an acquired defensive asset should be
based on the period during which the asset would diminish in value. ETIF 08 – 7
is effective for defensive intangible assets acquired in fiscal years beginning
on or after December 15, 2008. The Company does not believe EITF 08 - 7 will
have a significant impact on the Company’s consolidated financial
statements.




Change of
Year End:




Prior to
Share Exchange Agreement, Shenzhen Changhua and Masterise’s reporting year end
is December 31. However, our reporting year end was October 31. In order to be
consistent with our year end, our Board of Directors approved their
subsidiaries’ entire fiscal year end to change from December 31 to October
31.




The
consolidated financial statements consist of ten months transition period end
October 31, 2008 and 2007 (unaudited), and calendar year ended of December 31,
2007 respectively.




ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and
are not required to provide the information under this item.


28




ITEM
8.  FINANCIAL STATEMENTS




GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES


(A
DEVELOPMENT STAGE COMPANY)





CONSOLIDATED
FINANCIAL STATEMENTS


AS OF
OCTOBER 31, 2008 AND 2007


29





GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES




(A
DEVELOPMENT STAGE COMPANY)





CONTENTS





PagesReport
      of Independent Registered Public Accounting Firm
                  
                  
                  F-1Consolidated
      Balance Sheets
                  
                  
                  F-2Consolidated
      Statements of Operations and Comprehensive Loss
                  
                  
                  F-3Consolidated
      Statements of Stockholders’ Deficiency
                  
                  
                  F-4Consolidated
      Statements of Cash Flows
                  
                  
                  F-5Notes to Consolidated Financial Statements
                  
                  
                  F-6





Jimmy
      C.H. Cheung & Co
                  Certified
      Public Accountants
                  (A
      member of Kreston International)
                
                Registered
      with the Public
                  Company
      Accounting OversightBoard
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors of:
  Geostar
Mineral Corporation
  (a
development stage company)
 
 We have
audited the accompanying consolidated balance sheets of Geostar Mineral
Corporation and subsidiaries (a development stage company), as of October 31,
2008 and December 31, 2007 and the related consolidated statements of operations
and comprehensive loss, stockholders’ deficiency and cash flows for the ten
months ended October 31, 2008 and  the years ended December 31, 2007
and 2006. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits of the financial
statements provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Geostar Mineral Corporation and
subsidiaries (a development stage company), as of October 31, 2008 and December
31, 2007, and the results of its operations and its cash flows for the ten
months ended October 31, 2008 and the years ended December 31, 2007 and 2006 in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 8 to the
financial statements, the Company had a net loss of $227,038, an accumulated
deficit of $1,060,813 and a working capital deficiency of $831,167 and used cash
in operations of $171,845. These factors raise substantial doubt about its
ability to continue as a going concern.  Management’s plans concerning
this matter are also described in Note 8.  The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
  JIMMY
C. H. CHEUNG & CO
  Certified
Public Accountants
  Hong
Kong
 
 Date:
February 12, 2009
  1607
      Dominion Centre, 43 Queen’s Road East, Wanchai, Hong
      Kong
                      Tel:  (852)
      25295500 Fax:  (852) 2865106 7 Email:
      jchc@krestoninternational.com.hk
                      Website:  http://www.jimmycheungco.com
  F-1
 GEOSTAR
MINERAL CORPORATION AND SUBSIDARIES
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED BALANCE
SHEETS
 
 October 31
                                                        
                                                        
                                                        December 312008
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2007Audited
                                                        
                                                        
                                                        Unaudited
                                                        
                                                        
                                                        AuditedASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                                        
                                                        $
                                                        78,876
                                                        
                                                        
                                                        $
                                                        41,202
                                                        
                                                        
                                                        
                                                        40,000Other
      receivables and prepaid expenses
                                                        
                                                        
                                                        8,161
                                                        
                                                        
                                                        
                                                        7,458
                                                        
                                                        
                                                        
                                                        8,628Due
      from a stockholder
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        10,547
                                                        
                                                        
                                                        
                                                        10,474Total
      Current Assets
                                                        
                                                        
                                                        87,037
                                                        
                                                        
                                                        
                                                        59,207
                                                        
                                                        
                                                        
                                                        59,102-PROPERTY
      AND EQUIPMENT, NET
                                                        
                                                        
                                                        80,743
                                                        
                                                        
                                                        
                                                        112,171
                                                        
                                                        
                                                        
                                                        106,154-TOTAL
      ASSETS
                                                        
                                                        $
                                                        167,780
                                                        
                                                        
                                                        $
                                                        171,378
                                                        
                                                        
                                                        
                                                        165,256LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESOther
      payables and accrued liabilities
                                                        
                                                        $
                                                        26,992
                                                        
                                                        
                                                        $
                                                        37,319
                                                        
                                                        
                                                        
                                                        35,932Due
      to a minority stockholder
                                                        
                                                        
                                                        3,123
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        4,293Due
      to a stockholder
                                                        
                                                        
                                                        85,156
                                                        
                                                        
                                                        
                                                        4,197
                                                        
                                                        
                                                        
                                                        -Due
      to a director
                                                        
                                                        
                                                        251,713
                                                        
                                                        
                                                        
                                                        230,518
                                                        
                                                        
                                                        
                                                        235,810Due
      to a related company
                                                        
                                                        
                                                        389,667
                                                        
                                                        
                                                        
                                                        319,433
                                                        
                                                        
                                                        
                                                        340,438Due
      to a related party
                                                        
                                                        
                                                        161,553
                                                        
                                                        
                                                        
                                                        64,550
                                                        
                                                        
                                                        
                                                        64,100Total
      Current Liabilities
                                                        
                                                        
                                                        918,204
                                                        
                                                        
                                                        
                                                        656,017
                                                        
                                                        
                                                        
                                                        680,573COMMITMENTS
      AND CONTINGENCIES
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -MINORITY
      INTERESTS
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -STOCKHOLDERS'
      DEFICITCommon
      stock, $0.00001 par value, 100,000,000 shares  authorized and
      5,001,000 shares issued and outstanding
                                                        
                                                        
                                                        50
                                                        
                                                        
                                                        
                                                        50
                                                        
                                                        
                                                        
                                                        50Additional
      paid-in capital
                                                        
                                                        
                                                        392,529
                                                        
                                                        
                                                        
                                                        356,776
                                                        
                                                        
                                                        
                                                        364,765Accumulated
      deficit during development stage
                                                        
                                                        
                                                        (1,060,813
                                                        )
                                                        
                                                        
                                                        (800,646
                                                        )
                                                        
                                                        
                                                        (833,775
                                                        )Accumulated
      other comprehensive loss
                                                        
                                                        
                                                        (82,190
                                                        )
                                                        
                                                        
                                                        (40,819
                                                        )
                                                        
                                                        
                                                        (46,357
                                                        )Total
      Stockholders' Deficit
                                                        
                                                        
                                                        (750,424
                                                        )
                                                        
                                                        
                                                        (484,639
                                                        )
                                                        
                                                        
                                                        (515,317
                                                        )-TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                                        
                                                        $
                                                        167,780
                                                        
                                                        
                                                        $
                                                        171,378
                                                        
                                                        
                                                        
                                                        165,256
 
 The
accompanying notes are an integral part of these financial
statements
 
 F-2
  GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
 
 Ten months ended
                    
                    
                    Year ended
                    
                    
                    September 25, 2002October 31,
                    
                    
                    December 31,
                    
                    
                    (Inception) through2008
                    
                    
                    2007
                    
                    
                    2007
                    
                    
                    2006
                    
                    
                    October 31,2008Audited
                    
                    
                    Unaudited
                    
                    
                    Audited
                    
                    
                    Audited
                    
                    
                    AuditedOPERATING
      EXPENSESGeneral
      and administrative expenses
                    
                    $
                    139,392
                    
                    
                    $
                    89,894
                    
                    
                    $
                    100,677
                    
                    
                    $
                    91,541
                    
                    
                    $
                    846,215Depreciation
                    
                    
                    35,902
                    
                    
                    
                    39,946
                    
                    
                    
                    50,109
                    
                    
                    
                    47,435
                    
                    
                    
                    205,423Research
      and development (Net of government grant)
                    
                    
                    10,327
                    
                    
                    
                    3,205
                    
                    
                    
                    7,531
                    
                    
                    
                    24,882
                    
                    
                    
                    97,034Total
      Operating Expenses
                    
                    
                    185,621
                    
                    
                    
                    133,045
                    
                    
                    
                    158,317
                    
                    
                    
                    163,858
                    
                    
                    
                    1,148,672LOSS
      FROM OPERATIONS
                    
                    
                    (185,621
                    )
                    
                    
                    (133,045
                    )
                    
                    
                    (158,317
                    )
                    
                    
                    (163,858
                    )
                    
                    
                    (1,148,672
                    )OTHER
      INCOME (EXPENSES)Other
      income
                    
                    
                    1,394
                    
                    
                    
                    541
                    
                    
                    
                    567
                    
                    
                    
                    -
                    
                    
                    
                    1,961Interest
      income
                    
                    
                    170
                    
                    
                    
                    137
                    
                    
                    
                    260
                    
                    
                    
                    88
                    
                    
                    
                    1,402Interest
      paid to a stockholder and related party
                    
                    
                    (5,553
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (5,553
                    )Imputed
      interest
                    
                    
                    (27,764
                    )
                    
                    
                    (31,032
                    )
                    
                    
                    (39,021
                    )
                    
                    
                    (27,184
                    )
                    
                    
                    (117,072
                    )Other
      expenses
                    
                    
                    (9,664
                    )
                    
                    
                    (343
                    )
                    
                    
                    (360
                    )
                    
                    
                    (60
                    )
                    
                    
                    (10,084
                    )Total
      Other Expenses, net
                    
                    
                    (41,417
                    )
                    
                    
                    (30,697
                    )
                    
                    
                    (38,554
                    )
                    
                    
                    (27,156
                    )
                    
                    
                    (129,346
                    )NET
      LOSS BEFORE TAXES AND MINORITY INTERESTS
                    
                    
                    (227,038
                    )
                    
                    
                    (163,742
                    )
                    
                    
                    (196,871
                    )
                    
                    
                    (191,014
                    )
                    
                    
                    (1,278,018
                    )INCOME
      TAX EXPENSE
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -MINORITY
      INTERESTS
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (18,276
                    )
                    
                    
                    217,205NET
      LOSS
                    
                    
                    (227,038
                    )
                    
                    
                    (163,742
                    )
                    
                    
                    (196,871
                    )
                    
                    
                    (172,738
                    )
                    
                    
                    (1,060,813
                    )OTHER
      COMPREHENSIVE LOSSForeign
      currency translation gain (loss)
                    
                    
                    (35,833
                    )
                    
                    
                    (21,863
                    )
                    
                    
                    (27,401
                    )
                    
                    
                    (8,160
                    )
                    
                    
                    (82,190
                    )COMPREHENSIVE
      LOSS
                    
                    $
                    (262,871
                    )
                    
                    $
                    (185,605
                    )
                    
                    $
                    (224,272
                    )
                    
                    $
                    (180,898
                    )
                    
                    $
                    (1,143,003
                    )Net
      loss per share-basic and diluted
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.04
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.21
                    )Weighted
      average number of shares outstanding during the period-
      basic and diluted
                    
                    
                    5,001,000
                    
                    
                    
                    5,001,000
                    
                    
                    
                    5,001,000
                    
                    
                    
                    5,001,000
                    
                    
                    
                    5,001,000
 
 The
accompanying notes are an integral part of these financial
statements
 
 F-3
  GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ DEFICIENCY
 
 Accumulated
                    
                    
                    AccumulatedAdditional
                    
                    
                    deficit during
                    
                    
                    otherNumber
                    
                    
                    Common
                    
                    
                    Paid-in
                    
                    
                    development
                    
                    
                    comprehensiveof Shares
                    
                    
                    Stock
                    
                    
                    capital
                    
                    
                    stage
                    
                    
                    loss
                    
                    
                    TotalStock
      issued to founders for cash
                    
                    
                    5,001,000
                    
                    
                    $
                    50
                    
                    
                    $
                    275,457
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    275,507Net
      loss for the period
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (40,343
                    )
                    
                    
                    -
                    
                    
                    
                    (40,343
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (215
                    )
                    
                    
                    (215
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (40,558
                    )Balance
      at December 31, 2003
                    
                    
                    5,001,000
                    
                    
                    
                    50
                    
                    
                    
                    275,457
                    
                    
                    
                    (40,343
                    )
                    
                    
                    (215
                    )
                    
                    
                    234,949Net
      loss for the year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (65,960
                    )
                    
                    
                    -
                    
                    
                    
                    (65,960
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (355
                    )
                    
                    
                    (355
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (66,315
                    )Balance
      at December 31, 2004
                    
                    
                    5,001,000
                    
                    
                    
                    50
                    
                    
                    
                    275,457
                    
                    
                    
                    (106,303
                    )
                    
                    
                    (570
                    )
                    
                    
                    168,634Imputed
      interest on advances from a stockholder and related
company
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    23,103
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    23,103Net
      loss for the year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (357,863
                    )
                    
                    
                    -
                    
                    
                    
                    (357,863
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (10,226
                    )
                    
                    
                    (10,226
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (368,089
                    )Balance
      at December 31, 2005
                    
                    
                    5,001,000
                    
                    
                    
                    50
                    
                    
                    
                    298,560
                    
                    
                    
                    (464,166
                    )
                    
                    
                    (10,796
                    )
                    
                    
                    (176,352
                    )Imputed
      interest on advances from a stockholder and related
company
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    27,184
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    27,184Net
      loss for the year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (172,738
                    )
                    
                    
                    -
                    
                    
                    
                    (172,738
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (8,160
                    )
                    
                    
                    (8,160
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (180,898
                    )Balance
      at December 31, 2006
                    
                    
                    5,001,000
                    
                    
                    
                    50
                    
                    
                    
                    325,744
                    
                    
                    
                    (636,904
                    )
                    
                    
                    (18,956
                    )
                    
                    
                    (330,066
                    )Imputed
      interest on advances from a stockholder,related company and related
      party
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    39,021
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    39,021Net
      loss for the year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (196,871
                    )
                    
                    
                    -
                    
                    
                    
                    (196,871
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (27,401
                    )
                    
                    
                    (27,401
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (224,272
                    )Balance
      at December 31, 2007
                    
                    
                    5,001,000
                    
                    
                    
                    50
                    
                    
                    
                    364,765
                    
                    
                    
                    (833,775
                    )
                    
                    
                    (46,357
                    )
                    
                    
                    (515,317
                    )Imputed
      interest on advances from a stockholder and related
company
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    27,764
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    27,764Net
      loss for the ten months ended October 31,2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (227,038
                    )
                    
                    
                    -
                    
                    
                    
                    (227,038
                    )Foreign
      currency translation loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (35,833
                    )
                    
                    
                    (35,833
                    )Comphensive
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (262,871
                    )Balance
      at October 31,2008
                    
                    
                    5,001,000
                    
                    
                    $
                    50
                    
                    
                    $
                    392,529
                    
                    
                    $
                    (1,060,813
                    )
                    
                    $
                    (82,190
                    )
                    
                    $
                    (750,424
                    )
 
 The
accompanying notes are an integral part of these financial
statements
 
 F-4
  GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
 
 Ten months ended
                    
                    
                    Year ended
                    
                    
                    September 25, 2002October 31,
                    
                    
                    December 31,
                    
                    
                    (inception) through2008
                    
                    
                    2007
                    
                    
                    2007
                    
                    
                    2006
                    
                    
                    October 31, 2008Audited
                    
                    
                    Unaudited
                    
                    
                    Audited
                    
                    
                    Audited
                    
                    
                    AuditedCASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                    
                    $
                    (227,038
                    )
                    
                    $
                    (163,742
                    )
                    
                    $
                    (196,871
                    )
                    
                    $
                    (172,738
                    )
                    
                    $
                    (1,060,813
                    )Adjustments
      to reconcile net loss to cash used in operating
activities:Depreciation
                    
                    
                    35,902
                    
                    
                    
                    39,946
                    
                    
                    
                    50,109
                    
                    
                    
                    47,435
                    
                    
                    
                    205,423Minority
      interests
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (18,276
                    )
                    
                    
                    (217,205
                    )Imputed
      interest on advances from a stockholder and a related
party
                    
                    
                    27,764
                    
                    
                    
                    31,032
                    
                    
                    
                    39,021
                    
                    
                    
                    27,184
                    
                    
                    
                    117,072Changes
      in operating assets and liabilities(Increase)
      decrease in:Other
      receivables and prepaid expenses
                    
                    
                    467
                    
                    
                    
                    (3,802
                    )
                    
                    
                    (4,972
                    )
                    
                    
                    (513
                    )
                    
                    
                    (8,161
                    )Advances
      to suppliers
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    315
                    
                    
                    
                    -Increase
      (decrease) in:Other
      payables and accrued liabilities
                    
                    
                    (8,940
                    )
                    
                    
                    21,360
                    
                    
                    
                    19,973
                    
                    
                    
                    8,369
                    
                    
                    
                    26,992Net
      cash used in operating activities
                    
                    
                    (171,845
                    )
                    
                    
                    (75,206
                    )
                    
                    
                    (92,740
                    )
                    
                    
                    (108,224
                    )
                    
                    
                    (936,692
                    )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
                    
                    
                    (10,491
                    )
                    
                    
                    (5,846
                    )
                    
                    
                    (9,992
                    )
                    
                    
                    (7,812
                    )
                    
                    
                    (286,166
                    )Due
      from a related party
                    
                    
                    -
                    
                    
                    
                    10,233
                    
                    
                    
                    10,233
                    
                    
                    
                    51,699
                    
                    
                    
                    -Due
      from a stockholder
                    
                    
                    10,474
                    
                    
                    
                    39,453
                    
                    
                    
                    39,526
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      cash provided by (used in) investing activities
                    
                    
                    (17
                    )
                    
                    
                    43,840
                    
                    
                    
                    39,767
                    
                    
                    
                    43,887
                    
                    
                    
                    (286,166
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESContribution
      to common stock by stockholders
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    50Contribution
      by stockholders
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    492,662Due
      to a minority stockholder
                    
                    
                    3,123
                    
                    
                    
                    -
                    
                    
                    
                    3,123
                    
                    
                    
                    -
                    
                    
                    
                    3,123Due
      to a stockholder
                    
                    
                    80,863
                    
                    
                    
                    180
                    
                    
                    
                    276
                    
                    
                    
                    128
                    
                    
                    
                    85,156Due
      to a director
                    
                    
                    15,903
                    
                    
                    
                    29,080
                    
                    
                    
                    34,372
                    
                    
                    
                    46,943
                    
                    
                    
                    251,713Due
      to a related company
                    
                    
                    49,229
                    
                    
                    
                    64,876
                    
                    
                    
                    85,881
                    
                    
                    
                    21,694
                    
                    
                    
                    389,667Due
      to a related party
                    
                    
                    97,453
                    
                    
                    
                    (2,134
                    )
                    
                    
                    (2,584
                    )
                    
                    
                    2,584
                    
                    
                    
                    161,553Net
      cash provided by financing activities
                    
                    
                    246,571
                    
                    
                    
                    92,002
                    
                    
                    
                    117,945
                    
                    
                    
                    71,349
                    
                    
                    
                    1,383,924EFFECT
      ON EXCHANGE RATES ON CASH
                    
                    
                    (35,833
                    )
                    
                    
                    (21,863
                    )
                    
                    
                    (27,401
                    )
                    
                    
                    (8,160
                    )
                    
                    
                    (82,190
                    )NET
      INCREASE IN CASH AND CASH EQUIVALENTS
                    
                    
                    38,876
                    
                    
                    
                    38,773
                    
                    
                    
                    37,571
                    
                    
                    
                    (1,148
                    )
                    
                    
                    78,876CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
                    
                    
                    40,000
                    
                    
                    
                    2,429
                    
                    
                    
                    2,429
                    
                    
                    
                    3,577
                    
                    
                    
                    -CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
                    
                    $
                    78,876
                    
                    
                    $
                    41,202
                    
                    
                    $
                    40,000
                    
                    
                    $
                    2,429
                    
                    
                    $
                    78,876
 
 The
accompanying notes are an integral part of these financial
statements
  
 F-5
 
 GEOSTAR
MINERAL CORPORATION AND SUBSIDIARIES
 (A
DEVELOPMENT STAGE COMPANY)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
  1.
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES AND
ORGANIZATION
 
 (A)
              Organization
 
 Geostar
Mineral Corporation (“Geostar”) was incorporated in Nevada on September 12, 2006
and its principal business is the acquisition and exploration of mineral
resources in Canada. Geostar has not presently determined whether its properties
contain mineral resources that are economically recoverable and is considered an
exploration stage company.
 
 Shenzhen
Changhua Biomedicine Engineering Company Limited (“Shenzhen Changhua”) was
incorporated in the People’s Republic of China (“PRC”) on September 25, 2002 as
a limited liability company with a registered capital of $724,017. Shenzhen
Changhua is owned by two stockholders in the proportion of 70% and 30%
respectively. Shenzhen Changhua plans to develop, manufacture and market
self-reinforced, re-absorbable degradable PA screws, rods and binding ties for
fixation on human fractured bones. The Company is currently conducting clinical
trials on its products and intends to raise additional capital to produce and
market its products commercially pending the approval from the State Food and
Drug Administration (“SFDA”) of the PRC on its products. The Company has no
revenue since its inception and, in accordance with Statement of Financial
Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development
Stage Enterprise,” is considered a Development Stage Company.
 
 Masterise
Holdings Limited (“Masterise”) was incorporated in the British Virgin Islands on
31 May, 2007 as an investment holding company. Masterise is owned as to 63% by
the spouse of Shenzhen Changhua’s 70% majority stockholder and 37% by a third
party corporation.
 
 On
January 29, 2008, Masterise entered into a Share Purchase Agreement (“the
Agreement”) with a stockholder of Shenzhen Changhua whereupon Masterise acquired
70% of Shenzhen Changhua for US$64,100 in cash. The acquisition was completed on
February 25, 2008. As both Masterise and Shenzhen Changhua are under common
control and management, the acquisition was accounted for as a reorganization of
entities under common control. Accordingly, the operations of Shenzhen Changhua
for the ten months ended October 31, 2008 and 2007 were included in the
consolidated financial statements as if the transactions had occurred
retroactively.
 
 On
December 31, 2008, Geostar consummated a Share Exchange Agreement (“the Exchange
Agreement”) with the stockholders of Masterise pursuant to which Geostar issued
50,000 shares of Common Stock to the stockholders of Masterise for 100% equity
interest in Masterise.
 
 Concurrently,
on December 31, 2008, a major stockholder of Geostar also consummated an
Affiliate Stock Purchase Agreement (the “Affiliate Agreement”) with thirteen
individuals including all the stockholders of Masterise, pursuant to which the
major stockholder sold a total of 5,001,000 shares of Geostar’s common stock for
a total aggregate consideration of $5,000, including 4,438,250 shares to the
stockholders of Masterise.
 
 F-6
  On
consummation of the Exchange Agreement and the Affiliate Agreement, the 63%
majority stockholder of Masterise became an 54% stockholder of
Geostar.
 
 The
merger of Geostar and Masterise is being treated for accounting purposes as a
capital transaction and recapitalization by Masterise (“the accounting
acquirer”) and a re-organization by Geostar (“the accounting acquiree”). The
financial statements have been prepared as if the re-organization had occurred
retroactively. Following the merger, the Company ceased its mineral exploration
activities.
  Accordingly,
these financial statements include the following:
  (1)
                The
      balance sheet consisting of the net assets of the acquirer at historical
      cost and the net assets of the acquiree at historical
  cost.
 
 (2)
                The
      statement of operations including the operations of the acquirer for the
      periods presented and the operations of the acquiree from the date of the
      transaction.
 
 Geostar,
Masterise and Shenzhen Changhua are hereinafter referred to as (“the
Company”)
 
 (B)
              Principles
      of consolidation
 
 The
accompanying consolidated financial statements include the financial statements
of Geostar and its wholly owned subsidiaries, Masterise and its 70% owned
subsidiary, Shenzhen Changhua. The minority interests represent the minority
stockholders’ 30% proportionate share of the results of Shenzhen
Changhua.
 
 All
significant inter-company transactions and balances have been eliminated in
consolidation.
 
 (C)
              Change
      of year end
 
 Prior to
the acquisition, the Company’s subsidiaries  reporting  year
end was December 31. Geostar's reporting year end is October 31. In order to be
consistent  with Geostar’s  reporting  year end,
the Company's  Board of Directors  approved  all
of their  subsidiaries'  fiscal  year
end  change  from December 31 to October 31
 
 The
consolidated financial statements consist of a ten month transition period ended
October 31, 2008 and 2007 (unaudited), and the calendar years ended December 31,
2007 and 2006, respectively.
 
 The
audited financial statements of Masterise as of and for the years ended December
31, 2007 and 2006 were filed with Form 8-K dated December 31, 2008 with the
Securities and Exchange Commission.  The audited financial statements
as of October 31, 2008 include the activities of the Company’s
subsidiaries.
 
 Since
Masterise had no
material  operational  activities  for the years
ended  December  31,  2007
and  2006,  certain  comparative  amounts  have  been
reclassified  to conform  to
the  current  year's  presentation.  The  unaudited
financial statements as of and for the ten months ended October 31, 2008 have
been  included  for  comparative  purposes  only  and  reflect  all  adjustments
(consisting  of
normal  recurring  adjustments)  that  are,  in
the  opinion  of
management,  necessary  for a
fair  presentation  of the  results  of
the period presented.
  F-7
 
 (D)
              Use
      of estimates
 
 The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 (E)
              Cash
      and cash equivalents
 
 For
purpose of the statements of cash flows, cash and cash equivalents include cash
on hand and demand deposits with a bank with a maturity of less than three
months. As of October 31, 2008 and 2007 and December 31, 2007, all the cash and
cash equivalents were denominated in Renminbi (“RMB”) and were placed with banks
in the PRC.  They are not freely convertible into foreign currencies
and the remittance of these funds out of the PRC is subject to exchange control
restrictions imposed by the PRC government.
 
 (F)
                Property
      and equipment
 
 Property
and equipment are stated at cost, less accumulated
depreciation.  Expenditures for additions, major renewals and
betterments are capitalized and expenditures for maintenance and repairs are
charged to expense as incurred.
 
 Depreciation
is provided on a straight-line basis, less estimated residual value over the
assets estimated useful lives.  The estimated useful lives are as
follows:
 
 Plant
      and machinery
                
                5
      YearsMotor
      vehicles
                
                5
      YearsOffice
      equipment
                
                5
      YearsOffice
      improvements
                
                5
      Years
 
 (G)
              Long-lived
      assets
 
 In
accordance with SFAS No. 144, “Accounting for the impairment or disposal of
Long-Lived Assets", long-lived assets and certain identifiable intangible assets
held and used by the Company are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. For purposes of evaluating the recoverability of long-lived
assets, the recoverability test is performed using undiscounted net cash flows
related to the long- lived assets. The Company reviews long-lived assets to
determine that carrying values are not impaired.
 
 (H)
              Fair
      value of financial instruments
 
 SFAS No.
107, "Disclosure about Fair Value of Financial Instruments," requires certain
disclosures regarding the fair value of financial instruments. The carrying
amounts of other receivables, prepaid expenses, and due from related parties,
other payables and accrued liabilities and due to related parties approximate
their fair values because of the short-term nature of the instruments. The
management of the Company is of the opinion that the Company is not exposed to
significant interest or credit risks arising from these financial
statements.
  F-8
 (I)
              Government  grant
 
 Government
grant represents a subsidy from the local government and is unconditional. The
Company recognizes the grant upon receipt from the local government and is
accounted for as an offset to research and development expenses.
 
 (J)
              Income
      taxes
 
 The
Company accounts for income taxes under the SFAS No. 109, “Accounting for Income
Taxes” (“Statement 109”).  Under Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  Under Statement 109, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized as income in
the period included the enactment date.
 
 (K)
              Research
      and Development
 
 Research
and development costs related to both present and future products are expensed
as incurred.  Total expenditure on research and development charged to
general and administrative expenses for the ten months ended October 31, 2008
and 2007 and the years ended December 31, 2007 and 2006 and for the period from
September 25, 2002 (inception) through October 31, 2008 was $10,327, $3,205,
$7,531, $24,882 and $97,034 respectively.
 
 (L)
              Foreign
      currency translation
 
 Geostar,
Masterise and Shenzhen Changhua maintain their accounting records in their
functional currencies of United States Dollars (“US$”), Hong Kong Dollars
(“HK$”) and Renminbi (“RMB”) respectively.
 
 Foreign
currency transactions during the year are translated to the functional currency
at the approximate rates of exchange on the dates of
transactions.  Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated at the approximate rates of
exchange at that date.  Non-monetary assets and liabilities are
translated at the rates of exchange prevailing at the time the asset or
liability was acquired.  Exchange gains or losses are recorded in the
statement of operations.
 
 The
financial statements of Masterise and Shenghua Changhua (whose functional
currency is HK$ and RMB respectively) are translated into US$ using the closing
rate method.  The balance sheet items are translated into US$ using
the exchange rates at the respective balance sheet dates.  The capital
and various reserves are translated at historical exchange rates prevailing at
the time of the transactions while income and expenses items are translated at
the average exchange rate for the year.  All exchange differences are
recorded within equity. The translation loss recorded for the ten months ended
October 31 2008 and 2007 and for the years ended December 31,2008 and December
31, 2007 and for the period  from September 25, 2002 (inception)
through October 31, 2008 was $35,833, $21,863, $27,401, $8,160 and $82,190
respectively.
  F-9
 
 (M)
              Other
      comprehensive loss
  The
foreign currency translation gain or loss resulting from translation of the
financial statements expressed in RMB and HK$ to US$ is reported as other
comprehensive gain (loss) in the statements of operations and stockholders’
equity. Other comprehensive loss for the ten months ended October 31 2008 and
2007 and for the years ended December 31, 2007 and 2006 and for the period from
September 25, 2002 (inception) through October 31, 2008, were $35,833, $21,863,
$27,401, $8,160 and $82,190 respectively
  (N)
              Segments
 
 The
Company operates in only one segment; thereafter segment disclosure is not
presented.
  (O)
              Recent
      Accounting Pronouncements
 
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. SFAS 141R also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business combination.
This statement is effective for use beginning January 1, 2009. The Company
does not expect adoption of SFAS 141R will have a material impact on its
financial position and results of operations.
 
 In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS
160”).  This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the non-controlling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners.  SFAS 160
affects those entities that have an outstanding non-controlling interest in one
or more subsidiaries or that deconsolidate a subsidiary.  SFAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
Company does not expect adoption of SFAS 160 will have a material effect on its
financial position and results of operations.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows.  SFAS 161 applies to
all derivative instruments within the scope of SFAS 133, “Accounting for
Derivative Instruments and Hedging Activities” (SFAS 133) as well as related
hedged items, bifurcated derivatives, and non-derivative instruments that are
designated and qualify as hedging instruments. Entities with instruments subject
to SFAS 161 must provide more robust qualitative disclosures and expanded
quantitative disclosures.  SFAS 161 is effective prospectively for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application permitted. The Company does not
expect adoption of SFAS 161 will have a material effect on its financial
position and results of operations.
 
 F-10
 
 In
May 2008, the FASB released SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  SFAS No. 162 identifies the sources
of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of non-governmental entities that
presented in conformity with generally accepted accounting principles in the
United States of America. SFAS No. 162 will be effective 60 days following the
SEC’s approval of the PCAOB amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.  The
Company does not expect adoption of SFAS 162 will have a material effect on its
financial position and results of operations.
 
 In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts, an interpretation of FASB Statement No. 60.” The
scope of this Statement is limited to financial guarantee insurance (and
reinsurance) contracts, as described in this Statement, issued by enterprises
included within the scope of Statement 60. Accordingly, this Statement does not
apply to financial guarantee contracts issued by enterprises excluded from the
scope of Statement 60 or to some insurance contracts that seem similar to
financial guarantee insurance contracts issued by insurance enterprises (such as
mortgage guaranty insurance or credit insurance on trade receivables). This
Statement also does not apply to financial guarantee insurance contracts that
are derivative instruments included within the scope of FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities.” The Company does
not expect adoption of SFAS 163 will have a material effect on its financial
position and results of operations.
 
 In
October 2008, FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active”, to clarify
guidance on determining the fair value of a financial asset under SFAS No. 157
in a market that is not active. FSP FAS 157-3 was effective upon issuance,
including prior periods for which financial statements had not been issued. The
adoption of this statement effective September 30, 2008 did not have a material
impact on the Company’s financial position or results of
operations.
 
 In
November 2008, the Emerging Issues Task Force issued EITF No. 08 – 7,
“Accounting for Defensive Intangible Assets” (“EITF 08 -7”) that clarifies
accounting for defensive intangible assets subsequent to initial measurement.
EITF 08 – 7 applies to acquired intangible assets which an entity has no
intention of actively using, or intends to discontinue use of, the intangible
asset but holds it (locks up) to prevent others from obtaining access to it
(i.e., a defensive intangible asset). Under EITF 08 – 7, the Task Force reached
a consensus that an acquired defensive asset should be accounted for as a
separate unit of accounting (i.e., an asset separate from other assets of the
acquirer); and the useful life assigned to an acquired defensive asset should be
based on the period during which the asset would diminish in value. ETIF 08 – 7
is effective for defensive intangible assets acquired in fiscal years beginning
on or after December 15, 2008. The Company does not believe EITF 08 - 7 will
have a significant impact on the Company’s consolidated financial
statements.
 
 F-11
 
 2.PROPERTY AND
EQUIPMENT
  The
following is a summary of property and equipment at October 31, 2008 and 2007
and December 31, 2007:
  October 31,
                        
                        
                        December 31,2008
                        
                        
                        2007
                        
                        
                        2007Plant
      and machinery
                        
                        $
                        143,955
                        
                        
                        $
                        128,149
                        
                        
                        $
                        131,756Motor
      vehicles
                        
                        
                        40,236
                        
                        
                        
                        36,848
                        
                        
                        
                        37,694Office
      equipment
                        
                        
                        13,325
                        
                        
                        
                        12,203
                        
                        
                        
                        11,818Office
      improvements
                        
                        
                        117,251
                        
                        
                        
                        107,379
                        
                        
                        
                        109,844314,767
                        
                        
                        
                        284,579
                        
                        
                        
                        291,112Less:
      accumulated depreciation
                        
                        
                        234,024
                        
                        
                        
                        172,408
                        
                        
                        
                        184,956Property
      and equipment, net
                        
                        $
                        80,743
                        
                        
                        $
                        112,171
                        
                        
                        
                        106,156
  
  Depreciation
expense for the ten months ended October 31, 2008 and 2007 and for the years
ended December 31, 2007 and 2006 and for the period from September 25, 2002
(inception) through October 31, 2008 were $35,902, $ 39,946, $50,109, $47,435
and $205,423, respectively.
 
 3. OTHER PAYABLES AND
ACCRUED LIABILITIES
  Other
payables and accrued liabilities at October 31, 2008 and 2007, and December 31,
2007: consisted of the following:
 
 October 31,
                      
                      
                      December 31,2008
                      
                      
                      2007
                      
                      
                      2007Other
      payables
                      
                      $
                      1,657
                      
                      
                      $
                      13,485
                      
                      
                      
                      13,794Accrued
      liabilities
                      
                      
                      25,335
                      
                      
                      
                      23,834
                      
                      
                      
                      22,138$
                      26,992
                      
                      
                      $
                      37,319
                      
                      
                      
                      35,932
  4.RELATED
PARTY TRANSACTIONS
  As of
October 31, 2007 and December 31, 2007, the Company was owed $10,547 and $
10,474 respectively by a stockholder for a short term, unsecured and
interest-free advance.
 
 F-12
 As of
October 31, 2008 and December 31, 2007, the Company owed a minority stockholder
$3,123 and $4,293 respectively which is unsecured, interest free and repayable
on demand. Imputed interest is computed at 5% per annum on the amount
owed.
  As of
October 31, 2008 and 2007, the Company owed $85,156 and $4,197 to a
stockholder    respectively which is unsecured and repayable
on demand. Interest is charged at 7% per annum on the amount owed.
  As of
October 31, 2008 and 2007 and December 31, 2007, the Company owed $251,713,
$230,518 and $230,810 to a director respectively for advances made on an
unsecured basis, repayable on demand and interest free.
 
 As of
October 31, 2008, and 2007 and December 31, 2007, the Company owed $389,667,
$319,433 and $340,438 to a related company respectively on an unsecured basis,
repayable on demand and interest free.
 
 As of
October 31, 2008 and, 2007 and December 31, 2007, the Company owed $161,553,
$64,550 and $64,100 to a related party which is unsecured and repayable on
demand. Interest is charged at 7% per annum on the amount owed.
 
 Imputed
interest is charged at 7% and 5% per annum on the amounts owed to a minority
stockholder, a director, and related company for the ten months ended October 31
2008 and 2007 and for the years ended December 31, 2007 and 2006 and for the
period  from September 25, 2002 (inception) through October 31,
2008.
 
 Total
interest expenses on advances from a stockholder and a related party accrued for
the ten months ended October 31, 2008 and for the period from September 25, 2002
(inception) through October 31, 2008 was $5,553 and $5,553
respectively.
  5.COMMON
STOCK
  On
December 31, 2008, Geostar consummated a Share Exchange Agreement (“the Exchange
Agreement”) with the stockholders of Masterise pursuant to which Geostar issued
50,000 shares of Common Stock to the stockholders of Masterise for 100% equity
interest in Masterise.
 
 Concurrently,
on December 31, 2008, a major stockholder of Geostar also consummated an
Affiliate Stock Purchase Agreement (the “Affiliate Agreement”) with thirteen
individuals including all the stockholders of Masterise, pursuant to which the
major stockholder sold a total of 5,001,000 shares of Geostar’s common stock for
a total aggregate consideration of $5,000, including 4,438,250 shares to the
stockholders of Masterise.
  On
consummation of the Exchange Agreement and the Affiliate Agreement, the 63%
majority stockholder of Masterise became a 54% stockholder of
Geostar.
  F-13
  6.COMMITMENTS
AND CONTINGENCIES
  (A)
              Employee
      benefits
 
 The full
time employees of the Company are entitled to employee benefits including
medical care, welfare subsidies, unemployment insurance and pension benefits
through a Chinese government mandated multi-employer defined contribution plan.
The Company is required to accrue for these benefits based on certain
percentages of the employees’ salaries and make contributions to the plans out
of the amounts accrued for medical and pension benefits.  The total
provisions and contributions made for such employee benefits was $2,413, $2,453,
$ 2,930 $2,446 and $7,789 for the ten months ended October 31, 2008 and 2007 and
for the years ended December 31, 2007 and 2006 and for the
period  from September 25, 2002 (inception) through October 31, 2008,
respectively. The Chinese government is responsible for the medical benefits and
the pension liability to be paid to these employees.
  (B)
              Lease
      commitments
  The
Company leased office space from third party under operating lease which expires
on 19 July 2009 at monthly rental of $1,537.
  As of
October 31, 2008, the Company had outstanding commitments with respect to the
above operating leases, which are due as follows:
  2008
                        
                        $
                        3,0752009
                        
                        
                        10,166Total
                        
                        $
                        13,241
  7.  
  INCOME
TAX
  Geostar
was incorporated in the United States and has incurred net operating loss for
income tax purposes for 2008 and 2007. Geostar has net operating loss carry
forwards for income taxes amounting to approximately $7,903 as of October 31,
2008 which may be available to reduce future years’ taxable income. These carry
forwards will expire, if not utilized, commencing in 2028. Management believes
that the realization of the benefits from these losses appears uncertain due to
the Company’s limited operating history and continuing losses. Accordingly, a
full, deferred tax asset valuation allowance has been provided and no deferred
tax asset valuation allowance has been provided and no deferred tax asset
benefit has been recorded. The valuation allowance at October 31, 2008 and
December 31, 2007 was $7,903 and $0 respectively. The net change in the
valuation allowance for 2008 was an increase of $7,903.
  F-14
  Masterise
was incorporated in the BVI and under current law of the BVI, is not subject to
tax on income.
  Shenzhen
Changhua was incorporated in the PRC and is subject to PRC income tax which is
computed according to the relevant laws and regulations in the
PRC.  The income tax rate has been 25%. No income tax expense has been
provided by Shenzhen Changhua as it has incurred losses.
  7.CONCENTRATIONS
AND RISKS
  During
2008 and 2007, 100% of the Company’s assets were located in China.
  8. GOING
CONCERN
  As
reflected in the accompanying financial statements, the Company has an
accumulated deficit of $1,060,813 at October 31, 2008 that includes a net loss
of $227,038, and $196,871 for the ten months ended October 2008 and for the year
ended December 31, 2007 respectively.  The Company’s total current
liabilities exceed its total current assets by $831,167 and the Company used
cash in operations of $171,845.  These factors raise substantial doubt
about its ability to continue as a going concern.  In view of the
matters described above, recoverability of a major portion of the recorded asset
amounts shown in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the Company’s ability
to raise additional capital, obtain financing and succeed in its future
operations.  The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.
  To enable
the Company to continue as a going concern, management is actively pursuing
additional funding and strategic partners, which will enable the Company to
implement its business plan.  Management believes that these actions
as successful will allow the Company to continue its operations through the next
fiscal year.
  9.    SUBSEQUENT EVENT
  On
December 31, 2008, Geostar consummated a Share Exchange Agreement (“the Exchange
Agreement”) with the stockholders of Masterise pursuant to which Geostar issued
50,000 shares of Common Stock to the stockholders of Masterise for 100% equity
interest in Masterise.
  F-15
  Concurrently,
on December 31, 2008, a major stockholder of Geostar also consummated an
Affiliate Stock Purchase Agreement (the “Affiliate Agreement”) with thirteen
individuals including all the stockholders of Masterise, pursuant to which the
major stockholder sold a total of 5,001,000 shares of Geostar’s common stock for
a total aggregate consideration of $5,000, including 4,438,250 shares to the
stockholders of Masterise.
  On
consummation of the Exchange Agreement and the Affiliate Agreement, the 63%
majority stockholder of Masterise became a 54% stockholder of
Geostar.
 
 The
merger of Geostar and Masterise is being treated for accounting purposes as a
capital transaction and recapitalization by Masterise (“the accounting
acquirer”) and a re-organization by Geostar (“the accounting
acquire”).
  F-16
 ITEM 9.  CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
  On
December 16, 2008, we dismissed Malone & Bailey, PC as our independent
accountant.  There have been no disagreements on accounting and
financial disclosures from the inception of our company through the date of this
Form 10-K.
  On
December 16, 2008, we retained Jimmy C.H. Cheung & Co. as the new
independent accountant.  There have been no disagreements on
accounting and financial disclosures from the inception of our company through
the date of this Form 10-K.  Our financial statements for the period
from inception to October 31, 2008, included in this report have been audited by
Jimmy C.H. Cheung & Co., as set forth in this annual report.
  ITEM 9A.  CONTROLS AND
PROCEDURES.
  Evaluation
of Disclosure Controls and Procedures
  We
maintain “disclosure controls and procedures,” as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that
are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required
disclosure.  We conducted an evaluation (the “Evaluation”), under the
supervision and with the participation of our Chief Executive Officer (“CEO”)
and Chief Financial Officer (“CFO”), of the effectiveness of the design and
operation of our disclosure controls and procedures (“Disclosure Controls”) as
of the end of the period covered by this report pursuant to Rule 13a-15 of the
Exchange Act.  Based on this Evaluation, our CEO and CFO concluded
that our Disclosure Controls were effective as of the end of the period covered
by this report.
  Changes
in Internal Controls
  We have
also evaluated our internal controls for financial reporting, and there have
been no significant changes in our internal controls or in other factors that
could significantly affect those controls subsequent to the date of their last
evaluation.
  Limitations
on the Effectiveness of Controls
  Our
management, including our CEO and CFO, does not expect that our Disclosure
Controls and internal controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management or board override
of the control.
  30
  The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
  CEO
and CFO Certifications
  Appearing
immediately following the Signatures section of this report there are
Certifications of the CEO and the CFO. The Certifications are required in
accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302
Certifications). This Item of this report, which you are currently reading is
the information concerning the Evaluation referred to in the Section 302
Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics
presented.
  Management’s
Report on Internal Control over Financial Reporting
  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). The Company’s internal control over financial reporting is a process
designed to provide reasonable assurance to our management and board of
directors regarding the reliability of financial reporting and the preparation
of the financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
  Our
internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the Company; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America, and
that receipts and expenditures of the Company are being made only in accordance
with authorizations of management and directors of the Company; and (iii)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Company’s assets that could
have a material effect on the financial statements.
  Because
of its inherent limitations, internal controls over financial reporting may not
prevent or detect misstatements. All internal control systems, no matter how
well designed, have inherent limitations, including the possibility of human
error and the circumvention of overriding controls. Accordingly, even effective
internal control over financial reporting can provide only reasonable assurance
with respect to financial statement preparation. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
  Our
management assessed the effectiveness of our internal control over financial
reporting as of October 31, 2008. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal
Control-Integrated Framework. Based on our assessment, we believe that,
as of October 31, 2008, the Company’s internal control over financial reporting
was effective based on those criteria.
  31
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.
  The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
  ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
  Officers
and Directors
  Our
directors serve until his successor is elected and qualified. Each of our
officers is elected by the board of directors to a term of one (1) year and
serves until his or her successor is duly elected and qualified, or until he or
she is removed from office.  The board of directors has no nominating,
auditing or compensation committees.
  The name,
address, age and position of our officers and directors are set forth
below:
  Name
      and Address
                                                        
                                                        Age
                                                        
                                                        Position(s)Chi
      Ming YU
                                                        
                                                        35
                                                        
                                                        President,
      DirectorWang
      Hui
                                                        
                                                        39
                                                        
                                                        Chief
      Executive Officer, DirectorKai
      GUI
                                                        
                                                        39
                                                        
                                                        Director,
      Secretary, Chief Financial OfficerQUE
      Yong
                                                        
                                                        41
                                                        
                                                        Director
  The
person named above has held his offices/positions since inception of our company
and is expected to hold his offices/positions until the next annual meeting of
our stockholders.
  Background
of our Officers and Directors
  Chi Ming
YU, Director and President, is Director of Operations at Titan Holdings, Inc
where his main responsibilities are in Administration, Company Finance and
Investment, Marketing Research and Customer Relationship. From 2000 to 2003, Mr.
Yu worked as a sales manager at Fu Feng LLC.  Mr. Yu studied Computer
Science at Rutgers University, New Jersey.
 
 32
  Wang Hui,
Director and Chief Executive Officer, started her career at Hainan Xinte
Pharmaceutical Ltd in China. She worked her way up from cashier to sales
representative and then to sales manager. She then worked as District Manager of
Southern China with Hainan Tianfeng Pharmaceutical Ltd, and as General Manager
with Hainan Yichen Pharmaceutical Ltd. She is now the General Manager of
Shenzhen Changhua. Ms Wang has skills and experience in R&A, marketing and
business development in Chinese medical industry.
 
 Kai GUI,
Director, Secretary and Chief Financial Officer, worked as an Analyst Programmer
in the British media industry, and as IT Manager, Circulation Manager, and
Foreign Publishing Director at S.J.P. Ltd in London. Mr. Gui participated in
several business projects involving Chinese publicly listed companies. He is the
Director of China Feed Industry Association Information Centre’s European Office
and Vice President of Titan. After graduating from the University of Westminster
in London, Mr. Gui took a Post-graduate course in Financial Management at
Middlesex University in London.
 
 QUE Yong
, Director of Geostar Mineral Corporation, was in sales and marketing with
Hainan Xinteyao Pharmaceutical Ltd. from 1991 to 1995. He worked as sales
manager for Hainan Tianfeng Pharmaceutical Ltd from 1996 to 2001. He has been a
manager of Guangxi Changda Pharmaceutical Ltd since 2003.
  Conflicts
of Interest
  Involvement
in Certain Legal Proceedings
  Other
than as described in this section, to our knowledge, during the past five years,
no present or former director or executive officer of our company: (1) filed a
petition under the federal bankruptcy laws or any state insolvency law, nor had
a receiver, fiscal agent or similar officer appointed by a court for the
business or present of such a person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer within
two years before the time of such filing; (2) was convicted in a criminal
proceeding or named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses); (3) was the subject of any order, judgment
or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting the following activities: (i) acting as a futures commission
merchant, introducing broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant, associated person of any
of the foregoing, or as an investment advisor, underwriter, broker or dealer in
securities, or as an affiliated person, director of any investment company, or
engaging in or continuing any conduct or practice in connection with such
activity; (ii) engaging in any type of business practice; (iii) engaging in any
activity in connection with the purchase or sale of any security or commodity or
in connection with any violation of federal or state securities laws or federal
commodity laws; (4) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of
such person to engage in any activity described above under this Item, or to be
associated with persons engaged in any such activity; (5) was found by a court
of competent jurisdiction in a civil action or by the Securities and Exchange
Commission to have violated any federal or state securities law and the judgment
in subsequently reversed, suspended or vacate; (6) was found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated.
  33
  Audit
Committee and Charter
  We
have a separately-designated audit committee of the board. Audit committee
functions are performed by our board of directors. None of our directors are
deemed independent. All directors also hold positions as our officers. Our audit
committee is responsible for: (1) selection and oversight of our independent
accountant; (2) establishing procedures for the receipt, retention and treatment
of complaints regarding accounting, internal controls and auditing matters; (3)
establishing procedures for the confidential, anonymous submission by our
employees of concerns regarding accounting and auditing matters; (4) engaging
outside advisors; and, (5) funding for the outside auditory and any outside
advisors engagement by the audit committee. A copy of our audit committee
charter is filed as an exhibit to this report.
  Audit
Committee Financial Expert
  None
of our directors or officers has the qualifications or experience to be
considered a financial expert. We believe the cost related to retaining a
financial expert at this time is prohibitive. Further, because of our limited
operations, we believe the services of a financial expert are not
warranted.
  Code
of Ethics
  We
have adopted a corporate code of ethics. We believe our code of ethics is
reasonably designed to deter wrongdoing and promote honest and ethical conduct;
provide full, fair, accurate, timely and understandable disclosure in public
reports; comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code. A copy of the
code of ethics is filed as an exhibit to this report.
  Disclosure
Committee and Charter
  We
have a disclosure committee and disclosure committee charter. Our disclosure
committee is comprised of all of our officers and directors. The purpose of the
committee is to provide assistance to the Chief Executive Officer and the Chief
Financial Officer in fulfilling their responsibilities regarding the
identification and disclosure of material information about us and the accuracy,
completeness and timeliness of our financial reports. A copy of the disclosure
committee charter is filed as an exhibit to this report.
  Section
16(a) of the Securities Exchange Act of 1934
  As
of the date of this report, we are not subject to section 16(a) of the
Securities Exchange Act of 1934.
  34


ITEM
11.      EXECUTIVE COMPENSATION




The
following table sets forth information with respect to compensation paid by us
to our sole officer from inception on September 12, 2006 through October 31,
2008.




Executive Officer Compensation TableNon-
                                  
                                  
                                  NonqualifiedEquity
                                  
                                  
                                  Deferred
                                  
                                  
                                  AllIncentive
                                  
                                  
                                  Compensa-
                                  
                                  
                                  OtherStock
                                  
                                  
                                  Option
                                  
                                  
                                  Plan
                                  
                                  
                                  tion
                                  
                                  
                                  Compen-Name and
                                  
                                  
                                  
                                  Salary
                                  
                                  
                                  Bonus
                                  
                                  
                                  Awards
                                  
                                  
                                  Awards
                                  
                                  
                                  Compensation
                                  
                                  
                                  Earnings
                                  
                                  
                                  sation
                                  
                                  
                                  TotalPrincipal Position
                                  
                                  Year
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)
                                  
                                  
                                  (US$)(a)
                                  
                                  (b)
                                  
                                  (c)
                                  
                                  
                                  (d)
                                  
                                  
                                  (e)
                                  
                                  
                                  (f)
                                  
                                  
                                  (g)
                                  
                                  
                                  (h)
                                  
                                  
                                  (i)
                                  
                                  
                                  (j)Andriy
      Protskiv
                                  
                                  2008
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0President,
      Secretary,
                                  
                                  2007
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0Treasurer
                                  
                                  2006
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0Chi
      Ming YU
                                  
                                  2008
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0President,
      TreasurerKai
      GUI
                                  
                                  2008
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0SecretaryRoman
      Bilinski
                                  
                                  2008
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0President,
      Secretary, Treasurer




35




The
following table sets forth information with respect to compensation paid by us
to our director during the last completed fiscal year. Our fiscal year end is
October 31.




Director
      CompensationFeesEarned
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  Nonqualifiedor
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  Non-Equity
                                                                  
                                                                  
                                                                  DeferredPaid
      in
                                                                  
                                                                  
                                                                  Stock
                                                                  
                                                                  
                                                                  Option
                                                                  
                                                                  
                                                                  Incentive
      Plan
                                                                  
                                                                  
                                                                  Compensation
                                                                  
                                                                  
                                                                  All
      OtherCash
                                                                  
                                                                  
                                                                  Awards
                                                                  
                                                                  
                                                                  Awards
                                                                  
                                                                  
                                                                  Compensation
                                                                  
                                                                  
                                                                  Earnings
                                                                  
                                                                  
                                                                  Compensation
                                                                  
                                                                  
                                                                  TotalName
                                                                  
                                                                  Year
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)
                                                                  
                                                                  
                                                                  (US$)(a)
                                                                  
                                                                  (b)
                                                                  
                                                                  (c)
                                                                  
                                                                  
                                                                  (d)
                                                                  
                                                                  
                                                                  (e)
                                                                  
                                                                  
                                                                  (f)
                                                                  
                                                                  
                                                                  (g)
                                                                  
                                                                  
                                                                  (h)
                                                                  
                                                                  
                                                                  (i)Chi
      Ming YU
                                                                  
                                                                  2008
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0Kai
      GUI
                                                                  
                                                                  2008
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0QUE
      Yong
                                                                  
                                                                  2008
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0Andriy
      Protskiv
                                                                  
                                                                  2008
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0Roman
      Bilinski
                                                                  
                                                                  2008
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0
                                                                  
                                                                  
                                                                  
                                                                  0




All compensation received by our sole officer and director has been
disclosed.




There
are no stock option, retirement, pension, or profit sharing plans for the
benefit of our sole officer and director.




Long-Term
Incentive Plan Awards




We
do not have any long-term incentive plans that provide compensation intended to
serve as incentive for performance.




36




Indemnification




Under
our Bylaws, we may indemnify an officer or director who is made a party to any
proceeding, including a lawsuit, because of his position, if he acted in good
faith and in a manner he reasonably believed to be in our best interest. We may
advance expenses incurred in defending a proceeding. To the extent that the
officer or director is successful on the merits in a proceeding as to which he
is to be indemnified, we must indemnify him against all expenses incurred,
including attorney's fees. With respect to a derivative action, indemnity may be
made only for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by a court
order. The indemnification is intended to be to the fullest extent permitted by
the laws of the State of Nevada.




Regarding
indemnification for liabilities arising under the Securities Act of 1933, which
may be permitted to directors or officers under Nevada law, we are informed
that, in the opinion of the Securities and Exchange Commission, indemnification
is against public policy, as expressed in the Act and is, therefore,
unenforceable.




ITEM
12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT




The
following table sets forth, as of the date of this Annual Report on Form 10-K,
the total number of shares owned beneficially by each of our directors, officers
and key employees, individually and as a group, and the present owners of 5% or
more of our total outstanding shares. The stockholders listed below have direct
ownership of his/her shares and possess voting and dispositive power with
respect to the shares.




Name of Beneficial
                                      
                                      Amount of Direct
                                      
                                      
                                      
                                      Percent ofOwner
                                      
                                      Ownership
                                      
                                      Position
                                      
                                      ClassChi
      Ming YU
                                      
                                      
                                      5,001,000
                                      
                                      President,
      Treasurer,
                                      
                                      
                                      90.739
                                      %DirectorKai
      GUI
                                      
                                      
                                      0
                                      
                                      Secretary
      and Director
                                      
                                      
                                      0.00
                                      %QUE
      Yong
                                      
                                      
                                      0
                                      
                                      Director
                                      
                                      
                                      0.00
                                      %All
      Officers and Directors
                                      
                                      
                                      5,001,000
                                      
                                      
                                      
                                      
                                      90.739
                                      %




Future
Sales by Existing Stockholders




37




ITEM
13.     CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS




On
December 31, 2008, the Company entered into a Share Exchange Agreement under
which the Company issued 50,000 shares of its common stock, par value $0.00001,
to Titan, a limited liability company organized under the laws of Hong Kong, and
WANG Hui, an individual, (Titan and WANG Hui being the sole shareholders of
Masterise) in exchange for 100% of the issued and outstanding shares of common
stock of Masterise.




Also on
December 31, 2008, Chi Ming YU, a shareholder and affiliate of the Company,
consummated one Affiliate Stock Purchase Agreement with thirteen (13)
individuals including Titan and WANG Hui.  Pursuant to the Affiliate
Agreement, Chi Ming YU sold a total of 5,001,000 shares of the Company’s common
stock for a total aggregate price of $5,000, including 2,972,182 shares to WANG
Hui and 1,466,068 shares to Titan.




Kai GUI,
officer and director of Registrant owns five percent (5%) of the outstanding
capital stock of Titan, and YU Chi Fung, brother of Registrant’s president Chi
Ming YU, owns seventy percent (70%) of the outstanding capital stock of
Titan.




ITEM
14.  PRINCIPAL ACCOUNTING FEES AND SERVICES




(1)
Audit Fees




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




2008
                      
                      $
                      5,000
                      
                      Malone
      & Bailey, PC2008
                      
                      $
                      20,000
                      
                      Jimmy
      C.H. Cheung & Co.2007
                      
                      $
                      5,000
                      
                      Malone
      & Bailey, PC2007
                      
                      $
                      20,000
                      
                      Jimmy
      C.H. Cheung &
Co.




(2)
Audit-Related Fees




The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported in the preceding paragraph:




2008
                  
                  $
                  4,500
                  
                  Malone
      & Bailey, PC2008
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung & Co.2007
                  
                  $
                  0
                  
                  Malone
      & Bailey, PC2007
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung &
Co.


38




(3)
Tax Fees




The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:




2008
                  
                  $
                  0
                  
                  Malone
      & Bailey, PC2008
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung & Co.2007
                  
                  $
                  0
                  
                  Malone
      & Bailey, PC2007
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung &
Co.




(4)
All Other Fees




The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1), (2), and (3) was:




2008
                  
                  $
                  0
                  
                  Malone
      & Bailey, PC2008
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung & Co.2007
                  
                  $
                  0
                  
                  Malone
      & Bailey, PC2007
                  
                  $
                  0
                  
                  Jimmy
      C.H. Cheung &
Co.




(5)
Our audit committee’s pre-approval policies and procedures described in
paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approve all accounting related activities prior to the performance of any
services by any accountant or auditor.




(6)
The percentage of hours expended on the principal accountant’s engagement to
audit our financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant’s
full time, permanent employees was 0%.




39




ITEM
15.      EXHIBITS, FINANCIAL STATEMENT
SCHEDULES




Incorporated
      by referenceFiledExhibit
                    
                    Document
      Description
                    
                    Form
                    
                    Date
                    
                    Number
                    
                    herewith3.1
                    
                    Articles
      of Incorporation
                    
                    SB-2
                    
                    01-16-07
                    
                    3.13.2
                    
                    Bylaws
                    
                    SB-2
                    
                    01-16-07
                    
                    3.24.1
                    
                    Specimen
      Stock Certificate
                    
                    SB-2
                    
                    01-16-07
                    
                    4.114.1
                    
                    Code
      of Ethics
                    
                    
                    
                    
                    
                    
                    
                    X31.1
                    
                    Certification
      of Chief Executive Officer pursuant to 15d-15(e), promulgated under the
      Securities and Exchange Act of 1934, as amended.
                    
                    
                    
                    X31.2
                    
                    Certification
      of Chief Financial Officer pursuant to 15d-15(e), promulgated under the
      Securities and Exchange Act of 1934, as amended.
                    
                    
                    
                    X32.1
                    
                    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
                    
                    
                    
                    X32.2
                    
                    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
                    
                    
                    
                    X99.1
                    
                    Audit
      Committee Charter
                    
                    
                    
                    X99.2
                    
                    Disclosure
      Committee Charter
                    
                    
                    
                    X


40


SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities and Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 13th day of
February, 2009.





GEOSTAR MINERAL CORPORATIONBY:
                                              /s/ Chi Ming YUChi
      Ming YU, President and DirectorBY:
                                              /s/Wang HuiWang
      Hui, Director and Chief Executive OfficerBY:
                                              /s/ Kai
      GUIKai
      GUI, Director, Secretary and Chief Financial
  Officer


41