UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





Form
      10-KSB





(Mark
      One)





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





For
      the
      fiscal year ended December 31, 2007





oTRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      transition period from _________ to




Commission
      file number: 0-26415





Linkwell
      Corporation


(Name
      of
      small business issuer in its charter)


Florida
              
              65-1053546(State
                  or other jurisdiction of incorporation or organization)
              
              (I.R.S.
                  Employer Identification No.)


1104
                  Jiatang Road Jiading District, Shanghai China
              
              201807(Address
                  of principal executive offices)
              
              (Zip
                  Code)




Issuer's
      telephone number: (86) 21- 5566-6258





Securities
      registered under Section 12(b) of the Exchange Act:


Title
                  of each class
              
              Name
                  of each exchange on which registeredNone
              
              not
                  applicable




Securities
      registered under Section 12(g) of the Exchange Act: common stock, par value
      $0.0005 per share


(Title
      of
      class)





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





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of the registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. o





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





State
      issuer's revenues for its most recent fiscal year: $14,335,721 for the fiscal
      year ended December 31, 2007.





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked prices of such common equity, as of a
      specified date within the past 60 days. $14,377,677 on March 20,
      2008.





State
      the
      number of shares outstanding of each of the issuer's class of common equity
      as
      of the latest practicable date. There were 73,731,675 shares of common stock
      issued and outstanding as of December 31, 2007.





DOCUMENTS
      INCORPORATED BY REFERENCE





If
      the
      following documents are incorporated by reference, briefly describe them and
      identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which
      the document is incorporated: (1) any annual report to security holders; (2)
      any
      proxy or information statement; and (3) any prospectus filed pursuant to Rule
      424(b) of the Securities Act of 1933 ("Securities Act"). The listed documents
      should be clearly described for identification purposes (e.g., annual report
      to
      security holders for fiscal year ended December 24, 1990). Not
      Applicable.





Transitional
      Small Business Disclosure Form (check one): Yes o  No
x










**INDEX
      TO FORM 10-KSB ANNUAL REPORT**


Page**Part
                    I**Item
                    1. Description of Business
                3Item
                    2. Description of Property
                26Item
                    3. Legal Proceedings
                26Item
                    4. Submission of Matters to a Vote of Security Holders
                26**Part
                    II**Item
                    5. Market for Common Equity and Related Stockholder Matters and
                    Small
                    Business Issuer Purchases of Equity Securities
                27Item
                    6. Management's Discussion and Analysis or Plan of
                    Operation
                28Item
                    7. Financial Statements
                35Item
                    8. Changes In and Disagreements with Accountants on Accounting
                    and
                    Financial Disclosure
                35Item
                    8A(T). Controls and Procedures
                35Item8B.
                    Other Information
                36**Part
                    III**Item
                    9. Directors, Executive Officers, Promoters, Control Persons
                    and Corporate
                    Governance; Compliance with Section 16(a) of the Exchange
                    Act
                37Item
                    10. Executive Compensation
                39Item
                    11. Security Ownership of Certain Beneficial Owners and Management
                    and
                    Related Stockholder Matters
                39Item
                    12. Certain Relationships and Related Transactions; and Director
                    Independence
                44Item
                    13. Exhibits
                45Item
                    14. Principal Accountant Fees and Services
                47Signatures
                49Financial
                    Statements
                F-1







CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING INFORMATION





Certain
      statements in this annual report contain or may contain forward-looking
      statements that are subject to known and unknown risks, uncertainties and other
      factors which may cause actual results, performance or achievements to be
      materially different from any future results, performance or achievements
      expressed or implied by such forward-looking statements. These forward-looking
      statements were based on various factors and were derived utilizing numerous
      assumptions and other factors that could cause our actual results to differ
      materially from those in the forward-looking statements. These factors include,
      but are not limited to, our ability to increase our revenues, develop our
      brands, implement our strategic initiatives, economic, political and market
      conditions and fluctuations, government and industry regulation, U.S. and global
      competition, and other factors. Most of these factors are difficult to predict
      accurately and are generally beyond our control.





You
      should consider the areas of risk described in connection with any
      forward-looking statements that may be made in this annual report. Readers
      are
      cautioned not to place undue reliance on these forward-looking statements and
      readers should carefully review this annual report in its entirety, including
      the risks described in Part I, Item 1. Description of Business - Risk Factors.
      Except for our ongoing obligations to disclose material information under the
      Federal securities laws, we undertake no obligation to release publicly any
      revisions to any forward-looking statements, to report events or to report
      the
      occurrence of unanticipated events. These forward-looking statements speak
      only
      as of the date of this annual report, and you should not rely on these
      statements without also considering the risks and uncertainties associated
      with
      these statements and our business.





OTHER
      PERTINENT INFORMATION




As
      used
      herein, the “Linkwell”, “the Company”, “we”, “our”, “us” and similar terms
      include Linkwell Corporation and its subsidiaries, unless the context indicates
      otherwise. The information which appears on our web site at www.linkwell.us
      is
      not part of this annual report. The People's Republic of China is herein
      referred to as China or the PRC.




**PART
      I**





**ITEM
      1.**  **DESCRIPTION
      OF BUSINESS**





We
      operate under a holding company structure and currently have one wholly-owned
      operating subsidiary, Linkwell Tech Group Inc. ("Linkwell Tech") a Florida
      Corporation. Linkwell Tech owns 100% of Shanghai LiKang Disinfectant High-Tech
      Company, Limited (“LiKang Disinfectant”) as of March 25, 2008 and prior to March
      25, 2008 it owned 90% LiKang Disinfectant. Additionally, Linkwell Tech owns,
      as
      of March 25, 2008, 100% of Shanghai LiKang Biological High-Tech Company, Ltd.
      (“LiKang Biological”). LiKang Disinfectant owns 100% of Shanghai LiKang
      International Trade Co., Ltd. ("LiKang International"). We regard LiKang
      Disinfectant's business of hospital disinfectant products as our primary
      business.




Linkwell
      Corporation, through our 100% owned subsidiary, LiKang Disinfectant, is engaged
      in the development, manufacture, sale and distribution of disinfectant health
      care products primarily to the medical industry in China. The Company has a
      national marketing and sales presence throughout all 22 provinces as well as
      four autonomous regions and five municipalities in China. We currently employ
      19
      full-time sales and marketing people based in Shanghai. Shanghai LiKang
      Pharmaceuticals Technology Company (“LiKang Pharmaceuticals”), a company 90%
      owned by Linkwell’s Chairman and Chief Executive Officer, also sells our
      products using 72 independent sales representatives in China.





Currently,
      we market our products to the medical industry in China, however we are making
      efforts to diversify and expand our reach to the retail market. Recently, we
      have made efforts to expand our customer base and penetrate the civil,
      industrial, livestock and agricultural disinfection markets of China. As of
      now,
      we offer a variety of disinfectant products for the following
      applications:





n  Skin
      and
      mucous membrane disinfectants;




3




n  Hand
      disinfectants (external);


n  Environment
      and surface disinfectants;


n  Medical
      devices and equipment disinfectants;


n  Machine
      disinfectants;


n  Animal
      disinfectants.





LiKang
      Disinfectant has 56 marketed products, 50 of which are certified by one or
      more
      government authorities; the Chinese Ministry of Health, State Food and Drug
      Administration, or Ministry of Agriculture. China’s Ministry of Health approves
      those products that require the highest level of licensing and have granted
      28
      hygiene licenses to Linkwell. We also sell products which have been developed
      and manufactured by third parties. These parties manufacture disinfectant
      products that generated approximately 1% of our revenue for the fiscal year
      ended December 31, 2007. Products that we manufacture account for approximately
      99% of our total net revenues for the fiscal year ended December 31, 2007.





In
      addition, Linkwell Corporation owns a 100% interest in LiKang International,
      the
      primary business of which is the import and export of a variety of products
      and
      services ranging from small medical equipment and chemical products to
      computers.




Industry
      Background





In
      2007,
      Frost & Sullivan stated, “The Chinese healthcare industry has been one of
      the fastest growing healthcare industries in the world. It is expected to become
      the fifth largest by 2010. Its growth is mainly driven by the government’s
      initiatives to simplify regulatory procedures, enhance trade relations, and
      attract foreign investment through friendly policies.”





According
      to the China
      Federation of Industrial Economics, China’s
      disinfectant industry is estimated at well over $6.5 Billion. Other experts
      believe the Chinese market demand for biocides will increase by approximately
      7.9% annually to 574,000 metric tons by the year 2010.





The
      disinfectant industry in China may be characterized as an emerging industry,
      populated by approximately 1,000 small manufacturers and distributors, and
      half
      a dozen large international products with limited presence and products.





Major
      contributing factors responsible for the strength of China’s disinfectant
      industry growth include the transition to a market economy, increasing health
      consciousness in the general population and increasing government health
      standards and education.




Increasing
      Domestic Demand





Since
      the
      shift to a market economy, the Chinese government has initiated several policies
      to improve public health and living standards and improve the Chinese healthcare
      industry. Consequently, these initiatives and traditional market forces have
      driven increasing demand for disinfectant products. According to Frost &
Sullivan, China’s healthcare expenditures grew from 5.0% of GDP in 1999 to 6.7%
      in 2005, representing a growth rate of approximately 5%. During the same period,
      USA healthcare expenditures grew from 13.2% to 15.9%, representing a growth
      rate
      of approximately 3%.





After
      nearly 30 years of sustaining economic growth in China, both the Chinese
      government and the public have become more concerned about the quality and
      cost
      of healthcare in China. Heightened public concerns, as well as these new public
      concerns have led to a surge in interest for disinfectant products in China
      with
      consumers maintaining stockpiles of disinfectant products. Other factors that
      support the growth in demand for disinfectant products include:





·
            China’s
                population of 1.3 billion; a large and rapidly aging population base
                that
                require better sanitization standards to protect their health. According
                to a United Nations study released in 2005, the number of people
                aged 60
                or over in China is expected to rise to more than 430 million people;






4




·
            Healthcare
                professionals and citizens who want a healthcare system and hygienic
                standards as advanced as western
                countries;


·
            Ongoing
                government reforms in hospital sanitation, medical standards and
                disinfectant regulations; and


·
            Government
                educational program to increase public awareness of public health
                and
                hygienic standards.





Recent
      Health Concerns in China





The
      most
      critical factors that triggered health concerns in China are the recent and
      recurring health crises that have led to several epidemics (see Table below)
      and
      potential pandemics. In response, the Chinese government has taken initiatives
      to improve public health and living standards, including the establishment
      of
      The Ministry of Public Health in China for the disinfectant industry in China.





**Outbreak
                time**
            
            **Location**
            
            **Disease**
            
            **Situation**January,
                1988
            
            Shanghai
            
            Hepatitis
                A
            
            310,000
                reported cases of Hepatitis A, 47 deathsApril
                - May, 1998
            
            Shenzhen
            
            Sub-
                Tuberculosis bacillus disease
              M.
                chelonae
            
            Shenzhen
                Woman and Children Hospital reports an airborne infection. 168 patients
                infected, 46 severe casesNovember
                2002
            
            Throughout
                China
            
            SARS
            
            8,000
                reported cases, 800 deathsJune
                24 - August 20 2005
            
            Sichuan
                Province
            
            *Streptococcus
                suis*in
                swine and humans
            
            204
                reported cases of humans infected with the Swine streptococci in
                Sichuan,
                38 deathsApril
                2005
            
            Throughout
                China
            
            Pulmonary
                tuberculosis, Hepatitis B
            
            Pulmonary
                tuberculosis, Hepatitis B remain top two priorities on the infectious
                disease list in ChinaJune,
                2005
            
            Tibet
            
            Bubonic
                plague
            
            Five
                infected cases reported, two deathsJuly-September
                2005
            
            Hunan,
                Fujian, Zhejiang provinces
            
            Cholera
            
            638
                cases reported, two deathsAugust,
                2005
            
            Guizhou,
                Ningxia, Liaoning, Jilin
            
            Anthrax
            
            140
                cases reported, one deathOctober,
                2005
            
            Inner
                Mongolia , Hunan , Anhui , Liaoning , and Hubei provinces
            
            Avian
                Flu
            
            Three
                confirmed cases reported, two deathsOctober,
                2005
            
            Zhejiang,
                Anhui provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case in each province reportedMarch
                24, 2006
            
            Shanghai
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedJune
                16,2006
            
            Guangdong
                Province
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedAugust
                14, 2006
            
            XinJiang
                Province
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedJanuary
                9, 2007
            
            Anhui
                provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedFebruary
                27, 2007
            
            Fujian
                provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedMarch
                28, 2007
            
            Anhui
                provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedMay
                24, 2007
            
            People’s
                Liberation Army X department
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedDecember
                2, 2007
            
            Jiangsu
                provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reportedDecember
                6, 2007
            
            Jiangsu
                provinces
            
            highly
                pathogenic bird flu
            
            One
                confirmed case reported




5




SARS
      -
      Severe Acute Respiratory Syndrome





In
      recent
      years, the Severe Acute Respiratory Syndrome (SARS) has threatened the public
      community. SARS, which is a viral respiratory illness caused by a corona virus,
      called SARS-associated corona virus (SARS-CoV), was first reported in Asia
      in
      November 2002. Over the next few months, the illness spread to more than two
      dozen countries in North America, South America, Europe, and Asia before the
      SARS global outbreak of 2003 was contained. In April 2004, the Chinese Ministry
      of Health reported several new cases of possible SARS outbreaks in Beijing
      and
      the Anhui Province, which is located in east-central China.





According
      to the Center for Disease Control of the central government of China, the common
      manner in which SARS seems to spread is by close person-to-person contact.
      The
      virus that causes SARS is thought to be transmitted most readily by respiratory
      droplets (“droplet spread”) when an infected person coughs or sneezes. Droplet
      spread occurs as germs from the cough or sneeze of an infected person are
      propelled a short distance (generally up to three feet) through the air and
      deposited on the mucous membranes of the mouth, nose, or eyes of nearby persons.
      The virus also can spread when a person touches a surface or object contaminated
      with infectious droplets and then touches his or her mouth, nose, or eye(s).
      Ultimately, there is much the global community does not know about SARS, and
      it
      is possible that the SARS virus might spread more broadly through the air
      (airborne spread) or by other ways that are not yet known.





In
      the
      fiscal year ended 2007, there were no confirmed cases of SARS reported in
      China.




Avian
      Influenza





In
      2005,
      the threat of a global pandemic as a result of the avian flu began to capture
      the attention of the global community. The avian flu is a type of the A strain
      virus that infects birds. Typically, it is not common for humans to be infected
      with the virus via contact with birds, however a few bird-to-human outbreaks
      have been reported and most have been in Asia. Humans were infected when they
      came into contact with sick birds or contaminated surfaces. In most cases,
      infected persons reported flu-like symptoms, but some had more serious
      complications, including pneumonia and acute respiratory distress. The avian
      flu
      has led to increased concerns for improved health conditions.





In
      2007,
      there were 77 confirmed cases of highly pathogenic bird flu reported throughout
      the world, that resulted in 50 deaths. Within China there were 5 confirmed
      cases
      resulting in 3 deaths during 2007.




China
      Health Standards





In
      July
      2002, the Chinese Ministry of Public Health issued the 27th order of Ministry
      of
      Health of the People's Republic of China establishing national standards for
      the
      disinfection industry. The first criterion of the new order stipulated that
      disinfectant manufacturers in China must obtain a license to manufacture hygiene
      disinfectants. Secondly, prior to release, all disinfectant instruments must
      obtain the official hygiene permit document of both the local provincial hygiene
      administrative department and the Ministry of Public Health.





The
      process to obtain a manufacturing license involves three stages listed
      below:





1.
            Manufacturers
                file application materials with their local public health administrative
                department;


2.
            Local
                administrative departments perform an inspection of the manufacturing
                facilities according to "qualified disinfection product manufacturing
                enterprise requirements”; and


3.
            Upon
                satisfaction of "qualified disinfection product manufacturing enterprise
                requirements,” the manufacturer will be issued a
                license.





The
      process to obtain the official hygiene permit for individual disinfectant or
      instrument involves the steps listed below:





1.
            File
                the application;






6




2.
            Explain
                disinfectant ingredients or instrument layout and
                function;


3.
            Hygiene
                administrative departments examine the sample and perform independent
                tests to verify industry standards and benefits;
                and


4.
            If
                all the standards are met, the permit will be issued.





The
      table
      below details the 28 licenses issued to LiKang Disinfectant by the Ministry
      of
      Public Health of the central government of China.





#
            
            Products
            
            Date1
            
            An’erdian
                Skin Disinfectant
            
            2003.2.132
            
            An’erdian-type
                2nd skin disinfectant
            
            2002.11.223
            
            An’erdian-type
                3rd skin and mucous membrane disinfectant
            
            2005.1.194
            
            Dian’erkang
                Aerosol Disinfectant
            
            2004.3.225
            
            Dian’erkang
                2% glutaraldehyde disinfectant
            
            2002.11.226
            
            Aiershi
                disinfectant tablets
            
            2004.2.97
            
            Aiershi
                disinfectant
            
            2004.2.98
            
            Dian’erkang
                PVP-I disinfectant
            
            2005.3.309
            
            Dian’erkang
                Iodophor disinfectant
            
            2004.2.1910
            
            Jifro
                disinfectant gel
            
            2005.1.1911
            
            Dian’erkang
                alcohol disinfectant
            
            2003.12.2312
            
            Dian’erkang
                compound iodine disinfectant
            
            2004.4.2813
            
            Lvshaxing
                disinfectant granule
            
            2004.2.1914
            
            Lvshaxing
                disinfectant tablets
            
            2004.3.2915
            
            LiKang
                test paper of chlorine
            
            2004.1.1616
            
            Jifro
                4% Chlorhexidine gluconate surgical hand scrub
            
            2004.9.717
            
            JifroSongning
                disinfectant
            
            2004.9.718
            
            Lineng
                glutaraldehyde disinfectant
            
            2005.2.1719
            
            LiKang
                121 steam pressure sterilization chemical indicator
            
            2005.3.3020
            
            LiKang
                132 steam pressure sterilization chemical indicator
            
            2005.3.3021
            
            LiKang
                steam pressure sterilization chemical indicator
            
            2005.4.122
            
            LiKang
                84 disinfectant
            
            2005.6.2723
            
            LiKang
                Glutaraldehyde Monitors (Strip)
            
            2005.12.1424
            
            PuTai
                Skin Disinfectant
            
            2007.1.1125
            
            PuTai
                washless surgical hand scrub
            
            2007.1.1126
            
            PuTai
                washless surgical hand foam disinfectant
            
            2007.1.1127
            
            LiKang
                disinfectant detergent
            
            2007.4.1928
            
            JifroTaixin
                disinfectant
            
            2007.6.4




LINKWELL’S
      PRODUCT LINES





We
      market
      56 products, which range from air disinfection machines to hot press bags,
      disinfection swabs, and disinfection indicators. Our products fall into five
      categories and six product types.





Five
      Product Categories:





ü
            Skin
                and Mucous Membrane Disinfectants – 8 Products


ü
            Hand
                Disinfectants – 8 Products


ü
            Environment
                and Surface Disinfectants – 10
                Products


ü
            Medical
                Devices and Equipment Disinfectants – 5
                Products


ü
            Air
                disinfection equipment – 7 Products


ü
            Other
                products – 18 Products





Six
      Product Types:





ü
            Liquids
                - gel


ü
            Tablets
                - powder






7




ü
            Aerosol


ü
            Chemical
                indicator


ü
            Disinfectant
                appliance


ü
            Liquids
                - foam





We
      believe our varied product line gives us a marketing advantage to build a
      national customer base for our products and services. Approximately 99% of
      our
      sales are derived from products we have internally developed and produced and
      the remaining 1% of sales are produced by outside companies. The tables below
      offer a summary of our current product offerings:





Skin
      and
      Mucous Membrane Disinfectants





Skin
      and
      mucous membrane disinfectants target both external and internal applications.
      Prior to operations, incisions, or injections the products are used to clean
      the
      skin surface. Mucous membrane disinfectants target internal germs located in
      the
      mouth, eye, perineum, and other internal sources. This product group accounted
      for approximately 57% of our fiscal year 2007 sales, and approximately 57%
      of
      our fiscal year 2006 sales. The table below lists our skin and/or mucous
      membrane disinfectants.


Product
                  Names
              
              Ingredients
              
              Application
              
              Industry
                  StandardAn’erdian
                  Skin Disinfectant
              
              iodine,
                  alcohol
              
              Skin
                  disinfectant
              
              Q/SUVE
                  20-2003An’erdian-type
                  3rd skin and mucous membrane disinfectant
              
              iodine,
                  chlorhexidine
              
              Skin
                  & mucous membrane disinfectant
              
              Q/SUVE
                  22-2003Dian’erkang
                  PVP-I disinfectant
              
              Povidone-iodine
              
              Skin
                  & mucous membrane disinfectant
              
              Q/SUVE
                  28-2004Dian’erkang
                  alcohol disinfectant
              
              alcohol
              
              Skin
                  disinfectant
              
              Q/SUVE
                  08-2004PuTai
                  Skin disinfectant
              
              Chlorhexidine
                  gluconate, alcohol
              
              Skin
                  disinfectant
              
              Q/SUVE
                  37-2006




Hand
      Disinfectants





These
      disinfectants target the skin surface. Products are applied to the skin prior
      to
      medial procedures. This product group accounted for approximately 15% of our
      fiscal year 2007 sales and approximately 13.5% of our fiscal year 2006 sales.
      The table below lists our hand disinfectants.





Product
                Names
            
            Ingredients
            
            Application
            
            Industry
                StandardJifro
                antimicrobial hand washing
            
            Chlorhexidine
            
            Hand
                washing
            
            Q/SUVE
                04-2003Jifro
                disinfectant gel
            
            DP300
                (Triclosan)
            
            Hand
                disinfectant
            
            Q/SUVE
                02-2003Jifro
                4% Chlorhexidine gluconate surgical hand scrub
            
            Chlorhexidine
                gluconate
            
            Surgical
                hand disinfectant
            
            Q/SUVE
                09-2004PuTai
                washless surgical hand scrub
            
            Chlorhexidine
                gluconate, alcohol
            
            Hand
                disinfectant
            
            Q/SUVE
                39-2006PuTai
                washless surgical hand foam disinfectant
            
            Chlorhexidine
                gluconate, alcohol
            
            Hand
                disinfectant
            
            Q/SUVE
                38-2006





Environment
      and Surface Disinfectants





These
      disinfectants target a variety of surfaces, such as floors, walls, tables,
      and
      medical devices. Additionally the products can be applied to cloth materials
      including furniture and bedding. This product group accounted for approximately
      15% of our fiscal year 2007 sales and approximately 16.6% of our fiscal year
      2006 sales. The table below lists our environment and surface
      disinfectants.





Product
                Names
            
            Ingredients
            
            Application
            
            Industry
                StandardAiershi
                disinfectant tablets
            
            Trichloroisocyanuric
                acid
            
            Environment
                and surface disinfection
            
            Q/SUVE
                34-2004Lvshaxing
                disinfectant tablets
            
            Dichloro
                dimethylhydantoin
            
            Environment
                and surface disinfection
            
            Q/SUVE
                33-2003Dian’erkang
                aerosol disinfectant
            
            Benzethonium
                Chloride
            
            Environment
                and surface disinfection, preventing the spread of airborne viruses
                such
                as human influenza virus, SARS, and the Bird flu virus.
            
            Q/SUVE
                07-2004Lvshaxing
                disinfectant granule
            
            Dichloro
                dimethylhydantoin
            
            Environment
                and surface disinfection
            
            Q/SUVE
                32-2003LiKang
                disinfectant detergent
            
            Sodium
                hypochlorite
            
            Surface
                disinfectant
            
            Q/SUVE
                37-2006




8




Medical
      Devices and Equipment Disinfectants





This
      line
      of disinfectants targets medical equipment, including the sterilization of
      thermo sensitive instruments and endoscope equipment. This product group
      accounted for approximately 11% of our fiscal year 2007 sales and approximately
      11.5% of our fiscal year 2006 sales. The table below lists our medical device
      and equipment disinfectants.





Product
                Names
            
            Ingredients
            
            Application
            
            Industry
                StandardDian’erkang
                2% glutaraldehyde disinfectant
            
            Glutaraldehyde
            
            Disinfection
                and sterilization of device
            
            Q/SUVE
                10-2003Dian’erkang
                2% glutaraldehyde disinfectant (sales to Olympus
                Corporation)
            
            Glutaraldehyde
            
            Disinfection
                and sterilization of endoscopes
            
            Q/SUVE
                10-2003Dian’erkang
                multi-enzyme rapid detergents
            
            Multi-Enzyme
            
            Rinsing
                and decontamination of device
            
            Q/SUVE
                14-2004





Machine
      Series





This
      line
      of disinfectants targets air quality. This product group accounted for
      approximately 2% of our fiscal year 2007 sales and approximately 1.4% of our
      fiscal year 2006 sales. The table below lists our machine series
      disinfectants.





Product
                Names
            
            Ingredients
            
            Application
            
            Industry
                StandardLvshaxing
                LKQG-1000 air disinfection machine
            
            Ozone,
                ultraviolet radiation, electrostatic
            
            Air
                disinfection
            
            Q/SUPE
                09-2003An’erdian
                disinfection swab
            
            An’erdian
            
            Skin
                and disinfection
            
            Q/NYMN07-2003LiKang
                test paper of chlorine
            
            reagent
            
            Indicates
                disinfectant concentration
            
            Q/SUVE
                40-2003LiKang
                121 steam pressure sterilization chemical indicator (card and adhesive
                tape)
            
            Indication
                oil
            
            Indicates
                sterilization effect
            
            Q/SUVE
                16-2005LiKang
                132 steam pressure sterilization chemical indicator
                (label)
            
            Indication
                oil
            
            Indicates
                sterilization effect
            
            Q/SUVE
                17-2005LiKang
                steam pressure sterilization chemical indicator
            
            Indication
                oil
            
            Indicates
                sterilization effect
            
            Q/SUVE
                18-2005





Retail
      products





In
      2005,
      we began to expand our distribution reach to the retail market. As a result,
      our
      products have gained access to hotels, schools, supermarkets, and drugstores.
      We
      have repackaged commercial disinfectant products for sale to the consumer
      market. Since October 1999, we redeveloped four separate products for
      distribution to the retail market. LiKang Disinfectant redeveloped the following
      products in the months and years listed:


n
              Jin
                  Zhongda collutory (mouthwash)
              October
                  1999n
              Antibacterial
                  lubricant
              October
                  1999n
              LiKang
                  Disinfectant 84
              August
                  2005n
              Dian’erkang
                  aerosol disinfectant
              October
                  2005





9




Customers





We
      sell
      our products on a wholesale and retail basis to the medical community in China.
      We have approximately 5,000 active and recurring customers including hospitals,
      medical suppliers, and distribution companies throughout China. We maintain
      over
      20 distribution contracts with wholesale dealers and agents. We generally offer
      payment terms of four to six months before payment for the products is due.
      For
      the fiscal years ended December 31, 2007 and 2006, two affiliated entities
      that
      are our customers, LiKang Pharmaceutical (on October 16, 2007, LiKang
      Pharmaceutical changed its name to ZhongYou) and Shanghai LiKang Meirui
      Pharmaceuticals High-Tech Co. Ltd., represented approximately 17% and about
      40%,
      respectively, of our total net revenues. We have contracts with all our dealer
      and agent customers.





Manufacturing





We
      operate two production facilities in Shanghai, one located in the Shanghai
      Jiading district and one located in the Shanghai Jinshan district. Products
      are
      manufactured primarily in liquid, tablet, and powder form. Approximately 99%
      of
      LiKang Disinfectant’s revenues for fiscal 2007 were derived from products
      manufactured in these two factories.





The
      Shanghai Jiading district factory is approximately 21,500 square feet, all
      of
      which is used for production. This factory meets the good manufacturing practice
      (GMP) standards established by the central government; however, the equipment
      utilized in the factory is not GMP certified for the production of medical
      and
      chemical products. The main products produced at the Shanghai Jiading district
      factory are liquid and index disinfectant devices. The manufacturing facility
      has the capacity to produce approximately 9 million liters of liquid
      disinfectant annually. The manufacturing cycle for the liquids, from formulation
      to finished product, is one day.





The
      Shanghai Jinshan district factory is approximately 4,300 square feet and is
      used
      in the manufacture of the tablet and powder forms of disinfectants. The
      manufacturing capacity is 300 metric tons of tablet and 180 metric tons of
      powder disinfectant annually. The average manufacturing cycle for the tablets
      and powder, from formulation to finished product, is one day.





Products
      which represent the remaining approximate 1% of our fiscal year 2007 revenues
      are manufactured by third parties.





During
      fiscal 2007, following GMP certification for both the factory and the equipment;
      we began utilizing the services of LiKang Biological, a related party, to
      manufacture some of our products including our An'erdian and Dian'erkang lines
      of disinfectants. On March 25, 2008, Linkwell Tech bought 100% of the issued
      and
      outstanding stock of LiKang Biological. See Part III, Item 12. Certain
      Relationships and Related Transactions, and Director Independence appearing
      later in this annual report.





We
      have
      found in our experience that products manufactured at GMP certified facilities
      utilizing GMP certified equipment can be sold at higher prices than similar
      products manufactured at non- GMP certified facilities. While GMP certified
      products cost more to produce, we are able to increase our selling prices
      proportionally. Our product packaging varies to meet different needs of the
      market. We package our liquid and gel disinfectants in popular sizes ranging
      from 40 ml to 5 liters. Each of our tablet disinfectants contains 500 ml of
      active chlorine. We package these tablets in 50 tablet, 100 tablet and 200
      tablet bottles. Finally, we package our powder disinfectants in 250 gram and
      500
      gram containers.





We
      maintain an inventory of finished products equal to approximately 1 month of
      average sales. Currently, we are manufacturing at about 50% of full capacity
      based upon our current product demand, and we have the ability to increase
      to
      full capacity if demand continues to increase.





We
      have
      an in-house fulfillment and distribution operation, which is used to manage
      our
      supply chain, beginning with the placement of the order, continuing through
      order processing, packaging and shipping the products to each customer. We
      maintain inventory and fill customer orders from both the Jiading factory and
      the Jinshan factory.





10




Raw
      Materials





We
      purchase raw materials from six primary suppliers, including a related party,
      and we have signed purchase contracts with these suppliers in an effort to
      ensure a steady supply of raw materials. We have maintained stable business
      relations with these suppliers for over 10 years, and believe that our
      relationships with these primary suppliers will remain stable. In the event
      the
      relationships falter, there are many suppliers with the capability to supply
      our
      company. We purchase raw materials on payment terms of 30 days to three months.
      Some of the suppliers import from foreign countries, as listed below, and we
      purchase directly from these suppliers.





The
      table
      below details the supply relationships for raw materials





Raw
                materials
            
            Suppliers
            
            OriginIodine
            
            Shanghai
                Wenshui Chemical Co., Ltd
            
            USAPotassium
                iodide
            
            Shanghai
                Wenshui Chemical Co., Ltd
            
            HollandGlutaraldehyde
            
            Shanghai
                Jin an tang Hygienical Product Factory
            
            GermanyTriclosan
            
            Ciba
                Specialty Chemicals (China)LTD
            
            DomesticAlcohol
            
            Shanghai
                Jangbo Chemical Co., L td
            
            DomesticTrichloroisocyanuric
                acid
            
            Xuzhou
                Keweisi Disinfectant Co., Ltd
            
            Domestic





Customer
      Service and Support





We
      believe that a high level of customer service and support is critical in
      retaining and expanding our customer base. Customer care representatives
      participate in ongoing training programs under the supervision of our training
      managers. These training sessions include a variety of topics such as product
      knowledge and customer service tips. Our customer care representatives respond
      to customers’ e-mails and calls that are related to order status, prices and
      shipping. If our customer care representatives are unable to respond to a
      customer’s inquiry at the time of the call, we strive to provide an answer
      within 24 hours. We believe our customer care representatives are a valuable
      source of feedback regarding customer satisfaction. Our customer returns and
      credits average approximately 1% of total sales.





Linkwell’s
      New Product Development





We
      are
      committed to research and development. LiKang Disinfectant was created as a
      research and development organization by the Second Military Medical University
      (SMMU) of the Chinese Army in 1988. We develop our products internally and
      own
      all rights associated with these products.





We
      commercialized four new disinfectant products in 2007, including PuTai Skin
      Disinfectant, PuTai washless surgical hand scrub, PuTai washless surgical hand
      foam disinfectant and LiKang disinfectant detergent, which is an environmental
      and surface disinfectant. We currently have 10 products in development and
      have
      licensing applications filed for 3 of those products.





For
      the
      fiscal years ended December 31, 2007 and 2006, we spent approximately $61,452
      and approximately $18,000, respectively, on research and
      development.





Linkwell’s
      Marketing and Sales





We
      were
      formed in 1988 as a research and development organization by the Second Military
      Medical University (SMMU) of the Chinese Army. Our CEO, Mr. Xuelian Bian, was
      a
      member of the staff of SMMU. We believe that his relationships with alumni
      and
      business persons associated with SMMU provide us with certain marketing
      advantages. The university is a well recognized, prestigious institution in
      China and many of its graduates work at hospitals, medical suppliers, and
      distribution companies throughout China in senior positions, which places them
      in the decision making process for purchasing products such as ours. In
      addition, the students and faculty at the university provide a pool of talent
      from which we draw, both as potential employees or summer interns who go on
      to
      work at other companies, many of whom are customers or potential customers
      for
      our products. In marketing our products, we seek to leverage these
      relationships.





11




During
      the 2007 fiscal year, we expanded our distribution capability in the PRC. We
      have a national marketing and sales presence throughout all 22 provinces, as
      well as four autonomous regions, and four municipalities of China. We currently
      employ 19 full-time sales and marketing people based in Shanghai. Shanghai
      LiKang Pharmaceuticals Technology Company, an affiliate, also sells our products
      using 72 independent sales representatives in other provinces of China.





Approximately
      28% of our sales are achieved by our proprietary sales force, while the
      remaining 72% are outsourced to independent dealers and agents. We compensate
      our proprietary salesman with a base salary plus commission. The sales
      representatives are located in each of China’s provinces. The external sales
      network currently covers hospitals in 20 provinces including: Beijing,
      Guangdong, Tianjin, Fujian, Yunnan, Hainan, Jiangsu, Zhejiang, Anhui, Shandong,
      Henan, Hebei, Liaoning, Heilongjiang, Shanxi, Gansu, Ningxia, Guizhou, Hunan,
      Sichuan, Xinjiang, Neimenggu. The independent sales representatives sell
      directly to the end-users.





We
      also
      have relationships with 23 independent distribution agents who purchase products
      from us in larger quantities and then resell in smaller quantities to smaller
      health care facilities. In January 2005 we signed a two year agreement with
      Shanghai LiKang Meirui Pharmaceutical High-Tech Co., Ltd. to market our products
      to the retail/consumer market. Shanghai LiKang Meirui Pharmaceutical High-Tech
      Co., Ltd.  has
      a
      sales network which covers certain sectors of the retail/consumer market in
      China. Shanghai Shanhai Group, LiKang Disinfectant's minority shareholder,
      owns
      a 68% interest of Shanghai LiKang Meirui Pharmaceutical High-Tech Co.,
      Ltd.




Recent
      Development - Disinfectant Educational Center





On
      May
      25, 2006, we entered into an agreement with China Pest Infestation Control
      and
      Sanitation Association, an association governed by the Chinese central
      government, to establish and operate a disinfectant educational center in
      Beijing, China. We will be responsible for the establishment and development
      of
      the disinfectant educational center, as well as its management and funding.
      The
      China Pest Infestation Control and Sanitation Association will be responsible
      for establishing a job training base in Beijing. We believe we were selected
      to
      participate in this program based upon our reputation and experience in the
      disinfectant industry.





It
      is
      anticipated that the disinfectant educational center will offer a job training
      program to educate and train professionals to work in the disinfectant field.
      The disinfectant educational center will be a tuition based education program
      for which graduates will receive a license from the China Pest Infestation
      Control and Sanitation Association. After completion of the program, it is
      envisioned that a personnel exchange service center of the Chinese central
      government's Health Department will function much like a placement office and
      assist the center's graduates in securing positions with companies seeking
      to
      fill positions in the PRC. From time to time we may also recruit graduates
      from
      the disinfectant educational center to join our company.





In
      June
      2006, we entered into an oral arrangement with Beijing JinMeiHua Sterilizing
      Technology Development Company, Limited ("JinMeiHua"), an unrelated party,
      to
      act as our agent to operate the disinfectant educational center and to be
      responsible for the job training program specifics. However, during the 2007
      fiscal year, we terminated this contract and now control the operation of the
      disinfectant educational center and job training program independently of
      JinMeiHua.





We
      believe the China Pest Infestation Control and Sanitation Association and LiKang
      Disinfectant will share the profits of the disinfectant educational center
      with
      us; however the precise revenue share has not been determined. It is also
      expected that the China Pest Infestation Control and Sanitation Association
      will
      receive at a maximum 50% of the profits from the disinfectant educational
      center. JinMeiHua will not receive any profits for operating the disinfectant
      educational center because our arrangement with JinMeiHua has been terminated.
      We advanced JinMeiHua $249,797 to begin the development of the disinfectant
      educational center. The investment made by LiKang Disinfectant of $249,797
      in
      JinMeiHua was returned to LiKang Disinfectant in December 2006 because JinMeiHua
      was no longer involved in this program.





12




In
      2006,
      LiKang Disinfectant entered into an agreement with China Pest Infestation
      Control Association and Ministry of Health to establish and operate a
      disinfectant educational center in Beijing, China. In accordance with the
      agreement, LiKang Disinfectant is responsible for the establishment of the
      disinfectant educational center, as well as its management and funding. As
      of
      December 31, 2007, we had provided the text books and technical standards for
      training and we anticipate that the first class will be held for training the
      2008 Beijing Olympic Staff.




Linkwell’s
      Intellectual Property





We
      have
      received eleven patents and have one pending patent application with National
      Property Right Administration of the PRC. The patent approval process can take
      up to 36 months. The following is a list of LiKang Disinfectant’s patents and
      pending patent applications:




Patent
                Category
            
            Patent
                name
            
            Patent
                No
            
            NotesNew
                invention
            
            Low
                smell and stimulus contain chlorine disinfectant tablet, powder
                etc
            
            ZL
                200410068135.8
            
            Approved,
                expires August2026New
                invention
            
            A
                new skin & mucous membrane disinfectant including preparation
                methods
            
            Application
                # 200410025305.4
            
            Pending.
                Applied on 2004-11-12Appearance
                design
            
            Bottle
                (with the wing stretch)
            
            ZL
                00 3 14391.0
            
            Approved,
                expires April 2010Appearance
                design
            
            Packaging
                bottle
            
            ZL
                2003 3 0108274.5
            
            Approved,
                expires November 2013Appearance
                design
            
            Bottle
            
            ZL
                200530034239.2
            
            Approved,
                expires December2015Appearance
                design
            
            Test
                paper box of chlorine
            
            ZL
                2004 3 0022740.2
            
            Approved,
                expires May 2014Product
                Improvement
            
            Improved
                heavy duty bottle
            
            ZL
                03 2 29616.9
            
            Approved,
                expires March 2013Product
                Improvement
            
            High
                strength water sterilizer with Model H ultraviolet
                lamp
            
            ZL
                03 2 10513.4
            
            Approved,
                expires September 2013Product
                Improvement
            
            Sewage
                application
            
            ZL
                2004 2 0037013.8
            
            Approved,
                expires June 2014Product
                Improvement
            
            Container
                with the vacuum pump
            
            ZL
                200420090682.1
            
            Approved,
                expires June 2016Product
                Improvement
            
            Multifunctional
                air disinfectant
            
            ZL
                200420037010.4
            
            Approved,
                expires August2015Product
                Improvement
            
            Bracket
                for heavy duty bottle
            
            ZL
                200520039668.3
            
            Approved,
                expires October2016





We
      have
      nine product trademarks, of which four are registered trademarks with the China
      State Administration for industry and commerce trademark office. These
      trademarks cover our four major product lines, An’erdian, Jifro, Dian’erkang and
      Lvshaxing.





We
      are
      not a party to any confidentiality or similar agreement with any of our
      employees or any third parties regarding our intellectual property. It is
      possible that a third party could, without authorization, utilize our propriety
      technologies without our consent. We can give no assurance that our proprietary
      technologies will not otherwise become known or independently developed by
      competitors.





Linkwell’s
      Competition





We
      operate in a fragmented, competitive national market for healthcare disinfectant
      products. According to a survey conducted in 2004 by the China Federation of
      Industrial Economics (CFIC), the disinfectant market in the PRC was
      approximately $6.25 billion (USD). While the disinfectant industry in China
      is
      an emerging industry, and the industry is populated with small regional players,
      we estimate that there are over 1,000 manufacturers and distributors of
      disinfectant products in China and certain of our major competitors distribute
      products similar to ours, including those which also prevent the spread of
      airborne viruses such as avian flu and SARS.





13




We
      compete with foreign companies, including 3M, who are marketing a limited line
      of disinfectant products in China, as well as smaller, domestic manufacturers.
      Most domestic competitors offer a limited line of products and there are few
      domestic companies with a nationwide presence. We believe that our national
      marketing and sales presence throughout all 22 provinces, as well as four
      autonomous regions, and four municipalities of China gives us a competitive
      advantage over many other disinfectant companies in China.





In
      addition, prior to the adoption of industry standards in July 2002 by the
      central government of China, disinfectant products were generally marketed
      and
      sold based on pricing factors. We believe the recent standards implemented
      by
      the government and a growing middle income class will shift the customer demand
      from price to quality.





As
      a
      result of this heightened license and permit system, all disinfectant
      manufacturers must comply with "qualified disinfection product manufacturing
      enterprise requirements” established by the Ministry of Public Health. The
      requirements include standards for both hardware and software. Hardware would
      include facilities and machinery. Software would include the technology to
      monitor the facilities. Furthermore the requirements will encompass the
      knowledge and capability of both the production staff and quality control
      procedures.





Furthermore
      we estimate the new government standards adopted in July 2002 are increasing
      the
      barriers to entry in the disinfectant industry. We believe that the new
      standards may lead to fewer competitors as companies falter in their efforts
      to
      adhere to the new standards. The implementation of these improved production
      standards and licenses have effectively decreased the competitiveness of small
      and mid-size manufacturers. The new standards are especially difficult for
      companies with limited product offerings and inferior technical content.





Linkwell’s
      Competitive Advantages





We
      believe that the following are the principal competitive strengths that
      differentiate our company from the majority of our competition:





·
            Strong
                sales and distribution network in China – enables us to compete
                effectively with domestic competitors, as well as larger foreign-owned
                competitors.





·
            Product
                selection and availability –****A
                number of our competitors are smaller, regional companies with a
                limited
                number of product offerings. We offer our customers a wide variety
                of
                disinfectant products and ability to ship products to our customers
                on a
                timely basis throughout the PRC.





·
            Research
                and development –****Our
                efforts to respond to market demand for new products have resulted
                in the
                issuance to us of 28 hygiene licenses by the Ministry of Public Health
                of
                the central government of China. Based upon our knowledge of our
                competitors, we do not believe any of our competitors have received
                as
                many licenses since the enactment of the licensing standards in July
                2002.





·
            Strong
                product pipeline****–****We
                have a history of introducing 3 or 4 new products to the market each
                year.
                We have filed applications for 3 new products and have 7 additional
                products in development.




·
            Manufacturing
                capacity –****We
                are operating at 50% capacity to produce GMP certified products and
                we
                have the ability to increase capacity significantly at moderate costs.





·
            Customer
                services – Our sales personnel are thoroughly educated about our products,
                which enable them to better understand the needs of our customers.
                Our
                customer service representatives strive to answer questions immediately
                and no later than 24 hours after a customer’s
                inquiry.





14





·
            Reliability
                and speed of delivery. We believe our products have developed a reputation
                of good quality and effectiveness and our manufacturing capabilities
                enable us to produce and ship products to our customers
                promptly.





·
            Customer
                service –****Our
                customer service representatives participate in ongoing product training
                programs and we strive to respond to all customer inquiries within
                24
                hours.





·
            Price
                –****We
                have developed relationships with a number of raw material suppliers
                which
                enables us to keep our costs low and thereby offer prices to our
                customers
                which are very competitive.





Our
      primary competitors in the sale of chemical disinfectants are 3M and Ace
      Disinfection Factory Co., Ltd. The primary competitors for instrument
      disinfectants are Chengdu Kangaking Instrument Co., Ltd. and Hangzhou Yangchi
      Medicine Article Co., Ltd. and the primary competitors for chemical indicators
      are 3M and Shandong Xinhua Medical Instrument Co., Ltd. Domestic competition
      comes from regional companies which tend to offer products in small geographic
      areas and do not distribute their product lines throughout China.





Our
      primary competitors include:





Competitor
            
            Products3M
                Company
            
            Hand
                disinfectant, skin and mucous disinfectantAce
            
            Skin
                and mucous disinfectantChengdu
                Kangaking
            
            Medical
                equipment and devicesHangzhou
                Yangchi
            
            Sterilized
                Q-tipShandong
                Xinhua
            
            Chemical
                indicators





Our
      primary foreign competitor is 3M Company which has had a presence in China
      for
      more than 20 years. 3M Company entered the hand disinfection market at the
      end
      of 2004 and primarily offers products in the areas of index and control devices
      and disinfectant machines. At present, 3M Company has five products for use
      in
      operating rooms and its products are found in provincial capital cities of
      China
      such as Shanghai, Beijing, Guangzhou, Hangzhou, Nanjin, Chengdu and Xi’an. 3M
      Company’s product line in China is relatively narrow, with few overlapping
      products between 3M Company and our company.





Another
      foreign competitor is Johnson & Johnson, established operations in China in
      1994. In China, Johnson & Johnson offers a variety of skin, hand, and
      medical equipment disinfectants. Prior to the recent initiatives by the
      government, disinfectant products were marketed based on pricing and despite
      the
      brand awareness of Johnson & Johnson; its products did not have widespread
      reception among the community. Furthermore, Johnson & Johnson does not offer
      a wide variety of disinfectant products in China. Due to the difficulties in
      attaining a critical mass Johnson & Johnson recently withdrew from the
      surgical disinfectant market in China and has refocused its efforts on the
      disinfection of medical devices.




GOVERNMENT
      REGULATIONS





Our
      business and operations are located in the PRC. We are subject to local food,
      drug, environmental laws related to certification of manufacturing and
      distributing of disinfectants. We are also licensed by the Shanghai City
      Government to manufacture and distribute disinfectants. We are in substantial
      compliance with all provisions of those licenses and have no reason to believe
      that they will not be renewed as required by the applicable rules of Shanghai.
      In addition, our operations must conform to general governmental regulations
      and
      rules for private companies conducting business in China.





Pursuant
      to the July 2002 Ministry of Public Health 27th Order of Ministry of Health
      of
      the People's Republic of China, all disinfectant manufacturers in China must
      obtain a license to manufacture hygiene disinfectants. Prior to release, all
      disinfectant instruments must obtain the official hygiene permit document of
      Ministry of Public Health and the approval of the provincial hygiene
      administrative department. The implementation of these improved production
      standards and licenses has effectively decreased the competitiveness of small
      to
      mid size manufacturers with single product and inferior technical content.
      Presently we meet all standards initiated by this ordinance and we have been
      granted 28 hygiene licenses by the Ministry of Public Health.




15




We
      are
      also subject to various other rules and regulations, including the People’s
      Republic of China Infectious Disease Prevention and Cure Law, Disinfection
      Management Regulation, Disinfection Technique Regulation, Disinfection Product
      Manufacturer Sanitation Regulation, and Endoscope Rinse and Disinfection
      Technique Manipulation Regulation. We believe we are in material compliance
      with
      all of the applicable regulations.





PRC
      Legal
      System





Since
      1979, many laws and regulations addressing economic matters in general have
      been
      promulgated in the PRC. Despite development of its legal system, the PRC does
      not have a comprehensive system of laws. In addition, enforcement of existing
      laws may be uncertain and sporadic, and implementation and interpretation
      thereof inconsistent. The PRC judiciary is relatively inexperienced in enforcing
      the laws that exist, leading to a higher than usual degree of uncertainty as
      to
      the outcome of any litigation. Even where adequate laws exist in the PRC, it
      may
      be difficult to obtain swift and equitable enforcement of such laws, or to
      obtain enforcement of a judgment by a court of another jurisdiction. The PRC's
      legal system is based on written statutes and, therefore, decided legal cases
      are without binding legal effect, although they are often followed by judges
      as
      guidance. The interpretation of PRC laws may be subject to policy changes
      reflecting domestic political changes. As the PRC legal system develops, the
      promulgation of new laws, changes to existing laws and the preemption of local
      regulations by national laws may adversely affect foreign investors. The trend
      of legislation over the past 20 years has, however, significantly enhanced
      the
      protection afforded foreign investors in enterprises in the PRC. However, there
      can be no assurance that changes in such legislation or interpretation thereof
      will not have an adverse effect upon our business operations or
      prospects.





Economic
      Reform Issues





Since
      1979, the Chinese government has reformed its economic systems. Many reforms
      are
      unprecedented or experimental; therefore they are expected to be refined and
      improved. Other political, economic and social factors, such as political
      changes, changes in the rates of economic growth, unemployment or inflation,
      or
      in the disparities in per capita wealth between regions within China, could
      lead
      to further readjustment of the reform measures. We cannot predict if this
      refining and readjustment process may negatively affect our operations in future
      periods.





Over
      the
      last several years, China's economy has registered a high growth rate. Recently,
      there have been indications that rates of inflation have increased. In response,
      the Chinese government recently has taken measures to curb this excessively
      expansive economy. These measures have included devaluations of the Chinese
      currency as the result of inflation. This relative Renminbi (“RMB”) devaluation
      places some restrictions on the availability of domestic credit, reducing the
      purchasing capability of customers, and limiting re-centralization of the
      approval process for some foreign product purchases. These austerity measures
      alone may not succeed in slowing down the economy's excessive expansion or
      control inflation, and may result in severe dislocations in the Chinese economy.
      The Chinese government may adopt additional measures to further combat
      inflation, including the establishment of freezes or restraints on certain
      projects or markets.





To
      date
      reforms to China's economic system have not adversely impacted our operations
      and are not expected to adversely impact operations in the foreseeable future;
      however, there can be no assurance that the reforms to China's economic system
      will continue or that we will not be adversely affected by changes in China's
      political, economic, and social conditions and by changes in policies of the
      Chinese government, such as changes in laws and regulations, measures which
      may
      be introduced to control inflation, changes in the rate or method of taxation,
      imposition of additional restrictions on currency conversion and remittance
      abroad, and reduction in tariff protection and other import
      restrictions.




16




EMPLOYEES





LiKang
      Disinfectant employs approximately 170 full time employees, including our
      executive officers, as follows:





Department
            
            Number of EmployeesAdministrative
                center
            
            
            8Accounting
            
            
            13Production
            
            
            95Logistics
            
            
            26Sales
                and Marketing Staff in Shanghai
            
            
            19Research
                and Development
            
            
            9Total
            
            
            170




U.S.
      Advisors





On
      January 10, 2006 and effective January 1, 2006, the Company entered
      into a three year agreement with China Direct Investments, Inc. to provide
      business development and management services. In connection with this agreement,
      the Company issued China Direct Investments, Inc. 4,700,000 shares of the
      Company's common stock. The Company valued the service using the fair value
      of
      common shares on grant date at $0.18 per share and recorded deferred consulting
      expenses of $846,000 to be amortized over the service period. In July 2007,
      the Company terminated the service contact with China Direct Investments, Inc,
      and the remaining deferred consulting expenses associated with this agreement
      amounted to $564,000, which were expensed for the year ended December 31, 2007.





In
      September 2006, the Company entered into a three-year agreement with Zhiyan
      Shi
      to provide business development and management services. In connection with
      this
      agreement, the Company issued Zhiyan Shi 500,000 shares of the Company's common
      stock. The Company valued these services using the fair value of common shares
      on grant date at $0.185 per share and recorded deferred consulting expense
      of
      $92,500 to be amortized over the service period. For the year ended December
      31,
      2007, amortization of consulting compensation amounted to $30,833.





On
      June
      6, 2007, the Company entered into a six month agreement with FirsTrust Group
      Inc. to provide business development and management services. In connection
      with
      this agreement, on July 12, 2007, the Company issued 450,000 shares of its
      restricted common stock. The Company valued the service using the fair value
      of
      common shares on grant date at $0.17 per share and recorded deferred consulting
      expense of $76,500 to be amortized over the service period.





On
      December 6, 2007, the Company terminated the service contract with FirsTrust
      Group Inc.





HISTORY
      OF OUR COMPANY





We
      were
      incorporated in the state of Colorado on December 11, 1996 as Mizar Energy
      Company. From our inception through December 28, 1999, we were involved in
      the
      business of acquiring, developing and operating oil and gas properties. On
      December 28, 1999, we sold 60% of our issued and outstanding common stock to
      HBOA.Com, Inc., a District of Columbia corporation ("HBOA-DC"). Pursuant to
      this
      stock sale, there was a change in our business and management team and we began
      to focus on HBOA's business, which was related to the sale of products and
      services to the owners of home based businesses through its Internet web
      site.





On
      May
      31, 2000, HBOA-DC was merged with and into our wholly owned subsidiary,
      HBOA.Com, Inc., a Florida corporation ("HBOA-FL"). In June 2000, we began to
      develop our application service provider business, in addition to HBOA's web
      site. We focused on development of an Internet portal through which home based
      business owners, as well as commercial private label businesses, obtain the
      products, services, and information necessary to start, expand and profitably
      run their businesses. On November 10, 2000, our shareholders approved our
      proposal to change our name from Mizar Energy Company to HBOA Holdings, Inc.
      and
      to change our state of incorporation from Colorado to Florida and recorded
      a
      loss of approximately $258,000. On December 28, 2000, we formed a new
      subsidiary, Aerisys, Incorporated, a Florida corporation, to handle commercial
      private business. Effective as of July 18, 2003, we changed our name to Kirshner
      Entertainment & Technologies, Inc.




17




On
      May 2,
      2005, we closed a share exchange with all of the shareholders of Linkwell Tech
      in which we acquired 100% of the issued and outstanding shares of Linkwell
      Tech’s common stock in exchange for 36,273,470 shares of our common stock, which
      at closing represented approximately 87.5% of the issued and outstanding shares
      of our common stock. As a result of the transaction, Linkwell Tech became our
      wholly owned subsidiary. Linkwell Tech was founded in June 2004 .
      On June
      30, 2004, Linkwell Tech acquired 90% of LiKang Disinfectant through a stock
      exchange with Shanghai LiKang Pharmaceuticals Technology Company, Limited,
      the
      then 90% shareholder of LiKang Disinfectant. Shanghai Shanhai Group, an
      unaffiliated third party, owned the remaining 10% of LiKang Disinfectant.
      Shanghai Shanhai Group is owned by Shanghai Shanhai Group Employee Share-holding
      Committee (16.25%) and Shanghai Baoshan District Dachang Town South Village
      Economic Cooperation Club (83.75%). LiKang Disinfectant's officers and
      directors, Mr. Xuelian Bian and Wei Guan, own Shanghai LiKang Pharmaceuticals
      Technology Company, Limited, owning 90% and 10%, respectively, of that company.
      The transaction in which Linkwell Tech acquired the 90% interest in LiKang
      Disinfectant resulted in the formation of a U.S. holding company by Mr. Bian
      and
      Guan as it did not result in a change in the underlying ownership interests
      of
      LiKang Disinfectant.





Our
      then
      officers and directors resigned at the closing of the share exchange and Mr.
      Wei
      Guan and Xuelian Bian, who were the officers and directors of Linkwell Tech,
      were appointed our officers and directors. In connection with the share exchange
      and to satisfy all outstanding obligations and indebtedness owed by our company
      to our former CEO and certain third parties, Linkwell Tech provided us $175,000
      which we provided to our former CEO to be used by him to satisfy these
      obligations. We also issued our former CEO 1,400,000 shares of our common
      stock.





In
      July
      2005, we changed our name to Linkwell Corporation.





In
      February 2006, we sold 100% of the stock of Aerisys to Mr. Gary Verdier, our
      former CEO, in exchange for the assumption of all liabilities and obligation
      of
      Aerisys. Prior to the share exchange agreement with Linkwell Tech in May 2005,
      Aerisys had represented our sole operations. Aerisys marketed and sold the
      Aerisys Intelligent Community (TM), a web-based software program and private,
      browser-based intranet product that allows schools to collaborate with parents
      and faculty each day on classroom homework, assignments, critical dates, team
      priorities and school news in a private forum, primarily to K through 12 private
      schools. We had not been able to improve sales or business opportunities for
      Aerisys since May 2005.





On
      February 15, 2008, we entered into a stock purchase agreement (the “Stock
      Purchase Agreement”) with Ecolab Inc., a Delaware corporation (“Ecolab”),
      pursuant to which Ecolab agreed to purchase and Linkwell Tech agreed to sell
      888,889 of its shares, or 10% of the issued and outstanding capital stock of
      Linkwell Tech, for $2 million dollars. The transaction is expected to close
      early in the first quarter of this year after the satisfaction of certain
      conditions as set forth in the Stock Purchase Agreement.





In
      connection with and as a condition to closing the Stock Purchase Agreement,
      on
      February 29, 2008, LiKang Disinfectant entered into a series of commercial
      agreements, including a Consulting Agreement, two Distributor Agreements, and
      a
      Sales Representative Agreement.





Pursuant
      to the Consulting Agreement, LiKang Disinfectant is providing consulting
      services to Ecolab Chemicals Ltd., a company of limited liabilities incorporated
      under the laws of China and a wholly-owned subsidiary of Ecolab (“Ecolab
      Chemicals”), including identifying all regulatory approvals for manufacture,
      productions, transport, market, sale distribution and or use for certain of
      Ecolab Chemicals’ infection control, cleaning and sanitizing products for the
      period the Disinfectant Distribution Agreement (defined below) is in effect.
      Pursuant to the first Distribution Agreement, LiKang Disinfectant is a
      distributor for the promotion, sale and distribution of certain of Ecolab
      Chemicals’ infection control, cleaning and sanitizing products (the
“Disinfectant Distribution Agreement”) for the territory of PRC (excluding Hong
      Kong, Taiwan and Macau) for the period of two years unless extended or
      terminated early. Pursuant to the second Distribution Agreement, Ecolab
      Chemicals is the exclusive distributor for the promotion, marketing, sale and
      distribution of certain of certain of LiKang Disinfectant’s infection control
      products (the “Ecolab Chemicals Distribution Agreement”) for the territory of
      Hong Kong, Taiwan and Macau for the period of two years unless extended or
      terminated early. Pursuant to the Sales Representative Agreement, LiKang
      Disinfectant is a sales representative for the solicitation of sales of Ecolab
      Chemicals’ pest elimination services for the territory of the P.R.C. (excluding
      Hong Kong, Taiwan and Macau) for the period of two years unless extended or
      terminated early.




18




On
      April
      6, 2007, our wholly-owned subsidiary Linkwell Tech entered into two material
      stock purchase agreements. In one agreement, Linkwell Tech was to acquire 100%
      equity interest in Shanghai LiKang Biological High-Tech Company, Limited, a
      Chinese company in a related party transaction with Xuelian Bian, an individual,
      Wei Guan, an individual, and LiKang Pharmaceutical (the “Biological Stock
      Purchase Agreement”). Mr. Bian is Linkwell Corporation's Chief Executive
      Officer, President and Chairman of the Board and Wei Guan is Linkwell
      Corporation's Vice President, Secretary and Director. Mr. Bian and Mr. Guan
      own
      90% and 10% of LiKang Pharmaceutical, respectively. Mr. Bian and LiKang
      Pharmaceutical owned 60% and 40% of LiKang Biological, respectively. Pursuant
      to
      the terms of the Biological Stock Purchase Agreement, Mr. Bian and LiKang
      Pharmaceutical were to receive 1,000,000 shares of Linkwell Corporation
      restricted common stock. In the other agreement, Linkwell Tech, which already
      owned a 90% equity interest in Shanghai LiKang Disinfectant, was to purchase
      the
      remaining 10% equity interest of LiKang Disinfectant from Shanghai Shanhai
      Group, a non-affiliated Chinese entity (“Disinfectant Stock Purchase
      Agreement”). Pursuant to the terms of the Disinfectant Stock Purchase Agreement
      , Shanghai Shanhai Group was to receive 3,000,000 shares of Linkwell Corporation
      restricted common stock.





Due
      to
      restrictions under PRC law that prohibited the consideration then contemplated
      by the Biological
      Stock Purchase Agreement and Disinfectant
      Stock Purchase Agreement neither
      of the respective transactions contemplated by those agreements closed. As
      a
      result of this, on
      March
      25, 2008, the parties agreed to enter into an amendment to the Biological Stock
      Purchase Agreement (“Biological Amendment”) and an
      amendment to the Disinfectant Stock Purchase Agreement (“Disinfectant
      Amendment”) in
      an
      effort to complete the stock purchase transactions under those agreement.
      Pursuant to the terms of the Biological Amendment, the only material change
      to
      the Biological Stock Purchase Agreement relates to the consideration paid by
      Linkwell Tech to Xuelian Bian and LiKang Pharmaceutical which was changed from
      1,000,000 shares of the Company’s common stock to $200,000 and 500,000 shares of
      common stock. Pursuant
      to the terms of the Disinfectant Amendment, the only material change to the
      Disinfectant Stock Purchase Agreement relates to the consideration paid by
      Linkwell Tech to Shanghai Shanhai Group for the remaining 10% equity interest,
      which was changed from 3,000,000 shares of Common Stock, to $380,000 and
      1,500,000 shares of Common Stock. The other terms of the Disinfectant Stock
      Purchase Agreement remain in full force and effect.





As
      a
      result of the closing the aforementioned transactions on March 25, 2008, our
      wholly-owned subsidiary Linkwell Tech now owns 100% equity interest in LiKang
      Biological and a100% equity interest in LiKang Disinfectant.




RISK
      FACTORS





An
      investment in our common stock involves a significant degree of risk. You should
      not invest in our common stock unless you can afford to lose your entire
      investment. You should consider carefully the following risk factors and other
      information in this annual report before deciding to invest in our common
      stock.




19




RISKS
      RELATED TO OUR COMPANY





*We
      engage in a number of material transactions with related parties which could
      result in a conflict of interest involving our management.*





We
      are
      materially dependent on certain related party transactions in the ongoing
      conduct of our business. Sales to our affiliates Shanghai LiKang Pharmaceuticals
      Technology Company, Limited and Shanghai LiKang Meirui
      Pharmaceutical High-Tech Co .,
      Ltd.
      represented approximately 17% of our total net revenues in the 2007 fiscal
      year
      and approximately 41.8% of our total net revenues in fiscal year 2006. This
      related party represented approximately 40% and approximately 45.5% of our
      accounts receivable at December 31, 2007 and 2006, respectively. In addition,
      we
      lease our principal executive officers from Shanghai Shanhai Group, the minority
      shareholder of our LiKang Disinfectant subsidiary, and Shanghai LiKang Meirui
      Pharmaceutical High-Tech Co., Ltd, an affiliated company of this minority
      shareholder, both supplies us with raw materials and acts as a contract
      manufacturer for certain of our products. We have also engaged in an number
      of
      other related party transactions including extending working capital loans
      to
      Shanghai LiKang Pharmaceuticals Technology Company, Limited and Shanghai LiKang
      Biological High-Tech Company, Ltd., purchasing real property from Shanghai
      LiKang Pharmaceuticals Technology Company, Limited and utilizing the services
      of
      Shanghai LiKang Biological High-Tech Company, Ltd. to process certain of our
      products. These affiliated transactions may from time to time result in a
      conflict of interest for our management. Because these transactions are not
      subject to the approval of our shareholders, investors in our company are wholly
      reliant upon the judgment of our management in these related party
      transactions.





*The
      management of our company is located in the PRC and we are materially dependent
      upon advisory services of a U.S. company.*





None
      of
      the current members of our management have any experience in U.S. public
      companies and these individuals are not fluent in English. We have engaged
      Segue
      Ventures LLC to provide us with various informal advisory and consulting
      services, including U.S. business methods and compliance with SEC disclosure
      requirements. We selected Segue Ventures to provide these services to us in
      part
      because its staff includes a Chinese-speaking individual with education and
      experience in finance and economics.





Until
      such time as we are able to expand our board of directors to include
      English-speaking individuals who have experience with the operation and
      regulatory framework applicable to U.S. public companies, we are materially
      dependent upon our relationship with Segue Ventures, LLC. Our contract with
      this
      company expires in December 2008. If for any reason Segue Ventures, LLC should
      fail to provide the contracted services at the anticipated levels or fails
      to
      extend its services and we have not added members to our board of directors
      with
      the requisite experience we may be unable to prepare and file reports as
      required by the Securities Exchange Act of 1934 on a timely basis which could
      lead to our common stock being removed from the OTCBB. In this event, your
      ability to liquidate your investment would be negatively impacted and you could
      lose your entire investment in our company.





As
      is
      customary in the PRC, we extend relatively long payment terms to our customers,
      including on sales to related parties, which can negatively impact our cash
      flows. Our terms of sale generally require payment within four to six months,
      which is considerably longer than customary terms offered in the United States.
      For fiscal 2007, the average time of payment on accounts receivable from
      non-related third parties was 90 days and the average time of payment on
      accounts receivable from related parties as 270 days, compared to 180 days
      from
      related parties in fiscal 2006; an increase of 90 days. The Company would like
      to control the average time of payment on accounts receivable from related
      parties within 120 days.





We
      occasionally offer established customers, including related parties, longer
      payment terms of up to 240 days on new products as an incentive to purchase
      these products, which has served to further increase the average days
      outstanding for accounts receivable. We maintain a relatively low reserve for
      doubtful accounts when compared to a company operating in the U.S. Our payment
      terms may have the effect of adversely impacting our cash flow and our ability
      to fund our operations out of our operating cash flow. Our ability to continue
      to implement our growth strategy could suffer if our cash flows are adversely
      impacted which will have the effect of limiting our ability to increase our
      revenues in the future.





Certain
      agreements to which we are a party and are material to our operations lack
      various legal protections, which are customarily contained in similar contracts
      prepared in the United States.




20




We
      are a
      Chinese company and all of our business and operations are conducted in China.
      We are a party to certain material contracts, including an agreement for the
      lease for our principal offices and manufacturing facility. While these
      contracts contain the basic business terms of the agreements between the
      parties, these contracts do not contain certain provisions which are customarily
      contained in similar contracts prepared in the U.S., such as representations
      and
      warranties of the parties, confidentiality and non-compete clauses, provisions
      outlining events of defaults, and termination and jurisdictional clauses.
      Because our material contracts omit these types of clauses, notwithstanding
      the
      differences in Chinese and U.S. laws we may not have the same legal protections
      as we would if the contracts contained these additional provisions. We
      anticipate that contracts we enter into in the future will likewise omit these
      types of legal protections. While we have not been subject to any adverse
      consequences as a result of the omission of these types of clauses, and we
      consider the contracts to which we are a party to contain all the material
      terms
      of our business arrangements with the other party, future events may occur
      which
      lead to a dispute under agreements which could have been avoided if the
      contracts were prepared in conformity with U.S. standards. Contractual disputes
      which may arise from this lack of legal protections will divert management's
      time from the operation of our business and require us to expend funds
      attempting in settling a possible dispute. This possible diversion of management
      time will limit the time our management would otherwise devote to the operation
      of our business, and the diversion of capital could limit the funds we have
      available to pay our ongoing operating expenses.





*Each
      of our product groups operate in highly competitive
      businesses.*





Each
      of
      our product groups is subject to competition from other manufacturers of similar
      products. There are approximately 1,000 manufacturers of similar disinfectant
      products in China, but only approximately 30 manufacturers, including our
      company, operate on a continuous basis with the remainder of other companies
      periodically entering the market in times of increased demand. While we believe
      we are one of the leading manufacturers of disinfectant products in the PRC,
      from time to time there is a sporadic oversupply of these products which can
      adversely impact our market share and competitive position in this product
      group. As a result, we may not be able to effectively compete in our product
      segments which could have the effect of limiting our ability to sustain our
      current level of operations or grow our revenues in future periods.





*Because
      of the specialized, technical nature of the business, we are highly dependent
      on
      certain members of management, as well as our marketing, engineering and
      technical staff* .





The
      loss
      of the services of our current management and skill employees could have a
      material and negative effect on our ability to effectively pursue our business
      strategy. In addition to manufacturing high volumes of our products and
      developing new products, we must attract, recruit and retain a sizeable
      workforce of technically competent employees, including additional skilled
      and
      experienced managerial, marketing, engineering and technical personnel. If
      we
      are unable to do so, our ability to grow our business and increase our revenues
      could be limited.





*If
      we
      experience customer concentration, we may be exposed to all of the risks faced
      by our remaining material customers.*





For
      the
      fiscal years ended December 31, 2007 and 2006 revenues from one customer,
      Shanghai LiKang Pharmaceuticals Technology Company, Limited, an affiliate,
      represented approximately 16% and approximately 40%, respectively, of our total
      net revenues. Unless we maintain multiple customer relationships, it is likely
      that we will experience periods during which we will be highly dependent on
      a
      limited number of customers. Dependence on a few customers could make it
      difficult to negotiate attractive prices for our products and could expose
      us to
      the risk of substantial losses if a single dominant customer stops conducting
      business with us. Moreover, to the extent that we are dependent on any single
      customer, we are subject to the risks faced by that customer to the extent
      that
      such risks impede the customer's ability to stay in business and make timely
      payments to us.





*We
      depend on factories to manufacture our products, which may be insufficiently
      insured against damage or loss.*





We
      have
      no direct business operation, other than our ownership of our subsidiaries
      located in China, and the results of operations and our financial condition
      are
      solely dependent on our subsidiaries' factories in China. We do not currently
      maintain insurance to protect against damage and loss to our facilities and
      other leasehold improvements. Therefore, any material damage to, or the loss
      of,
      any of our facilities due to fire, severe weather, flooding or other cause,
      would not be shared with an insurance company, and if large enough, would have
      a
      material and negative effect on our financial condition. If the damage was
      significant, we could be forced to stop operations until such time as the
      faculties could be repaired.




21




*Our
      operations are subject to government regulation. If we fail to comply with
      the
      applicable regulations, our ability to operate in future periods could be in
      jeopardy.*





We
      are
      subject to various state and local environmental laws related to our business.
      We are subject to local food, drug, environmental laws related to certification
      of manufacturing and distributing of any disinfectant. We are also licensed
      by
      the Shanghai City Government to manufacture and distribute disinfectants. While
      we are in substantial compliance with all provisions of those registrations,
      inspections and licenses and have no reason to believe that they will not be
      renewed as required by the applicable rules of the Central Government and the
      Shandong Province, any non-renewal of these authorities could result in the
      cessation of our business activities.





*We
      may not have sufficient protection of certain of our intellectual
      property.*





We
      utilize certain technologies in the purification of raw material used in our
      products which are proprietary in nature. We are not a party to any
      confidentiality or similar agreements with employees and third parties including
      consultants, vendors and customers and it not likely that we will enter into
      these types of agreements in the future. It is possible that our employees
      or a
      third party could, without authorization, utilize our propriety technologies
      without our consent. The unauthorized use of this proprietary information by
      third parties could adversely affect our business and operations as well as
      any
      competitive advantage we may have in our market segment. We may not have
      adequate remedies for the protection of our proprietary technologies and these
      proprietary technologies could become known or independently developed by
      competitors, in which event our ability to effectively compete could be in
      jeopardy.





*We
      have not voluntarily implemented various corporate governance measures, in
      the
      absence of which, shareholders may have reduced protections against interested
      director transactions, conflicts of interest and other
      matters.*





We
      are
      not subject to any law, rule or regulation requiring that we adopt any of the
      corporate governance measures that are required by the rules of national
      securities exchanges such as independent directors and audit committees. It
      is
      possible that if we were to adopt some or all of the corporate governance
      measures, shareholders would benefit from somewhat greater assurances that
      internal corporate decisions were being made by disinterested directors and
      that
      policies had been implemented to define responsible conduct. Prospective
      investors should bear consider our current lack of corporate governance measures
      in formulating their investment decisions.




RISKS
      RELATED TO DOING BUSINESS IN CHINA





*All
      of our assets and operations are located in the PRC and are subject to changes
      resulting from the political and economic policies of the Chinese
      government.*





Our
      business operations could be restricted by the political environment in the
      PRC.
      The PRC has operated as a socialist state since 1949 and is controlled by the
      Communist Party of China. In recent years, however, the government has
      introduced reforms aimed at creating a "socialist market economy" and policies
      have been implemented to allow business enterprises greater autonomy in their
      operations. Changes in the political leadership of the PRC may have a
      significant effect on laws and policies related to the current economic reform
      programs, other policies affecting business and the general political, economic
      and social environment in the PRC, including the introduction of measures to
      control inflation, changes in the rate or method of taxation, the imposition
      of
      additional restrictions on currency conversion and remittances abroad, and
      foreign investment. Moreover, economic reforms and growth in the PRC have been
      more successful in certain provinces than in others, and the continuation or
      increases of such disparities could affect the political or social stability
      of
      the PRC.





Although
      we believe that the economic reform and the macroeconomic measures adopted
      by
      the Chinese government have had a positive effect on the economic development
      of
      China, the future direction of these economic reforms is uncertain and the
      uncertainty may decrease the attractiveness of our company as an investment,
      which may in turn result in a decline in the trading price of our common
      stock.




22




*The
      Chinese government exerts substantial influence over the manner in which we
      must
      conduct our business activities.*





The
      PRC
      only recently has permitted provincial and local economic autonomy and private
      economic activities. The government of the PRC has exercised and continues
      to
      exercise substantial control over virtually every sector of the Chinese economy
      through regulation and state ownership. Accordingly, government actions in
      the
      future, including any decision not to continue to support recent economic
      reforms and to return to a more centrally planned economy or regional or local
      variations in the implementation of economic policies, could have a significant
      effect on economic conditions in the PRC or particular regions thereof. In
      such
      an event, we could be forced to cease operations.





*Restrictions
      on currency exchange may limit our ability to receive and use our revenues
      effectively.*





Because
      all of revenues are in the form of Renminbi, any future restrictions on currency
      exchanges may limit our ability to use revenue generated in Renminbi to fund
      any
      future business activities outside China or to make dividend or other payments
      in U.S. dollars. Although the Chinese government introduced regulations in
      1996
      to allow greater convertibility of the Renminbi for current account
      transactions, significant restrictions still remain, including primarily the
      restriction that foreign-invested enterprises may only buy, sell or remit
      foreign currencies, after providing valid commercial documents, at those banks
      authorized to conduct foreign exchange business. In addition, conversion of
      Renminbi for capital account items, including direct investment and loans,
      is
      subject to government approval in China, and companies are required to open
      and
      maintain separate foreign exchange accounts for capital account items. We cannot
      be certain that the Chinese regulatory authorities will not impose more
      stringent restrictions on the convertibility of the Renminbi, especially with
      respect to foreign exchange transactions.





*We
      may be unable to enforce our rights due to policies regarding the regulation
      of
      foreign investments in China.*





The
      PRC's
      legal system is a civil law system based on written statutes in which decided
      legal cases have little value as precedents, unlike the common law system
      prevalent in the United States. The PRC does not have a well-developed,
      consolidated body of laws governing foreign investment enterprises. As a result,
      the administration of laws and regulations by government agencies may be subject
      to considerable discretion and variation, and may be subject to influence by
      external forces unrelated to the legal merits of a particular matter. China's
      regulations and policies with respect to foreign investments are evolving.
      Definitive regulations and policies with respect to such matters as the
      permissible percentage of foreign investment and permissible rates of equity
      returns have not yet been published. Statements regarding these evolving
      policies have been conflicting and any such policies, as administered, are
      likely to be subject to broad interpretation and discretion and to be modified,
      perhaps on a case-by-case basis. The uncertainties regarding such regulations
      and policies present risks which may affect our ability to achieve our stated
      business objectives. If we are unable to enforce any legal rights we may have
      under our contracts or otherwise, our ability to compete with other companies
      in
      our industry could be limited which could result in a loss of revenue in future
      periods which could impact our ability to continue as a going
      concern.





*Recent
      PRC regulations relating to acquisitions of PRC companies by foreign entities
      may create regulatory uncertainties that could restrict or limit our ability
      to
      operate, including our ability to pay dividends.*





The
      PRC
      State Administration of Foreign Exchange, or SAFE, issued a public notice in
      January 2005 concerning foreign exchange regulations on mergers and acquisitions
      in China. The public notice states that if an offshore company controlled by
      PRC
      residents intends to acquire a PRC company, such acquisition will be subject
      to
      strict examination by the relevant foreign exchange authorities. The public
      notice also states that the approval of the relevant foreign exchange
      authorities is required for any sale or transfer by the PRC residents of a
      PRC
      company’s assets or equity interests to foreign entities for equity interests or
      assets of the foreign entities.




23




In
      April
      2005, SAFE issued another public notice further explaining the January notice.
      In accordance with the April 2005 notice, if an acquisition of a PRC company
      by
      an offshore company controlled by PRC residents has been confirmed by a Foreign
      Investment Enterprise Certificate prior to the promulgation of the January
      2005
      notice, the PRC residents must each submit a registration form to the local
      SAFE
      branch with respect to their respective ownership interests in the offshore
      company, and must also file an amendment to such registration if the offshore
      company experiences material events, such as changes in the share capital,
      share
      transfer, mergers and acquisitions, spin-off transaction or use of assets in
      China to guarantee offshore obligations. The April 2005 notice also provides
      that failure to comply with the registration procedures set forth therein may
      result in restrictions on our PRC resident shareholders and our subsidiaries.
      Pending the promulgation of detailed implementation rules, the relevant
      government authorities are reluctant to commence processing any registration
      or
      application for approval required under the SAFE notices.





In
      addition, on August 8, 2006, the Ministry of Commerce (“MOFCOM”), joined by the
      State-Owned Assets Supervision and Administration Commission of the State
      Council, State Administration of Taxation, State Administration for Industry
      and
      Commerce, China Securities Regulatory Commission and SAFE, amended and released
      the Provisions for Foreign Investors to Merge and Acquire Domestic Enterprises,
      new foreign-investment rules which took effect September 8, 2006, superseding
      much, but not all, of the guidance in the prior SAFE circulars. These new rules
      significantly revise China’s regulatory framework governing onshore-offshore
      restructurings and how foreign investors can acquire domestic enterprises.
      These
      new rules signify greater PRC government attention to cross-border merger,
      acquisition and other investment activities, by confirming MOFCOM as a key
      regulator for issues related to mergers and acquisitions in China and requiring
      MOFCOM approval of a broad range of merger, acquisition and investment
      transactions. Further, the new rules establish reporting requirements for
      acquisition of control by foreigners of companies in key industries, and
      reinforce the ability of the Chinese government to monitor and prohibit foreign
      control transactions in key industries.





These
      new
      rules may significantly affect the means by which offshore-onshore
      restructurings are undertaken in China in connection with offshore private
      equity and venture capital financings, mergers and acquisitions. It is expected
      that such transactional activity in China in the near future will require
      significant case-by-case guidance from MOFCOM and other government authorities
      as appropriate. It is anticipated that application of the new rules will be
      subject to significant administrative interpretation, and we will need to
      closely monitor how MOFCOM and other ministries apply the rules to ensure its
      domestic and offshore activities continue to comply with PRC law. Given the
      uncertainties regarding interpretation and application of the new rules, we
      may
      need to expend significant time and resources to maintain
      compliance.





It
      is
      uncertain how our business operations or future strategy will be affected by
      the
      interpretations and implementation of the SAFE notices and new rules. Our
      business operations or future strategy could be adversely affected by the SAFE
      notices and the new rules. For example, we may be subject to more stringent
      review and approval process with respect to our foreign exchange
      activities.





*Failure
      to comply with the United States Foreign Corrupt Practices Act could subject
      us
      to penalties and other adverse consequences.*





We
      are
      subject to the United States Foreign Corrupt Practices Act, which generally
      prohibits United States companies from engaging in bribery or other prohibited
      payments to foreign officials for the purpose of obtaining or retaining
      business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent
      practices occur from time-to-time in the PRC. We can make no assurance, however,
      that our employees or other agents will not engage in such conduct for which
      we
      might be held responsible. If our employees or other agents are found to have
      engaged in such practices, we could suffer severe penalties and other
      consequences that may have a material adverse effect on our business, financial
      condition and results of operations.





*We
      may have difficulty establishing adequate management, legal and financial
      controls in the PRC.*





PRC
      companies have historically not adopted a Western style of management and
      financial reporting concepts and practices, which includes strong corporate
      governance, internal controls and, computer, financial and other control
      systems. In addition, we may have difficulty in hiring and retaining a
      sufficient number of qualified employees to work in the PRC. 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. Therefore, we may, in turn, experience
      difficulties in implementing and maintaining adequate internal controls. Any
      such deficiencies, weaknesses or lack of compliance could have a materially
      adverse effect on our business.




24




RISKS
      RELATED TO OUR COMMON STOCK





*We
      have not voluntarily implemented various corporate governance measures, in
      the
      absence of which, stockholders may have more limited protections against
      interested director transactions, conflicts of interest and similar
      matters.*





Recent
      Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted
      in
      the adoption of various corporate governance measures designed to promote the
      integrity of the corporate management and the securities markets. Some of these
      measures have been adopted in response to legal requirements. Others have been
      adopted by companies in response to the requirements of national securities
      exchanges, such as the NYSE or The NASDAQ Stock Market, on which their
      securities are listed. Among the corporate governance measures that are required
      under the rules of national securities exchanges are those that address board
      of
      directors' independence, audit committee oversight, and the adoption of a code
      of ethics. Although we have adopted a Code of Ethics, we have not yet adopted
      any of these other corporate governance measures and, since our securities
      are
      not yet listed on a national securities exchange, we are not required to do
      so.
      We have not adopted corporate governance measures such as an audit or other
      independent committees of our board of directors as we presently do not have
      any
      independent directors. If we expand our board membership in future periods
      to
      include additional independent directors, we may seek to establish an audit
      and
      other committees of our board of directors. It is possible that if we were
      to
      adopt some or all of these corporate governance measures, stockholders would
      benefit from somewhat greater assurances that internal corporate decisions
      were
      being made by disinterested directors and that policies had been implemented
      to
      define responsible conduct. For example, in the absence of audit, nominating
      and
      compensation committees comprised of at least a majority of independent
      directors, decisions concerning matters such as compensation packages to our
      senior officers and recommendations for director nominees may be made by a
      majority of directors who have an interest in the outcome of the matters being
      decided. Prospective investors should bear in mind our current lack of corporate
      governance measures in formulating their investment decisions.





*Provisions
      of our Certificate of Incorporation and bylaws may delay or prevent a takeover
      which may not be in the best interests of our stockholders.*





Provisions
      of our articles of incorporation and bylaws may be deemed to have anti-takeover
      effects, which include when and by whom special meetings of our shareholders
      may
      be called, and may delay, defer or prevent a takeover attempt. In addition,
      certain provisions of the Nevada Revised Statutes also may be deemed to have
      certain anti-takeover effects which include that control of shares acquired
      in
      excess of certain specified thresholds will not possess any voting rights unless
      these voting rights are approved by a majority of a corporation's disinterested
      shareholders.





In
      addition, our articles of incorporation authorize the issuance of up to
      10,000,000 shares of preferred stock with such rights and preferences as may
      be
      determined from time to time by our Board of Directors, of which no shares
      are
      currently outstanding. Our Board of Directors may, without shareholder approval,
      issue preferred stock with dividends, liquidation, conversion, voting or other
      rights that could adversely affect the voting power or other rights of the
      holders of our common stock.





*Our
      stock price will fluctuate and could subject our company to
      litigation.*





The
      market price of our common stock may fluctuate significantly in response to
      a
      number of factors, some of which are beyond its control. These factors
      include:





·
            Quarterly
                variations in operating results;


·
            Changes
                in accounting treatments or
                principles;


·
            Additions
                or departures of key personnel;


·
            Stock
                market price and volume fluctuations of publicly-traded companies
                in
                general and Chinese-based companies in particular;
                and


·
            General
                political, economic and market
                conditions.




25




*Because
      our stock currently trades below $5.00 per share, and is quoted on the OTC
      Bulletin Board, our stock is considered a "penny stock" which can adversely
      affect its liquidity.*





As
      the
      trading price of our common stock is less than $5.00 per share, our common
      stock
      is considered a "penny stock," and trading in our common stock is subject to
      the
      requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under
      this
      rule, broker/dealers who recommend low-priced securities to persons other than
      established customers and accredited investors must satisfy special sales
      practice requirements. The broker/dealer must make an individualized written
      suitability determination for the purchaser and receive the purchaser's written
      consent prior to the transaction.





SEC
      regulations also require additional disclosure in connection with any trades
      involving a "penny stock," including the delivery, prior to any penny stock
      transaction, of a disclosure schedule explaining the penny stock market and
      its
      associated risks. These requirements severely limit the liquidity of securities
      in the secondary market because few broker or dealers are likely to undertake
      these compliance activities. In addition to the applicability of the penny
      stock
      rules, other risks associated with trading in penny stocks could also be price
      fluctuations and the lack of a liquid market.




**ITEM
      2.** **DESCRIPTION
      OF PROPERTY**




Our
      facilities include our principal executive offices, located at 1104 Jiatang
      Road
      Jiading District, Shanghai China  201807.
      We lease our principal executive office building and warehouse space, which
      consists of approximately 1,860 square feet, from Shanghai Shanhai Group, an
      unaffiliated third party, under leases expiring in December 2010 for an annual
      rental of approximately $32,000, increasing during the lease years beginning
      in
      2008 in amounts ranging from 8% to 10% annually.





Our
      other
      executive office is located at Room 702, No 11 Guotai Road, under leases
      expiring in January 2008 for an annual rental of approximately
      $30,829.





Until
      August 2005 we leased approximately 21,500 square feet of manufacturing space
      from Shanghai LiKang Pharmaceutical Technology Company, Limited, an affiliate,
      under a lease originally expiring December 2006 for an annual rent of
      approximately $11,500. In August 2005 we purchased this building, which includes
      an assignment of the land use permit, for $333,675. See Part II, Item 12.
      Certain Relationships and Related Transactions, and Director Independence
      appearing later in this annual report.





We
      also
      lease an additional approximate 2005 square feet of warehouse space from
      Shanghai Henglian Industrial Co. Limited, an unaffiliated third party, under
      a
      lease that expires in September 30, 2008 for an annual rental of approximately
      $39,409.




**ITEM
      3.** **LEGAL
      PROCEEDINGS**





None.




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





None.




26




**PART
      II**





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





Our
      common stock is quoted on the Over The Counter Bulletin Board (“OTCBB”). On
      March 24, 2005, our symbol was changed from KSHR to LWLL in connection with
      a
      1:10 reverse split of our common stock effective on that date. The reported
      high
      and low bid prices for the common stock as reported on the OTCBB are shown
      below
      for the periods indicated. The quotations reflect inter-dealer prices, without
      retail mark-up, markdown or commission, and may not represent actual
      transactions.


High
              
              LowFiscal
                  2006First
                  quarter ended March 31, 2006
              
              $
              0.26
              
              $
              0.15Second
                  quarter ended June 30, 2006
              
              $
              0.36
              
              $
              0.22Third
                  quarter ended September 30, 2006
              
              $
              0.26
              
              $
              0.15Fourth
                  quarter ended December 31, 2006
              
              $
              0.32
              
              $
              0.17Fiscal
                  2007First
                  quarter ended March 31, 2007
              
              $
              0.30
              
              $
              0.18Second
                  quarter ended June 30, 2007
              
              $
              0.25
              
              $
              0.14Third
                  quarter ended September 30, 2007
              
              $
              0.19
              
              $
              0.10Fourth
                  quarter ended December 31, 2007
              
              $
              0.40
              
              $
              0.11





On
      March
      24, 2008, the last sale price of our common stock as reported on the OTCBB
      was
      $0.185. As of December 31, 2007, there were approximately 138 record owners
      of
      our common stock.





Dividend
      Policy





We
      have
      never paid cash dividends on our common stock. Payment of dividends will be
      within the sole discretion of our Board of Directors and will depend, among
      other factors, upon our earnings, capital requirements and our operating and
      financial condition. At the present time, our anticipated financial capital
      requirements are such that we intend to follow a policy of retaining earnings
      in
      order to finance the development of our business.





While
      we
      have no current intention of paying dividends on our common stock, should we
      decide in the future to do so, as a holding company, our ability to pay
      dividends and meet other obligations depends upon the receipt of dividends
      or
      other payments from our operating subsidiaries. In addition, our operating
      subsidiaries, from time to time, may be subject to restrictions on their ability
      to make distributions to us, including as a result of restrictive covenants
      in
      loan agreements, restrictions on the conversion of local currency into U.S.
      dollars or other hard currency and other regulatory restrictions.





Recent
      Sales of Unregistered Securities





In
      January 2007, warrants representing 3,213,320 shares of common stock were
      exercised at $0.10 per share.





On
      June
      6, 2007, the Company entered into a six months agreement with FirsTrust Group
      Inc. to provide business development and management services. In connection
      with
      this agreement, on July 12, 2007, the Company issued 450,000 shares of its
      restricted common stock. The Company valued the service using the fair value
      of
      common shares on grant date at $0.17 per share and recorded deferred consulting
      expense of $76,500 to be amortized over the service period. Associated with
      this
      agreement, for the fiscal year ended December 31, 2007, there is no amount
      need
      to be amortized.





On
      December 3, 2007, the Company issued 200,000 shares of its restricted common
      stock; 100,000 shares to each of Mr. Ye Wenhu and Ms. Xu Xinfang. They provide
      business development and management services to the Company. The Company valued
      the service using the fair value of common shares on grant date at $0.17 per
      share and recorded consulting expense of $34,000.




27




**ITEM
      6.** **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





**OVERVIEW**





Since
      1988, we have developed, manufactured and distributed disinfectant health care
      products primarily to the medical industry in China. In recent years, China
      has
      witnessed a variety of public health crises, such as the outbreak of SARS,
      which
      demonstrated the need for increased health standards in China. In response,
      beginning in 2002, the Chinese government has undertaken various initiatives
      to
      improve public health and living standards, including continuing efforts to
      educate the public about the need for proper sanitation procedures and the
      establishment of production standards for the disinfectant industry in China.
      As
      a result of this heightened license and permit system, all disinfectant
      manufacturers must comply with "qualified disinfection product manufacturing
      enterprise requirements” established by the Ministry of Public Health. The
      requirements include standards for hardware (including facilities and
      machinery), software (including the technology to monitor the facilities),
      and
      for the knowledge and capability of both the production staff and quality
      control procedures. Following the adoption of the industry standards in 2002,
      we
      have been granted 31 hygiene licenses by the Ministry of Public Health.





We
      believe that the government standards adopted in July 2002 have increased the
      barriers to entry for competitors in the disinfectant industry in China. The
      implementation of these higher production standards and license requirements
      has
      effectively decreased the competitiveness of small to mid size manufacturers
      since the new standards are especially difficult for companies with limited
      product offerings and inferior technical content. In addition, prior to the
      adoption of industry standards, disinfectant products were generally marketed
      and sold based on price as opposed to quality. We believe that as a result
      of
      these new industry standards, the marketplace has become focused on product
      quality, which we believe has enabled us to increase our commercial customer
      base and subsequently, our revenues.





In
      May
      2005, we entered into a share exchange agreement with all of the shareholders
      of
      Linkwell Tech under which we acquired 100% of the issued and outstanding shares
      of Linkwell Tech's common stock in exchange for 36,273,470 shares of our common
      stock, which at closing represented approximately 87.5% of the issued and
      outstanding shares of our common stock. As a result of the transaction, Linkwell
      Tech became our wholly owned subsidiary. In June, 2004, prior to our share
      exchange with Linkwell Tech, Linkwell Tech acquired 90% of LiKang Disinfectant’s
      through a stock exchange with Shanghai LiKang Pharmaceuticals Technology
      Company, Limited, the then 90% shareholder of LiKang Disinfectant. Shanghai
      LiKang Pharmaceuticals Technology Company, Limited is owned by Mr. Xuelian
      Bian
      and Guan Wei; our officers, directors and principal shareholders. Shanghai
      Shanhai Group, an unaffiliated third party, owns the remaining 10% of LiKang
      Disinfectant. The transaction in which Linkwell Tech acquired the 90% interest
      in LiKang Disinfectant resulted in the formation of a U.S. holding company
      by
      Mr. Bian and Guan as it did not result in a change in the underlying ownership
      interests of LiKang Disinfectant. For financial accounting purposes, the reverse
      merger transaction in which we acquired Linkwell Tech was treated as a
      recapitalization of our company with the former shareholders of the company
      retaining approximately 12.5% of the outstanding stock. We regard
      LiKang Disinfectant's products for the commercial medical industry as the
      primary segment of our business. Our
      consolidated financials statements included elsewhere in this annual report
      for
      the periods after the date of the stock exchange between our company and
      Linkwell Tech reflect the change in the capital structure of our company due
      to
      the recapitalization.





Historically,
      our focus has been on the commercial distribution of our products. Our customers
      include hospitals, medical suppliers and distribution companies throughout
      China. Recently we have made efforts to expand our distribution to reach the
      retail market. We have repackaged select commercial disinfectant products for
      sale to the mass consumer market and have begun to expand our customer base
      to
      include hotels, schools, supermarkets, and drugstores. By virtue of the Chinese
      government's continuing focus on educating the Chinese population about the
      benefits of proper sanitation procedures, we believe that one key to increasing
      our revenues is the continued expansion of the retail distribution of our
      products.




28




The
      disinfectant industry in China is an emerging industry that is populated with
      small, regional companies. We estimate that there are in excess of 1,000
      manufacturers and distributors of disinfectant products in China; however,
      most
      domestic competitors offer a limited line of products and there are few domestic
      companies with a nationwide presence. We believe that our national marketing
      and
      sales presence throughout all 22 provinces, four autonomous regions, and four
      major municipalities of China gives us a competitive advantage over other
      disinfectant companies in China and enables us to leverage our brand awareness
      for products with commercial customers to the retail marketplace.





Our
      present manufacturing facilities and production capacities are sufficient for
      the foreseeable future, and we believe that we have the necessary assets and
      capital available to us to enable us to increase our revenues in future periods
      as the overall market for disinfectant products in China continues to increase.
      We will continue to focus our efforts on developing a retail market for our
      products, as well as expanding our traditional base of commercial customers.
      In
      addition, we may also consider the possible acquisition of independent sales
      networks which could be used to increase our product distribution as well as
      smaller, regional companies in our industry.




**Results
      of Operations**




***Fiscal
      year ended December 31, 2007 as compared to the fiscal year ended December
      31,
      2006***


**2007**
              
              **2006**
              
              **Change**
              
              **% of**
                **Change**Net
                  revenues
              
              $
              14,335,721
              
              $
              7,745,378
              
              $
              6,590,343
              
              
              85
              %Cost
                  of sales
              
              
              10,071,991
              
              
              4,609,557
              
              
              5,462,434
              
              
              119
              %Selling
                  expenses
              
              
              1,099,266
              
              
              573,315
              
              
              525,951
              
              
              92
              %G&A
                  expenses
              
              
              2,753,132
              
              
              1,730,178
              
              
              1,022,954
              
              
              59
              %Total
                  operating expenses
              
              
              3,852,398
              
              
              2,303,493
              
              
              1,548,905
              
              
              67
              %Operating
                  income
              
              
              411,332
              
              
              832,328
              
              
              (420,996
              )
              
              (51
              )%Total
                  other income(expense)
              
              
              81,727
              
              
              (142,647
              )
              
              224,374
              
              
              (157
              )%Gain
                  from discontinued operations
              
              
              -
              
              
              12,794
              
              
              (12,794
              )
              
              (100
              )%Income
                  taxes
              
              
              -
              
              
              (1,318
              )
              
              1,318
              
              
              100
              %Minority
                  interest
              
              
              (132,924
              )
              
              (133,037
              )
              
              113
              
              
              (0
              )%Net
                  income
              
              $
              360,135
              
              $
              568,120
              
              $
              (207,985
              )
              
              (37
              )%





**Other
      key indicators**





**Fiscal**
              **2007**
            
            **Fiscal**
              **2006**
            
            **% of**
              **change**Cost
                of revenues as a percentage of revenues
            
            
            70
            %
            
            60
            %
            
            10
            %Gross
                profit margin
            
            
            30
            %
            
            40
            %
            
            (10
            )%Selling
                expenses as a percentage of revenues
            
            
            8
            %
            
            7
            %
            
            1
            %G&A
                expenses as a percentage of revenues
            
            
            19
            %
            
            22
            %
            
            (3
            )%Total
                operating expenses as a percentage of revenues
            
            
            27
            %
            
            30
            %
            
            (3
            )%




**Net
      revenues**





Net
      revenues for the fiscal year ended December 31, 2007 increased $6,590,343,
      or
      approximately 85%, to $14,335,721, compared with $7,745,378 for the fiscal
      year
      ended December 31, 2006. Net revenues were $8,127,717 for our subsidiary LiKang
      Disinfectant and $6,208,004 for our subsidiary, LiKang International
      respectively.





The
      majority of the increase in net revenues was attributable to our subsidiary
      LiKang International, whose net revenues for the fiscal year ended 2007 were
      $6,208,004 as compared to $720,996 for the fiscal year ended December 31, 2006,
      an increase of $5,487,008, or approximately 761%.




Net
      revenues for our subsidiary LiKang Disinfectant increased $1,103,335 to
      $8,127,717 or approximately 16% for year 2007 compared to net revenue of
      $7,024,382 in 2006. We believe this increase in demand was due to an increase
      in
      our sales staff and customer recognition of our high-quality, competitively
      priced disinfectant products.




29




Approximately
        82% of our total net revenues were attributable to sales to third parties
        and
        approximately 18% were attributable to sales to related parties for the fiscal
        year ended December 31, 2007, as compared to approximately 58% and 42%,
        respectively, for the fiscal year ended December 31, 2006. While sales to
        non-related parties increased by $7,185,851, or approximately
        159%, for the fiscal year ended December 31, 2007 from the comparable period
        in
        fiscal year of 2006, sales to related parties decreased $595,508, or
        approximately 18%. This change in sales distribution reflects management’s
        desire to diversify and grow its customer base and achieve greater independence.
 
 Our
        net
        revenues for the fiscal year ended December 31, 2007, included revenues from
        Shanghai LiKang Pharmaceuticals Technology Company, Limited, an affiliated
        entity, of $2,354,010 compared to $3,211,758 from sales during the same period
        in 2006. This represents a decrease of $857,748 or approximately 27%. Also
        included in our net revenues for the fiscal year ended December 31,2007 were
        revenues of $34,707 from sales of our products to Shanghai LiKang Meirui
        Pharmaceuticals High-Tech Co., Ltd., an affiliate, for an increase of $13,039
        or
        approximately 60%, from $ 21,668 for the fiscal year ended December 31, 2006,
        as
        well as revenues of $851 and $3,773 from sales of raw materials to affiliate
        Shanghai LiKang Biological High-Tech Company, Ltd. for the fiscal years ended
        December 31, 2007 and 2006, respectively.
 
 **Cost
        of revenues**
 
 Cost
        of
        revenues includes raw materials and manufacturing costs, which includes labor,
        rent and an allocated portion of overhead expenses including utilities directly
        related to production activities. For the fiscal year ended December 31,
        2007,
        cost of revenues amounted to $10,071,991 or approximately 70% of net revenues
        as
        compared to cost of revenues of $4,609,557, or approximately 60% of net revenues
        for the fiscal year ended December 31, 2006. Historically, our cost of revenues
        has been comprised as follows: approximately 65% to raw material costs and
        35%
        to manufacturing costs. The increase in cost of revenues as a percentage
        of net
        revenues for the fiscal year ended December 31, 2007 as compared to the fiscal
        year ended December 31, 2006 is attributable, partially, to price increases
        of
        raw materials during the fiscal year of 2007. We also experienced an increase
        in
        overhead costs, including utilities and rent during the fiscal year ended
        December 31, 2007 as compared to the fiscal year ended December 31, 2006.
        We
        absorbed the majority of these increased costs in order to increase our market
        share in the disinfectant industry.
 
 We
        purchase raw materials from several primary suppliers and we have purchase
        contracts with these suppliers in an effort to ensure a steady supply of
        raw
        materials. We also purchase raw materials and finished products from Shanghai
        LiKang Meirui Pharmaceutical High-Tech Co. Ltd., an affiliate. These purchases
        totaled $8,871 and $1,094 for the fiscal years ended December 31, 2007 and
        2006,
        respectively.
 
 **Gross
        profit**
 
 Gross
        profit for the fiscal year ended December 31, 2007 was $4,263,730 or
        approximately 30% of net revenues, as compared to $3,135,821 or approximately
        40% of net revenues for the fiscal year ended December 31, 2006. The decrease
        in
        gross margin reflects an overall increase in the price of raw materials and
        the
        proportionally larger increase in revenues from LiKang International, whose
        gross margin was 6.37% in 2007 relative to LiKang Disinfectant, whose gross
        margin was 47.60% in 2007.
 
 **Operating
        expenses**
 
 Total
        operating expenses for the fiscal year ended December 31, 2007 were $3,852,398,
        an increase of $1,548,905, or approximately 67%, from total operating expenses
        in the fiscal year ended December 31, 2006 of $2,303,493. For the fiscal
        year
        ended December 31, 2007, this increase included the following:
 
 ·
              Selling
                  expenses for 2007 amounted to $1,099,266 as compared to $573,315 for
                  the fiscal year ended December 31, 2006, an increase of $525,951
                  or
                  approximately 92%. This increase is primarily attributable to building
                  out
                  our sales and service division to improve future growth as
                  follows:
  30
  o
              Shipping
                  costs amounted to $274,086 compared to $173,840 for the fiscal
                  year ended
                  December 31, 2006, an increase of $100,246 or
                  58%;
 
 o
              Advertising
                  costs amounted to $5,069 compared to $21,323 for the fiscal year
                  ended
                  December 31, 2006, a decrease of $16,254 or
                  76%;
 
 o
              Repair
                  and maintenance costs amounted to $11,733 as compared to $38,861
                  for the
                  fiscal year ended December 31, 2006, a decrease of $27,128 or 70%;
                  and
 
 ·
              General
                  and administrative expenses were $2,753,132 as compared to $1,730,178
                  for
                  the fiscal year ended December 31, 2006, an increase of $1,022,954,
                  or
                  approximately 59%. These expenses included the
                  following:
 
 o
              We
                  incurred consulting fees during the fiscal years ended December
                  31, 2007
                  and 2006 of $764,050 and $398,945, respectively. These fees were
                  substantially related to the issuance of common stock for business
                  development and management services related to our administrative
                  operations in the United States; and
 
 o
              For
                  the fiscal year ended December 31, 2007, salaries and wages and
                  related
                  benefits increased to $696,693 as compared to $426,465 for the
                  fiscal year
                  ended December 31, 2006, an increase of approximately $270,228
                  or
                  approximately 63%, due to the hiring of additional employees.
  **Income
        from operations**
 
 We
        reported income from operations of $411,332 for the fiscal year ended December
        31, 2007 as compared to income from operations of $832,328 for the fiscal
        year
        ended December 31, 2006, a decrease of $420,996 or approximately 51%. This
        decrease in income from operations is due primarily to an increase in allowance
        for doubtful accounts of $315,536 for 2007 compared to $131,296 for 2006,
        or approximately 140%, and an increase in doubtful accounts-related
        party of $133,422 for 2007 compared to $87,937 for 2006; or approximately
        52%. Our management believes it will collect on these amounts owed in 2008,
        but
        also believes it is prudent to report them as allowance for doubtful debts.
 
 Regarding
        sales to healthcare institutions in China, it is customary for relatively
        long
        collection term in accounts receivable. Our management team is working to
        improve payment timeliness for 2008.
  **Other
        income (expenses)**
 
 For
        the
        fiscal year ended December 31, 2007, the total other income (expense) amounted
        to $81,727 as compared to $(142,647) for the fiscal year ended December 31,
        2006, an increase of $224,374. This change is primarily attributable
        to:
 
 §
              Interest
                  expense of $68,867 as compared to $41,589 for the fiscal year ended
                  December 31, 2006, an increase of $27,278, due to increased borrowings
                  during the fiscal year ended December 31, 2007;
                  and
 
 §
              A
                  decrease in interest income of $1,792 to $3,649 for the fiscal
                  year ended
                  December 31, 2007 as compared to $5,441 for the fiscal year ended
                  December
                  31, 2006. This decrease was attributable to the decrease in average
                  cash
                  balance in our bank accounts.
  **Income
        before discontinued operations, income taxes and minority
        interest**
 
 For
        the
        fiscal year ended December 31, 2007, our income before discontinued operations,
        income taxes and minority interest was $493,059 as compared to $689,681 for
        the
        fiscal year ended December 31, 2006, a decrease of $196,622 or approximately
        29%.
  31
  **Discontinued
        operations**
 
 In
        January 2006, we sold 100% of the capital stock of our Aerisys subsidiary
        to its
        former CEO in exchange for an assumption of all liabilities related to it.
        The
        gain from discontinued operations of $12,794 in the fiscal year ended December
        31, 2006 represents the gain on disposal of this subsidiary. For the fiscal
        year
        ended December 31, 2007, we had no discontinued operation.
 
 **Minority
        interest**
 
 For
        the
        fiscal year ended December 31, 2007, we reported a minority interest expense
        of
        $132,924 as compared to $133,037 for the fiscal year ended December 31, 2006.
        The minority interest is attributable to LiKang Disinfectant's 10% minority
        shareholder, Shanghai Shanhai Group.
 
 **Net
        income**
 
 We
        reported net income of $360,135 for the fiscal year ended December 31, 2007,
        as
        compared to net income of $568,120 for the fiscal year ended December 31,
        2006.
        However, the net income for Linkwell’s subsidiary, LiKang Disinfectant,
        increased approximately 3%, with net income of $1,196,318 for 2007 compared
        to
        $1,161,828 for 2006.
 
 The
        primary causes for the decrease in net income for the year ended 2007 was
        attributable to four key factors: (1) the increase in cost of sales; (2)
        the low
        net income of our subsidiary Shanghai LiKang International; (3) the increase
        in
        doubtful accounts of $448,958; and (4) a one-time write off of $564,000 as
        a
        result of terminating our contract with China Direct Investments, Inc.
 
 As
        described in the “Gross profit” paragraph above, we experienced an increase in
        the price of raw materials. Our management is working with raw material
        suppliers to minimize any additional price increases during 2008.
 
 The
        net
        revenue of $6,208,004 for our subsidiary, LiKang International, represented
        approximately 43% of our total net revenues in 2007. Although their net revenue
        growth was approximately 761%, the net income was only $21,137. The business
        of
        LiKang International mainly includes export of medical equipment, mechanical
        equipment and chemical products. During 2007, the Chinese government canceled
        its tax reimbursement policy for many products that had been in place in
        2006.
        In addition, the foreign currency exchange rate between USD and RMB declined
        sharply during 2007, dropping approximately 6.44% from 7.8175 on January
        1, 2007
        to 7.3141 on December 31, 2007. The price increase of oil and other raw
        materials also negatively affected our profits.
 
 On
        January 10, 2006 and effective January 1, 2006, the Company entered into
        a three
        year agreement with China Direct Investments, Inc. to provide business
        development and management services. In connection with this agreement, the
        Company issued 4,700,000 shares of the Company’s common stock. The Company
        valued the service using the fair value of common shares on grant date at
        $0.18
        per share and recorded deferred consulting expense of $846,000 to be amortized
        over the service period. In July 2007, the Company terminated the service
        contract with China Direct Investments, Inc, and the remaining deferred
        consulting expenses associated with this agreement amounted to $564,000,
        which
        has been amortized for the fiscal year ended December 31, 2007.
 
 **Liquidity
        and Capital Resources**
  As
        shown
        in the accompanying financial statements, our working capital increased
        $1,999,499, or approximately 56%, from $3,564,485 on December 31, 2006 to
        $5,563,984 on December 31 2007. With the expansion of our businesses, we
        anticipate a strong demand on our capital resources in the near future. In
        addition to our working capital on hand, we intend to obtain required capital
        through a combination of bank loans and the sale of our equity securities.
        Although there are no commitments or agreements on the part of anyone at
        this
        time to provide us with additional bank financing or to purchase securities,
        we
        are optimistic that we will be able to obtain additional capital resources
        to
        fund our business expansions.
  32
  We
        currently have no material commitments for capital expenditures. At December
        31,
        2007, we had approximately $699,210 in short term loans. Other than our working
        capital and loans, we presently have no other alternative capital resources
        available to us. We plan to build additional product lines and upgrade our
        manufacturing facilities, in order to expand our producing capacity and improve
        the quality of our products. Based on our preliminary estimates, it will
        require
        additional capital of approximately $1 million.
  We
        need
        to raise additional capital resources to meet the demands described above.
        We
        may seek to raise additional capital through the sale of equity securities.
        There can be no assurances that any additional debt or equity financing will
        be
        available to us on acceptable terms, if at all. The inability to obtain debt
        or
        equity financing could have a material adverse effect on our operating results,
        and as a result we could be required to cease or significantly reduce our
        operations, seek a merger partner or sell additional securities on terms
        that
        may be disadvantageous to shareholders.
  **Net
        Cash from Operating Activities**
  Net
        cash
        used in operating activities for the year ended December 31, 2007 was $702,034
        as compared to net cash provided by operating activities of $135,560 for
        the
        period ended December 31, 2006, a decrease of $837,594 or (618)%. For the
        year
        ended December 31, 2007, we used cash to fund a net increase in accounts
        receivable of $1,631,849, a net increase of $719,230 in accounts
        receivable-related parties, an increase of $292,993 in inventories, a decrease
        in advances from customers of $459,144 and a decrease of $152,769 in other
        receivables. These cash outflows were offset by our net income, an increase
        of
        $647,917 in prepaid and other current assets and an increase of $107,644
        in
        accounts payable, accrued expenses and other payables.
  **Net
        Cash from Investing Activities**
  Net
        cash
        used in investing activities for the year ended December 31, 2007 was $997,331
        as compared to net cash used in investing activities of $97,948 for the same
        period in 2006, an increase of $899,383 or 918%. This change is attributable
        to
        an increase of a loan of $946,591 to related parties by netting a decrease
        of
        $48,609 in loan receivables from third parties and a purchase of $99,349
        in
        property, plant and equipment.
  **Net
        Cash from Financing Activities**
  Net
        cash
        provided by financing activities was $712,051 for the year ended December
        31,
        2007, as compared to net cash provided by financing activities of $204,267
        for
        the year ended December 31, 2006, a increase of $507,784 or 249%. The increased
        cash flow from financing activities is mainly a result of an increase of
        proceeds from warrants exercised of $321,332 and an increase in proceeds
        of
        $556,190 from a loan payable to a related party.
  **CRITICAL
        ACCOUNTING POLICIES**
  The
        preparation of our consolidated financial statements in conformity with
        accounting principles generally accepted in the United States requires us
        to
        make estimates and judgments that affect our reported assets, liabilities,
        revenues, and expenses, and the disclosure of contingent assets and liabilities.
  We
        base
        our estimates and judgments on historical experience and on various other
        assumptions we believe to be reasonable under the circumstances. Future events,
        however, may differ markedly from our current expectations and assumptions.
        While there are a number of significant accounting policies affecting our
        consolidated financial statements; we believe the following critical accounting
        policies involve the most complex, difficult and subjective estimates and
        judgments: allowance for doubtful accounts; income taxes; stock-based
        compensation; and asset impairment.
  33
  **ALLOWANCE
        FOR DOUBTFUL ACCOUNTS**
  We
        maintain an allowance for doubtful accounts to reduce amounts to their estimated
        realizable value. A considerable amount of judgment is required when we assess
        the realization of accounts receivables, including assessing the probability
        of
        collection and the current credit-worthiness of each customer. If the financial
        condition of our customers were to deteriorate, resulting in an impairment
        of
        their ability to make payments, an additional provision for doubtful accounts
        could be required. We initially record a provision for doubtful accounts
        based
        on our historical experience, and then adjust this provision at the end of
        each
        reporting period based on a detailed assessment of our accounts receivable
        and
        allowance for doubtful accounts. In estimating the provision for doubtful
        accounts, we consider: (i) the aging of the accounts receivable;
        (ii) trends within and ratios involving the age of the accounts receivable;
        (iii) the customer mix in each of the aging categories and the nature of
        the receivable; (iv) our historical provision for doubtful accounts;
        (v) the credit worthiness of the customer; and (vi) the economic
        conditions of the customer's industry as well as general economic conditions,
        among other factors.
  **INCOME
        TAXES**
  We
        account for income taxes in accordance with SFAS No. 109, Accounting for
        Income Taxes. SFAS 109 prescribes the use of the liability method. Under
        this method, deferred tax assets and liabilities are recognized for the future
        tax consequences attributable to temporary differences between the financial
        statement carrying amounts and the tax basis of assets and liabilities. Deferred
        tax assets and liabilities are measured using the enacted tax rates expected
        to
        apply to taxable income in the years in which those temporary differences
        are
        expected to be recovered or settled. We then assess the likelihood that our
        deferred tax assets will be recovered from future taxable income and to the
        extent we believe that recovery is not likely, we establish a valuation
        allowance. To the extent we establish a valuation allowance, or increase
        or
        decrease this allowance in a period, we increase or decrease our income tax
        provision in our statement of operations. If any of our estimates of our
        prior
        period taxable income or loss prove to be incorrect, material differences
        could
        impact the amount and timing of income tax benefits or payments for any period.
        In addition, as a result of the significant change in the Company's ownership,
        the Company's future use of its existing net operating losses may be limited.
  The
        Company currently operates in the PRC, however, our operations could change
        in
        the near future and we could be subject to tax liability involving a
        consideration of uncertainties in the application and interpretation of complex
        tax regulations in a multitude of jurisdictions across operations in other
        countries.
  We
        recognize potential liabilities and record tax liabilities for anticipated
        tax
        audit issues in the U.S. and other tax jurisdictions based on our estimate
        of
        whether, and the extent to which, additional taxes will be due. The tax
        liabilities are reflected net of realized tax loss carry forwards. We adjust
        these reserves upon specific events; however, due to the complexity of some
        of
        these uncertainties, the ultimate resolution may result in a payment that
        is
        different from our current estimate of the tax liabilities. If our estimate
        of
        tax liabilities proves to be less than the ultimate assessment, an additional
        charge to expense would result. If payment of these amounts ultimately proves
        to
        be less than the recorded amounts, the reversal of the liabilities would
        result
        in tax benefits being recognized in the period when the contingency has been
        resolved and the liabilities are no longer necessary.
  Changes
        in tax laws, regulations, agreements and treaties, foreign currency exchange
        restrictions or our level of operations or profitability in each taxing
        jurisdiction could have an impact upon the amount of income taxes that we
        provide during any given year.
  **STOCK-BASED
        COMPENSATION**
  We
        account for share-based payments in accordance with SFAS No. 123(R),
        Share-Based Payment. Under the fair value recognition provisions of this
        statement, share-based compensation cost is measured at the grant date based
        on
        the value of the award and is recognized as expense over the vesting period.
        Determining the fair value of share-based awards at the grant date requires
        judgment, including estimating expected volatility. In addition, judgment
        is
        also required in estimating the amount of share-based awards that are expected
        to be forfeited. If actual results differ significantly from these estimates,
        stock-based compensation expense and our results of operations could be
        materially impacted.
  **ASSET
        IMPAIRMENT**
  We
        periodically evaluate the carrying value of other long-lived assets, including,
        but not limited to, property and equipment and intangible assets, when events
        and circumstances warrant such a review. The carrying value of a long-lived
        asset is considered impaired when the anticipated undiscounted cash flows
        from
        such asset is less than its carrying value. In that event, a loss is recognized
        based on the amount by which the carrying value exceeds the fair value of
        the
        long-lived asset. Fair value is determined primarily using the anticipated
        cash
        flows discounted at a rate commensurate with the risk involved. Significant
        estimates are utilized to calculate expected future cash flows utilized in
        impairment analyses. We also utilize judgment to determine other factors
        within
        fair value analyses, including the applicable discount rate
  34
  **OFF-BALANCE
        SHEET ARRANGEMENTS**
  There
        are
        no off-balance sheet arrangements that have or are reasonably likely to have
        a
        current or future effect on the Company's financial condition, changes in
        financial condition, revenues or expenses, results of operations, liquidity,
        capital expenditures or capital resources, that are material to investors.
  **ITEM
        7.** **FINANCIAL
        STATEMENTS**
 
 Our
        financial statements are contained in pages F-1 through F-23, which appear
        at
        the end of this annual report.
  **ITEM
        8.** **CHANGES
        IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE**
 
 None.
 
 **ITEM
        8A(T).**  **CONTROLS
        AND PROCEDURES**
  Disclosure
        Controls and Procedures
  Our
        management, with the participation of our principal executive officer, evaluated
        the effectiveness of our disclosure controls and procedures as of December
        31,
        2007. The term “disclosure controls and procedures,” as defined in Rules
        13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other
        procedures of a company that are designed to ensure that information required
        to
        be disclosed by a company in the reports that it files or submits under the
        Exchange Act is recorded, processed, summarized and reported, within the
        time
        periods specified in the Securities and Exchange Commission’s rules and forms.
        Disclosure controls and procedures include, without limitation, controls
        and
        procedures designed to ensure that information required to be disclosed by
        a
        company in the reports that it files or submits under the Exchange Act is
        accumulated and communicated to the company’s management, including its
        principal executive and principal financial officers, as appropriate to allow
        timely decisions regarding required disclosure. Management recognizes that
        any
        controls and procedures, no matter how well designed and operated, can provide
        only reasonable assurance of achieving their objectives and management
        necessarily applies its judgment in evaluating the cost-benefit relationship
        of
        possible controls and procedures. Based on the evaluation of our disclosure
        controls and procedures as of December 31, 2007, our principal executive
        officer
        concluded that, as of such date, our disclosure controls and procedures were
        not
        effective at the reasonable assurance level.
  Internal
        Control Over Financial Reporting
  Management’s
        Annual Report on Internal Control over Financial Reporting
  The
        management of the company is responsible for establishing and maintaining
        adequate internal control over financial reporting for the company. Internal
        control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
        promulgated under the Securities Exchange Act of 1934 as a process designed
        by,
        or under the supervision of, the company’s principal executive and principal
        financial officers and effected by the company’s board of directors, management
        and other personnel, to provide reasonable assurance regarding the reliability
        of financial reporting and the preparation of financial statements for external
        purposes in accordance with generally accepted accounting principals and
        includes those policies and procedures that:
  •  
        Pertain to the maintenance of records that in reasonable detail accurately
        and
        fairly reflect the transactions and dispositions of the assets of the company;
  35
  •  
        Provide reasonable assurance that transactions are recorded as necessary
        to
        permit preparation of financial statements in accordance with generally accepted
        accounting principles, and that receipts and expenditures of the company
        are
        being made only in accordance with authorizations of management and directors
        of
        the company; and
  •  
        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 control over financial reporting may
        not
        prevent or detect misstatements. 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.
 
 The
        company’s management assessed the effectiveness of the company’s internal
        control over financial reporting as of December 31, 2007. In making this
        assessment, the company’s management 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, management concluded that, as of December 31, 2007, our internal
        control over financial reporting is not effective due to a material weakness.
        This material weakness is that all of our employees and accounting staff
        are
        located in the PRC and we do not presently have a chief financial officer,
        comptroller or similarly titled senior financial officer who is bilingual
        and
        experienced in the application of U.S. GAAP. We have taken the steps to
        eliminate this material weakness including the hiring of additional accounting
        consulting staff to review and oversee our application of generally accepted
        accounting principles in the United States to bring additional financial
        expertise to our organization and to facilitate the flow of information to
        our
        independent accountants. This accounting consulting staff has assisted us
        in
        implementing additional practices to ensure that we (i) properly accrue
        undeclared and unpaid dividends, (ii) properly record related party
        transactions, and (iii) properly account for changes in loans payable. However,
        until we expand our full time staff to include a bilingual senior financial
        officer who has the requisite experience necessary, as well as supplement
        the
        accounting knowledge of our staff, notwithstanding the guidance provided
        to us
        by the accounting consulting staff we could continue to have material weaknesses
        in our disclosure controls that may lead to restatements of our financial
        statements.
  This
        annual report does not include an attestation report of the company’s registered
        public accounting firm regarding internal control over financial reporting.
        Management’s report was not subject to attestation by the company’s registered
        public accounting firm pursuant to temporary rules of the Securities and
        Exchange Commission that permit the company to provide only management’s report
        in this annual report.
  Changes
        in Internal Control Over Financial Reporting
  No
        change
        in our internal controls over financial reporting occurred during the fiscal
        quarter ended December 31, 2007 that has materially affected, or is reasonably
        likely to materially affect, our internal control over financial reporting.
  **ITEM
        8B.**  **OTHER
        INFORMATION**
 
 None.
  36
  **PART
        III**
 
 **ITEM
        9.** **DIRECTORS,
        EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVRNANCE;
        COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT**
  Directors
        and Executive Officers
 Name
                
                Age
                
                PositionsXuelian
                    Bian
                
                42
                
                Chief
                    Executive Officer, President and Chairman of the BoardWei
                    Guan
                
                42
                
                Vice
                    President and Director
  Mr.
        Xuelian Bian – has served as our Chairman of the Board, Chief Executive Officer
        and President since May 2, 2005. Simultaneously, he has served as Chief
        Executive Officer, President and Director of Linkwell Tech since its inception
        in June 2004 and as General Manager of LiKang Disinfectant since 1993. From
        1990
        to 1993, he was a project assistant in charge of science and technology
        achievement application in the Second Military Medical University, Shanghai,
        China. From 1986 to 1990, Mr. Bian was a member of the technical staff in
        the
        Epidemiological Institute in the Second Military Medical University. Mr.
        Bian
        contributed to the compilation of "Disinfection - Antiseptic - Anticorrosion
        -
        Preservation" and "Modern Disinfection Study" of which the first book laid
        the
        foundation for Chinese disinfectant study. Mr. Bian started related research
        with his colleagues on the microbiology sterilization effect examination,
        high
        strength ultraviolet lamp tube and decontaminating apparatus prior to the
        inception of LiKang Disinfectant. Mr. Bian graduated from the China Army
        Second
        Military Medical University in 1990 with a bachelor degree in public
        health.
 
 Mr.
        Wei
        Guan – has served as our Vice President and a member of our Board of Directors
        since May 2, 2005. He has served as Vice President of Linkwell Tech since
        its
        inception in June 2004 and vice General Manager of Shanghai LiKang Disinfectant
        Company, Limited since 2002. From 1987 to 1990, Mr. Guan worked at Hunan
        Machinery Importing & Exporting Corporation as a member of management. From
        1990 to 2002, he worked for the Division of Importing and Export at Worldbest
        Group as a general manager. Mr. Guan graduated from Hunan University in
        Changsha, Hunan Province with a bachelor degree in Industry Foreign Trading
        in
        1987.
 
 There
        are
        no family relationship between any of the executive officers and directors.
        Each
        director is elected at our annual meeting of stockholders and holds office
        until
        the next annual meeting of stockholders, or until his successor is elected
        and
        qualified.
  Key
        Employees
 
 Mr. Chun
        Ming Huang, age 39, has served as COO of Linkwell Corporation since 2005.
        From
        2001 until joining Linkwell in 2005, Mr. Huang served as the Associate
        Director of the Analytical Department of WuXi Pharma Tech. Mr Huang received
        his
        master degree in pharmaceuticals from the Second Military Medical University
        in
        1992.
 
 Ms.
        Gendi
        Li, age 55, has served as LiKang Disinfectant's Controller since 2003. From
        1996
        to 2003, Ms. Li was employed as an Executive Accountant and Financial Manager
        for QiaoFu Construction Holding Company (Shanghai). From 1993 to 1996, Ms.
        Li
        was employed as an Executive Accountant and Head of the Finance Department
        at
        Shanghai Yuxin Machinery Co., Ltd. From 1968 to 1993, Ms. Li was employed
        in
        various financial positions, including Executive Accountant, and Head of
        the
        Finance Department at First Plastic Machinery Factory. Ms. Li graduated from
        the
        Shanghai Finance and Economics Institute.
 
 Mr.
        Wensheng Sun, age 39, has been LiKang Disinfectant's Vice-General Manager
        for
        Production since 1995 and has held the same position at LiKang Disinfectant
        since 1995 following completion of his Masters degree in Medicine at the
        Second
        Military Medical University School of Pharmacy.
 
 Mr. Rick
        Wang, age 32, currently serves as Linkwell Corporation's Secretary.
        Mr. Wang joined LiKang Disinfectant in 1999 and received his bachelor
        degree from the Public Health Department of Xinjiang Medical College in
        1997.
 
 Compliance
        with Section 16(a) of the Exchange Act
 
 Based
        solely upon a review of Forms 3 and 4 and amendments thereto furnished to
        us
        under Rule 16a-3(d) of the Securities Exchange Act during the fiscal year
        ended
        December 31, 2007 and Forms 5 and amendments thereto furnished to us with
        respect to the fiscal year ended December 31, 2007, as well as any written
        representation from a reporting person that no Form 5 is required, we are
        not
        aware of any officer, director or beneficial owner that failed to file on
        a
        timely basis, as disclosed in the aforementioned forms, reports required
        by
        Section 16(a) of the Securities Exchange Act during the fiscal year ended
        December 31, 2007.
  37
  Code
        of
        Business Conduct and Ethics
 
 In
        December 2005, we adopted a Code of Business Conduct and Ethics applicable
        to
        our Chief Executive Officer, principal financial and accounting officers
        and
        persons performing similar functions. A Code of Business Conduct and Ethics
        is a
        written standard designed to deter wrongdoing and to promote:
 
 ·
              Honest
                  and ethical conduct,
 ·
              Full,
                  fair, accurate, timely and understandable disclosure in regulatory
                  filings
                  and public statements, compliance with applicable laws, rules and
                  regulations,
 ·
              The
                  prompt reporting violation of the code, and
 ·
              Accountability
                  for adherence to the Code.
 
 A
        copy of
        our Code of Business Conduct and Ethics has been filed with the Securities
        and
        Exchange Commission as an exhibit to this annual report. We will provide
        a copy,
        without charge, to any person desiring a copy of the Code of Business Conduct
        and Ethics, by written request to, 1104 Jiatang Road Jiading District, Shanghai
        China  201807,
        Attention: Corporate Secretary.
  Committees
        of the Board of Directors
 
 Our
        Board
        of Directors has not established any committees, including an Audit Committee,
        a
        Compensation Committee, a Nominating Committee or any committee performing
        similar functions. The functions of those committees are being undertaken
        by the
        entire Board as a whole. Because we do not have any independent directors,
        our
        Board of Directors believes that the establishment of committees of the Board
        would not provide any benefits to our company and could be considered more
        form
        than substance.
 
 We
        do not
        have a policy regarding the consideration of any director candidates which
        may
        be recommended by our stockholders, including the minimum qualifications
        for
        director candidates, nor has our Board of Directors established a process
        for
        identifying and evaluating director nominees. We have not adopted a policy
        regarding the handling of any potential recommendation of director candidates
        by
        our stockholders, including the procedures to be followed. Our Board has
        not
        considered or adopted any of these policies as we have never received a
        recommendation from any stockholder for any candidate to serve on our Board
        of
        Directors. Given that all of our operations are located in the PRC and our
        lack
        of directors and officers insurance coverage, we do not anticipate that any
        of
        our stockholders will make such a recommendation in the near future. While
        there
        have been no nominations of additional directors proposed, in the event such
        a
        proposal is made, all members of our Board will participate in the consideration
        of director nominees.
 
 None
        of
        our directors is an “audit committee financial expert” within the meaning of
        Item 407(d) of Regulation S-B. In general, an “audit committee financial expert”
is an individual member of the audit committee or Board of Directors
        who:
 
 ·
              Understands
                  generally accepted accounting principles and financial statements,
 ·
              Is
                  able to assess the general application of such principles in connection
                  with accounting for estimates, accruals and reserves,
 ·
              Has
                  experience preparing, auditing, analyzing or evaluating financial
                  statements comparable to the breadth and complexity to our financial
                  statements,
 ·
              Understands
                  internal controls over financial reporting, and
 ·
              Understands
                  audit committee functions.
  38


Our
      Board
      of Directors is comprised of individuals who were integral to our formation
      and
      who are involved in our day to day operations. While we would prefer that one
      or
      more of our directors be an audit committee financial expert, none of these
      individuals who have been key to our development have professional backgrounds
      in finance or accounting. When we are able to expand our Board of Directors
      to
      include one or more independent directors, we intend to establish an Audit
      Committee of our Board of Directors. It is our intention that one or more of
      these independent directors will also qualify as an audit committee financial
      expert. Our securities are not quoted on an exchange that has requirements
      that
      a majority of our Board members be independent and we are not currently
      otherwise subject to any law, rule or regulation requiring that all or any
      portion of our Board of Directors include “independent” directors, nor are we
      required to establish or maintain an Audit Committee or other committee of
      our
      Board of Directors.




**ITEM
      10** **.**  **EXECUTIVE
      COMPENSATION**





Summary
      Compensation Table





The
      following table summarizes all compensation recorded by us in each of the last
      two completed fiscal years for our principal executive officer. Our principal
      executive officer also serves as our principal financial officer. No other
      executive officer received total annual compensation exceeding
      $100,000.





SUMMARY
                COMPENSATION TABLEName
                and principal
              position
                (a)
            
            Year
              (b)
            
            Salary
              ($)
              (c)
            
            Bonus
              ($)
              (d)
            
            Stock
              Awards
              ($)
              (e)
            
            Option
              Awards
              ($)
              (f)
            
            Non-Equity
                Incentive Plan Compensation
              ($)
              (g)
            
            Non-qualified
                Deferred Compensation Earnings
              ($)
              (h)
            
            All
              Other
                Compensations
              ($)
              (i)
            
            Total
              ($)
              (j)Xuelian
                Bian 1
            
            
            2007
            
            
            12,800
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            12,800Chief
                Executive Officer, principal executive officer, and principal financial
                officer
            
            
            2006
            
            
            10,250
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,250





1  Mr.
      Bian
      has served as our Chief Executive Officer, Chief Financial Officer, President
      and director since May 2, 2005.





Employment
      Agreements - We are not a party to any employment agreements.





Compensation
      of Directors





Our
      Board
      of Directors is presently comprised of our executive officers who do not receive
      compensation for their services as directors. At such time as we expand our
      Board of Directors to include independent members we will establish a policy
      for
      the compensation of those members.





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





Securities
      Authorized For Issuance under Equity Compensation Plans





The
      following table sets forth securities authorized for issuance under equity
      compensation plans, including individual compensation arrangements, by us under
      our Stock Option Plan and any compensation plans not previously approved by
      our
      stockholders as of December 31, 2007.





Number
                of
              securities
                to
              be
                issued
              upon
              exercise
                of
              outstanding
              options,
              warrants
                and
              rights
                (a)
            
            Weighted
              average
              exercise
                price
              of
                outstanding
              options,
              warrants
                and
              rights
                (b)
            
            Number
                of
              securities
              remaining
              available
                for
              future issuance
              under
                equity compensation
              plans (excluding
                securities
              reflected in
              column (a))
                (c)Plan
                categoryPlans
                approved by our stockholders:2005
                Equity Compensation Plan
            
            
            N/A
            
            
            N/A
            
            
            0Plans
                not approved by stockholders:
            
            
            N/A
            
            
            N/A
            
            
            N/ANone




39





Stock
      Option Plans





Year
      2000
      Equity Compensation Plan





On
      October 10, 2000, our Board of Directors adopted our Year 2000 Equity
      Compensation Plan under which a total of 540,000 shares of common stock are
      made
      available for the granting of awards, a portion or all of which may qualify
      as
      incentive stock options, non-incentive stock options and restricted stock
      grants. The purpose of the plan, which was approved by our shareholders on
      November 10, 2000, is to encourage stock ownership by our officers, directors,
      key employees and consultants, and to give such persons a greater personal
      interest in the success of our business and an added incentive to continue
      to
      advance and contribute to us. If any option or restricted stock grant expires
      or
      terminates before it has been exercised in full, the shares of common stock
      allocable to the unexercised portion of such option or restricted stock grant
      may again be subject to an option or restricted stock grant under the 2000
      Equity Compensation Plan. The number of shares available and subject to options,
      option prices and, to the extent applicable, the number of shares subject to
      any
      restricted stock grant will be adjusted upward or downward, as the case may
      be,
      in the event of any subdivision or consolidation of shares or other capital
      readjustment, stock dividend, merger, consolidation or similar transaction
      affecting the shares. At December 31, 2007 we did not had any options to
      purchase shares of our common stock outstanding under the plan.





The
      2000
      Equity Compensation Plan is administered by our Board of Directors who have
      the
      sole authority to determine which eligible employees of our company receive
      options and restricted stock grants under the plan, the times when options
      and
      restricted stock grants are granted, the number of shares covered by the option
      and restricted stock grant, the provisions of any agreement and when options
      may
      be exercised or when restricted stock grants become vested. In addition, the
      Board has the power and authority to construe and interpret the
      Plan.





Stock
      options may be granted by the Board at prices determined in the discretion
      of
      the Board, provided that the option price must be at least equal to the fair
      market value of the common stock on the date of the grant. The option price
      is
      payable in cash, common stock or such other form of payment as may be determined
      by the Board. The exercise price of an incentive stock option must be at least
      equal to the fair market value of our common stock on the date of grant or
      110%
      of such value in the case of options granted to an individual who is a 10%
      or
      greater shareholder of our company.





An
      optionee generally may exercise an option only while an employee of our company.
      If an optionee becomes disabled or dies while in the employ of our company,
      the
      option may be exercised within one year of the optionee's death or termination
      due to disability. The expiration date of an option will be determined by the
      Board at the time of the grant, but in no event will an incentive stock option
      be exercisable after the expiration of 10 years from the date of grant or five
      years in the case of incentive options granted to a 10% or greater shareholder.
      The Board may grant to an eligible individual shares of our common stock subject
      to specified restrictions on transferability and vesting as provided in a
      written grant agreement or resolutions in which the restricted stock grant
      is
      adopted and approved by the Board. Restricted stock grants may be made in lieu
      or cash compensation or as additional compensation. The Board may also make
      restricted stock grants contingent on pre-established performance goals
      determined by the Board. Except for certain transfers that may be permitted
      by
      the Board, no option or restricted stock grant may be transferred by an eligible
      individual other than by will or the laws of descent or
      distribution.


40




The
      2000
      Equity Compensation Plan terminates on December 21, 2010. The Board of Directors
      may at any time amend, suspend or discontinue the plan, except that no amendment
      may be made without the approval of the shareholders which would increase the
      number of shares subject to the plan, materially change the designation of
      the
      class of employees eligible to receive options, remove the administration of
      the
      plan from the Board or a committee of the Board or materially increase the
      benefits accruing to participants under the plan.





Non-Qualified
      Stock Option Plan





On
      December 21, 2000 our Board of Directors adopted our Non-Qualified Stock Option
      Plan under which a total of 200,000 shares of common stock are made available
      for granting of non-qualified stock options to officers, directors, employees
      and key advisors or consultants. The purpose of the plan is to encourage the
      participants to contribute materially to our growth. If any option expires
      or
      terminates before it has been exercised in full, the shares of common stock
      allocable to the unexercised portion of such option may again be subject to
      an
      option under the Non Qualified Stock Option Plan. The number of shares available
      and subject to options and option prices will be adjusted upward or downward,
      as
      the case may be, in the event of any subdivision or consolidation of shares
      or
      other capital readjustment, stock dividend, merger, consolidation or similar
      transaction affecting the shares. At December 31, 2007 we did not have any
      options to purchase shares of our common stock outstanding under the plan.





The
      Non-Qualified Stock Option Plan is administered by our Board of Directors who
      have the sole authority to determine which who is eligible to receive grants
      of
      non-qualified options under the plan, the times when options are granted, the
      number of shares covered by the option, the provisions of any agreement and
      when
      options may be exercised. In addition, the Board has the power and authority
      to
      construe and interpret the Plan.





Stock
      options may be granted by the Board at prices determined in the discretion
      of
      the Board and the exercise price of the option may be greater than, or less
      than, the fair market value of our common stock. The option price is payable
      in
      cash, common stock or such other form of payment as may be determined by the
      Board. An optionee generally may exercise an option only while the grantee
      is
      employed by us or otherwise providing our company services. If an optionee
      becomes disabled or dies while in the employ of our company or while otherwise
      providing services to us, the option may be exercised within 90 days after
      optionee's death or termination due to disability. The expiration date of an
      option will be determined by the Board at the time of the grant, but in no
      event
      will a stock option be exercisable after the expiration of 10 years from the
      date of grant. Except for certain transfers that may be permitted by the Board,
      no option may be transferred by an eligible individual other than by will or
      the
      laws of descent or distribution.





The
      2000
      Equity Compensation Plan terminates on December 21, 2010. The Board of Directors
      may at any time amend, suspend or discontinue the plan, except that no amendment
      may be made without the approval of the shareholders which would increase the
      number of shares subject to the plan, materially change the designation of
      the
      class of employees eligible to receive options, remove the administration of
      the
      plan from the Board or a committee of the Board or materially increase the
      benefits accruing to participants under the plan.





2005
      Equity Compensation Plan





On
      June
      28, 2005, our Board of Directors adopted our 2005 Equity Compensation Plan
      under
      which 5,000,000 shares of our common stock have been reserved for issuance
      upon
      the exercise of options or stock grants under the plan. Our officers, directors,
      key employees and consultants are eligible to receive stock grants and
      non-qualified options under the Plan. Only our employees are eligible to receive
      incentive options. The purpose of the 2005 Equity Compensation Plan is to
      encourage stock ownership by our officers, directors, key employees and
      consultants, and to give such persons a greater personal interest in the success
      of our business and an added incentive to continue to advance and contribute
      to
      us. Shares used for stock grants and plan options may be authorized and unissued
      shares or shares reacquired by us, including shares purchased in the open
      market. Shares covered by plan options which terminate unexercised will again
      become available for grant as additional options, without decreasing the maximum
      number of shares issuable under the plan, although such shares may also be
      used
      by us for other purposes. As of December 31, 2007 we had no outstanding options
      or stock grants under the plan and no shares available for issuance under the
      2005 Equity Compensation Plan.


41




Our
      Board
      of Directors, or a committee of the Board, administers the 2005 Equity
      Compensation Plan including, without limitation, the selection of the persons
      who will be awarded stock grants and granted options, the type of options to
      be
      granted, the number of shares subject to each option and the exercise price.
      Plan options may either be options qualifying as incentive stock options under
      Section 422 of the Internal Revenue Code of 1986, as amended, or non-qualified
      options. In addition, the plan allows for the inclusion of a reload option
      provision, which permits an eligible person to pay the exercise price of the
      option with shares of common stock owned by the eligible person and receive
      a
      new option to purchase shares of common stock equal in number to the tendered
      shares. Any incentive option granted under the Plan must provide for an exercise
      price of not less than 100% of the fair market value of the underlying shares
      on
      the date of grant, but the exercise price of any incentive option granted to
      an
      eligible employee owning more than 10% of our outstanding common stock must
      not
      be less than 110% of fair market value on the date of the grant. The exercise
      price of non-qualified options shall be determined by the Board of Directors,
      but shall not be less than the par value of our common stock on the date the
      option is granted.





The
      term
      of each plan option and the manner in which it may be exercised is determined
      by
      the Board of Directors or the committee, provided that no option may be
      exercisable more than 10 years after the date of its grant and, in the case
      of
      an incentive option granted to an eligible employee owning more than 10% of
      the
      common stock, no more than five years after the date of the grant. The plan
      provides that, with respect to incentive stock options, the aggregate fair
      market value (determined as of the time the option is granted) of the shares
      of
      common stock, with respect to which incentive stock options are first
      exercisable by any option holder during any calendar year shall not exceed
      $1,000,000. Unless the plan is approved by our shareholders within one year
      of
      the effective date, no incentive stock options may be granted and all incentive
      stock options that may have been previously granted shall automatically be
      converted into non-qualified stock options. As of the date of this prospectus
      we
      have not submitted the 2005 Equity Compensation Plan to our shareholders for
      approval.





The
      plan
      provides that, if our outstanding shares are increased, decreased, exchanged
      or
      otherwise adjusted due to a share dividend, forward or reverse share split,
      recapitalization, reorganization, merger, consolidation, combination or exchange
      of shares, an appropriate and proportionate adjustment shall be made in the
      number or kind of shares subject to the plan or subject to unexercised options
      and in the purchase price per share under such options. Any adjustment, however,
      does not change the total purchase price payable for the shares subject to
      outstanding options. In the event of our proposed dissolution or liquidation,
      a
      proposed sale of all or substantially all of our assets, a merger or tender
      offer for our shares of common stock, the Board of Directors may declare that
      each option granted under the plan shall terminate as of a date to be fixed
      by
      the Board of Directors; provided that not less than 30 days written notice
      of
      the date so fixed shall be given to each participant holding an option, and
      each
      such participant shall have the right, during the period of 30 days preceding
      such termination, to exercise the participant's option, in whole or in part,
      including as to options not otherwise exercisable.





Plan
      options are exercisable by delivery of written notice to us stating the number
      of shares with respect to which the option is being exercised, together with
      full payment of the purchase price therefore. Payment is to be in the form
      of
      cash, checks, certified or bank cashier's checks, promissory notes secured
      by
      the shares issued through exercise of the related options, shares of common
      stock or in such other form or combination of forms which may be acceptable
      to
      the Board of Directors, provided that any loan or guarantee by us of the
      purchase price may only be made upon resolution of the Board that such loan
      or
      guarantee is reasonably expected to benefit us.





All
      plan
      options are nonassignable and nontransferable, except by will or by the laws
      of
      descent and distribution, and during the lifetime of the optionee, may be
      exercised only by such optionee. If an optionee shall die while our employee
      or
      within three months after termination of employment by us because of disability,
      or retirement or otherwise, such options may be exercised, to the extent that
      the optionee shall have been entitled to do so on the date of death or
      termination of employment, by the person or persons to whom the optionee's
      right
      under the option pass by will or applicable law, or if no such person has such
      right, by his executors or administrators.


42




In
      the
      event of termination of employment because of death while an employee or because
      of disability, the optionee's options may be exercised not later than the
      expiration date specified in the option or one year after the optionee's death,
      whichever date is earlier, or in the event of termination of employment because
      of retirement or otherwise, not later than the expiration date specified in
      the
      option or one year after the optionee's death, whichever date is earlier. If
      an
      optionee's employment by us terminates because of disability and such optionee
      has not died within the following three months, the options may be exercised,
      to
      the extent that the optionee shall have been entitled to do so at the date
      of
      the termination of employment, at any time, or from time to time, but not later
      than the expiration date specified in the option or one year after termination
      of employment, whichever date is earlier.





If
      an
      optionee's employment terminates for any reason other than death or disability,
      optionee may exercise the options to the same extent that the options were
      exercisable on the date of termination, for up to three months following such
      termination, or on or before the expiration date of the options, whichever
      occurs first. In the event that the optionee was not entitled to exercise the
      options at the date of termination or if the optionee does not exercise such
      options (which were then exercisable) within the time specified herein, the
      options will terminate. If an optionee's employment terminates for any reason
      other than death, disability or retirement, all right to exercise the option
      terminate not later than 90 days following the date of such termination of
      employment.





The
      Board
      of Directors may amend, suspend or terminate the plan at any time. Unless the
      plan shall have been earlier suspended or terminated by the Board of Directors,
      the 2005 Equity Compensation Plan terminates on June 28, 2015.





As
      of
      January 22, 2008, 5,000,000 shares of our restricted common stock had been
      granted under the Equity Compensation Plan. No shares of common stock (plus
      any
      shares that might in the future be returned to the Equity Compensation Plan
      as a
      result of the termination, expiration, or forfeiture of options) remain
      available for future grant under the Equity Compensation Plan as of such date.
      Management believes that the number of shares of common stock currently
      available for issuance under the Equity Compensation Plan is insufficient to
      meet its needs to provide for awards to the plan participants for the next
      twelve months.




On
      January 22, 2008, our Board of Directors approved and adopted an amendment
      to our Equity Compensation Plan, subject to shareholder approval. On
      January 22, 2008, stockholders owning approximately 53.9% of the
      outstanding shares of our common stock approved the amendment to the Equity
      Compensation Plan by action taken by written consent without a meeting in
      accordance with the Florida Business Corporation Act. No further vote of our
      stockholders is required to approve the amendment to the Equity Compensation
      Plan. Such approval by our stockholders will be effective 20 calendar days
      after
      the date this Information Statement is first mailed to our
      stockholders.




The
      amendment to our Equity Compensation Plan will increase the number of shares
      of
      common stock with respect to which awards may be granted under the Equity
      Compensation Plan from 5,000,000 to 15,000,000. At December 31, 2007, there
      were
      73,731,675 shares of our common stock issued and outstanding. The following
      table sets forth information regarding the beneficial ownership of our common
      stock as of December 31, 2007 by:





·
            Each
                person known by us to be the beneficial owner of more than 5% of
                our
                common stock;


·
            Each
                of our directors;


·
            Each
                of our executive officers; and


·
            Our
                executive officers, directors and director nominees as a
                group.





Unless
      otherwise indicated, the business address of each person listed is in care
      of
      1104 Jiatang Road Jiading District, Shanghai China  201807.
      The percentages in the table have been calculated on the basis of treating
      as
      outstanding for a particular person, all shares of our common stock outstanding
      on that date and all shares of our common stock issuable to that holder in
      the
      event of exercise of outstanding options, warrants, rights or conversion
      privileges owned by that person at that date which are exercisable within 60
      days of that date. Except as otherwise indicated, the persons listed below
      have
      sole voting and investment power with respect to all shares of our common stock
      owned by them, except to the extent that power may be shared with a
      spouse.


43




Name
                of Beneficial Owner
            
            Amount
                and Nature
              of
                Beneficial
              Ownership
            
            Percentage
              of
                Class1Xuelian
                Bian
            
            
            20,420,919
            
            
            27.7
            %Wei
                Guan
            
            
            13,602,551
            
            
            18.4
            %All
                officers and directors as a group (two persons)
            
            
            34,023,470
            
            
            46.1
            %Holders
                of 5% or more of the total number of shares outstanding




1
      Calculated based on 73,731,675 shares outstanding as December 31,
      2007.




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





LiKang
      Disinfectant is engaged in business activities with four related parties. These
      companies are referred to throughout this report and financial documents as
      “related parties” or “affiliated entities”:





Shanghai
      LiKang Pharmaceuticals Technology Company, Limited





Mr.
      Xuelian Bian and Wei Guan; our officers, directors and principal shareholders,
      are the shareholders of Shanghai LiKang Pharmaceuticals Technology Company,
      Limited, owning 90% and 10%, respectively. During the fiscal year ended 2007,
      Mr. Xuelian Bian and Wei Guan sold all shares of Shanghai LiKang Pharmaceuticals
      Technology Company, Limited to Shanghai Jiuqing Pharmaceuticals Company,
      Limited. Shanghai LiKang Pharmaceuticals Technology Company, Limited (on October
      16, 2007, LiKang Pharmaceutical changed its name to ZhongYou), distributes
      our
      products to the commercial medical industry. For the fiscal year ended December
      31, 2007, we recorded net revenues of $2,354,010 from sales to that related
      party. At December 31, 2007, Shanghai LiKang Pharmaceuticals Technology Company,
      Limited owed us $2,089,641 as a related party receivable for products purchased
      from us.





In
      December 2005, we loaned Shanghai LiKang Pharmaceuticals Technology Company,
      Limited $100,000 for working capital purposes. The loan bears interest at the
      rate of 3% per annum. The principal and interest were paid in April
      2006.





Shanghai
      LiKang Meirui Pharmaceutical High-Tech Co., Limited





Shanghai
      LiKang Meirui Pharmaceutical High-Tech Co., Ltd. was a supplier of both raw
      materials and finished products to LiKang Disinfectant. During the fiscal year
      ended 2007, the Company made no further purchases from Shanghai LiKang Meirui
      Pharmaceutical High-Tech Co., Ltd. Currently, Shanghai LiKang Meirui
      Pharmaceutical High-Tech Co., Ltd. only purchases products from us which it
      resells to the retail/consumer market in the PRC. Shanghai Shanhai Group is
      the
      majority owner of Shanghai LiKang Meirui Pharmaceutical High-Tech Co., Ltd.,
      owning a 68% interest.





At
      December 31, 2007, we owed Shanghai LiKang Meirui Pharmaceutical High-Tech
      Co.,
      Ltd. zero for purchases of products.





In
      January 2005, LiKang Disinfectant signed a two year agreement with Shanghai
      LiKang Meirui Pharmaceutical High-Tech Co., Ltd. to market its products to
      the
      retail/consumer market using Shanghai LiKang Meirui Pharmaceutical High-Tech
      Co.
      Ltd.'s proprietary sales network which caters to the retail/consumer market
      in
      China. For the fiscal year ended December 31, 2007 we recorded net revenues
      on
      sales to this affiliate of $34,707.





Shanghai
      Shanhai Group





Shanghai
      Shanhai Group, which is the minority shareholder of our LiKang subsidiary,
      is
      owned by Shanghai Shanhai Group Employee Share-holding Committee (16.25%) and
      Shanghai Baoshan District Dachang Town South Village Economic Cooperation Club
      (83.75%). These two entities are owned by the employees of Shanghai Shanhai
      Group. We lease our principal executive offices and warehouse space from
      Shanghai Shanhai Group. For fiscal year ended December 31, 2007 we paid rent
      expense to Shanghai Shanhai Group of $32,000.


44




In
      January 2005, LiKang Disinfectant borrowed $179,601 from Shanghai Shanhai Group
      for working capital purposes. The loan bears interest at 10% per annum and
      is
      payable on demand. For the year ended December 31, 2007, interest expense
      related to this note amounted to $10,718.





In
      January 2005, LiKang Disinfectant also entered into a five year agreement with
      Shanghai Shanhai Group whereby it agreed to pay Shanghai Shanhai Group a fixed
      amount of $9,375 annually a return on its original investment in LiKang
      Disinfectant of RMB 500,000 (approximately $62,500 U.S.). We have recorded
      interest expense of $ 9,735 for the fiscal year ended December 31, 2007 for
      this
      obligation.





Shanghai
      LiKang Biological Hi-Tech Company, Ltd.





As
      of
      December 31, 2007, Shanghai LiKang Biological High-Tech Company, Ltd. was 60%
      owned by LiKang Pharmaceutical and 40% owned by Mr. Xuelian Bian, an executive
      officer and director of our company. On March 25, 2008, our wholly-owned
      subsidiary Linkwell Tech purchased 100% equity interest in LiKang Biological
      from LiKang Pharmaceutical and Mr. Xuelian Bian. LiKang Pharmaceuticals is
      owned
      by Mr. Bian and Wei Guan, 90% and 10%, respectively. Shanghai LiKang Biological
      manufactures and sells biological products, cosmetic products and develops
      technology for third parties. The transactions with LiKang Biological
      included:





·
            Selling
                certain raw materials. For the fiscal year ended December 31, 2007,
                we
                recorded sales of $851 on sales of raw materials to LiKang Biological.
                At
                December 31, 2007, LiKang Biological did not owe us any receivables;
                and





·
            Manufacturing
                contract for small portions of certain of our products. For the fiscal
                year ended December 31, 2007, we paid $151,067 to LiKang Biological
                for
                the processing of certain products on our behalf.




Other
      related party transactions





There
      were no other related party transactions.




Director
      Independence





None
      of
      the members of our Board of Directors are “independent” as defined by Rule
      4200(a)(14) of the Financial Industry Regulatory Authority (FINRA) Rules.




**ITEM
      13.**  **EXHIBITS**





The
      following documents are filed as a part of this report or are incorporated
      by
      reference to previous filings, if so indicated:





Exhibit
                No.
            
            Description2.1
            
            Stock
                Purchase Agreement between HBOA.Com, Inc., Philip J. Davis and John
                C. Lee
                dated November 17, 1999 (1)2.2
            
            Amendment
                No. 1 to the Stock Purchase Agreement between HBOA.Com, Inc., Phillip
                J.
                Davis and John C. Lee dated December 28, 1999 (1)2.3
            
            Stock
                Exchange Agreement dated May 2, 2005 by and among Kirshner Entertainment
                & Technologies, Inc., Gary Verdier, Linkwell Tech Group, Inc. and the
                shareholders of Linkwell (2)




45





3.1
            
            Articles
                of Incorporation (3)3.2
            
            Articles
                of Amendment to Articles of Incorporation (4)3.3
            
            Articles
                of Amendment to Articles of Incorporation (5)3.4
            
            Articles
                of Amendment to Articles of Incorporation (6)3.5
            
            Articles
                of Amendment to the Articles of Incorporation (11)3.6
            
            Bylaws
                (3)3.7
            
            Articles
                of Amendment to the Articles of Incorporation (12)4.1
            
            Form
                of common stock purchase warrant (7)4.2
            
            Form
                of Class A and Class B Common Stock Purchase Warrants
                (11)10.1
            
            HBOA
                Holdings, Inc. - Year 2000 Equity Compensation Plan (8)10.2
            
            HBOA
                Holdings, Inc. - Non Qualified Stock Option Plan (9)10.3
            
            Linkwell
                Corporation 2005 Equity Compensation Plan (10)10.3(a)
            
            Amendment
                No.1 to Linkwell Corporation Equity Compensation Plan dated February
                28,
                2008*10.4
            
            Consulting
                and Management Agreement dated August 24, 2005 between Linkwell
                Corporation and China Direct Investments, Inc. (20)10.5
            
            Form
                of Subscription Agreement for $1,500,000 unit offering
                (11)10.6
            
            Form
                of agreement between Shanghai LiKang Disinfectant High-Tech Company,
                Limited and its customers (12)10.7
            
            Form
                of agreement between Shanghai LiKang Disinfectant High-Tech Company,
                Limited and its suppliers (12)10.8
            
            Sales
                Agreement dated as of January 1, 2005 between Shanghai LiKang Disinfectant
                High-Tech Co., Ltd. and Shanghai LiKang Meirui Pharmaceutical High-Tech
                Co., Ltd. (20)10.9
            
            Lease
                Agreement effective January 1, 2005 between Shanghai LiKang Disinfectant
                High-Tech Co., Ltd. and Shanghai Shanhai Group for principal executive
                offices (20)10.10
            
            Lease
                Agreement effective January 1, 2002 between Shanghai LiKang
                Pharmaceuticals Co., Ltd. and Shanghai LiKang Disinfectant High-Tech
                Co.
                Ltd. (20)10.11
            
            Lease
                Agreement effective January 1, 2005 between Shanghai Jinshan Zhuhang
                Plastic Lamp Factory, Ltd. and Shanghai LiKang Disinfectant High-Tech
                Co.
                Ltd. (20)10.12
            
            Manufacturing
                Agreement dated as of January 1, 2005 between Shanghai LiKang Disinfectant
                High-Tech Co., Ltd. and Shanghai LiKang Meirui Pharmaceutical High-Tech
                Co., Ltd. (20)10.13
            
            Stock
                Purchase Agreement effective February 6, 2006 between Linkwell
                Corporation, Aerisys Incorporated and Gary Verdier (13)10.14
            
            Transfer
                Agreement dated August 5, 2005 between Shanghai LiKang Disinfectant
                High-Tech Company, Limited, Shanghai LiKang Pharmaceuticals Technology
                Company and Xuelian Bian (20)10.15
            
            Contract
                Management Agreement dated January 1, 2005 between Shanghai Shanhai
                Group
                and Shanghai LiKang Disinfectant High-Tech Co., Ltd.
                (20)10.16
            
            Lease
                Agreement dated December 15, 2004 between Shanghai Shanhai Group
                and
                Shanghai LiKang Disinfectant High-Tech Co., Ltd. (20)10.17
            
            Lease
                Agreement dated August 11, 2005 between Shanghai Henglain Industrial
                Co.,
                Ltd. and Shanghai LiKang Disinfectant High-Tech Co., Ltd.
                (20)10.18
            
            Lease
                Agreement dated September 16, between Shanghai Henglain Industrial
                Co.,
                Ltd. and Shanghai LiKang Disinfectant High-Tech Co., Ltd.
                (20)10.19
            
            Disinfection
                Education Center Agreement dated May 25, 2006 between Shanghai LiKang
                Disinfectant High-Tech Co., Ltd. and China Pest Infestation Control
                and
                Sanitation Association (20)10.20
            
            Agreement
                between Linkwell Corporation and China Direct Investments, Inc.
                (21)10.21
            
            Stock
                Purchase Agreement, dated April 6, 2007, by and among the Company,
                Linkwell Tech, Xuelian Bian and LiKang Pharmaceutical
                (22)10.21(a)
            
            Amendment
                to Stock Purchase Agreement, dated March 25, 2008 by and among the
                Company, Linkwell Tech, Xuelian Bian and LiKang Pharmaceutical
                (23)10.22
            
            Stock
                Purchase Agreement, dated April 6, 2007, by and among the Company,
                Linkwell Tech, Xuelian Bian and LiKang Pharmaceutical
                (22)10.22(a)
            
            Amendment
                to Stock Purchase Agreement, dated March 25, 2008, by and among the
                Company, Linkwell Tech and Shanghai Shanhai
                (23)




46





10.23
            
            Loan
                agreement between LiKang Disinfectant and LiKang Biological, as
                translated, dated January 2, 2007 (24)10.24
            
            Consulting
                agreement dated September 8, 2006 between Linkwell Corp and Zhiyan
                Shi
                (24)10.25
            
            Stock
                Purchase Agreement dated February 15, 2008, among Linkwell
                Corporation, Linkwell Tech Group, Inc., and Ecolab Inc.
                *14.1
            
            Code
                of Business Conduct and Ethics (20)21.1
            
            Subsidiaries
                of the small business issuer (20)23.1
            
            Consent
                of Sherb & Co., LLP*31.1
            
            Section
                302 Certificate of Chief Executive Officer *31.2
            
            Section
                302 Certificate of principal financial and accounting officer
                *32.1
            
            Section
                906 Certificate of Chief Executive Officer
                *





*  filed
      herewith





(1)
            
            Incorporated
                by reference to the Form 10-SB as filed on June 17,
                1999.(2)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on December 3,
                1999.(3)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on December 8,
                1999.(4)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on December 27,
                2001.(5)
            
            Incorporated
                by reference to the annual report on Form 10-KSB for the fiscal year
                ended
                December 31, 2002.(6)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on March 17,
                2005.(7)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on April 15,
                2005.(8)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on January 31,
                2002.(9)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on February 1,
                2005.(10)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on August 17,
                2006.(11)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on August 22,
                2006.(12)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on September 15,
                2006.(13)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on October 14,
                2006.(14)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on October 27,
                2006.(15)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on October 27,
                2006.(16)
            
            Incorporated
                by reference to the registration statement on Form S-8, SEC File
                No.
                333-138297 as filed on October 30, 2006.(17)
            
            Incorporated
                by reference to the registration statement on Form SB-2, SEC File
                No.
                333-139752, as amended, as initially filed on December 29,
                2006.(18)
            
            Incorporated
                by reference to the registration statement on Form S-8, SEC File
                No.
                333-125871, as filed on June 16, 2005.(19)
            
            Incorporated
                by reference to the registration statement on Form S-8, SEC File
                No.
                333-121963, as filed on January 11, 2005.(20)
            
            Incorporated
                by reference to the registration statement on Form SB-2, SEC File
                No.
                333-131666, as amended, as initially filed on February 8,
                2006.(21)
            
            Incorporated
                by reference to the by reference to the annual report on Form 10-KSB
                for
                the fiscal year ended December 31, 2006.(22)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on April 14,
                2007.(23)
            
            Incorporated
                by reference to the Report on Form 8-K as filed on March 28,
                2008.(24)
            
            Incorporated
                by reference to the by reference to the quarterly report on Form
                10-QSB
                for the quarter ended March 31,
                2007.





ITEM
      14.PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





Sherb
      & Co., LLP served as our independent registered public accounting firm for
      fiscal 2007 and 2006. The following table shows the fees that were billed for
      the audit and other services provided by the firm for fiscal 2007 and 2006.





Fiscal
                2007
            
            Fiscal
                2006Audit
                Fees
            
            $
            85,500
            
            $
            75,000Audit-Related
                Fees
            
            
            0
            
            
            0Tax
                Fees
            
            
            0
            
            
            0All
                Other Fees
            
            
            0
            
            
            0Total
            
            $
            85,500
            
            $
            75,000




47





Audit
      Fees — This category includes the audit of our annual financial statements,
      review of financial statements included in our Form 10-QSB quarterly reports
      and
      services that are normally provided by the independent auditors in connection
      with engagements for those fiscal years. This category also includes advice
      on
      audit and accounting matters that arose during, or as a result of, the audit
      or
      the review of interim financial statements.





Audit-Related
      Fees — This category consists of assurance and related services by the
      independent auditors that are reasonably related to the performance of the
      audit
      or review of our financial statements and are not reported above under “Audit
      Fees.” The services for the fees disclosed under this category include
      consultation regarding our correspondence with the SEC and other accounting
      consulting.





Tax
      Fees
— This category consists of professional services rendered by our independent
      auditors for tax compliance and tax advice. The services for the fees disclosed
      under this category include tax return preparation and technical tax advice.





All
      Other
      Fees — This category consists of fees for other miscellaneous
      items.





Our
      Board
      of Directors has adopted a procedure for pre-approval of all fees charged by
      the
      our independent auditors. Under the procedure, the Board approves the engagement
      letter with respect to audit, tax and review services. Other fees are subject
      to
      pre-approval by the Board, or, in the period between meetings, by a designated
      member of Board. Any such approval by the designated member is disclosed to
      the
      entire Board at the next meeting. The audit and tax fees paid to the auditors
      with respect to fiscal year 2006 were pre-approved by the entire Board of
      Directors.


48


SIGNATURES





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





**Linkwell
      Corporation**





By:
            /s/
                Xuelian BianXuelian
                BianCEO,
                President,Principal
                Executive Officer,Principal
                Financial and Accounting Officer





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





Signature
            
            Title
            
            Date/s/
                Xuelian Bian
            
            CEO,
                President, Chairman, Principal Executive Officer,
            
            April
                15, 2008Xuelian
                Bian
            
            Principal
              Financial and Accounting Officer/s/
                Wei Guan
            
            Vice
                President, Secretary and Director
            
            April
                15, 2008Wei
                Guan




49





LINKWELL
      CORPORATION AND SUBSIDIARIES


INDEX
      TO
      CONSOLIDATED FINANCIAL STATEMENTS




CONTENTS




Report
                of Independent Registered Public Accounting Firm
            
            
            F-2Consolidated
                Financial Statements:Consolidated
                Balance Sheet
            
            
            F-3Consolidated
                Statements of Operations
            
            
            F-4Consolidated
                Statements of Stockholders' Equity
            
            
            F-5
                to F-6Consolidated
                Statements of Cash Flows
            
            
            F-7Notes
                to Consolidated Financial Statements
            
            
            F-8
                to F-23




F-1





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors


Linkwell
      Corporation and Subsidiaries


Shanghai,
      China




We
      have
      audited the accompanying consolidated balance sheets of Linkwell Corporation
      and
      Subsidiaries as of December 31, 2007 and 2006 and the related consolidated
      statements of operations, changes in shareholders' equity, and cash flows for
      the years ended December 31, 2007 and 2006. These consolidated financial
      statements are the responsibility of the Company's management. Our
      responsibility is to express an opinion on these consolidated financial
      statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purposes of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining
      on a test basis, evidence supporting the amount and disclosures in the combined
      financial statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits provide
      a
      reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Linkwell Corporation and
      Subsidiaries as of December 31, 2007 and 2006, and the results of their
      operations and their cash flows for the years ended December 31, 2007 and 2006,
      in conformity with accounting principles generally accepted in the United States
      of America.




/s/
                Sherb & Co., LLPCertified
                Public Accountants





Boca
      Raton, Florida


March
      31,
      2008




F-2




LINKWELL
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
      BALANCE SHEETS


December
      31,




2007
            
            2006ASSETSCURRENT
                ASSETS:Cash
            
            $
            1,222,128
            
            $
            1,713,723Accounts
                receivable (net of allowance for doubtful accounts of $460,175 and
                $144,639 in 2007 and 2006 respectively)
            
            
            2,999,191
            
            
            1,682,878Accounts
                receivable-related parties (net of allowance for doubtful accounts
                of
                $221,359 and $87,937 in 2007 and 2006 respectively)
            
            
            1,992,233
            
            
            1,406,425Other
                receivable
            
            
            261,231
            
            
            414,000Inventories
                (net of reserve for obsolete inventory of $136,287 and $127,160 in
                2007
                and 2006 respectively)
            
            
            829,476
            
            
            536,483Prepaid
                expenses and other current assets
            
            
            1,015,558
            
            
            367,641Due
                from related parties
            
            
            946,591
            
            
            -Short
                term loan receivable
            
            
            -
            
            
            48,609Total
                Current Assets
            
            
            9,266,408
            
            
            6,169,759PROPERTY
                AND EQUIPMENT – net
            
            
            749,073
            
            
            774,733Total
                Assets
            
            $
            10,015,481
            
            $
            6,944,492LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIES:Loans
                payable
            
            $
            699,210
            
            $
            652,382Loan
                payable - related party
            
            
            -
            
            
            165,471Accounts
                payable and accrued expenses
            
            
            1,246,943
            
            
            1,301,131Tax
                payable
            
            
            92,815
            
            
            -Other
                payable
            
            
            189,421
            
            
            27,589Due
                to related party
            
            
            760,457
            
            
            204,267Advances
                from customers
            
            
            713,578
            
            
            254,434Total
                Current Liabilities
            
            
            3,702,424
            
            
            2,605,274MINORITY
                INTEREST
            
            
            527,244
            
            
            394,320STOCKHOLDERS'
                EQUITY:Preferred
                    stock (No Par Value; 10,000,000 Shares Authorized; No shares
                    issued and
                    outstanding)Common
                    Stock ($0.0005 Par Value; 150,000,000 Shares Authorized; 73,731,675
                    and
                    69,868,355 shares issued and outstanding in 2007 and 2006
                    respectively)
            
            
            36,866
            
            
            34,934Common
                stock issuable
            
            
            11
            
            
            -Additional
                paid-in capital
            
            
            5,724,363
            
            
            5,290,536Accumulated
                deficit
            
            
            (510,921
            )
            
            (871,056
            )Deferred
                compensation
            
            
            (51,389
            )
            
            (646,222
            )Other
                comprehensive gain - foreign currency
            
            
            586,883
            
            
            136,706Total
                Stockholders' Equity
            
            
            5,785,813
            
            
            3,944,898Total
                Liabilities and Stockholders' Equity
            
            $
            10,015,481
            
            $
            6,944,492





See
      notes
      to consolidated financial statements




F-3





LINKWELL
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF OPERATIONS




For
                the YearEnded
                December 31,2007
            
            2006NET
                REVENUESNon-affiliated
                companies
            
            $
            11,694,030
            
            $
            4,508,179Affiliated
                companies
            
            
            2,641,691
            
            
            3,237,199Total
                Net Revenues
            
            
            14,335,721
            
            
            7,745,378COST
                OF SALES
            
            
            10,071,991
            
            
            4,609,557GROSS
                PROFIT
            
            
            4,263,730
            
            
            3,135,821OPERATING
                EXPENSES:Selling
                expenses
            
            
            1,099,266
            
            
            573,315General
                and administrative expenses
            
            
            2,753,132
            
            
            1,730,178Total
                Operating Expenses
            
            
            3,852,398
            
            
            2,303,493INCOME
                FROM OPERATIONS
            
            
            411,332
            
            
            832,328OTHER
                INCOME (EXPENSE):Other
                income
            
            
            146,945
            
            
            (4,367
            )Registration
                rights penalty
            
            
            -
            
            
            (76,000
            )Interest
                income
            
            
            3,649
            
            
            5,441Interest
                expense - related party
            
            
            -
            
            
            (26,132
            )Interest
                expense
            
            
            (68,867
            )
            
            (41,589
            )Total
                Other Income (Expense)
            
            
            81,727
            
            
            (142,647
            )INCOME
                    BEFORE DISCONTINUED OPERATIONS, INCOME TAXES AND MINORITY
                    INTEREST
            
            
            493,059
            
            
            689,681DISCONTINUED
                OPERATIONS:Gain
                from discontinued operations
            
            
            -
            
            
            12,794INCOME
                BEFORE INCOME TAXES AND MINORITY INTEREST
            
            
            493,059
            
            
            702,475INCOME
                TAXES
            
            
            -
            
            
            (1,318
            )INCOME
                BEFORE MINORITY INTEREST
            
            
            493,059
            
            
            701,157MINORITY
                INTEREST
            
            
            (132,924
            )
            
            (133,037
            )NET
                INCOME
            
            $
            360,135
            
            $
            568,120CUMULATIVE
                PREFERRED DIVIDENDS
            
            
            -
            
            
            (96,240
            )NET
                INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
            
            $
            360,135
            
            $
            471,880BASIC
                AND DILUTED INCOME PER COMMON SHARE:Basic
                earnings per share from continued operation
            
            $
            0.00
            
            $
            0.01Basic
                earnings per share including discontinued operation
            
            $
            0.00
            
            $
            0.01Diluted
                earnings per share from continued operation
            
            $
            0.00
            
            $
            0.01Diluted
                earnings per share including discontinued operation
            
            $
            0.00
            
            $
            0.01WEIGHTED
                AVERAGE COMMON SHARES OUTSTANDING:Basic
            
            
            73,195,593
            
            
            53,098,047Diluted
            
            
            73,455,345
            
            
            57,539,614




See
      notes
      to consolidated financial statements




F-4





LINKWELL
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY


For
      the
      Year Ended December 31, 2007 and 2006




Series A Preferred Stock
            
            Series B Preferred Stock
            
            Common Stock
            
            Common Stock
              IssuableShares
            
            Amount
            
            Shares
            
            Amount
            
            Shares
            
            Amount
            
            Shares
            
            AmountBalance,
                December 31, 2005
            
            
            375,345
            
            $
            277,276
            
            
            1,500,000
            
            $
            1,395,000
            
            
            45,304,139
            
            $
            22,652
            
            
            -
            
            $
            -Conversion
                of Series A preferred stock
            
            
            (375,345
            )
            
            (277,276
            )
            
            -
            
            
            -
            
            
            3,753,450
            
            
            1,877
            
            
            -
            
            
            -Conversion
                of Series B preferred stock
            
            
            -
            
            
            -
            
            
            (1,500,000
            )
            
            (1,395,000
            )
            
            15,000,000
            
            
            7,500
            
            
            -
            
            
            -Grant
                of stock warrants for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Common
                stock issued for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,200,000
            
            
            2,600
            
            
            -
            
            
            -Common
                stock issued for preferred stock dividends
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            610,766
            
            
            305
            
            
            -
            
            
            -Cumulative
                preferred stock dividend
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Amortization
                of deferred compensation
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Comprehensive
                income:Net
                income for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
                comprehensive income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Balance,
                December 31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            69,868,355
            
            
            34,934
            
            
            -
            
            
            -Grant
                of common stock for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            650,000
            
            
            325
            
            
            -
            
            
            -Warrants
                exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,213,320
            
            
            1,607
            
            
            -
            
            
            -Common
                stock issuable for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            21,280
            
            
            11Amortization
                of deferred compensation
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Comprehensive
                income:Net
                income for the year
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
                comprehensive incomeBalance,
                December 31, 2007
            
            
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            
            73,731,675
            
            $
            36,866
            
            
            21,280
            
            $
            11


F-5





LINKWELL
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY


For
      the
      Year Ended December 31, 2007 and 2006




Additional
            
            
            
            
            
            Other
            
            TotalPaid-in
            
            Accumulated
            
            Deferred
            
            Comprehensive
            
            Stockholders'Capital
            
            Deficit
            
            Compensation
            
            Loss
            
            EquityBalance,
                December 31, 2005
            
            $
            2,584,562
            
            $
            (1,342,936
            )
            $
            (106,667
            )
            $
            20,668
            
            $
            2,850,555Conversion
                of Series A preferred stock
            
            
            275,399
            
            
            -
            
            
            -
            
            
            -
            
            
            -Conversion
                of Series B preferred stock
            
            
            1,387,500
            
            
            -
            
            
            -
            
            
            -
            
            
            -Grant
                of stock warrants for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Common
                stock issued for services
            
            
            935,900
            
            
            -
            
            
            (938,500
            )
            
            -
            
            
            -Common
                stock issued for preferred stock dividends
            
            
            107,175
            
            
            -
            
            
            -
            
            
            -
            
            
            107,480Cumulative
                preferred stock dividend
            
            
            -
            
            
            (96,240
            )
            
            -
            
            
            -
            
            
            (96,240
            )Amortization
                of deferred compensation
            
            
            -
            
            
            -
            
            
            398,945
            
            
            -
            
            
            398,945Comprehensive
                income:Net
                income for the year
            
            
            -
            
            
            568,120
            
            
            -
            
            
            -
            
            
            568,120Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            116,038
            
            
            116,038Total
                comprehensive income
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            684,158Balance,
                December 31, 2006
            
            
            5,290,536
            
            
            (871,056
            )
            
            (646,222
            )
            
            136,706
            
            
            3,944,898Grant
                of common stock for services
            
            
            110,175
            
            
            -
            
            
            (76,500
            )
            
            -
            
            
            34,000Warrants
                exercised
            
            
            319,725
            
            
            -
            
            
            -
            
            
            -
            
            
            321,332Common
                stock issuable for services
            
            
            3,927
            
            
            -
            
            
            -
            
            
            -
            
            
            3,938Amortization
                of deferred compensation
            
            
            -
            
            
            -
            
            
            671,333
            
            
            -
            
            
            671,333Comprehensive
                income:Net
                income for the year
            
            
            -
            
            
            360,135
            
            
            -
            
            
            -
            
            
            360,135Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            450,177
            
            
            450,177Total
                comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            810,312Balance,
                December 31, 2007
            
            $
            5,724,363
            
            $
            (510,921
            )
            $
            (51,389
            )
            $
            586,883
            
            $
            5,785,813





See
      notes
      to consolidated financial statements




F-6


LINKWELL
      CORPORATION AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF CASH FLOWS




For
                the YearsEnded
                December 31,2007
            
            2006CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                income
            
            $
            360,135
            
            $
            568,120(Gain)Loss
                from discontinued operations
            
            
            -
            
            
            (12,794
            )Income
                from continuing operations
            
            
            360,135
            
            
            555,326Adjustments
                to reconcile net income from operations to net cash provided by (used
                in)
                operating activities:Depreciation
                and amortization
            
            
            126,295
            
            
            91,657Minority
                interest
            
            
            132,924
            
            
            145,150Allowance
                for doubtful accounts
            
            
            315,536
            
            
            131,296Allowance
                for doubtful accounts-related party
            
            
            133,422
            
            
            87,937Stock-based
                compensation
            
            
            709,271
            
            
            398,945Changes
                in assets and liabilities:Accounts
                receivable
            
            
            (1,631,849
            )
            
            (361,386
            )Accounts
                receivable - related party
            
            
            (719,230
            )
            
            (621,992
            )Other
                receivable
            
            
            152,769
            
            
            (414,000
            )Inventories
            
            
            (292,993
            )
            
            431,741Prepaid
                and other current assets
            
            
            (647,917
            )
            
            (285,891
            )Other
                assets
            
            
            -
            
            
            734Accounts
                payable and accrued expenses
            
            
            107,644
            
            
            (71,984
            )Tax
                payable
            
            
            92,815
            
            
            (75,489
            )Advances
                from customers
            
            
            459,144
            
            
            123,516**NET
                CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES**
            
            
            **(702,034**
            **)**
            
            **135,560**CASH
                FLOWS FROM INVESTING ACTIVITIES:Decrease
                in loan receivable
            
            
            48,609
            
            
            (48,609
            )Increase
                in loan receivable - related party
            
            
            (946,591
            )
            
            -Increase
                in deposit on investment
            
            
            -
            
            
            100,000Purchase
                of property, plant and equipment
            
            
            (99,349
            )
            
            (149,339
            )**NET
                CASH USED IN INVESTING ACTIVITIES**
            
            
            **(997,331**
            **)**
            
            **(97,948**
            **)**CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from loans payable
            
            
            699,210
            
            
            63,157Proceeds
                from loans payable-related party
            
            
            556,190
            
            
            204,267Repayment
                of loan payable
            
            
            (699,210
            )Repayment
                of loan payable - related party
            
            
            (165,471
            )
            
            (63,157
            )Proceeds
                from Warrants Exercised
            
            
            321,332
            
            
            -**NET
                CASH PROVIDED BY FINANCING ACTIVITIES**
            
            
            **712,051**
            
            
            **204,267**EFFECT
                OF EXCHANGE RATE ON CASH
            
            
            495,719
            
            
            11,766NET
                (DECREASE) INCREASE IN CASH
            
            
            (491,595
            )
            
            253,645CASH
                - beginning of year
            
            
            1,713,723
            
            
            1,460,078CASH
                - end of year
            
            $
            1,222,128
            
            $
            1,713,723SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION:Cash
                paid for:Interest
            
            $
            68,867
            
            $
            67,721Income
                taxes
            
            $
            -
            
            $
            1,318




See
      notes
      to consolidated financial statements


F-7


**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**




**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





**ORGANIZATION**





Linkwell
      Corporation (formerly Kirshner Entertainment & Technologies, Inc.)
      (“Linkwell,” or the “Company”) was incorporated in the state of Colorado on
      December 11, 1996. On May 31, 2000, the Company acquired 100% of HBOA.Com,
      Inc.
      The Company focused on development of an Internet portal through which home
      based business owners, as well as commercial private label businesses, obtain
      the products, services, and information necessary to start, expand and
      profitably run their businesses. On December 28, 2000, the Company formed a
      new
      subsidiary, Aerisys Incorporated (“Aerisys”), a Florida corporation, to handle
      commercial private business. In June 2003, the Company formed its entertainment
      division and changed its name to reflect this new division. Effective as of
      March 31, 2003, we discontinued our entertainment division and our technology
      division, except for the Aerisys operations that continue on a limited
      basis.





On
      May 2,
      2005, the Company entered into and consummated a share exchange with all of
      the
      shareholders of Linkwell Tech Group, Inc. (“Linkwell Tech”). Pursuant to the
      share exchange, the Company acquired 100% of the issued and outstanding shares
      of Linkwell's common stock, in exchange for 36,273,470 shares of our common
      stock, which at closing represented approximately 87.5% of the issued and
      outstanding shares of our common stock. As a result of the transaction, Linkwell
      became our wholly owned subsidiary. For financial accounting purposes, the
      exchange of stock was treated as a recapitalization of Kirshner with the former
      shareholders of the Company retaining 7,030,669 or approximately 12.5% of the
      outstanding stock. The consolidated financials statements reflect the change
      in
      the capital structure of the Company due to the recapitalization and the
      consolidated financial statements reflect the operations of the Company and
      its
      subsidiaries for the periods presented.





Linkwell
      was founded on June 22, 2004, as a Florida corporation. On June 30, 2004,
      Linkwell acquired 90% of Shanghai LiKang Disinfectant High-Tech Company, Ltd.
      (“LiKang Disinfectant”) through a stock exchange. The transaction on which
      Linkwell acquired its 90% interest in LiKang Disinfectant resulted in the
      formation of a U.S. holding company by the shareholders of LiKang Disinfectant
      as it did not result in a change in the underlying ownership interest of LiKang
      Disinfectant. LiKang Disinfectant is a science and technology enterprise founded
      in 1988. LiKang Disinfectant is involved in the development, production,
      marketing and sale, and distribution of disinfectant health care
      products.





LiKang
      Disinfectant's products are utilized by the hospital and medical industry in
      China LiKang Disinfectant has developed a line of disinfectant product
      offerings. LiKang Disinfectant regards the hospital disinfecting products as
      the
      primary segment of its business. LiKang Disinfectant has developed and
      manufactured several series products in the field of skin mucous disinfection,
      hand disinfection, surrounding articles disinfection, medical instruments
      disinfection and air disinfection.





On
      June
      30, 2005, the Company's Board of Directors approved an amendment of its Articles
      of Incorporation to change the name of the Company to Linkwell Corporation.
      The
      effective date of the name change was after close of business on August 16,
      2005.





In
      August
      2006, LiKang Disinfectant incorporated a new subsidiary, Shanghai LiKang
      International Trade Co., Ltd (“LiKang International”). The primary business of
      LiKang International involves import and export activities relating to computer,
      computer components, instruments and meters, electromechanical devices,
      constructional materials, metallic material, hardware, handiwork, knitting
      textile, furniture, chemical raw materials, and business consulting service,
      investment consulting, graphics design, conference services, exhibition
      services, equipment lease, import and export of technology.





On
      January 31, 2007, Linkwell Corporation entered into a non-binding letter of
      intent with a Fortune 500 company under which it will acquire a 10% equity
      interest in Linkwell's subsidiary, Shanghai LiKang Disinfectant.




F-8




**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**




**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





On
      April
      6, 2007, our wholly-owned subsidiary, Linkwell Tech, entered into two material
      stock purchase agreements. In one agreement, Linkwell Tech was to acquire 100%
      equity interest in Shanghai LiKang Biological High-Tech Company, Limited, a
      Chinese company, in a related party transaction with Xuelian Bian, an
      individual, Wei Guan, an individual, and LiKang Pharmaceutical (the “Biological
      Stock Purchase Agreement”). Mr. Bian is Linkwell Corporation's Chief Executive
      Officer, President and Chairman of the Board and Wei Guan is Linkwell
      Corporation's Vice President, Secretary and Director. Mr. Bian and Mr. Guan
      own
      90% and 10% of LiKang Pharmaceutical, respectively. Mr. Bian and LiKang
      Pharmaceutical owned 60% and 40% of LiKang Biological, respectively. Pursuant
      to
      the terms of the Biological Stock Purchase Agreement, Mr. Bian and LiKang
      Pharmaceutical were to receive 1,000,000 shares of Linkwell Corporation
      restricted common stock. In the other agreement, Linkwell Tech, which already
      owned a 90% equity interest in Shanghai LiKang Disinfectant, was to purchase
      the
      remaining 10% equity interest of LiKang Disinfectant from Shanghai Shanhai
      Group, a non-affiliated Chinese entity (“Disinfectant Stock Purchase
      Agreement”). Pursuant to the terms of the Disinfectant Stock Purchase Agreement,
      Shanghai Shanhai Group was to receive 3,000,000 shares of Linkwell Corporation
      restricted common stock.





Due
      to
      restrictions under PRC law that prohibited the consideration then contemplated
      by the Biological Stock Purchase Agreement and Disinfectant Stock Purchase
      Agreement neither of the respective transactions contemplated by those
      agreements closed in 2007. As a result, on March 25, 2008, the parties agreed
      to
      enter into an amendment to the Biological Stock Purchase Agreement (“Biological
      Amendment”) and an amendment to the Disinfectant Stock Purchase Agreement
      (“Disinfectant Amendment”) in an effort to complete the stock purchase
      transactions under those agreements. Pursuant to the terms of the Biological
      Amendment, the only material change to the Biological Stock Purchase Agreement
      relates to the consideration paid by Linkwell Tech to Xuelian Bian and LiKang
      Pharmaceutical, which was changed from 1,000,000 shares of the Company’s common
      stock to $200,000 and 500,000 shares of common stock. Pursuant to the terms
      of
      the Disinfectant Amendment, the only material change to the Disinfectant Stock
      Purchase Agreement relates to the consideration paid by Linkwell Tech to
      Shanghai Shanhai Group for the remaining 10% equity interest, which was changed
      from 3,000,000 shares of Common Stock, to $380,000 and 1,500,000 shares of
      Common Stock. The other terms of the Disinfectant Stock Purchase Agreement
      remain in full force and effect.





As
      a
      result of the closing the aforementioned transactions on March 25, 2008, our
      wholly-owned subsidiary Linkwell Tech now owns 100% equity interest in LiKang
      Biological and a100% equity interest in LiKang Disinfectant.





**BASIS
      OF PRESENTATION**





Certain
      reclassifications have been made to the prior year to conform to current year
      presentation. The consolidated financial statements are prepared in accordance
      with generally accepted accounting principles in the United States of America
      (“US GAAP”). The consolidated financial statements of the Company include the
      accounts of its wholly-owned subsidiary, Linkwell Tech Group, Inc., and its
      90%-owned subsidiary, LiKang Disinfectant and LiKang International Trading.
      All
      significant inter-company balances and transactions have been
      eliminated.





**USE
      OF ESTIMATES**





The
      preparation of financial statements in conformity with U.S. GAAP requires
      management to make estimates and assumptions that affect certain reported
      amounts and disclosures. Accordingly, actual results could differ from those
      estimates. Significant estimates in the year ended December 31, 2007 and 2006
      include the allowance for doubtful accounts, stock-based compensation, the
      useful life of property and equipment and intangible assets and the inventory
      reserve.




F-9





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





**FAIR
      VALUE OF FINANCIAL INSTRUMENTS**





The
      carrying amounts reported in the balance sheet for cash and cash equivalents,
      accounts receivable, accounts payable and accrued expenses, customer advances,
      loans and amounts due from related parties approximate their fair market value
      based on the short-term maturity of these instruments.





**CASH
      AND CASH EQUIVALENTS**





For
      purposes of the consolidated statements of cash flows, the Company considers
      all
      highly liquid instruments purchased with a maturity of three months or less
      and
      money market accounts to be cash equivalents.





**ACCOUNTS
      RECEIVABLE**





The
      Company has a policy of reserving for uncollectible accounts based on its best
      estimate of the amount of probable credit losses in its existing accounts
      receivable. The Company periodically reviews its accounts receivable to
      determine whether an allowance is necessary based on an analysis of past due
      accounts and other factors that may indicate that the realization of an account
      may be in doubt. Account balances deemed to be uncollectible are charged to
      the
      allowance after all means of collection have been exhausted and the potential
      for recovery is considered remote. At December 31, 2007 and 2006, the Company
      has established, based on a review of its third party accounts receivable
      outstanding balances, an allowance for doubtful accounts in the amount of
      $460,175 and $144,639 respectively. At December 31, 2007 and 2006, the Company
      has established, based on a review of its related party accounts receivable
      outstanding balances, an allowance for doubtful accounts in the amount of
      $221,359 and $87,937 respectively.





**INVENTORIES**





Inventories,
      consisting of raw materials, work-in-process and finished goods related to
      the
      Company’s products are stated at the lower of cost or market utilizing the
      weighted average cost method. The
      valuation of inventory requires the Company to estimate obsolete or excess
      inventory based on analysis of future demand for our products. Due to the nature
      of the Company’s business and our target market, levels of inventory in the
      distribution channel, changes in demand due to price changes from competitors
      and introduction of new products are not significant factors when estimating
      the
      Company’s excess or obsolete inventory. If inventory costs exceed expected
      market value due to obsolescence or lack of demand, inventory write-downs may
      be
      recorded as deemed necessary by management for the difference between the cost
      and the market value in the period that impairment is first recognized.





**PROPERTY
      AND EQUIPMENT**





Property
      and equipment are carried at cost. Depreciation and amortization are provided
      using the straight-line method over the estimated economic lives of the assets,
      which are from 5 to 20 years. The cost of repairs and maintenance are expensed
      as incurred; major replacements and improvements are capitalized. When assets
      are retired or disposed of, the cost and accumulated depreciation are removed
      from the accounts, and any resulting gains or losses are included in income
      statement in the year of disposition




F-10





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





**IMPAIRMENT
      OF LONG-LIVED ASSETS**





In
      accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
      “Accounting for the Impairment or Disposal of Long-Lived Assets”. The Company
      periodically reviews its long-lived assets for impairment whenever events or
      changes in circumstances indicate that the carrying amount of the assets may
      not
      be fully recoverable. The Company recognizes an impairment loss when the sum
      of
      expected undiscounted future cash flows is less than the carrying amount of
      the
      asset. The amount of impairment is measured as the difference between the
      asset’s estimated fair value and its book value. The Company did not consider it
      necessary to record any impairment charges during the fiscal year ended December
      31, 2007.





**ADVANCES
      FROM CUSTOMERS**





Advances
      from customers at December 31, 2007 and 2006 were $713,578 and $254,434,
      respectively. Advances from customers consist of prepayments from third party
      customers to the Company for merchandise that had not yet been shipped by the
      company. The Company will recognize the deposits as revenue as customers take
      delivery of the goods, in compliance with its revenue recognition
      policy.





**INCOME
      TAXES**





The
      Company files federal and state income tax returns in the United States for
      its
      domestic operations, and files separate foreign tax returns for the Company's
      Chinese subsidiaries. Income taxes are accounted for under Statement of
      Financial Accounting Standards No. 109, “Accounting for Income Taxes,” which is
      an asset and liability approach that requires the recognition of deferred tax
      assets and liabilities for the expected future tax consequences of events that
      have been recognized in the Company's financial statements or tax
      returns.





**INCOME
      (LOSS) PER COMMON SHARE**





The
      Company presents net income (loss) per share (“EPS”) in accordance with SFAS No.
      128, “Earnings per Share”. Accordingly, basic income (loss) per share is
      computed by dividing income (loss) available to common shareholders by the
      weighted average number of shares outstanding, without consideration for common
      stock equivalents. Diluted net income per share is computed by dividing the
      net
      income by the weighted-average number of common shares outstanding as well
      as
      common share equivalents outstanding for the period determined using the
      treasury-stock method for stock options and warrants and the if-converted method
      for convertible notes. Diluted earnings per share reflects the potential
      dilution that could occur based on the exercise of stock options or warrants,
      unless such exercise would be anti-dilutive, with an exercise price of less
      than
      the average market price of the Company’s common stock.





The
      Company’s common stock equivalents at December 31, 2007 and 2006 include the
      following:





**December
                31****2007**
            
            **2006**Warrants
            
            
            33,921,545
            
            
            37,134,86533,921,545
            
            
            43,634,865


F-11


**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**




**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





**REVENUE
      RECOGNITION**





The
      Company follows the guidance of the Securities and Exchange Commission’s Staff
      Accounting Bulletin 104 for revenue recognition. In general, the Company records
      revenue when persuasive evidence of an arrangement exists, services have been
      rendered or product delivery has occurred, the sales price to the customer
      is
      fixed or determinable, and collectability is reasonably assured. The following
      policies reflect specific criteria for the various revenues streams of the
      Company:





The
      Company's revenues from the sale of products are recorded when the goods are
      shipped, title passes, and collectability is reasonably assured.





The
      Company's revenues from the sale of products to related parties are recorded
      when the goods are shipped which occurs simultaneously with the shipment being
      made by our related parties to their customers. Upon shipment, title passes,
      and
      collectability is reasonably assured. The Company receives purchase orders
      from
      our related parties on an as need basis from the related party customers.
      Generally, the related party does not hold the Company’s inventory. If the
      related party has inventory on hand at the end of a reporting period, the sale
      is reversed and the inventory is included on the Company’s balance
      sheet.





Prior
      to
      October 1, 2006, LiKang International follows the guidance of EITF 99-19
“Reporting Revenue Gross as a Principal versus Net as an agent.” LiKang
      International records the net revenue when the supplier is the primary obligor
      in the arrangement. Since October 1, 2006, LiKang International has become
      the
      primarily obligor for providing products to its customers and takes ownership
      of
      its inventory. Accordingly, effective October 1, 2006, LiKang International
      records gross revene when persuasive evidence of an arrangement exists, services
      have been rendered or product delivery has occurred, the sales price to the
      customer is fixed or determined, and collectability is reasonable
      assured.





**CONCENTRATION
      OF CREDIT RISK**





Financial
      instruments which potentially subject the Company to concentrations of credit
      risk consist principally of cash and trade accounts receivable. The Company
      places its cash with high credit quality financial institutions in the U.S.
      and
      in China. Almost all of the Company's sales are credit sales which are primarily
      to customers whose ability to pay is dependent upon the industry economics
      prevailing in these areas; however, concentrations of credit risk with respect
      to trade accounts receivables is limited due to generally wide distribution
      of
      our products and shorter payment terms than customary in PRC. The Company also
      performs ongoing credit evaluations of its customers to help further reduce
      credit risk. For the year ended December 31, 2007 and 2006, sales to related
      parties accounted for 18% and 42% of net revenues, respectively. The largest
      related party, LiKang Pharmaceutical (“ZhongYou” after October 16, 2007) and its
      branches (See Note 5) purchased $2,354,010 (about 16% of net revenue), from
      the
      Company in 2007. Guangzhou JianLian, a non-related third party purchased
      $1,751,736 (about 12% of net revenue) from the Company in 2007.





**COMPREHENSIVE
      INCOME**





The
      Company uses Statement of Financial Accounting Standards No.130 (SFAS 130)
      “Reporting Comprehensive Income”. Comprehensive income is comprised of net
      income and all changes to the statements of stockholders' equity, except those
      due to investments by stockholders, changes in paid-in capital and distributions
      to stockholders.





**SHIPPING
      COSTS**





Shipping
      costs are included in selling and marketing expenses and totaled $274,086 and
      $173,840 for the fiscal year ended December 31, 2007 and 2006,
      respectively.


F-12





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





**ADVERTISING**





Advertising
      is expensed as incurred. For the fiscal year ended December 31, 2007 and 2006,
      advertising expenses amounted to $5,069 and $21,323 and were included in selling
      expense, respectively.





**STOCK-BASED
      COMPENSATION**





Effective
      October 1, 2005, the Company adopted Statement of Financial Accounting Standards
      No.123 (revised 2004), Share Based Payment (“SFAS No. 123R”). SFAS No.123R
      establishes the financial accounting and reporting standards for stock-based
      compensation plans. As required by SFAS No. 123R, the Company recognized the
      cost resulting from all stock-based payment transactions including shares issued
      under its stock option plans in the financial statements.





**NON-EMPLOYEE
      STOCK BASED COMPENSATION**





The
      cost
      of stock-based compensation awards issued to non-employees for services are
      recorded at either the fair value of the services rendered or the instruments
      issued in exchange for such services, whichever is more readily determinable,
      using the measurement date guidelines enumerated in Emerging Issues Task Force
      Issue (“EITF”) 96-18,
      “Accounting for Equity Instruments That Are Issued to Other Than Employees for
      Acquiring, or in Conjunction with Selling, Goods or Services” (“EITF
      96-18”).





**REGISTRATION
      RIGHTS AGREEMENTS**





The
      Company has adopted View C of EITF 05-4 “Effect of a Liquidated Damages Clause
      on a Freestanding Financial Instrument Subject to EITF 00-19” (“EITF 05-4”).
      Accordingly, the Company classifies as liability instruments, the fair value
      of
      registration rights agreements when such agreements (i) require it to file,
      and
      cause to be declared effective under the Securities Act, a registration
      statement with the SEC within contractually fixed time periods, and (ii) provide
      for the payment of liquidating damages in the event of its failure to comply
      with such agreements. Under View C of EITF 05-4, (i) registration rights with
      these characteristics are accounted for as derivative financial instruments
      at
      fair value and (ii) contracts that are (a) indexed to and potentially settled
      in
      an issuer's own stock and (b) permit gross physical or net share settlement
      with
      no net cash settlement alternative are classified as equity instruments. At
      December 31, 2006 we reflected accrued registration rights penalty payable
      of
      $120,000 in connection with the Company's Series B Preferred Stock offering.
      During the fiscal year ended December 31, 2007, each of the investors from
      the
      Series B Preferred Stock offering elected to waive their right to penalties
      related to the Series B Preferred Stock offering. Accordingly, the full amount
      of the accrued penalty approximately $117,000, which has been waived, has been
      included as an element of other income in our consolidated statements of
      operations at December 31, 2007. ****





**FOREIGN
      CURRENCY TRANSLATION**





Transactions
      and balances originally denominated in U.S. dollars are presented at their
      original amounts. Transactions and balances in other currencies are converted
      into U.S. dollars in accordance with Statement of Financial Accounting Standards
      (SFAS) No. 52, “Foreign Currency Translation” and are included in determining
      net income or loss.




F-13





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





**FOREIGN
      CURRENCY TRANSLATION (CONTINUED)**





The
      functional and reporting currency is the U.S. dollar. The functional currency
      of
      the Company's Chinese subsidiary is Renminbi, the local currency, or sometimes
      referred to as the Chinese Yuan (“RMB”). The financial statements of the
      subsidiary are translated into United States dollars using period-end rates
      of
      exchange for assets and liabilities, and average rates of exchange for the
      period for revenues, costs, and expenses. Net gains and losses resulting from
      foreign exchange transactions are included in the consolidated statements of
      operations and were not material during the periods presented. Translation
      adjustments resulting from the process of translating the local currency
      financial statements into U.S. dollars are included in determining comprehensive
      income. The cumulative translation adjustment was $495,719 for the year ended
      December 31, 2007 and effect of exchange rate changes on cash at December 31,
      2006 was $11,766.





**RESEARCH
      AND DEVELOPMENT**





Research
      and development costs are expensed as incurred. These costs primarily consist
      of
      cost of material used and salaries paid for the development of the Company’s
      products and fees paid to third parties. Research and development costs for
      the
      fiscal year ended December 31, 2007 and 2006 were approximately $61,452 and
      $18,000, respectively.





**RECENT
      ACCOUNTING PRONOUNCEMENTS**





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements” (SFAS 157), which provides guidance for how companies should
      measure fair value when required to use a fair value measurement for recognition
      or disclosure purposes under generally accepted accounting principle (GAAP).
      SFAS 157 is effective for fiscal years beginning after November 15,
      2007. The Company is currently assessing the impact, if any, the adoption of
      SFAS 157 will have on its financial statements.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities-including an amendment of FAS 115”
(Statement 159). Statement 159 allows entities to choose, at specified election
      dates, to measure eligible financial assets and liabilities at fair value that
      are not otherwise required to be measured at fair value. If a company elects
      the
      fair value option for an eligible item, changes in that item's fair value in
      subsequent reporting periods must be recognized in current earnings. Statement
      159 is effective for fiscal years beginning after November 15, 2007. The Company
      is currently evaluating the timing of adoption and the impact that adoption
      might have on its financial position or results of operations.





On
      May 2, 2007, the FASB issued FASB Staff Position FIN 48-1, or FSP FIN 48-1,
“Definition of Settlement in FASB Interpretation No. 48”. FSP FIN 48-1
      provides guidance on how an enterprise should determine whether a tax position
      is effectively settled for the purpose of recognizing previously unrecognized
      tax benefits. The Company retroactively adopted the provisions of FSP FIN 48-1
      effective January 1, 2007 and has determined that it had no impact on its
      consolidated financial statements.





In
      June
      2007, the EITF reached a consensus on EITF Issue No. 07-3 “Accounting for
      Advance Payments for Goods or Services to be Received for Use in Future Research
      and Development Activities” (“EITF 07-3”). EITF 07-3 provides clarification
      surrounding the accounting for non-refundable research and development advance
      payments, whereby such payments should be recorded as an asset when the advance
      payment is made and recognized as an expense when the research and development
      activities are performed. EITF 07-3 will be effective for the Company on a
      prospective basis beginning January 1, 2008.


F-14





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)**





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements”. This Statement amends ARB 51 to establish
      accounting and reporting standards for the noncontrolling (minority) interest
      in
      a subsidiary and for the deconsolidation of a subsidiary. It clarifies that
      a
      noncontrolling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements. SFAS No. 160 is effective for the Company’s fiscal year
      beginning October 1, 2009. Management is currently evaluating the effect of
      this
      pronouncement on financial statements.





In
      December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
      Statement replaces SFAS No. 141, Business Combinations. This Statement retains
      the fundamental requirements in Statement 141 that the acquisition method of
      accounting (which Statement 141 called the purchase method) be used for all
      business combinations and for an acquirer to be identified for each business
      combination. This Statement also establishes principles and requirements for
      how
      the acquirer: a) recognizes and measures in its financial statements the
      identifiable assets acquired, the liabilities assumed, and any noncontrolling
      interest in the acquiree; b) recognizes and measures the goodwill acquired
      in
      the business combination or a gain from a bargain purchase and c) determines
      what information to disclose to enable users of the financial statements to
      evaluate the nature and financial effects of the business combination. SFAS
      No.
      141(R) will apply prospectively to business combinations for which the
      acquisition date is on or after Company’s fiscal year beginning October 1, 2009.
      While the Company has not yet evaluated this statement for the impact, if any,
      that SFAS No. 141(R) will have on its consolidated financial statements, the
      Company will be required to expense costs related to any acquisitions after
      September 30, 2009.





In
      March
      2008, FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and
      Hedging Activities”. The new standard is intended to improve financial reporting
      about derivative instruments and hedging activities by requiring enhanced
      disclosures to enable investors to better understand their effects on an
      entity’s financial position, financial performance, and cash flows. It is
      effective for financial statements issued for fiscal years and interim periods
      beginning after November 15, 2008, with early application encouraged. We are
      currently evaluating the impact of adopting SFAS No.161 on our consolidated
      financial statements.





Other
      accounting standards that have been issued or proposed by the FASB or other
      standards-setting bodies that do not require adoption until a future date are
      not expected to have a material impact on the consolidated financial statements
      upon adoption.





**NOTE
      2 - INVENTORIES**





A
      summary
      of inventories by major category at December 31, 2007 and 2006 are as
      follows:




**December
                31,**
            
            **December
                31,****2007**
            
            **2006**Raw
                materials
            
            $
            420,797
            
            $
            294,977Work-in-process
            
            
            31,012
            
            
            43,567Finished
                goods
            
            
            513,954
            
            
            325,099965,763
            
            
            663,643Less:
                Reserve for obsolete inventory
            
            
            (136,287
            )
            
            (127,160
            )**Net
                inventories**
            
            **$**
            **829,476**
            
            **$**
            **536,483**


F-15


**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      3 – PROPERTY AND EQUIPMENT**





On
      December 31, 2007 and 2006, property and equipment consist of the
      following:


**Estimated****Useful
                Life**
            
            **December 31,**
            
            **December 31,****(In
                years)**
            
            **2007**
            
            **2006**Office
                equipment and furniture
            
            
            3-7
            
            $
            142,161
            
            $
            111,685Autos
                and trucks
            
            
            5
            
            
            157,179
            
            
            178,287Manufacturing
                equipment
            
            
            2-10
            
            
            263,021
            
            
            209,293Building
            
            
            5-20
            
            
            541,330
            
            
            505,0771,103,691
            
            
            1,004,342Less:
                Accumulated depreciation
            
            
            
            
            
            (354,618
            )
            
            (229,609
            )**Total
                property and equipment, net**
            
            
            
            
            **$**
            **749,073**
            
            **$**
            **774,733**





For
      the
      fiscal year ended December 31, 2007 and 2006, depreciation expense amounted
      to
      $126,295 and $91,657, respectively.





**NOTE
      4 – LOANS PAYABLE**





Loans
      payable consisted of the following at December 31, 2007 and 2006:





**December 31,**
            
            **December 31,****2007**
            
            **2006**Loan
                from De Chang Credit Union due on June 2, 2008 and May 17, 2007 with
                interest at 7.88% and 7.02% per annum respectively. Guaranteed by
                Shanghai
                Shanhai.
            
            $
            356,460
            
            
            332,587Loan
                from De Chang Credit Union due on December 10, 2008 and December
                3,
                2007with
                interest 7.29% and 7.34% per annum respectively. Guaranteed by Shanghai
                Shanhai and Chairman Bian.
            
            $
            342,750
            
            
            319,795**Total
                Loans Payable**
            
            **$**
            **699,210**
            
            
            **652,382**





**NOTE
      5 – RELATED PARTY TRANSACTIONS**





The
      Company's 90% owned subsidiary, LiKang Disinfectant, is engaged in business
      activities with four related parties: Shanghai LiKang Meirui Pharmaceuticals
      High-Tech Company, Ltd. (“Meirui”), Shanghai Shanhai Group (“Shanhai”), Shanghai
      LiKang Pharmaceuticals Technology Co., Ltd. (“LiKang Pharmaceuticals” or
“ZhongYou” after October 16, 2007), and Shanghai LiKang Biological High-Tech
      Co., Ltd. (“Biological”).





Shanghai
      LiKang Meirui Pharmaceuticals High-Tech Co., Ltd. (“Meirui”), a company of which
      Shanghai Shanhai Group, LiKang Disinfectant's minority shareholder, owns 68%,
      used to provide certain contract manufacturing of two products for LiKang
      Disinfectant. Specifically, Meirui provided LiKang Disinfectant with ozone
      producing equipment and ultraviolet radiation lamp lights. In addition, under
      the terms of a two-year agreement entered into in January 2005, Meirui produces
      the Lvshaxing Air Disinfectant Machine and LiKang Surgery hand-washing table
      for
      LiKang Disinfectant. In January 2005, LiKang Disinfectant signed a two-year
      agreement with Meirui to market its products to the retail consumer market
      using
      Meirui's proprietary sales network which caters to the retail consumer market
      in
      China. The agreement above was ceased on December, 2006. Additionally, in the
      fiscal year of 2007 and 2006, the Company purchased products from Meirui
      amounting to $8,871 and $1,094 respectively. At December 31, 2007, the remaining
      balance owed to Meirui was $0. We now only use Meirui’s sales network. For the
      fiscal year ended December 31, 2007 we recorded net revenues on sales to Meirui
      of $34,707.


F-16





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      5 – RELATED PARTY TRANSACTIONS (CONTINUED)**




At
      December 31, 2007, Shanghai LiKang Meirui Pharmaceuticals High-Tech Company
      owed
      us $37,775. In general, accounts receivable due from Meirui are due within
      4 to
      6 months, which approximate normal business terms with independent third
      parties.




Shanghai
      LiKang Pharmaceuticals Technology Co., Ltd., (“LiKang Pharmaceuticals” or
“ZhongYou” after October 16, 2007), which was owned by Mr. Xuelian Bian (90%)
      and Wei Guan (10%), the Company's officers and directors, sells the Company's
      products to third parties. In March, 2007, Wei Guan sold his 10% shares to
      Bing
      Chen, President of LiKang Disinfectant. In August, Xuelian Bian sold his 90%
      shares to his mother, Xiuyue, Xing. In October, 2007, the two new shareholders,
      Bing Chen (10%) and Xiuyue Xing (90%) sold all of their shares in LiKang
      Pharmaceuticals to Shanghai Jiuqing Pharmaceuticals Company, Ltd., whose 100%
      owner is Shanghai Ajiao Shiye Co. Ltd. Mr. Bian is a 60% shareholder of Shanghai
      Ajiao Shiye Co. Ltd. Starting from October 16, 2007, the registered name of
      LiKang Pharmaceutical has been changed to Shanghai ZhongYou Pharmaceutical
      High
      Tech Corporation. Moreover, Bing Chen, Director of LiKang Disinfectant, is
      also
      Director of LiKang Pharmaceuticals (or “ZhongYou” after October 16, 2007). For
      the fiscal year ended December 31, 2007 and 2006, the Company recorded net
      revenues of $2,354,010 and $ 3,211,758 to LiKang Pharmaceuticals, respectively.
      On December 31, 2007, accounts receivable due from LiKang Pharmaceuticals was
      $2,089,641. In general, accounts receivable due from LiKang Pharmaceuticals
      are
      due within 4 to 6 months, which approximate normal business terms with
      independent third parties.





Shanghai
      Shanhai Group, the minority shareholder of LiKang Disinfectant, is owned by
      Group Employee Share-holding Commission (16.25%) and Baoshan District Dachang
      Town South Village Economic Cooperation Club (83.75%). The Company leases its
      principal executive offices and warehouse space from Shanghai Shanhai Group
      for
      approximately $32,000 per year. Shanghai Shanhai Group also holds the land
      use
      permit for the principal executive office building. For the fiscal year ended
      December 31, 2007 and 2006, rent expense paid to this related party amounted
      to
      $ 31,707 and $38,462 respectively. Additionally, in January 2005, the Company
      borrowed $179,601 (RMB 1,310,000) from Shanghai Shanhai Group for working
      capital purposes, which is reflected on the accompanying balance sheet as loans
      payable - related party. The loan bears interest at 10% per annum and is payable
      on demand. For the fiscal year ended December 31, 2007, interest expense related
      to this note amounted to $18,705. The loan has been paid back to Shanghai
      Shanhai Group on December, 2007.





Shanghai
      LiKang Biological High-Tech Company, Ltd. (“Biological”), which is 60% owned by
      Mr. Xuelian Bian, the Company's officer and director, and 40%-owned by Shanghai
      LiKang Pharmaceuticals Technology Company, Limited (owned by Mr. Xuelian Bian
      (90%) and Wei Guan (10%), the Company's officers and directors till 2007 )
      sells
      biological products, cosmetic products and develops technology for third
      parties. the Company sells certain raw materials to Biological employed in
      the
      Biological production process. For the fiscal year ended December 31, 2007
      and
      2006, the Company recorded net revenues of $851 and $3,773 to Biological,
      respectively. During the year ended December 31, 2007 and 2006, Biological
      processed certain products on behalf of the Company for $151,067 and
      $78,946.  At
      December 31, 2007 and 2006, the remaining balance of accounts payable due to
      Biological was $58,347 and $47,570 respectively. In addition, the Company loaned
      $781,470 (RMB 5,700,000) to Biological for working capital purpose during the
      year of 2007. The loan was non-interest bearing and reflected on the
      accompanying balance sheet as due from related party.





The
      Company's two officers and directors, from time to time, provided advances
      to
      LiKang International Trading, the 100% subsidiary of LiKang Disinfectant, for
      working capital purposes. These advances are usually short-term in nature and
      non-interest bearing. The amount due to the executive officers at December
      31,
      2007 was $167,944, which were made to the LiKang International in 2006 and
      2007
      and is included in due to related party on the accompanying balance sheet.
      The
      advances of $167,944 were contributed by Xuelian Bian, our CEO and Chairman,
      and
      Wei Guan our Vice President and director. The advances were related to the
      registered capital commitment of LiKang International Trading. For the fiscal
      year ended December 31, 2007, LiKang International Trading recorded net revenues
      of $252,124 from Linkwell Hong Kong, a company controlled by Mr. Wei Guan.
      Linkwell Hong Kong usually paid cash in advance before making orders from LiKang
      International Trading. On December 31, 2007, the remaining balance of advances
      from Linkwell Hong Kong was $211,793. From time to time, LiKang International
      Trading borrowed from LiKang Pharmaceutical (or ZhongYou after October 16,
      2007)
      for working capital purpose.




F-17





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**




**NOTE
      5 – RELATED PARTY TRANSACTIONS (CONTINUED)**




These
      loans are non-interesting bearing .On December 31, 2007, LiKang International
      Trading owes $333,708 to LiKang Pharmaceutical (or ZhongYou after October 16,
      2007).





In
      2006
      when LiKang Disinfectant bought LiKang International Trading, it owed Mr.
      Xuelian Bian and Mr. Guan Wei about $40,441. For the fiscal year ended December
      31, 2007, LiKang International Trading, the Company's 100% owned subsidiary,
      borrowed from Mr. Xuelian Bian $61,695 (RMB 450,000) and Mr. Guan Wei $65,808
      (RMB 480,000). The loans are non interest-bearing and have no specific due
      date.





**NOTE
      6 – STOCKHOLDER’ EQUITY**





**Common
      Stock**





On
      January 10, 2006 and effective January 1, 2006, the Company entered into a
      three
      year agreement with China Direct Investments, Inc. to provide business
      development and management services. In connection with this agreement, the
      Company issued 4,700,000 shares of the Company’s common stock. The Company
      valued the service using the fair value of common shares on grant date at $0.18
      per share and recorded deferred consulting expense of $846,000 to be amortized
      over the service period. In July 2007, the Company terminated the service
      contact with China Direct Investments, Inc, and the remaining deferred
      consulting expenses associated with this agreement amount to $564,000 have
      been
      amortized for the fiscal year ended December 31, 2007.





In
      September, 2006, the Company entered into a three-year agreement with a
      consultant to provide business development and management services. In
      connection with this agreement, the Company issued 500,000 shares of the
      Company’s common stock. The Company valued these services using the fair value
      of common shares on grant date at $0.185 per share and recorded deferred
      consulting expense of $92,500 to be amortized over the service period. For
      the
      fiscal year ended December 31, 2007, amortization of consulting compensation
      amounted to $30,125.





On
      June
      6, 2007, the Company entered into a six months agreement with Firs Trust Group
      Inc. to provide business development and management services. In connection
      with
      this agreement, on July 12, 2007, the Company issued 450,000 shares of its
      restricted common stock. The Company valued the service using the fair value
      of
      common shares on grant date at $0.17 per share and recorded deferred consulting
      expense of $76,500 to be amortized over the service period. Associated with
      this
      agreement, for the fiscal year ended December 31, 2007, $76,500 was
      expensed.





On
      December 3, 2007, the Company issued 200,000 shares of its restricted common
      stock to Mr. Ye Wenhu, individual and Ms. Xu Xinfang, individual. They provided
      business development and management services to the Company. The Company valued
      the service using the fair value of common shares on grant date at $0.17 per
      share and recorded consulting expense of $34,000.





In
      January 2007, warrants of total 3,213,320 shares of common stock were exercised
      at $0.10 per share. Stock
      warrant activity for the fiscal year ended December 31, 2007 is summarized
      as
      follows:





**Number
                of**
            
            **Weighted-Average****Warrants**
            
            **Exercise
                Price****Outstanding
                at December 31, 2006**
            
            
            37,134,865
            
            $
            0.25Granted
            
            
            -
            
            
            -Exercised
            
            
            (3,213,320
            )
            $
            0.10**Outstanding
                at December 31, 2007**
            
            
            **33,921,545******
            
            $
            **0.26****Weighted-average
                fair value of warrants Granted during the year**
            
            
            
            
            $
            0.00




F-18





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      6 – SHAREHOLDER’ EQUITY (CONTINUED)**





The
      following table summarizes the Company's stock warrants outstanding at December
      31, 2007:





**Warrants
                Outstanding and Exercisable**Range
                of
            
            Number
            
            Weighted
                Average
            
            Weighted
                AverageExercise
            
            Of
            
            Remaining
            
            ExercisePrice
            
            Warrants
            
            Exercise
                Life
            
            Price$
            0.10
            
            
            540,130
            
            
            2.50
            
            $
            0.10$
            0.20
            
            
            17,155,000
            
            
            2.75
            
            $
            0.20$
            0.30
            
            
            15,866,665
            
            
            3.00
            
            $
            0.30$
            0.75-2.5
            
            
            359,750
            
            
            0.55
            
            $
            2.02**33,921,545**





**NOTE
      7 – FOREIGN OPERATIONS**





For
      the
      fiscal year ended December 31, 2007 and 2006, the Company derived all of its
      revenue from its subsidiaries located in the People's Republic of China.
      Identifiable assets by geographic areas as of December 31, 2007 are as
      follows:





**Identifiable Assets**
            
            **Identifiable Assets****December 31**
            
            **December 31****2007**
            
            **2006****United
                States**
            
            $
            39,331
            
            $
            101,091**People's
                Republic of China**
            
            
            9,976,150
            
            
            6,843,401**Total**
            
            **$**
            **10,015,481******
            
            **$**
            **6,944,492**





**NOTE
      8 – INCOME TAX**





The
      Company's parent and their US subsidiaries are subject to top applicable
      Federal, State and Local tax statues. The Company's subsidiaries in China are
      governed by the Income Tax Law of the Peoples Republic of China concerning
      Foreign Investment Enterprises and Foreign Enterprises and local income tax
      laws
      (the "PRC Income Tax Law"). Pursuant to the PRC Income Tax Law, in 2007,
      wholly-owned foreign enterprises are subject to tax at a statutory rate of
      approximately 33%.





The
      components of income (loss) before income tax consist of the
      following:





Year
                Ended December 31,2007
            
            2006US
                Operations
            
            $
            (857,321
            )
            $
            (520,000
            )Chinese
                Operations
            
            
            1,217,455
            
            
            1,210,000$
            370,599
            
            $
            690,000





For
      their
      US Operations the Company has not recorded any net deferred tax assets, due
      to
      the uncertainty of recoverability on such assets. The Company's Chinese
      Operations are governed by the Income Tax Law of the Peoples Republic of China
      concerning Foreign Investment Enterprises and Foreign Enterprises and local
      income tax laws (the "PRC Income Tax Law"). Pursuant to the PRC Income Tax
      Law,
      wholly-owned foreign enterprises are subject to two years tax exemption and
      three years 50% tax reduction from its establishment. In 2007, the Company
      is
      subject to income tax exemption.


F-19





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      8 – INCOME TAX (CONTINUED)**





The
      Company has net operating loss ("NOL") carryforwards for United States income
      tax purposes at December 31, 2007 expiring through the year 2027. Management
      estimates the NOL as of December 31, 2007 to be approximately $1,600,000. The
      utilization of the Company's NOL's may be limited because of a possible change
      in ownership as defined under Section 382 of Internal Revenue Code. The Company
      has recorded a valuation allowance for benefit available from these NOL's,
      as it
      is more likely than not that realization will not occur.




NOL
                carryforwards
            
            $
            640,000Valuation
                allowance
            
            
            (640,000
            )Deferred
                tax asset, net of allowance with regards to NOL's
            
            $
            -





**NOTE
      9 – COMMITMENTS AND CONTINGENCIES**





Operating
      Leases





The
      Company leases office and manufacturing space and warehouse under leases that
      expire through February 2011.





Future
      minimum rental payments required under these operating leases are as
      follows:




Year
                Ended December 31,2008
            
            $
            32,8522009
            
            
            32,8522010
            
            
            32,8522011
            
            
            2,842Total
                minimum lease payments
            
            
            101,398





For
      the
      years ended December 31, 2007 and 2006, rent expense amounted to $ 103,090
      and
      $81,159, respectively.





Litigation





The
      Company is not a party to any pending legal proceeding. No federal, state or
      local governmental agency is presently contemplating any proceeding against
      the
      Company. No director, executive officer or affiliate of the Company or owner
      of
      record or beneficially of more than five percent of the Company's common stock
      is a party adverse to the company or has a material interest adverse to the
      Company in any proceeding.





**NOTE
      10 – SEGMENT INFORMATION**





The
      following information is presented in accordance with SFAS No. 131, Disclosure
      about Segments of an Enterprise and Related Information. For the fiscal year
      ended December 31, 2007 and 2006, the Company operated in two reportable
      business segments (1) the sale of commercial disinfectant products; and (2)
      trading company that involves import and export activities. The Company's
      reportable segments are strategic business units that offer different products.
      They are managed separately based on the fundamental differences in their
      operations. Condensed information with respect to these reportable business
      segments for the fiscal year ended December 31, 2007 and 2006 is as
      follows:




F-20





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      10 – SEGMENT INFORMATION (CONTINUED)**





**Fiscal
      year ended December 31, 2007:**





**Disinfectant**
              **Products**
            
            **Import
                And**
              **Export**
              **Business**
            
            **Corporate**
              **And**
              **Other**
            
            **Consolidated**Net
                revenue - Non-affiliated companies
            
            $
            5,738,150
            
            $
            5,955,880
            
            $
            -
            
            $
            11,694,030Net
                revenue - Affiliated companies
            
            
            2,389,567
            
            
            252,124
            
            
            -
            
            
            2,641,691Interest
                expense (income)
            
            
            64,033
            
            
            1,150
            
            
            35
            
            
            65,218Depreciation
                and Amortization
            
            
            126,198
            
            
            97
            
            
            -
            
            
            126,295Net
                income (loss)
            
            
            1,196,319
            
            
            21,137
            
            
            (857,321
            )
            
            360,135Long-lived
                asset expenditures
            
            
            97,429
            
            
            1,920
            
            
            -
            
            
            99,349Segment
                Assets
            
            $
            8,171,705
            
            $
            1,804,445
            
            $
            39,331
            
            $
            10,015,481





Net
      revenues for the fiscal year ended December 31, 2007 were $14,335,721. Included
      in our net revenues for the fiscal year ended December 31, 2007 are $2,641,691
      of related party sales and $11,694,030 of sales to independent third parties.
      Included in our net revenues for the fiscal year ended December 31, 2007, is
      $8,127,717 of revenues attributable to LiKang Disinfectant and $6,208,004 of
      revenues attributable to LiKang International.





The
      Segment Assets related to the import and export business are comprised of cash
      of $439,401, accounts receivables of $239,447, other receivables $86,291,
      prepaid expenses and others of $1,032,663, inventory of $4,823, and property
      and
      equipment of $1,820.





**Fiscal
      year ended December 31, 2006:**





**Disinfectant**
              **Products**
            
            **Import
                And**
              **Export**
              **Business**
            
            **Corporate**
              **And**
              **Other**
            
            **Consolidated**Net
                revenue
            
            $
            3,787,183
            
            $
            720,996
            
            $
            -
            
            $
            4,508,179Net
                revenue-related party
            
            
            3,237,199
            
            
            -
            
            
            -
            
            
            3,237,199Interest
                income (expenses)
            
            
            62,496
            
            
            (216
            )
            
            -
            
            
            62,280Depreciation
                and Amortization
            
            
            91,657
            
            
            -
            
            
            -
            
            
            91,657Net
                income (loss)
            
            
            1,161,828
            
            
            (86,220
            )
            
            (507,488
            )
            
            568,120Long-lived
                asset expenditures
            
            
            149,339
            
            
            -
            
            
            -
            
            
            149,339Segment
                Assets
            
            $
            5,794,144
            
            $
            1,049,257
            
            $
            101,091
            
            $
            6,944,492





Net
      revenues for fiscal 2006 were $7,745,378. Included in our net revenues 2006
      are
      $3,237,199 in related party sales and $4,508,179 in third party sales. Included
      in our net revenues for fiscal 2006 are $7,024,382 of revenues attributable
      to
      LiKang Disinfectant and $720,996 of revenues attributable to LiKang
      International.





The
      Segment Assets related to the Import and Export Business are comprised of cash
      of $317,451, accounts receivables $54,755, other receivables $414,000, advances
      on purchases of $262,381 and inventory of $670.




F-21





**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      10 – OPERATING RISK**





**(a)**
            **Country
                risk**





Currently,
      the Company’s revenues are primarily derived from the sale of line of
      disinfectant product offerings to customers in the People’s Republic of China
      (PRC). The Company hopes to expand its operations to countries outside the
      PRC,
      however, such expansion has not been commenced and there are no assurances
      that
      the Company will be able to achieve such an expansion successfully. Therefore,
      a
      downturn or stagnation in the economic environment of the PRC could have a
      material adverse effect on the Company’s financial condition.





**(b)**
            **Products
                risk**





In
      addition to competing with other manufacturers of disinfectant product
      offerings, the Company competes with larger U.S. companies who have greater
      funds available for expansion, marketing, research and development and the
      ability to attract more qualified personnel. These U.S. companies may be able
      to
      offer products at a lower price. There can be no assurance that the Company
      will
      remain competitive should this occur.





**(c)**
            **Exchange
                risk**





The
      Company can not guarantee that the current exchange rate will remain steady,
      therefore there is a possibility that the Company could post the same amount
      of
      profit for two comparable periods and because of a fluctuating exchange rate
      actually post higher or lower profit depending on exchange rate of Renminbi
      converted to US dollars on that date. The exchange rate could fluctuate
      depending on changes in the political and economic environments without
      notice.





**(d)**
            **Political
                risk**





Currently,
      PRC is in a period of growth and is openly promoting business development in
      order to bring more business into PRC. Additionally PRC currently allows a
      Chinese corporation to be owned by a United States corporation. If the laws
      or
      regulations relating to ownership of a Chinese corporation are changed by the
      PRC government, the Company's ability to operate the PRC subsidiaries could
      be
      affected.





**NOTE
      11 – SUBSEQUENT EVENTS**





On
      February 15, 2008, the Company and its wholly-owned subsidiary, Linkwell
      Tech, entered into a stock purchase agreement (the “Stock Purchase Agreement”)
      with Ecolab Inc., a Delaware corporation (“Ecolab”), pursuant to which Ecolab
      agreed to purchase and Linkwell Tech agreed to sell 888,889 of its shares (the
      “Shares”), or 10% of the issued and outstanding capital stock of Linkwell Tech,
      for $2 million dollars (the “Stock Purchase”).  The transaction is expected
      to close by the end of April, 2008 after the satisfaction of certain conditions
      as set forth in the Stock Purchase Agreement.




In
      connection with and as a condition to closing the Stock Purchase Agreement,
      on
      February 29, 2008, Shanghai LiKang Disinfectant entered into a series of
      commercial agreements, including a Consulting Agreement, two Distributor
      Agreements, and a Sales Representative Agreement.




Pursuant
      to the Consulting Agreement, Disinfectant is providing consulting services
      to
      Ecolab Chemicals Ltd., a company of limited liabilities incorporated under
      the
      laws of China and a wholly-owned subsidiary of Ecolab (“Ecolab Chemicals”),
      including identifying all regulatory approvals for manufacture, productions,
      transport, market, sale distribution and or use for certain of Ecolab Chemicals’
infection control, cleaning and sanitizing products for the period the
      Disinfectant Distribution Agreement (defined below) is in effect.  Pursuant
      to the first Distribution Agreement, Disinfectant is a distributor for the
      promotion, sale and distribution of certain of Ecolab Chemicals’ infection
      control, cleaning and sanitizing products (the “Disinfectant Distribution
      Agreement”) for the territory of the


F-22


**LINKWELL
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007 and 2006**





**NOTE
      11 – SUBSEQUENT EVENTS (CONTINUED)**





People’s
      Republic of China (the “P.R.C.”) (excluding Hong Kong, Taiwan and Macau) for the
      period of two years unless extended or terminated early. Pursuant to the second
      Distribution Agreement, Ecolab Chemicals is the exclusive distributor for the
      promotion, marketing, sale and distribution of certain of certain of
      Disinfectant’s infection control products (the “Ecolab Chemicals Distribution
      Agreement”) for the territory of Hong Kong, Taiwan and Macau Disinfectant is a
      sales representative for the soli for the period of two years unless extended
      or
      terminated early. Pursuant to the Sales Representative Agreement, citation
      of
      sales of Ecolab Chemicals’ pest elimination services for the territory of the
      P.R.C. (excluding Hong Kong, Taiwan and Macau) for the period of two years
      unless extended or terminated early.




On
      February 1, 2008 we filed a SCHEDULE 14C INFORMATION to inform investors that
      a
      majority of stockholders entitled to vote approved an increase in the number
      of
      shares of common stock that may be granted under our 2005 Equity Compensation
      Plan from 5,000,000 to 15,000,000.




On
      April
      6, 2007, Linkwell Tech Group, Inc. entered into a stock purchase agreement
      (“Biological Stock Purchase Agreement”) whereby it agreed to acquire a 100%
      equity interest in Shanghai Likang Biological High-Tech Company, Limited, a
      Chinese company ("Likang Biological") in a related party transaction by and
      among the Company, Linkwell Tech, Xuelian Bian, an individual and Shanghai
      Likang Pharmaceutical Technology Co., Ltd, a Chinese company ("Likang
      Pharmaceutical"). Mr. Bian is the Company's Chief Executive Officer, President
      and Chairman of the Board. Mr. Bian owns 90% of Likang Pharmaceutical. Mr.
      Bian
      and Likang Pharmaceutical own 60% and 40% of Likang Biological, respectively.
      On
      March 25, 2008, the parties agreed to enter into an amendment to the Biological
      Stock Purchase Agreement (“Biological Amendment”) in an effort to complete the
      stock purchase. Pursuant to the terms of the Biological Amendment, the only
      material change to the Biological Stock Purchase Agreement relates to the
      consideration paid by Linkwell Tech to Xuelian Bian and Likang Pharmaceutical
      which was changed from 1,000,000 shares of the Company’s common stock, par value
      $.0005 per share (“Common Stock”), to $200,000 and 500,000 shares of Common
      Stock. The other terms of the Biological Stock Purchase Agreement remain in
      full
      force and effect.





On
      April
      6, 2007, the Company and Linkwell Tech entered into a stock purchase agreement
      (“Disinfectant Stock Purchase Agreement”) with Shanghai Likang Disinfectant
      High-Tech Company, Limited, a Chinese company ("Likang Disinfectant), whereby
      Linkwell Tech agreed to purchase a10% equity interest of Likang Disinfectant
      from Shanghai Shanhai Group, a non-affiliated Chinese entity ("Shanghai
      Shanhai"). Prior to the completion of this transaction, Linkwell Tech holds
      90%
      of the equity interest of Likang Disinfectant. On March 25, 2008, the parties
      agreed to enter into an amendment to the Disinfectant Stock Purchase Agreement
      (“Disinfectant Amendment”) in an effort to complete the stock purchase. Pursuant
      to the terms of the Disinfectant Amendment, the only material change to the
      Disinfectant Stock Purchase Agreement relates to the consideration paid by
      Linkwell Tech to Shanghai Shanhai for the remaining 10% equity interest, which
      was changed from 3,000,000 shares of Common Stock, to $380,000 and 1,500,000
      shares of Common Stock. The other terms of the Disinfectant Stock Purchase
      Agreement remain in full force and effect.


F-23