UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549




FORM
10-Q




QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934




For the
fiscal Quarter ended June 30, 2010


Commission
file number 000-52622




GREEN
      PLANET BIOENGINEERING CO. LIMITED(Exact
      Name of Registrant as Specified In Its Charter)
  DELAWARE
              
              37-1532842(State
      or Other Jurisdiction of
                Incorporation
      or Organization)
              
              (I.R.S.
      Employer Identification No.)
  19950
      W. Country Club Drive, Suite 100, Aventura, FL
  33180(Address
      of Principal Executive Offices)
            (Zip
      Code)  1
      305 328 8662(Registrant’s
      Telephone Number,
                Including
      Area Code)




Securities
registered under Section 12(b) of the Act




NONE




Securities
registered pursuant to Section 12(g) of the Act:




NONE




(Title of
Class)







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





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d0 of the act.  Yes o   No
x




Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the 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


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




Large
Accelerated Filer o   Accelerated
Filer o   Non-accelerated
Filer o   Smaller
Reporting Company x





Indicate
by check mark whether the registrant is a shell company (as defined in Exchange
Act Rule 12b-2).




Yes:
      o
            No:
      x




The
number of shares of common stock outstanding as of August 13, 2010 was
20,006,402.









TABLE OF
CONTENTS





Page
      NumberPART
      I
            
            FINANCIAL INFORMATIONItem
      1Condensed
      Consolidated Statements of Income and Comprehensive Income for the Three
      and Six Months Ended June 30, 2010 and 2009 (Unaudited)
            
            F-1Condensed
      Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and December
      31, 2009 (Audited)
            
            F-2Condensed
      Consolidated Statements of Cash Flows for the Six Months Ended June 30,
      2010 and 2009 (Unaudited)
            
            F-3Notes
      to Condensed Consolidated Financial Statements
            
            F-4-F-23Item
      2
            
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            
            4Item
      3
            
            Quantitative
      and Qualitative Disclosures about Market Risk
            
            15Item
      4
            
            Controls
      and Procedures
            
            15PART
      II
            
            OTHER
      INFORMATIONItem
      1
            
            Legal
      Proceedings
            
            17Item
      2
            
            Market
      for Common Equity and Related Stockholder Matters
            
            17Item
      3
            
            Defaults
      upon Senior Securities
            
            17Item
      4
            
            Submission
      of Matters to a Vote of Security Holders
            
            17Item
      5
            
            Other
      Information
            
            17Item
      6
            
            Exhibits
            
            18SIGNATURES
            
            19




2




FORWARD-LOOKING
STATEMENTS




This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934.  These
statements involve risks and uncertainties, including, among other things,
statements regarding our business strategy, future revenues and anticipated
costs and expenses.  Such forward-looking statements include, among
others, those statements including the words “expects,” “anticipates,”
“intends,” “believes,” “may,” “will,” “should,” “could,” “plans,” “estimates,”
and similar language or negative of such terms.  Our actual results
may differ significantly from those projected in the forward-looking
statements.  Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in Item 2
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations.”  You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this
report.  Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we do not know whether we can achieve
positive future results, levels of activity, performance, or
goals.  Actual events or results may differ materially.  We
undertake no obligation to publicly release any revisions to
the   forward-looking statements or reflect events or
circumstances taking place after the date of this document.




3




Green
Planet Bioengineering Co., Ltd.
  Condensed
Consolidated Financial Statements
 For the
three and six months ended
 June 30,
2010 and 2009
  (Stated
in US dollars)
  
  Green
Planet Bioengineering Co., Ltd.
 Condensed
Consolidated Financial Statements
 For
the three and six months ended June 30, 2010 and 2009
  Index to
Condensed Consolidated Financial Statements
  PagesCondensed
      Consolidated Statements of Income and Comprehensive Income
              
              F-1Condensed
      Consolidated Balance Sheets
              
              F-2Condensed
      Consolidated Statements of Cash Flows
              
              F-3Notes
      to Condensed Consolidated Financial Statements
              
              F-4
      - F-23
  
  Green
Planet Bioengineering Co
 Consolidated
Statements of Income and Comprehensive Income
 (Stated
in US dollars)
 Three
      Months ended June 30,
                    
                    
                    Six
      Months ended June 30,2010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009Revenues
                    
                    $
                    5,212,337
                    
                    
                    $
                    2,169,748
                    
                    
                    $
                    8,471,766
                    
                    
                    $
                    4,467,369Cost
      of sales
                    
                    
                    2,763,611
                    
                    
                    
                    988,587
                    
                    
                    
                    4,232,891
                    
                    
                    
                    1,841,273Gross
      profits
                    
                    
                    2,448,726
                    
                    
                    
                    1,181,161
                    
                    
                    
                    4,238,875
                    
                    
                    
                    2,626,096Operating
      expensesGeneral
      and administrative expenses
                    
                    
                    366,909
                    
                    
                    
                    267,760
                    
                    
                    
                    688,708
                    
                    
                    
                    494,811Research
      and development expenses
                    
                    
                    53,220
                    
                    
                    
                    36,573
                    
                    
                    
                    113,608
                    
                    
                    
                    73,039Selling
      and marketing expenses
                    
                    
                    111,788
                    
                    
                    
                    35,362
                    
                    
                    
                    286,099
                    
                    
                    
                    76,557531,917
                    
                    
                    
                    339,695
                    
                    
                    
                    1,088,415
                    
                    
                    
                    644,407Income
      from operations
                    
                    
                    1,916,809
                    
                    
                    
                    841,466
                    
                    
                    
                    3,150,460
                    
                    
                    
                    1,981,689Interest
      and financing expense
                    
                    
                    (30,992
                    )
                    
                    
                    (8,318
                    )
                    
                    
                    (40,201
                    )
                    
                    
                    (8,406
                    )Interest
      income
                    
                    
                    4,003
                    
                    
                    
                    1,423
                    
                    
                    
                    5,572
                    
                    
                    
                    1,672Other
      income
                    
                    
                    4,397
                    
                    
                    
                    -
                    
                    
                    
                    4,397
                    
                    
                    
                    -Income
      before income taxes
                    
                    
                    1,894,217
                    
                    
                    
                    834,571
                    
                    
                    
                    3,120,228
                    
                    
                    
                    1,974,955Provision
      for income taxes
                    
                    
                    (359,343
                    )
                    
                    
                    (218,714
                    )
                    
                    
                    (613,196
                    )
                    
                    
                    (516,373
                    )Net
      income
                    
                    
                    1,534,874
                    
                    
                    
                    615,857
                    
                    
                    
                    2,507,032
                    
                    
                    
                    1,458,582Earnings
      per share-
      Basic
                    
                    $
                    0.08
                    
                    
                    $
                    0.04
                    
                    
                    $
                    0.13
                    
                    
                    $
                    0.09-
      Diluted
                    
                    $
                    0.07
                    
                    
                    $
                    0.03
                    
                    
                    $
                    0.11
                    
                    
                    $
                    0.07Weighted
      average number of shares outstanding :-
      Basic
                    
                    
                    20,006,402
                    
                    
                    
                    15,589,367
                    
                    
                    
                    20,006,402
                    
                    
                    
                    15,498,546-
      Diluted
                    
                    
                    22,709,501
                    
                    
                    
                    20,017,704
                    
                    
                    
                    22,709,501
                    
                    
                    
                    19,984,454STATEMENT
      OF COMPREHENSIVE INCOMENet
      Income
                    
                    $
                    1,534,874
                    
                    
                    $
                    615,857
                    
                    
                    $
                    2,507,032
                    
                    
                    $
                    1,458,582Other
      comprehensive incomeUnrealized
      foreign currency gain (loss)
                    
                    
                    149,724
                    
                    
                    
                    (395
                    )
                    
                    
                    150,342
                    
                    
                    
                    (19,894
                    )Comprehensive
      income
                    
                    
                    1,684,598
                    
                    
                    
                    615,462
                    
                    
                    
                    2,657,374
                    
                    
                    
                    1,438,688
  See Notes
to Consolidated Financial Statements
  F-1
  Green
Planet Bioengineering Co
 Consolidated
Balance Sheets
 (Stated
in US dollars)
 June
      30, 2010
                      
                      
                      December
      31, 2009ASSETSCurrent
      assetsCash
      and cash equivalents
                      
                      $
                      3,850,624
                      
                      
                      $
                      791,775Receivables
                      
                      
                      3,484,985
                      
                      
                      
                      5,078,734Inventory
                      
                      
                      1,727,745
                      
                      
                      
                      1,203,490Deferred
      Taxes
                      
                      
                      77,718
                      
                      
                      
                      76,772Prepaid
      Expense and other receivables
                      
                      
                      848,346
                      
                      
                      
                      820,288Prepayments
      of operating leases
                      
                      
                      1,711,130
                      
                      
                      
                      1,711,130Total
      current assets
                      
                      
                      11,700,548
                      
                      
                      
                      9,682,189Property,
      plant and equipment, net
                      
                      
                      3,901,252
                      
                      
                      
                      3,507,538Land
      use rights
                      
                      
                      995,679
                      
                      
                      
                      1,000,428Intangible
      assets
                      
                      
                      852,406
                      
                      
                      
                      681,315Deposits
      for acquisition of intangible assets
                      
                      
                      258,055
                      
                      
                      
                      161,151Deferred
      taxes
                      
                      
                      22,919
                      
                      
                      
                      22,770Prepayments
      of operating leases
                      
                      
                      9,159,621
                      
                      
                      
                      7,790,914Available
      for sale securities
                      
                      
                      -
                      
                      
                      
                      5,000,000TOTAL
      ASSETS
                      
                      $
                      26,890,480
                      
                      
                      $
                      27,846,305LIABILITIES
      AND SHAREHOLDERS’ EQUITYLIABILITIESCurrent
      liabilitiesAccounts
      Payable and accrued liabilities
                      
                      $
                      1,757,103
                      
                      
                      $
                      557,155Other
      Payables and accrued expense
                      
                      
                      420,998
                      
                      
                      
                      541,371Amount
      due to related party
                      
                      
                      18,014
                      
                      
                      
                      16,189Amount
      due to stockholder - note 13
                      
                      
                      123,839
                      
                      
                      
                      34,528Deferred
      taxes
                      
                      
                      162,206
                      
                      
                      
                      148,581Secured
      loans from financial institution
                      
                      
                      589,840
                      
                      
                      
                      1,860,561Convertible
      loan payable - note 15
                      
                      
                      272,500
                      
                      
                      
                      190,000Loan
      from a related party - note 13
                      
                      
                      1,800,000
                      
                      
                      
                      -Income
      tax payable
                      
                      
                      317,053
                      
                      
                      
                      611,745Deferred
      revenue
                      
                      
                      63,408
                      
                      
                      
                      62,995Total
      current liabilities
                      
                      
                      5,524,961
                      
                      
                      
                      4,023,125TOTAL
      LIABILITIES
                      
                      $
                      5,524,961
                      
                      
                      $
                      4,023,125COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS’
      EQUITYPreferred
      stock : par value $0.001 per shareAuthorized
      : 10,000,000 sharesIssued
      and outstanding : 0 shares and 5,101
                      
                      
                      -
                      
                      
                      
                      5shares
      at June 30, 2010 and December 31, 2009Common
      stock : par value $0.001 per shareAuthorized
      : 250,000,000 sharesIssued
      and outstanding : 20,006,402 shares
                      
                      
                      20,006
                      
                      
                      
                      20,006at
      June 30, 2010 and December 31, 2009Additional
      paid-in capital
                      
                      
                      5,178,866
                      
                      
                      
                      10,293,896Statutory
      reserve
                      
                      
                      1,305,895
                      
                      
                      
                      1,305,895Accumulated
      other comprehensive income
                      
                      
                      1,609,318
                      
                      
                      
                      1,458,976Retained
      earnings
                      
                      
                      13,251,434
                      
                      
                      
                      10,744,402Total
      shareholders' equity of the company
                      
                      
                      21,365,519
                      
                      
                      
                      23,823,180TOTAL
      LIABILITIES AND SHAREHOLDERS’ EQUITY
                      
                      $
                      26,890,480
                      
                      
                      $
                      27,846,305
  See Notes
to Consolidated Financial Statements
  F-2
 Green
      Planet Bioengineering Co.Consolidated
      Statements of Cash Flows(Stated
      in US dollars)
 Six
      Months ended June 30,2010
                      
                      
                      2009Cash
      flows from operating activitiesNet
      Income
                      
                      $
                      2,507,032
                      
                      
                      $
                      1,458,582Adjustments
      to reconcile net income to netcash
      provided by operating activities :Depreciation
                      
                      
                      155,469
                      
                      
                      
                      108,271Amortization
      of intangible assets
                      
                      
                      54,559
                      
                      
                      
                      28,456Amortization
      of land use rights
                      
                      
                      11,300
                      
                      
                      
                      11,676Amortization
      of lease prepayments
                      
                      
                      1,052,864
                      
                      
                      
                      -Deferred
      taxes
                      
                      
                      12,679
                      
                      
                      
                      -Share-based
      compensation
                      
                      
                      -
                      
                      
                      
                      13,130Stock
      option expense
                      
                      
                      -
                      
                      
                      
                      -Changes
      in operating assets and liabilities :Accounts
      receivable, net
                      
                      
                      1,648,312
                      
                      
                      
                      680,549Prepaid
      and other current assets
                      
                      
                      (28,058
                      )
                      
                      
                      50,419Inventories
                      
                      
                      (524,255
                      )
                      
                      
                      (35,801
                      )Prepayments
      of operating leases
                      
                      
                      -
                      
                      
                      
                      (1,817,840
                      )Trade
      payables
                      
                      
                      1,199,948
                      
                      
                      
                      (75,710
                      )Other
      payables and accrued expenses
                      
                      
                      (147,923
                      )
                      
                      
                      (72,040
                      )Amount
      due to a related party
                      
                      
                      1,875
                      
                      
                      
                      1,759Amount
      due to a stockholder
                      
                      
                      8,208
                      
                      
                      
                      925Income
      tax payable
                      
                      
                      (294,692
                      )
                      
                      
                      (88,101
                      )Deferred
      revenue
                      
                      
                      -
                      
                      
                      
                      -Net
      cash flows provided by operating activities
                      
                      
                      5,657,318
                      
                      
                      
                      264,275Cash
      flows from investing activitiesPayments
      to acquire property, plant and equipment
                      
                      
                      (447,995
                      )
                      
                      
                      (211,913
                      )Deposits
      paid for acquisition of intangible assets
                      
                      
                      (96,904
                      )
                      
                      
                      (439,800
                      )Deposits
      paid for plantation base leases
                      
                      
                      (2,359,360
                      )
                      
                      
                      -Proceeds
      on sale of equipment
                      
                      
                      2,881
                      
                      
                      
                      -Purchase
      of intangible assets
                      
                      
                      (221,190
                      )
                      
                      
                      -Net
      cash flows used in investing activities
                      
                      
                      (3,122,568
                      )
                      
                      
                      (651,713
                      )Cash
      flows from financing activitiesProceeds
      from loan - related party
                      
                      
                      1,800,000
                      
                      
                      
                      -Proceeds
      from bank loans
                      
                      
                      589,840
                      
                      
                      
                      659,700Repayments
      of government loans
                      
                      
                      -
                      
                      
                      
                      (146,500
                      )Repurchase
      and cancellation of common shares
                      
                      
                      -
                      
                      
                      
                      -Repayments
      of bank loans
                      
                      
                      (1,860,561
                      )
                      
                      
                      -Repayment
      of notes payable
                      
                      
                      -
                      
                      
                      
                      -Reverse
      takeover capitalization
                      
                      
                      -
                      
                      
                      
                      -Exercise
      of warrants
                      
                      
                      -
                      
                      
                      
                      764Advances
      from a stockholder
                      
                      
                      -
                      
                      
                      
                      -Net
      cash flows provided by financing activities
                      
                      
                      529,279
                      
                      
                      
                      513,964Effect
      of foreign currency translation on cash and cash
    equivalents
                      
                      
                      (5,180
                      )
                      
                      
                      (711
                      )Net
      increase in cash and cash equivalents
                      
                      
                      3,058,849
                      
                      
                      
                      125,815Cash
      and cash equivalents - beginning of period
                      
                      
                      791,775
                      
                      
                      
                      665,568Cash
      and cash equivalents - end of period
                      
                      $
                      3,850,624
                      
                      
                      $
                      791,383Supplemental
      disclosures for cash flow information:Cash
      paid for interest
                      
                      $
                      62,161
                      
                      
                      $
                      8,174Cash
      paid for Income taxes
                      
                      $
                      899,252
                      
                      
                      $
                      599,456Supplemental
      disclosures of non cash activity:Cancellation
      of preferred stock
                      
                      $
                      5
                      
                      
                      $
                      -
   F-3
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  1.           
General information
  Green
Planet Bioengineering Co., Ltd, (the “Company”), formerly known as Mondo
Acquisition II, Inc, was incorporated in the State of Delaware on October 30,
2006.
  On
October 24, 2008, the Company entered into an agreement with the shareholders of
Elevated Throne Overseas Ltd. (“Elevated Throne”) to acquire their issued and
outstanding common stocks in Elevated Throne by issuing 14,141,667 shares of its
common stock. The acquisition, which was consummated on the same day,
constituted a reverse takeover transaction (“RTO”) and thereafter Elevated
Throne became a wholly-owned subsidiary of the Company.
  Elevated
Throne was incorporated in the British Virgin Islands (the “BVI”) on May 8, 2008
as a limited liability company with registered share capital of $50,000, divided
into 50,000 common shares of $1 par value each. Elevated Throne formed Fujian
Green Planet Bioengineering Co., Ltd. (“Fujian Green Planet”) as a wholly
foreign-owned enterprise under the laws of the People’s Republic of China (the
“PRC”) on July 25, 2008. Fujian Green Planet has a registered capital of
$2,000,000. Pursuant to Fujian Green Planet’s articles of association, Elevated
Throne is required to contribute $2,000,000 to Fujian Green Planet as capital.
The Company paid $300,000 and $1,700,000 on September 7, 2009 and February 19,
2010, respectively, to fully satisfy the business license requirement according
to the articles of association.
  PRC law
places certain restrictions on roundtrip investments through the
acquisition of a PRC entity by PRC residents.  To comply with these
restrictions, in conjunction with the RTO, the Company, via Fujian Green Planet,
entered into and consummated certain contractual arrangements with Sanming
Huajian Bio-Engineering Co., Ltd (“Sanming Huajian”) and their respective
stockholders pursuant to which the Company provides Sanming Huajian with
technology consulting and management services and appoints its senior executives
and approves all matters requiring shareholders’ approval.  As a
result of these contractual arrangements, which obligates Fujian Green Planet to
absorb a majority of the risk of loss from the activities of Sanming Huajian and
enables Fujian Green Planet to receive a majority of its expected residual
returns, the Company accounts for Sanming Huajian as a variable interest entity
(“VIE”) under FASB Interpretation No. 46R, “Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51” (the “VIE Arrangement”).
  Sanming
Huajian was organized under the laws of the PRC on April 16, 2004 under the name
of Sanming Zhonjian Biological Technology Industry Co., Ltd as a domestic
corporation.  It is classified as a non-joint capital stock
corporation and therefore the capital stock, consistent with most of the PRC
corporations, are not divided into a specific number of shares having a stated
nominal amount. Sanming Huajian is owned by Mr. Zhao Min, Ms. Zheng Minyan and
Jiangle Jianlong Mineral Industry Co., Ltd with equity interest of 35%, 36% and
29% respectively. Mr. Zhao and Ms. Zheng collectively own more than 90% of the
Company’s issued and outstanding common stock after the RTO.
  The
reverse takeover accounting was used to account for the RTO and the VIE
Arrangement as Sanming Huajian was under common control of Mr. Zhao and Ms.
Zheng before and after the VIE Arrangement. These financial statements, issued
under the name of the Company, represent the continuation of the financial
statements of Sanming Huajian.
  F-4
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  1.
              General
      information (Cont’d)
  Following
the RTO and the VIE Arrangement, the Company is primarily engaged in the
manufacture, marketing and sale of extracts from tobacco leaves
residues.  The Company’s products include Solanesol, Nicotine
Sulphate, organic pesticides, organic fertilizers, CoQ10 (raw format) and a
patented organic health supplement called “Paiqianshu”. Paiqianshu comes in both
liquid and pill forms and it is made from natural green barley shoot
extraction.  The Company operates manufacturing and distribution
primarily in the PRC.
  On
June 17, 2009, the Company entered into a Preferred Share Purchase
Agreement with ONE Bio Corp. (“ONE”) pursuant to which the Company agreed to
sell and ONE agreed to acquire 5,101 shares of the Company’s preferred stock
(“Preferred Stock”), with par value $0.001 per share. Each share of the
Preferred Stock shall (a) provide ONE with the right to vote 1,000 votes on all
matters submitted to a vote of the Company’s shareholders and (b) be convertible
into 1,000 shares of the Company’s common stock. ONE paid to the Company for the
said shares of Preferred Stock $5,000,000 which was paid by ONE through the
issuance to the Company of 1,004,807 common shares (post split), representing
4.9% of ONE’s issued and outstanding common stock. The transaction closed on
July 22, 2009 upon receipt of all required documents and stock
certificates.
  As part
of the transaction, the Company has also agreed that 35% of the ONE’s shares
issued to the Company shall be deposited into an escrow account in the event the
Company’s EBITDA for fiscal year 2009 is less than the Company’s EBITDA for
fiscal 2008, the number of shares of ONE’s stock issued to the Company shall be
proportionately reduced as provided for in the Preferred Stock Purchase
Agreement. The Company is also subject to a lockup and leak out period and has
one Piggy-Back Registration right as further defined in the Preferred Stock
Purchase Agreement.
  On April
14, 2010, we entered into an agreement with ONE Bio, Corp. pursuant to which,
among other things, (i) that certain Amended and Restated Green Planet Preferred
Stock Purchase Agreement made effective as of June 17, 2009, between us and ONE
Bio Corp. (“Amended and Restated GP Preferred Stock Agreement”) was cancelled,
(ii) we returned to ONE Bio Corp the 1,004,808 shares of ONE Bio, Corp. common
stock that were issued to us pursuant to the Amended and Restated GP Preferred
Stock Agreement, and (iii) ONE Bio Corp returned to us the 5,101 preferred
 shares of our stock that we issued to ONE Bio, Corp pursuant to the
Amended and Restated GP Preferred Stock Agreement.
  On April
14, 2010, we granted to ONE an option to acquire 100% of the stock of Elevated
Throne Overseas Ltd. (“Elevated Throne”), our 100% owned BVI subsidiary. In the
event ONE exercises this option, the closing of the transaction will be subject
to the approval of our stockholders. Furthermore, as a result of this event and
if the transaction is fully consummated, ONE will own 100% of Elevated Throne
and its subsidiaries which constitutes essentially all former operations of
Green Planet. Green Planet, in the event ONE exercises this option, will remain
a subsidiary of ONE and operate as a public shell corporation with the business
purpose to acquire or merge with an existing business operation.
  F-5
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.
              Summary
      of significant accounting policies
  Principles
of consolidation and basis of presentation
  The
accompanying consolidated financial statements of the Company have been prepared
in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”).
  The
consolidated financial statements include the accounts of the Company, its
subsidiaries and its 100% VIE Sanming Huajian. All significant intercompany
accounts and transactions have been eliminated.
  In
      the opinion of the management of the Company, all adjustments, which are
      of a normal recurring nature and necessary for a fair presentation of the
      results for the period ended June 30, 2010, have been made. These
      consolidated financial statements should be read in conjunction with the
      financial foot notes thereto and the Company’s Form 10K for the year ended
      December 31, 2009.
  Use
of estimates
  In
preparing the consolidated financial statements in conformity with U.S. GAAP,
management makes estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the dates of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting periods. These estimates and
assumptions include, but are not limited to, the valuation of trade receivables,
inventories, fair value of available-for-sale securities, deferred taxes and
stock-based compensation, and the estimation on useful lives and realizability
of intangible assets and property, plant and equipment. Actual results could
differ from those estimates.
  Fair
Value Measurements
  In April
2009, the Financial Accounting Standard Board (“FASB”) released ASC 820, Fair
Value Measurements and Disclosures,(formerly SFAS No. 157 “Fair
Value Measurements”) that defines fair value, establishes a framework for
measuring fair value in accordance with U.S. GAAP, and expands disclosures about
fair value measurements.
  According
to ASC 820, investment measured and reported at fair value are classified and
disclosed in one of the following hierarchy:
  Level
      1 -
              Quoted
      prices are available in active markets for identical investments as of the
      reporting date. The type of investments included in Level 1 included
      listed equities and listed
derivatives.
  Level
      2 -
              Pricing
      inputs are other than quoted prices in active markets, which are either
      directly or indirectly observable as of the reporting date, and fair value
      is determined through the use of models or other valuation
      methodologies.  Investments that are generally included in this
      category include corporate bonds and loans, less liquid and restricted
      equity securities and certain over-the-counter
  derivatives.
  F-6
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.
              Summary
      of significant accounting policies
(Cont’d)
  Level
      3 -
              Pricing
      inputs are unobservable for the investment and included situations where
      there is little, if any, market activity for the
      investment.  The inputs into the determination of fair value
      require significant management judgment or
  estimation.
  On April
14, 2010, we entered into an agreement with ONE Bio, Corp. pursuant to which,
among other things, (i) that certain Amended and Restated Green Planet Preferred
Stock Purchase Agreement made effective as of June 17, 2009, between us and ONE
Bio Corp. (“Amended and Restated GP Preferred Stock Agreement”) was
cancelled.
  The
Company had no investments according to the fair value hierarchy levels as of
June 30, 2010:
  Accumulated
other comprehensive income
  Accumulated
other comprehensive income in the consolidated balance sheet represents foreign
currency translation adjustment.
 
 Available-for-sale
securities
  Available-for-sale
securities include securities held for indefinite periods of time that are not
classified either as trading securities or as held-to-maturity securities.
Available-for-sale securities are recognized at cost and carried at fair value
in the balance sheet. Unrealized holding gains and losses are excluded from
earnings and recognized in a separate component of other comprehensive income,
net of the related tax effects, until realized.
  Convertible
loan
  The
Company’s convertible loan has non-detachable conversion feature, that were
in-the-money with a beneficial conversion feature as of the commitment date. At
issuance, the Company values separately the beneficial conversion features in
convertible loan. Beneficial conversion feature is recognized by allocating to
additional paid-in capital of the net proceeds from the sale of the convertible
loan equal to the intrinsic value of the beneficial conversion
feature.  Intrinsic value is calculated as the difference, as of the
commitment date, between the conversion price of the convertible loan and the
closing price of the Company’s common stock on the OTCBB, multiplied by the
number of shares of the Company’s common stock into which the convertible loan
is convertible. If the intrinsic value of the beneficial conversion feature is
greater than the net proceeds allocated to the convertible loan, the amount of
the discount assigned to the beneficial conversion feature is limited to the
amount of the proceeds.  Interest expense is recognized using the
effective interest method, meaning that any premium or discount upon issuance is
amortized over the life of the instrument.
  F-7
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.
              Summary
      of significant accounting policies
(Cont’d)
  Concentrations
of credit risk
  The
      Company has slightly broadened and changed its product portfolio and as a
      result, the Company has experienced a higher number of customers and less
      concentration of credit risk.
                  During
      the reporting periods, customers representing the highest sales revenue of
      the Company are as follows:
  Six
      months ended

                    June
      30,2010
                
                
                2009(unaudited)
                
                
                (unaudited)Customer
      A
                
                $
                1,886,887
                
                
                $
                727,770Customer
      B
                
                
                889,454
                
                
                
                682,604Customer
      C
                
                
                866,127
                
                
                
                614,262Customer
      D
                
                
                614,694
                
                
                
                532,901Customer
      E
                
                
                531,884
                
                
                
                293,200Customer
      F
                
                
                525,478
                
                
                
                253,649Customer
      G
                
                
                515,990
                
                
                
                219,494Customer
      H
                
                
                423,437
                
                
                
                203,082Customer
      I
                
                
                345,695
                
                
                
                199,995$
                6,599,646
                
                
                $
                3,725,957
  Concentrations
of credit risk (cont’d)
  Details
of customers which represent the highest value of the Company’s trade
receivables are:
  As
      ofJune
      30,
              
              
              December
      31,2010
              
              
              2009(unaudited)
              
              
              (audited)Customer
      A
              
              $
              1,054,044
              
              
              $
              681,506Customer
      B
              
              
              579,813
              
              
              
              671,062Customer
      C
              
              
              302,293
              
              
              
              645,347Customer
      D
              
              
              229,964
              
              
              
              620,080Customer
      E
              
              
              222,185
              
              
              
              547,485Customer
      F
              
              
              176,657
              
              
              
              533,982Customer
      G
              
              
              176,657
              
              
              
              323,852Customer
      H
              
              
              148,640
              
              
              
              300,199Customer
      I
              
              
              106,171
              
              
              
              169,794$
              3,026,535
              
              
              $
              4,493,217
  Cash
and cash equivalents
  Cash and
cash equivalents include all cash, deposits in banks and other highly liquid
investments with initial maturities of three months or less to be cash
equivalents. As of June 30, 2010 and December 31, 2009 almost all the cash and
cash equivalents were denominated in Renminbi (“RMB”) and were placed with banks
in the PRC. They are not freely convertible into foreign currencies and the
remittance of these funds out of the PRC is subject to exchange control
restrictions imposed by the PRC government.
  F-8
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.
              Summary
      of significant accounting policies
(Cont’d)
  Allowance
for doubtful accounts
  The
Company establishes an allowance for doubtful accounts based on management’s
assessment of the collectability of trade and other receivables.  A
considerable amount of judgment is required in assessing the amount of the
allowance; the Company considers the historical level of credit losses and
applies percentages to aged receivable categories. The Company makes judgments
about the creditworthiness of each customer based on ongoing credit evaluations,
and monitors current economic trends that might impact the level of credit
losses in the future. If the financial condition of the customers were to
deteriorate, resulting in their inability to make payments, a larger allowance
may be required.
  Based on
the above assessment, during the reporting periods, the management establishes
the following rates of general provision provided on gross amount of trade and
other receivables:
  RateAged
      within 1/2
      year
              
              0%Aged
      over 1/2 year
      but within 1 year
              
              5%Aged
      over 1 year but within 3 years
              
              20%More
      than 3 years
              
              100%
  Additional
specific provision is made against trade and other receivables aged less than 1
year to the extent which they are considered to be doubtful.
  Bad debts
are written off when identified. The Company extends unsecured credit to
customers ranging from three to six months in the normal course of business. The
Company does not accrue interest on trade accounts receivable.
  No
allowance for doubtful debts was provided for the six months ended June 30, 2010
and June 30, 2009, respectively.
  Inventories
  Inventories
are stated at the lower of cost or market value. Cost is determined on a
weighted-average basis and includes all expenditures incurred in bringing the
goods to the point of sale and putting them in a saleable
condition.  In assessing the ultimate realization of inventories, the
management makes judgments as to future demand requirements compared to current
or committed inventory levels. The Company’s reserve requirements generally
increase with its projected demand requirements; decrease due to market
conditions, product life cycle changes. During the reporting periods, all of the
Company’s products are saleable with high profit margins, the Company did not
make any allowance for slow-moving or defective inventories.
  No
allowance of obsolete inventories was provided for during the six months ended
June 30, 2010 and 2009.
  F-9
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.
              Summary
      of significant accounting policies
(Cont’d)
  Intangible
assets
  Intangible
assets are stated at cost less accumulated amortization. Amortization is
provided on a straight-line basis over their estimated useful lives. The
principal amortization periods are as follows:-
  Amortization
      periodTechnologies
              
              5
      to 10 yearsSoftware
              
              5
      years
  The
Company periodically reviews the original estimated useful lives of long-lived
assets and makes adjustments when appropriate. Intangible assets with finite
useful lives are tested for impairment whenever events or changes in
circumstances indicate that an asset’s carrying amount may not be recoverable.
The Company evaluates its intangible assets for impairment by comparing the
future undiscounted cash flows of the underlying assets to their respective
carrying amounts.
  Property,
plant and equipment
  Property,
plant and equipment are stated at cost less accumulated depreciation. Cost
represents the purchase price of the asset and other costs incurred to bring the
asset into its existing use.
  Depreciation
is provided on straight-line basis over their estimated useful lives. The
principal depreciable periods are as follows:
 DepreciableperiodBuildings
              
              20
      yearsPlant
      and machinery
              
              10
      yearsOffice
      equipment
              
              5
      yearsMotor
      vehicles
              
              5
      years
  Construction
in progress represents buildings and machinery under construction, which is
stated at cost less any impairment losses, and is not depreciated. Cost
comprises the direct costs of construction. Construction in progress is
reclassified to the appropriate category of property, plant and equipment when
completed and ready for use.
  Maintenance
or repairs are charged to expense as incurred.  Upon sale or
disposition, the applicable amounts of asset cost and accumulated depreciation
are removed from the accounts and the net amount less proceeds from disposal is
charged or credited to income.
  Land
use rights
  Land use
rights are stated at cost less accumulated amortization. Amortization is
provided using the straight-line method over the terms of the lease of 50 years
obtained from the relevant PRC land authority.
  Impairment
of long-lived assets
  Long-lived
assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be recoverable. The
Company recognizes impairment of long-lived assets in the event that the net
book values of such assets exceed the future undiscounted cash flows
attributable to such assets.  During the reporting periods, the
Company has not identified any indicators that would require testing for
impairment.
  F-10
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.           Summary
of significant accounting policies (Cont’d)
  Revenue
recognition
  The
Company generates revenue from sales of extracts from tobacco leaves residues.
Revenue is recognized when products are delivered and the customer takes
ownership and assumes risk of loss, collection of the relevant receivable is
probable, persuasive evidence of an arrangement exists and the sales price is
fixed or determinable.
  Deferred
revenue
  Deferred
revenue represents subsidy income received from the government. It mainly
consisted of receipt of granted funds to subsidize the Company’s research and
development activities and recognized as income when the relevant criteria are
met.
  Cost
of sales
  Cost of
sales consists primarily of materials costs, freight charges, purchasing and
receiving costs, inspection costs, wages, employee compensation, depreciation
and related costs, which are directly attributable to the production of
products.
  Selling
expenses
  Selling
expenses mainly consist of advertising, commission, entertainment, salaries, and
traveling expense which are incurred during the selling activities.
  Advertising
and research and development expenses
  Advertising
and research and development expenses are charged to expense as
incurred.
  Stock-based
compensation
  The
Company follows the provisions of ASC Topic 718 formerly SFAS No. 123R,
“Share-Based Payment”, which requires the use of the fair value method of
accounting for share-based compensation. Under the fair value based method,
compensation cost related to employee stock options or similar equity
instruments which are equity-classified awards, is measured at the grant date
based on the value of the award and is recognized over the requisite service
period, which is usually the vesting period. ASC Topic 718 also requires
measurement of cost of a liability-classified award based on its current fair
value.
  The fair
value of warrants granted is determined using the Black-Scholes model. Under
this model, certain assumptions, including the risk-free interest rate, the
expected life of the warrants and the estimated fair value of the Company’s
common stock and the expected volatility, are required to determine the fair
value of the warrants. If different assumptions had been used, the fair value of
the warrants would have been different from the amount the Company computed and
recorded, which would have resulted in either an increase or decrease in the
compensation expense.
  F-11
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.           Summary
of significant accounting policies (Cont’d)
 Income
taxes
  The
Company uses the asset and liability method of accounting for income taxes
pursuant to ASC Topic 740 formerly SFAS No. 109, “Accounting for Income Taxes”.
Under the asset and liability method of
SFAS 109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statements carrying amounts of existing assets and liabilities and loss carry
forwards and their respective tax bases.  Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.
  Off-balance
sheet arrangements
  The
Company does not have any off-balance sheet arrangements.
  Basic
and diluted earnings per share
  The
Company reports basic earnings per share in accordance with ASC Topic 260
formerly SFAS No. 128, “Earnings Per Share”. Basic earnings per share is
computed using the weighted average number of shares outstanding during the
periods presented. The weighted average number of shares of the Company
represents the common stock outstanding during the reporting
periods.
  Diluted
earnings per share are computed using the sum of weighted average number of
shares outstanding and dilutive potential shares outstanding during the periods
presented. During the six months ended June 30, 2010 and 2009, dilutive
potential shares included warrants issued to consultants.
  Comprehensive
income
  The
Company has adopted ASC Topic 220 formerly SFAS No. 130, “Reporting
Comprehensive Income”, which establishes standards for reporting and display of
comprehensive income, its components and accumulated
balances.  Components of comprehensive income include net income and
foreign currency translation adjustments.
  Foreign
currency translation
  The
functional currency of the Company is Renminbi (“RMB”) and RMB is not freely
convertible into foreign currencies. The Company maintains its financial
statements in the functional currency.  Monetary assets and
liabilities denominated in currencies other than the functional currency are
translated into the functional currency at rates of exchange prevailing at the
balance sheet dates.  Transactions denominated in currencies other
than the functional currency are translated into the functional currency at the
exchanges rates prevailing at the dates of the transactions. Exchange gains or
losses arising from foreign currency transactions are included in the
determination of net income/loss for the respective periods.
  For
financial reporting purposes, the financial statements of the Company which are
prepared using the functional currency have been translated into United States
dollars.  Assets and liabilities are translated at the exchange rates
at the balance sheet dates and revenue and expenses are translated at the
average exchange rates and stockholders’ equity is translated at historical
exchange rates. Any translation adjustments resulting from the above are not
included in determining net income but are included in accumulated other
comprehensive income, a component of stockholders’ equity. The average exchange
rates in effect as of June 30, 2010 and June 30, 2009 were 1USD for 6.83 RMB and
6.84 RMB, respectively. The exchange rate in effect as of December 31, 2009 was
1USD for 6.84 RMB. The source for the above exchange rate information is from
Oanda.com.
  F-12
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.           
Summary of significant accounting policies (Cont’d)
  Recently
issued accounting pronouncements
 In March
2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and
Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic
815-15, Derivatives and hedging. The amendments clarify about the scope
exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the
embedded credit derivatives. The ASU is effective on the first day of the first
fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end
entity, the ASU becomes effective on July 1, 2010. Early application is
permitted at the beginning of the first fiscal quarter beginning after March 5,
2010. The adoption of this guidance has not had and is not expected to have a
material impact on the Company’s consolidated financial statements.
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes”
(Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification
subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30,
2010 The President signed the Health Care & Education Affordable Care Act
reconciliation bill that amends its previous Act signed on March 23, 2010. FASB
Codification topic 740, Income Taxes, requires the measurement of current and
deferred tax liabilities and assets to be based on provisions of enacted tax
law. The effects of future changes in tax laws are not anticipated.” Therefore,
the different enactment dates of the Act and reconciliation measure may affect
registrants with a period-end that falls between March 23, 2010 (enactment date
of the Act), and March 30, 2010 (enactment date of the reconciliation measure).
However, the announcement states that the SEC would not object if such
registrants were to account for the enactment of both the Act and the
reconciliation measure in a period ending on or after March 23, 2010, but notes
that the SEC staff “does not believe that it would be appropriate for
registrants to analogize to this view in any other fact patterns.” The adoption
of this guidance has not had and is not expected to have a material impact on
the Company’s consolidated financial statements.
  In April
2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock
Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to
clarify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the
entity’s equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, an
entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this Update are effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2010. The amendments in this Update should be applied by recording a
cumulative-effect adjustment to the opening balance of retained earnings. The
cumulative-effect adjustment should be calculated for all awards outstanding as
of the beginning of the fiscal year in which the amendments are initially
applied, as if the amendments had been applied consistently since the inception
of the award. The cumulative-effect adjustment should be presented separately.
Earlier application is permitted. The adoption of this guidance has not had and
is not expected to have a material impact on the Company’s consolidated
financial statements.
  In April
2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for
Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB
accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR
78], Modernization of Oil and Gas Reporting and provides update as to amendments
to SEC Regulation S-X, Rule 4-10. The adoption of this guidance has not had and
is not expected to have a material impact on the Company’s consolidated
financial statements.
 
 F-13
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  2.           
Summary of significant accounting policies (Cont’d)
 
 Recently
issued accounting pronouncements (cont’d)
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial
Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how
investments through separate accounts affect an insurer’s consolidation analysis
of those investments. Under the ASU: an insurance entity should not consider any
separate account interests held for the benefit of policy holders in an
investment to be the insurer’s interests and should not combine those interests
with its general account interest in the same investment when assessing the
investment for consolidation, unless the separate account interests are held for
the benefit of a related party policy holder as defined in the Variable Interest
Entities Subsections of Subtopic 810-10 and those Subsections require the
consideration of related parties. The amendments in this Update are effective
for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2010. Early adoption is permitted. The amendments in this Update
should be applied retrospectively to all prior periods upon the date of
adoption. The adoption of this guidance has not had and is not expected to have
a material impact on the Company’s consolidated financial
statements.
  In April
2010, the FASB issued Accounting Standard Update No. 2010-16.
“Entertainment-Casinos” (Topic 924). ASU No.2010-16 addresses diversity in
practice regarding whether an entity accrues liabilities for a base jackpot
before it is won because they could avoid the payment. The amendments in this
update clarify that an entity should not accrue jackpot liabilities (or portions
thereof) before a jackpot is won if the entity can avoid paying that jackpot.
Jackpots should be accrued and charged to revenue when an entity has the
obligation to pay the jackpot. This guidance applies to both base and
progressive jackpots. The ASU amendments are effective for fiscal years, and the
interim periods within those fiscal years, beginning on or after December 15,
2010.  The adoption of this guidance has not had and is not expected
to have a material impact on the Company’s consolidated financial
statements.
  In April
2010, the FASB issued Accounting Standard Update No. 2010-17. “Revenue
Recognition-Milestone Method” (Topic 605) ASU No.2010-17 provides guidance on
defining a milestone and determining when it may be appropriate to apply the
milestone method of revenue recognition for research or development
transactions. An entity often recognizes these milestone payments as revenue in
their entirety upon achieving a specific result from the research or development
efforts. A vendor can recognize consideration that is contingent upon
achievement of a milestone in its entirety as revenue in the period in which the
milestone is achieved only if the milestone meets all criteria to be considered
substantive. Determining whether a milestone is substantive is a matter of
judgment made at the inception of the arrangement. The ASU is effective for
fiscal years and interim periods within those fiscal years beginning on or after
June 15, 2010. Early application is permitted. Entities can apply this guidance
prospectively to milestones achieved after adoption. However, retrospective
application to all prior periods is also permitted. The adoption of this
guidance has not had and is not expected to have a material impact on the
Company’s consolidated financial statements.
  F-14
 
 Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
 
 2.           Summary
of significant accounting policies (Cont’d)
  Recently
issued accounting pronouncements (cont’d)
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-18. “Receivables”
(Topic 310). ASU No.2010-18 provides guidance on accounting for acquired loans
that have evidence of credit deterioration upon acquisition. Paragraph
310-30-15-6 allows acquired assets with common risk characteristics to be
accounted for in the aggregated as a pool. Upon establishment of the pool, the
pool becomes the unit of accounting. When loans are accounted for as a pool, the
purchase discount is not allocated to individual loans; thus all of the loans in
the pool accrete at a single pool rate (based on cash flow projections for the
pool). Under subtopic 310-30, the impairment analysis also is performed on the
pool as a whole as opposed to each individual loan. Paragraphs 310-40-15-4
through 15-12 establish the criteria for evaluating whether a loan modification
should be classified as a troubled debt restructuring. Specifically paragraph
310-40-15-5 states that “a restructuring of a debt constitutes a troubled debt
restructuring for purposes of this subtopic if the creditor for economic or
legal reasons related to the debtor’s financial difficulties grants a concession
to the debtor that it would not otherwise consider.” The ASU is effective for
modification of loans accounted for within pools under subtopic 310-30 occurring
in the first interim or annual period ending on or after July 15, 2010. The
amendments are to be applied prospectively. Early application is permitted. The
adoption of this guidance has not had and is not expected to have a material
impact on the Company’s consolidated financial statements.
  In May
2010, the FASB issued Accounting Standard Update No. 2010-19 “Foreign Currency”.
(“ASU No. 2010-19”). ASU 2010-19, codifies the SEC staff announcement made at
the March 18, 2010, EITF meeting. The ASU “provides the SEC staff’s views on
certain foreign currency issues related to investments in Venezuela.” These
issues relate to Venezuela’s highly inflationary status. The ASU became
effective on March 18, 2010. The adoption of this guidance has not had and is
not expected to have a material impact on the Company’s consolidated financial
statements.
  3.Finance
costs
 Three
      months endedJune
      30
                
                
                Six months endedJune
      302010
                
                
                2009
                
                
                2010
                
                
                2009(unaudited)
                
                
                (unaudited)
                
                
                (unaudited)
                
                
                (Unaudited)Bank
      loan interest
                
                $
                27,583
                
                
                $
                -
                
                
                $
                62,161
                
                
                $
                -Other
      loan interest
                
                
                -
                
                
                
                8,174
                
                
                
                -
                
                
                
                8,174Bank
      charges
                
                
                325
                
                
                
                99
                
                
                
                1,400
                
                
                
                232Exchange
      loss
                
                
                2,600
                
                
                
                18
                
                
                
                3,656
                
                
                
                0$
                30,508
                
                
                $
                8,291
                
                
                $
                67,217
                
                
                $
                8,406
  4.
              Income
      taxes
  United
States
  The
Company is subject to the United States of America Tax law at tax rate of
40.7%.  No provision for the US federal income taxes has been made as
the Company had no taxable income in this jurisdiction for the reporting
periods. The Company has not provided deferred taxes on undistributed earnings
of its non-U.S. subsidiaries or VIE as of June 30, 2010 as it was the Company’s
current policy to reinvest these earnings in non-U.S. operations.
  BVI
  Elevated
Throne was incorporated in the BVI and, under the current laws of the BVI, is
not subject to income taxes.
  F-15
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  PRC
  The PRC’s
legislative body, the National People’s Congress, adopted the unified Corporate
Income Tax Law on March 16, 2007. This new tax law replaces the existing
separate income tax laws for domestic enterprises and foreign-invested
enterprises and became effective on January 1, 2008.  Under the new
tax law, a unified income tax rate is set at 25% for both domestic enterprises
and foreign-invested enterprises.
  Accordingly,
Fujian Green Planet and Sanming Huajian, both of which are established in the
PRC, are subject to PRC enterprise income tax at the rate of 25% on their
assessable profits during the six month periods ended June 30, 2010 and
2009.
  The
components of the provision for income taxes are:-
 Six
      months ended

                    June
      302010
                
                
                2009(unaudited)
                
                
                (unaudited)Current
      taxes - PRC
                
                $
                601,070
                
                
                $
                506,162Deferred
      taxes
                
                
                12,126
                
                
                
                10,211$
                613,196
                
                
                $
                516,373
  Deferred
tax assets as of June 30, 2010 and December 31, 2009 composed of the
following:-
  As
      ofJune
      30,
              
              
              December
      31,2010
              
              
              2009The
      PRC
              
              (unaudited)
              
              
              (audited)Current deferred tax
      assets :Decelerated
      amortization of land use rights
              
              $
              -
              
              
              $
              -Decelerated
      amortization of intangible assets
              
              
              4,424
              
              
              
              4,395Provision of
      expenses
              
              
              73,294
              
              
              
              72,378$
              77,718
              
              
              $
              76,773Non-current deferred
      tax assets :Accelerated
      amortization of intangible assets
              
              $
              18,801
              
              
              $
              18,679Provision of
      expenses
              
              
              4,118
              
              
              
              4,091$
              22,919
              
              
              $
              22,770Current
      deferred tax liabilitiesRental
      expenses capitalized in inventory
              
              $
              -
              
              
              $
              (148,581
              )Cost to be adjusted
      up due to tax exemption
              
              
              (162,206
              )
              
              
              -
 
 5.
              Earnings
      per share
  The basic
and diluted earnings per share are calculated using the net income and the
weighted average number of shares outstanding during the reporting periods. All
share and per share data have been adjusted to reflect the recapitalization of
the Company in the RTO.
  F-16
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  The
diluted earnings per share for the three and six months ended June 30, 2010 is
based on the net income for the periods and the weighted average number of
shares of 22,709,501 after adjusting for the number of 2,703,099 dilutive
potential common shares. This includes the conversion of warrants into common
stock.
  6.
              Inventories
  As
      ofJune 30,
              
              
              December 31,2010
              
              
              2009(unaudited)
              
              
              (audited)Raw
      materials
              
              $
              220,936
              
              
              $
              124,132Work-in-progress
              
              
              1,329,442
              
              
              
              1,022,630Finished
      goods
              
              
              177,367
              
              
              
              56,728$
              1,727,745
              
              
              $
              1,203,490
  7.
              Intangible
      assets
  As
      ofJune 30,
              
              
              December
      31,2010
              
              
              2009(unaudited)
              
              
              (audited)Technologies
              
              $
              1,098,577
              
              
              $
              871,680Software
              
              
              3,200
              
              
              
              3,1791,101,777
              
              
              
              874,859Accumulated
      amortization
              
              
              (249,371
              )
              
              
              (193,544
              )Net
              
              $
              852,406
              
              
              $
              681,315
  The
technologies were purchased from third parties for producing products -
Solanesol, Organic Green Barley Supplements (Paiqianshu), Resveratrol, 5-HTP,
Tanshinone and Q10 Health Supplements. The application for related patent is in
process and has been initially accepted by the relevant government
department.
  During
the six months ended June 30, 2010 and 2009, amortization charge was $54,559 and
$28,456 respectively. The additional estimated aggregate amortization expenses
for intangible assets for the five succeeding years are as follows:
  Year
      endingDecember31,2010
              
              $
              49,3502011
              
              
              92,2692012
              
              
              92,1622013
              
              
              92,1622014
              
              
              92,162$
              418,107
  F-17
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  8.
              Property,
      plant and equipment
  As
      ofJune 30,
                
                
                December 31,2010
                
                
                2009(unaudited)
                
                
                (audited)Cost:Buildings
                
                $
                1,938,884
                
                
                $
                1,926,273Plant
      and machinery
                
                
                1,271,326
                
                
                
                1,245,877Office
      equipment
                
                
                171,393
                
                
                
                110,816Motor
      vehicles
                
                
                209,753
                
                
                
                108,579Leasehold
      improvement
                
                
                88,476
                
                
                
                -3,679,832
                
                
                
                3,391,545Accumulated
      depreciation
                
                
                (898,686
                )
                
                
                (769,751
                )2,781,146
                
                
                
                2,621,794Construction
      in progress
                
                
                1,120,106
                
                
                
                885,744Net
                
                $
                3,901,252
                
                
                $
                3,507,538
  Construction
in progress mainly comprises of capital expenditure for construction of the
Company’s new office and machinery.
  During
the reporting periods, depreciation is included in:
  Three
      Months Ended
              
              
              Six
      Months EndedJune
              
              
              June
              
              
              June
              
              
              June2010
              
              
              2009
              
              
              2010
              
              
              2009Cost
      of Sales
              
              $
              39,678
              
              
              $
              32,783
              
              
              $
              78,411
              
              
              $
              72,476Administrative
      and R&D Expenses
              
              
              51,564
              
              
              
              22,997
              
              
              
              77,058
              
              
              
              45,980Total
              
              $
              91,242
              
              
              $
              55,780
              
              
              $
              155,469
              
              
              $
              118,456
  9.
              Land
      use rights
  As
      ofJune 30,
              
              
              December 31,2010
              
              
              2009(unaudited)
              
              
              (audited)Land
      use rights
              
              $
              1,129,889
              
              
              $
              1,122,540Accumulated
      amortization
              
              
              (134,210
              )
              
              
              (122,112
              )$
              995,679
              
              
              $
              1,000,428
  F-18
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  The
carrying amount of land use rights as of June 30, 2010 comprises of two land use
rights, which were acquired for building factories and offices, with carrying
amounts of $92,212 and $903,467 respectively.
  The legal
title of the first land use right with carrying amount of $92,212 has not yet
been transferred to the Company. The application of legal title is in the
process and the management expects there will be no legal hindrance in obtaining
the legal titles and no extra costs will be incurred.
  During
the three and six months ended June 30, 2010 amortization charge was $5,622 and
$11,235, respectively and was included in administrative expenses. The
amortization charge for the same periods last year was $5,840 and $6,848,
respectively. The additional estimated amortization charges of land use rights
for the five succeeding years are as follows:
  Year
      ending December31,2010
              
              $
              11,2992011
              
              
              22,5982012
              
              
              22,5982013
              
              
              22,5982014
              
              
              22,598$
              101,690
  10.
              Prepayments
      of operating lease
  The
prepayments represent the value of the land lease rights of $10,870,751, which
are associated with the lease obligation of the Company for land to promote the
Company’s newer product portfolio such as fertilizers and pesticides. The lower
cost of raw materials will fully or partially offset the cost for the new
operating leases.
  11.
              Available-for-sale
      securities
  The
amount represents 1,004,807 shares (post split) of ONE’s common stock (a 4.9%
interest) issued to the Company pursuant to the Preferred Share Purchase
Agreement, of which 35% of these share were deposited in an escrow (Note
1).
  There
were limited trading transactions of ONE’s shares in the market during the past
months and the fair value of ONE’s common stock held by the Company as of June
30, 2010 was determined by the management. The inputs into the determination of
fair value require significant management judgment and estimation.
  The
management determined the fair values of the ONE’s shares as of June 30, 2010
approximated their carrying value and no fair value changes had therefore been
recognized.
  On April
14, 2010, we entered into an agreement with ONE Bio, Corp. pursuant to which,
among other things, (i) that certain Amended and Restated Green Planet Preferred
Stock Purchase Agreement made effective as of June 17, 2009, between us and ONE
Bio Corp. (“Amended and Restated GP Preferred Stock Agreement”) was
cancelled.
  F-19
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  12.
              Other
      payables and accrued expenses
  As
      ofJune 30,
              
              
              December
      31,2010
              
              
              2009(unaudited)
              
              
              (audited)Rental
      payable
              
              $
              -
              
              
              $
              -Salaries
      payable
              
              
              71,770
              
              
              
              71,337Other
      accrued expenses
              
              
              244,523
              
              
              
              311,037Value-added
      tax payable
              
              
              104,705
              
              
              
              158,997Land
      use rights payable
              
              
              -
              
              
              
              -$
              420,998
              
              
              $
              541,371
  13.
              Amounts
      due and loan to a related party and a
  stockholder
  The
amounts due to a stockholder are interest-free, unsecured and repayable on
demand.
 In
February 2010 the Company obtained from a related party a loan in the amount of
$1,800,000, which carries an interest rate of 10% per annum. The unpaid balance
together with all accrued and unpaid interest thereon shall be due and payable
in January 2011. However, the parties have agreed that all accrued and unpaid
interest will be waived.
  14.
              Secured
      loans from a financial institution
  The
Company’s two loans in the total amount of $1,860,561 as of December 31, 2009,
both of which carried interest at the annual rate of 7.434% have been duly paid
off during the three months ended June 30, 2010. As a result, the Company’s
pledged plant, equipment, and land use rights are no longer in
effect.
  In June
2010, the Company entered into a short term loan agreement in the amount of
$589,840 with a financial institution. The loan is secured by a guarantee put up
by a guarantee company. In return, the Company has paid a counter guarantee of
20% of the loan amount, which is $117,968 to the guarantee company. However, the
guarantee deposit was not paid as of June 30, 2010. The guarantee company does
not require any collateral. The service fee charged by the guarantee company is
$9,244 in total.
  15.
              Convertible
      loan payable
  On June
22, 2009, the Company obtained $300,000 financing from ONE for general corporate
and working capital purposes. The financing was in the form of convertible loan
that carries interest at a rate of 10% per annum. Interest was accrued
commencing from September 1, 2009 and shall continue to accrue on a daily basis
until payment in full has been reached. The unpaid balance together with all
accrued and unpaid interest thereon shall be due and payable on September 1,
2010 or later with a minimum payment of 1.5 times of the loan. The settlement
may be convertible at the election of ONE into shares of the Company common
stock at a price of $0.5 per share.
  Since the
convertible loan has beneficial conversion features, the conversion option of
$165,000, valued separately by its intrinsic value, is recorded as an increase
to additional paid-in capital and $135,000 is recognized as convertible
loan.
  F-20
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  16.           Common
stock and preferred stock
  Common
stock
  The
Company did not issue any common stock or warrants for the six months ended June
30, 2010. In addition, the Company did not exercise any warrants during the same
period. The par value of the Company’s common stock is $0.001 per
share.
  Series
A preferred stock
  The
Company is authorized under its Articles of Incorporation to issue 10,000,000
shares of Series A preferred stock with a par value of $0.001 per share. Each
share of the Company’s preferred stock provided the holder with the right to
vote 1,000 votes on all matters submitted to a vote of the shareholders of the
Company and be convertible into 1,000 shares of the Company’s common stock. The
preferred stock is non-participating and carries no dividend.
  17.
              Statutory
      reserve
  The
Company’s statutory reserve comprise statutory reserve fund of Sanming Huajian.
In accordance with the relevant laws and regulations of the PRC, Sanming Huajian
and Fujian Green Planet are required to set aside at least 10% of their
after-tax net profit each year, if any, to fund the statutory reserve until the
balance of the reserve reaches 50% of their respective registered capital. The
statutory reserve is not distributable in the form of cash dividends and can be
used to make up cumulative prior year losses.
  18.
              Stock-based
      compensation
  Non-cash
stock-based compensation was $Nil and $13,130 for the three and six months ended
June 30, 2010 and June 30, 2009, respectively. During the twelve months
period endedDecember 31, 2009, the Company recognized total non-cash stock-based
compensation of $13,130 in connection with 404,000 shares of common stocks
issued to several management personnel of the Company in return for their
services rendered. $12,318, $487 and $325 of the stock-based compensation were
charged to the statement of income and comprehensive income as administrative
expenses, research and development expenses and selling expenses
respectively.
  There was
no warrants activity during the six months ended June 30, 2010. See below chart
referencing outstanding warrants as of June 30, 2010.
  Number
      of warrantsOutstanding
              
              
              
              
              
              
              
              
              Outstandingas
      of
              
              
              
              
              
              Granted/
              
              
              as
      ofExercise
              
              
              January
              
              
              
              
              
              forfeited/
              
              
              JuneMonth
      of grant
              
              price
              
              
              1,
      2010
              
              
              Exercised
              
              
              cancelled
              
              
              30,
      2010October
      2008
              
              $
              0.001
              
              
              
              152,599
              
              
              
              -
              
              
              
              -
              
              
              
              152,599152,599
              
              
              
              -
              
              
              
              -
              
              
              
              152,599
  F-21
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  19.
              Defined
      contribution plan
  Pursuant
to the relevant PRC regulations, the Company is required to make contributions
at a rate of 29% of the average salaries for the latest fiscal year-end of
Fujian Province to a defined contribution retirement scheme organized by a
state-sponsored social insurance plan in respect of the retirement benefits for
the Company’s employees in the PRC. The only obligation of the Company with
respect to retirement scheme is to make the required contributions under the
plan. No forfeited contribution is available to reduce the contribution payable
in the future years. The defined contribution plan contributions were charged to
the statement of income and comprehensive income.
  The
Company contributed $19,472 and $41,350 to the scheme for the three and six
months ended June 30, 2010, respectively, compared to $12,091 and $23,638 for
the three and six months ended June 30, 2009, respectively.
  20.
              Commitments
      and contingencies
  (a)           Capital
commitments
  (i)
              As
      of June 30, 2010 and December 31, 2009, the Company had capital
      commitments of $162,206 and $261,117, respectively, in respect of the
      acquisition of property, plant and equipment that were contracted but not
      provided for in the financial
statements.
  (ii)
              As
      of June 30, 2010 and December 31, 2009, the Company had capital
      commitments of $309,666 and $161,151, respectively, in regard to the
      acquisition of intangible assets that were contracted but not provided for
      in the financial statements.
  The
deposits for the acquisition of intangible assets represent prepayments to
certain academic institutions to acquire new technologies, which are still in
progress and not ready for use at the respective balance sheet dates. The
amounts will be transferred to intangible assets for amortization upon
completion of the development.
  (b)          Operating
lease arrangements
  As of
June 30, 2010, the Company had three non-cancelable operating leases for its
office premises and lands. The leases will expire at various dates through year
2011 to 2039 and the expected payments over the life of the leases as of June
30, 2010 were $59,196,036. The main part of the lease payments, approximately
$59,190,444, pertains to the Company’s use of the operating land leases for the
new product portfolio. The lower cost of raw materials will fully or partially
offset the cost for the new operating land lease.
  21.
              Segment
      information
  The
Company uses the “management approach” in determining reportable operating
segments. The management approach considers the internal organization and
reporting used by the Company’s chief operating decision maker for making
operating decisions and assessing performance as the source for determining the
Company’s reportable segments.  The Company is solely engaged in the
manufacture, marketing, sale and distribution of extracts from tobacco leaves
residues. Since the nature of the products, their production processes, the type
of their customers and their distribution methods are substantially similar,
management considers they are as a single reportable segment under ASC Topic
280-10-05 “Disclosures about Segments of an Enterprise and Related
Information”.
  F-22
  Green
Planet Bioengineering Co., Ltd
 Notes
to Condensed Consolidated Financial Statements
 (Unaudited)
 (Stated
in US Dollars)
  All of
the Company’s long-lived assets and revenues are classified based on customers
located in the PRC.
  22.
              Related
      party transactions
  Apart
from the transactions as disclosed in notes 13 and 15 to the condensed
consolidated financial statements, during the three and six months ended June
30, 2010, the Company recorded rental and motor vehicle expenses of $92,785 and
$97,496, respectively to a related company and a stockholder, who is also a
director of the Company, has a beneficial interest. The recorded expenses for
the same periods last year were $880 and $1,758, respectively.
  23.
              Subsequent
      event
  In July
of 2010, Sanming Huajian (the “company”) entered into a 2-year revolving loan
facility with a bank in China. As per the agreement, the Company is entitled to
RMB 12 million (approximately US$1,762,000) over a two year period. The loan is
secured by certain land use rights and property of the company.
  F-23




Part
      I
            FINANCIAL
      INFORMATION




Item
      2
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations




Overview




Green
Planet Bioengineering Co., Limited (“Green Planet”) (formally Mondo Acquisition
II, Inc.) was incorporated in the State of Delaware on October 30, 2006. Since
inception, we have been engaged in organizational efforts to obtain initial
financing. We were formed as a vehicle to pursue a business combination through
the acquisition of, or merger with, an operating business. We filed a
registration statement on Form 10-SB with the U.S. Securities and Exchange
Commission (the “SEC”) on May 2, 2007, and since its effectiveness, we have
focused our efforts to identify a possible business combination. On October 2,
2008, we changed our name to Green Planet.




On
October 24, 2008 (“Closing Date”), we executed and consummated a Share Exchange
Agreement by and among (i) Elevated Throne Overseas Ltd., a British Virgin
Islands limited liability company which is the parent company of FuJian Green
Planet Bioengineering Co., Ltd., a wholly foreign-owned enterprise (“WFOE”)
organized under the laws of the People’s Republic of China (“PRC”); (ii) the
stockholders of 100% of Elevated Throne Overseas Ltd.’s common stock (the
“Elevated Throne Overseas Ltd.’s Shareholders”); and (iii) our then-controlling
stockholder, Cris Neely (who owned 93.5%). Prior to the Share Exchange
Agreement, Mr. Min Zhao and Ms. Min Yan Zheng were the controlling persons of
Elevated Throne Overseas Ltd. (100%).  At closing, we acquired control
of Elevated Throne Overseas Ltd., by issuing to the Elevated Throne Overseas
Ltd.’s Shareholders (Mr. Zhao and Ms. Zheng) 14,141,667 shares of our Common
Stock in exchange for all of the outstanding capital stock of Elevated Throne
Overseas Ltd. (the “Transaction”). Immediately after the Closing Date of this
transaction, we had a total of 15,141,667 shares of common stock outstanding,
with the Elevated Throne Overseas Ltd.’s Shareholders owning approximately
93.40% of our outstanding common stock, and the balance held by those who held
the common stock prior to the Closing Date. Upon closing of the Transaction, Mr.
Min Zhao and Ms. Min Yan Zheng became our controlling shareholders and we no
longer were a “blank check” company.




Elevated
Throne Overseas Ltd. owns 100% of FuJian Green Planet Bioengineering Co., Ltd.,
which is a WFOE under the laws of the PRC. WFOE has entered into a series of
contractual arrangements with Sanming Huajian Bio-Engineering Co., Ltd., a
limited liability company headquartered in, and organized under the laws of, the
PRC. The PRC restructuring transaction closed as of October 24, 2008. Fujian
Green Planet Bioengineering Co., Ltd. is required under the agreements to
complete additional post-closing steps required in order to maintain its good
standing under PRC law. These steps include Fujian Green Planet Bioengineering
Co., Ltd. making required regulatory filings and giving proof to regulatory
authorities that it has received the required portion of its registered capital
as of the deadline required under PRC law. The Company paid $300,000 and
$1,700,000 on September 7, 2009 and February 19, 2010, respectively, to fully
satisfy the business license requirement according to the Company’s articles of
association and to comply with PRC law.




4





As a
result of the Reverse Merger Transaction, we acquired 100% of the capital stock
of Elevated Throne Overseas Ltd. and consequently, control of the business and
operations of Elevated Throne Overseas Ltd., FuJian Green Planet Bioengineering
Co., Ltd., and Sanming Huajian Bio-Engineering Co., Ltd. Prior to the Reverse
Merger Transaction, we were a public reporting “blank check” company in the
development stage. From and after the Closing Date of the Share Exchange
Agreement, we are no longer a “blank check” company and our primary operations
consist of the business and operations of Sanming Huajian Bio-Engineering Co.,
Ltd., which are conducted in China.




On July
22, 2009, Green Planet announced that majority control of the Company had been
acquired by ONE Bio, Corp. (“ONE”). ONE acquired in a series of transactions
approximately 80% of the outstanding shares of common stock of Green Planet on a
fully diluted basis. The transactions involved the acquisition of common shares
and warrants from the majority shareholders of Green Planet and the acquisition
by ONE of 5,101 Class A Preferred Shares of Green Planet. As a result of these
transactions, ONE has become the majority shareholder of Green Planet and based
upon the number of shares outstanding and assuming conversion of the Green
Planet preferred stock into common stock, ONE would own approximately 83% of
Green Planet’s shares.  Green Planet owns 100% of FuJian Green Planet
Bioengineering Co., Ltd., a WFOE, that through a series of contractual
arrangements has effective control of the business and operations of and has an
irrevocable option to purchase the equity and/or assets of Sanming Huajian
Bio-Engineering Co., Ltd. (a PRC company), a green process manufacturer of high
quality health supplements, organic fertilizers and
pesticides.  Consequently, Green Planet effectively controls the
business and operations of Sanming Huajian Bio-Engineering Co.,
Ltd.




On April
14, 2010, we entered into an agreement with ONE Bio, Corp. pursuant to which,
among other things, (i) that certain Amended and Restated Green Planet Preferred
Stock Purchase Agreement made effective as of June 17, 2009, between us and ONE
Bio Corp. (“Amended and Restated GP Preferred Stock Agreement”) was cancelled,
(ii) we returned to ONE Bio Corp the 1,004,808 shares of ONE Bio, Corp. common
stock that were issued to us pursuant to the Amended and Restated GP Preferred
Stock Agreement, and (iii) ONE Bio Corp returned to us the 5,101 preferred
 shares of our stock that we issued to ONE Bio, Corp pursuant to the
Amended and Restated GP Preferred Stock Agreement.




On April
14, 2010, we granted to ONE an option to acquire 100% of the stock of Elevated
Throne Overseas Ltd. (“Elevated Throne”), our 100% owned BVI subsidiary. In the
event ONE exercises this option, the closing of the transaction will be subject
to the approval of our stockholders. Furthermore, as a result of this event and
if the transaction is fully consummated, ONE will own 100% of Elevated Throne
and its subsidiaries which constitutes essentially all former operations of
Green Planet. Green Planet will remain a subsidiary of ONE and operate as a
public shell corporation with the business purpose to acquire or merge with an
existing business operation.




5




Business
Overview




Green
Planet headquartered in Aventura, FL with its main operations located in Sanming
and Fuzhou, China, is a high-tech bioengineering enterprise that engages in
research, development, production and marketing and sales of various organic
health and agricultural products originating, among other sources, from residues
of tobacco leaves. The Company’s products are Coenzyme Q10 (“CoQ10”), a health
supplement that supports the cardiovascular system and a patented organic health
supplement called “Paiqianshu”. Paiqianshu comes in both liquid and tablet forms
and it’s made from natural green barley shoot extraction. Furthermore, the
Company has added 5-HTP and Sarcandra to its product portfolio, which currently
are large sellers of the Company’s portfolio. In addition, the Company sells
Resveratrol and Genoderma tea. The Company’s business involves activities
covering the entire supply chain such as R&D, manufacturing, sales,
marketing, and distribution. The Company primarily sells its products in the PRC
(China).




Results
of Operations and Financial Condition




In this
Section, the Company will discuss the following: (i) results of operations and
financial condition for the six months ended June 30, 2010 versus the six months
ended June 30, 2009 and the three months ended June 30, 2010 versus the three
months ended June 30, 2009; (ii) liquidity and capital resources; (iii) a
discussion of the Company’s risk factors; and (iv) the Company’s critical
accounting policies.




Six
Months Ended June 30, 2010 versus June 30, 2009




Net
Sales


The
Company generated net sales of $8,471,766 for the six months ended June 30, 2010
compared to $4,467,369 for the six months ended June 30, 2009, an increase of
$4,004,397 or 90%. The increase in sales is mainly due to the Company’s
broadened product portfolio and the Company’s increased sales focus with its
additional sales staff compared to last year’s activities. The broader product
line caters to a higher number of customers. The Company’s two products 5-HTP
and Sarcandra have been large sellers during the six months ended June 30, 2010.
These products were not part of the Company’s product portfolio last year. The
Company anticipates the new products continue to grow in sales supported by
various marketing initiatives.




Cost
of Sales


The cost
of sales was $4,232,891 for the six months ended June 30, 2010 compared to
$1,841,273 for the six months ended June 30, 2009, an increase of $2,391,618.
The increase is mainly due to the significantly higher net sales. In addition,
the change in customer and product mix has attributed to the higher cost of
sales. We experienced a relatively stable raw material pricing during the two
measuring periods. Furthermore, the Company continues to have strong
relationships with its vendors.




Gross
profit


The gross
profit for the six months ended June 30, 2010 was $4,238,875 compared to
$2,626,096 for the same period of last year, an increase of $1,612,779 or 61%.
The gross profit margin was 50% and 59% for the six months ended June 30, 2010
and 2009, respectively.The Companycontinues to show
stability in its market pricing as well as continuity in its manufacturing
operations. The main reason for the higher gross profit is due to the Company’s
broader product portfolio catering to a larger number of customers, as a result
driving higher net sales. The main reason for the lower gross profit percentage
is due to that the higher sales volume has triggered certain volume discounts to
a few customers. The Company anticipates continuing to have a solid gross margin
percentage.




6




Selling
Expenses


Selling
expenses totaled $286,099 and $76,557 for the six months ended June 30, 2010 and
June 30, 2009, respectively. The main cost drivers were personnel costs, travel
and costs related to various marketing campaigns. The increase in the selling
expenses is mainly attributable to advertizing and trade show expenses which
totaled $151,899 for the six months ended June 30, 2010 in order to successfully
drive future sales and sales of new products. The Company has added sales staff
compared to the same period of last year with the intention of increasing sales
and to continue providing excellent customer service and retention.




Administrative
Expenses


Administrative
expenses amounted to $688,708 and $494,811 for the six months ended June 30,
2010 and June 30, 2009, respectively. The main expenses were attributable to
management and staff, accounting, audit fees and facilities expenses. The main
reasons for the increase are attributable to higher personnel costs due to the
increased number of employees that supports the overall growing business and
various administrative expenses related to the company’s trade show activities.
In addition, the Company reported non-cash impacting amortization and
depreciation costs of $114,640 for the six months ended June 30, 2010 compared
to $81,080 the same period last year.




Research
and Development Expenses


Research
and development (R&D) expenses totaled $113,608 and $73,039 for the six
months ended June 30, 2010 and June 30, 2009 respectively. The increase in
R&D expenses is due to the Company’s broader product line. The Company’s
efforts to broaden and strengthen its product portfolio will continue, however,
at a pace that is consistent with the economy and the increasing sales
activities.




Operating
Income


The
operating income amounted to $3,150,460 for six months ended June 30, 2010
compared to $1,981,689 for same period in 2009, which is an increase of 59%. The
main reason for the increase is due to the improved net sales and gross profit
resulting from the Company’s broader product portfolio and focused sales
activities.




Income
Taxes


Income
tax is accounted for using the tax effect accounting method, whereby the income
tax expense of the current period is determined based on the total amount of the
income tax payable for the period and the amount of the tax effect of timing
differences. The liability method is used in determining the tax effect of the
timing differences. The Company records its income taxes based on the
requirements of ASC 740, previously SFAS No. 109, “Accounting for Income Taxes,”
which includes an estimate of taxes payable or refundable for the current period
and deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in our financial statements or tax
returns.




7




Deferred
tax assets and liabilities reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The management
periodically assesses the deferred tax assets and the adequacy of deferred tax
liabilities, including the results of local, state, federal tax audits or
estimates and judgments used.





The
Company operates in the People’s Republic of China and is subject to its tax
laws. In accordance with the relevant tax laws and regulations of the People’s
Republic of China, the corporation income tax rate has been revised to 25%
across the board for all enterprises, whether domestic or foreign-owned from 33%
with effect from January 1, 2008. The Company is subject to the United States of
America Tax law at a tax rate of 40.7%. No provision for the US federal income
taxes has been made as the Company had no taxable income in this jurisdiction
for the reporting periods.




Net
Income


The net
income for the Company was $2,507,032 and $1,458,582 for the six months ended
June 30, 2010 and June 30, 2009 respectively. The increase in net income of
$1,048,450 is mainly due to the higher sales volume and increased gross profit.
However, the decrease in net profit margin is mainly due to a shift in the
product mix in order to drive higher sales. The Company’s belief is that when
the new products continue to increase in volume, the net profit margin will
increase due to economies of scale. The Company continues to show a strong net
income despite a global financial down turn.




Three
Months Ended June 30, 2010 versus June 30, 2009




Net
Sales


The
Company generated net sales of $5,212,337 for the three months ended June 30,
2010 compared to $2,169,748 for the three months ended June 30, 2009, an
increase of $3,042,589 or 140%. The increase in net sales is mainly due to a
broader product line which caters to a higher number of customers. The company’s
product 5-HTP and Sarcandra sold very well during the quarter with net sales of
$2,645,112. Additionally, the Company’s improved sales focus with its additional
sales staff compared to the last year’s activities contributed to the increased
net sales. The Company anticipates the new and broader product line continue to
grow in sales supported by various marketing initiatives.




Cost
of Sales


Cost of
sales was $2,763,611 for the three months ended June 30, 2010 compared to
$988,587 for the three months ended June 30, 2009, an increase of $1,775,024.
The increase is due to a higher volume in sales and the change in product and
customer mix. We experienced a relatively stable raw material pricing on
existing products during the two measuring periods. Furthermore, the Company
continues to have strong relationships with its vendors.




8




Gross
profit


The gross
profit for the three months ended June 30, 2010 was $2,448,726 compared to
$1,181,161 for the same period of last year, an increase of $1,267,565 or 107%.
The gross profit margin was 47% and 54% for the three months ended June 30, 2010
and 2009, respectively. The Companycontinues to show
stability in its market pricing as well as continuity in its manufacturing
operations. The main reason for the higher gross profit is due to the Company’s
broader product portfolio catering to a larger number of customers, as a result
driving higher net sales and gross profit. The main reason for the lower gross
profit percentage is due to that the higher sales volume has triggered certain
volume discounts to a few customers. The Company anticipates continuing to have
a solid gross margin percentage.




Selling
Expenses


Selling
expenses totaled $111,788 and $35,362 for the three months ended June 30, 2010
and June 30, 2009, respectively. The main cost drivers were personnel costs,
travel costs, and costs related to various marketing campaigns. The increase in
the selling expenses is partly attributable to advertizing and trade show
expenses which totaled $29,881 for the three months ended June 30, 2010 in order
to drive future sales and sales of new products. The Company has added sales
staff compared to the same period of last year with the intention of increasing
sales and providing excellent customer service, as a consequence the selling
expenses have increased.




Administrative
Expenses


Administrative
expenses amounted to $366,909 and $267,760 for the three months ended June 30,
2010 and June 30, 2009, respectively. The main expenses were attributable to
management and staff, accounting, audit fees and facilities expenses. The main
reasons for the increase are attributable to higher personnel costs due to the
increased number of employees that supports the overall growing business and
various administrative expenses related to the company’s trade show activities
in the current quarter. In addition, the Company reported non-cash impacting
amortization and depreciation costs of $48,950 for the three months ended June
30, 2010 compared to $41,897 the same period last year.




Research
and Development Expenses


Research
and development (R&D) expenses totaled $53,220 and $36,573 for the three
months ended June 30, 2010 and June 30, 2009 respectively. The increase in
R&D expenses is due to the Company’s broader product portfolio. The
Company’s efforts to broaden and strengthen its product portfolio will continue,
however, at a pace that is consistent with the economy and the increasing sales
activities.




Operating
Income


The
operating income amounted to $1,916,809 for the quarter ended June 30, 2010
compared to $841,466 for same quarter in 2009, which is an increase of
$1,075,343 or 128%. The higher net sales and gross profit contributed to the
increase in operating income mainly resulting from the Company’s broader product
line and increased sales focus. The operating income margin was 37% compared to
39% the same period last year.




9




Income
Taxes


Income
tax is accounted for using the tax effect accounting method, whereby the income
tax expense of the current period is determined based on the total amount of the
income tax payable for the period and the amount of the tax effect of timing
differences. The liability method is used in determining the tax effect of the
timing differences. The Company records its income taxes based on the
requirements of ASC 740, previously SFAS No. 109, “Accounting for Income Taxes,”
which includes an estimate of taxes payable or refundable for the current period
and deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in our financial statements or tax
returns.




Deferred
tax assets and liabilities reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The management
periodically assesses the deferred tax assets and the adequacy of deferred tax
liabilities, including the results of local, state, federal tax audits or
estimates and judgments used.





The
Company operates in the People’s Republic of China and is subject to its tax
laws. In accordance with the relevant tax laws and regulations of the People’s
Republic of China, the enterprise income tax rate has been revised to 25% across
the board for all enterprises, whether domestic or foreign-owned from 33% with
effect from January 1, 2008. The Company is subject to the United States of
America Tax law at a tax rate of 40.7%.  No provision for the US
federal income taxes has been made as the Company had no taxable income in this
jurisdiction for the reporting periods.




Net
Income


The net
income for the Company was $1,534,874 and $615,857 for the three months ended
June 30, 2010 and June 30, 2009 respectively. The increase in net income of
$919,017 or 149% is mainly due to the higher sales volume and the increased
gross profit. The minor increase in net profit margin is mainly due to the
Company’s newer product line and large sellers, especially 5-HTP and Sarcandra,
have shown the highest gross profit margins in the quarter ended June 30, 2010.
The Company’s belief is that when the new products continue to increase in
volume, the net profit margin will increase due to economies of
scale.




10




Liquidity
and Capital Resources


The
Company’s working capital and long-term funding primarily comes from operating
cash flow and loans, while the financial resources are used in capital
expenditures, operating activities and repayment of loans. Net cash flow
provided by operating activities amounted to $5,657,318 for the six months ended
June 30, 2010 compared to net cash flow provided by operating activities of
$264,275 for same period in 2009. The significantly higher cash inflow is mainly
due to $1,648,312 in reduced trade receivables and the increased net income of
$1,048,450. The customers buying the Company’s newer product portfolio are given
shorter credit terms than compared to the older product portfolio and customers
and thereby providing a stronger cash flow. In addition, the Company has been
able to negotiate longer credit terms with its vendors, which also contributed
to the improved cash flow from operating activities with $1,199,948. The
Company’s trade receivables totaled $3,484,985 as of June 30, 2010 compared to
$5,078,734 as of December 31, 2009. No allowance for doubtful receivables was
provided for the six months ended June 30, 2010. The Company believes it has a
strong and loyal customer base. The total inventory amounted to $1,727,745 and
$1,203,490 as of June 30, 2010 and December 31, 2009 respectively. The higher
inventory level is due to the Company’s overall increasing business and the
expected increased sales volumes. The main part of the inventory as of June 30,
2010 consists of work in progress and raw material, which totaled $1,550,378.
Future operations are estimated to be funded mainly by the Company’s strong net
income. In addition, the Company is continuing to work aggressively to reduce
its accounts receivables to further strengthen its cash position. The main part
of the Company’s cash outflow is estimated to pertain to R&D and
administrative expenses. In addition, based on the demand for the Company’s
products, the Company plans to add necessary equipment to its manufacturing
facility to match the market demand. However, this will be in strong correlation
with the product demand factor and the Company’s cash inflow and net income.
During the quarter ended June 30, 2010 the Company repaid two loans totaling
$1,860,561. Furthermore, the Company entered into a short term loan agreement in
the amount of $589,840with
a financial institution during the quarter ended June 30, 2010.  The
Company has no pledged property, plant and equipment as of June 30, 2010. As
further described in note 14 to the condensed consolidated financial statement,
the loanis
secured by a guarantee put up by a guarantee company. In return, the Company has
paid a counter guarantee of 20% of the loan amount, which is $117,968 to the
guarantee company. The guarantee company does not require any collateral. During
last year, the Company made an arrangement with the government to move part of
the land use rights to operating leases for other pieces of land to promote its
newer product portfolio. The carrying value was transferred to prepayments for
the new land leases. As further described in note 10 to the condensed
consolidated financial statement, the new operating leases commenced on July 1,
2009 and will be paid over 30 years.  The lower cost of raw materials
will fully or partially offset the cost for the new operating
leases.




Subsequent
Event




In July
of 2010, Sanming Huajian (the “company”) entered into a 2-year revolving loan
facility with a bank in China. As per the agreement, the Company is entitled to
RMB 12 million (approximately US$1,762,000) over a two year period. The loan is
secured by certain land use rights and property of the company.




Foreign
Currency Translation


The
Company’s operating entity, Sanming Huajian Bio-Engineering Co., Ltd.maintains
its financial statements in the functional currency of the People’s Republic of
China, which is the “Renminbi” (RMB). Monetary assets and liabilities
denominated in currencies other than the functional currency are translated into
the functional currency at rates of exchange prevailing at the balance sheet
dates. Transactions denominated in currencies other than the functional currency
are translated into the functional currency at the exchanges rates prevailing at
the dates of the transaction. Exchange gains or losses arising from foreign
currency transactions are included in the determination of net income for the
respective periods.




11




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




The
source for the below exchange rate information is from Oanda.com





Exchange
      Rates
            
            6/30/2010
            
            
            12/31/2009Fiscal
      period/year end RMB : US$ exchange rate
            
            
            
            6.78
            
            
            
            6.84Average
      period/yearly RMB : US$ exchange rate
            
            
            
            6.83
            
            
            
            6.84




The RMB:
US$ average exchange rate as of June 30, 2009 was 6.84.




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




Significant
Estimates




Critical
accounting polices include the areas where we have made what we consider to be
particularly subjective or complex judgments in making estimates and where these
estimates can significantly impact our financial results under different
assumptions and conditions.




We
prepare our financial statements in conformity with accounting principles
generally accepted in the United States of America. As such, we are required to
make certain estimates, judgments and assumptions that we believe are reasonable
based upon the information available. These estimates, judgments and assumptions
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the
periods presented. Actual results could be different than those
estimates.




Recent
Accounting Pronouncements




In March
2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and
Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic
815-15, Derivatives and hedging. The amendments clarify about the scope
exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the
embedded credit derivatives. The ASU is effective on the first day of the first
fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end
entity, the ASU becomes effective on July 1, 2010. Early application is
permitted at the beginning of the first fiscal quarter beginning after March 5,
2010. The adoption of this guidance has not had and is not expected to have a
material impact on the Company’s consolidated financial statements.




12




In April
2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes”
(Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification
subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30,
2010 The President signed the Health Care & Education Affordable Care Act
reconciliation bill that amends its previous Act signed on March 23, 2010. FASB
Codification topic 740, Income Taxes, requires the measurement of current and
deferred tax liabilities and assets to be based on provisions of enacted tax
law. The effects of future changes in tax laws are not anticipated.” Therefore,
the different enactment dates of the Act and reconciliation measure may affect
registrants with a period-end that falls between March 23, 2010 (enactment date
of the Act), and March 30, 2010 (enactment date of the reconciliation measure).
However, the announcement states that the SEC would not object if such
registrants were to account for the enactment of both the Act and the
reconciliation measure in a period ending on or after March 23, 2010, but notes
that the SEC staff “does not believe that it would be appropriate for
registrants to analogize to this view in any other fact patterns.” The adoption
of this guidance has not had and is not expected to have a material impact on
the Company’s consolidated financial statements.




In April
2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock
Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to
clarify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the
entity’s equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, an
entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this Update are effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2010. The amendments in this Update should be applied by recording a
cumulative-effect adjustment to the opening balance of retained earnings. The
cumulative-effect adjustment should be calculated for all awards outstanding as
of the beginning of the fiscal year in which the amendments are initially
applied, as if the amendments had been applied consistently since the inception
of the award. The cumulative-effect adjustment should be presented separately.
Earlier application is permitted. The adoption of this guidance has not had and
is not expected to have a material impact on the Company’s consolidated
financial statements.




In April
2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for
Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB
accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR
78], Modernization of Oil and Gas Reporting and provides update as to amendments
to SEC Regulation S-X, Rule 4-10. The adoption of this guidance has not had and
is not expected to have a material impact on the Company’s consolidated
financial statements.




In April
2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial
Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how
investments through separate accounts affect an insurer’s consolidation analysis
of those investments. Under the ASU: an insurance entity should not consider any
separate account interests held for the benefit of policy holders in an
investment to be the insurer’s interests and should not combine those interests
with its general account interest in the same investment when assessing the
investment for consolidation, unless the separate account interests are held for
the benefit of a related party policy holder as defined in the Variable Interest
Entities Subsections of Subtopic 810-10 and those Subsections require the
consideration of related parties. The amendments in this Update are effective
for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2010. Early adoption is permitted. The amendments in this Update
should be applied retrospectively to all prior periods upon the date of
adoption. The adoption of this guidance has not had and is not expected to have
a material impact on the Company’s consolidated financial
statements.




13




In April
2010, the FASB issued Accounting Standard Update No. 2010-16.
“Entertainment-Casinos” (Topic 924). ASU No.2010-16 addresses diversity in
practice regarding whether an entity accrues liabilities for a base jackpot
before it is won because they could avoid the payment. The amendments in this
update clarify that an entity should not accrue jackpot liabilities (or portions
thereof) before a jackpot is won if the entity can avoid paying that jackpot.
Jackpots should be accrued and charged to revenue when an entity has the
obligation to pay the jackpot. This guidance applies to both base and
progressive jackpots. The ASU amendments are effective for fiscal years, and the
interim periods within those fiscal years, beginning on or after December 15,
2010.  The adoption of this guidance has not had and is not expected
to have a material impact on the Company’s consolidated financial
statements.




In April
2010, the FASB issued Accounting Standard Update No. 2010-17. “Revenue
Recognition-Milestone Method” (Topic 605) ASU No.2010-17 provides guidance on
defining a milestone and determining when it may be appropriate to apply the
milestone method of revenue recognition for research or development
transactions. An entity often recognizes these milestone payments as revenue in
their entirety upon achieving a specific result from the research or development
efforts. A vendor can recognize consideration that is contingent upon
achievement of a milestone in its entirety as revenue in the period in which the
milestone is achieved only if the milestone meets all criteria to be considered
substantive. Determining whether a milestone is substantive is a matter of
judgment made at the inception of the arrangement. The ASU is effective for
fiscal years and interim periods within those fiscal years beginning on or after
June 15, 2010. Early application is permitted. Entities can apply this guidance
prospectively to milestones achieved after adoption. However, retrospective
application to all prior periods is also permitted. The adoption of this
guidance has not had and is not expected to have a material impact on the
Company’s consolidated financial statements.




In April
2010, the FASB issued Accounting Standard Update No. 2010-18. “Receivables”
(Topic 310). ASU No.2010-18 provides guidance on accounting for acquired loans
that have evidence of credit deterioration upon acquisition. Paragraph
310-30-15-6 allows acquired assets with common risk characteristics to be
accounted for in the aggregated as a pool. Upon establishment of the pool, the
pool becomes the unit of accounting. When loans are accounted for as a pool, the
purchase discount is not allocated to individual loans; thus all of the loans in
the pool accrete at a single pool rate (based on cash flow projections for the
pool). Under subtopic 310-30, the impairment analysis also is performed on the
pool as a whole as opposed to each individual loan. Paragraphs 310-40-15-4
through 15-12 establish the criteria for evaluating whether a loan modification
should be classified as a troubled debt restructuring. Specifically paragraph
310-40-15-5 states that “a restructuring of a debt constitutes a troubled debt
restructuring for purposes of this subtopic if the creditor for economic or
legal reasons related to the debtor’s financial difficulties grants a concession
to the debtor that it would not otherwise consider.” The ASU is effective for
modification of loans accounted for within pools under subtopic 310-30 occurring
in the first interim or annual period ending on or after July 15, 2010. The
amendments are to be applied prospectively. Early application is permitted. The
adoption of this guidance has not had and is not expected to have a material
impact on the Company’s consolidated financial statements.




14




In May 2010, the FASB issued Accounting Standard Update No. 2010-19 “Foreign
Currency”. (“ASU No. 2010-19”). ASU 2010-19, codifies the SEC staff announcement
made at the March 18, 2010, EITF meeting. The ASU “provides the SEC staff’s
views on certain foreign currency issues related to investments in Venezuela.”
These issues relate to Venezuela’s highly inflationary status. The ASU became
effective on March 18, 2010. The adoption of this guidance has not had and is
not expected to have a material impact on the Company’s consolidated financial
statements.
  Off-Balance
Sheet Arrangements
  We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
  Market
Risks
  The
Company operates in the People’s Republic of China, of which has its own
currency.  This may cause the Company to experience and be exposed to
different market risks such as changes in interest rates and currency
deviations.
  Item
      3
              Quantitative
      and Qualitative Disclosures about Market RiskNot
    ApplicableItem
      4
              Controls
      and Procedures
  Disclosure
Control and Procedures
  Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934, or the “Exchange Act,” is
recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms.  Disclosure controls and procedures
include without limitation, controls and procedures designed to ensure that
information required to be disclosed in company reports filed or submitted under
the Exchange Act is accumulated and communicated to management, including our
chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding disclosure.
  15
  The
Company’s management with the participation of the Company’s Chief Executive
Officer and Chief Financial Officer evaluated the effectiveness of the Company’s
disclosure controls and procedures as of June 30, 2010.  Based upon
this evaluation, the Company’s Chief Executive Officer and Chief Financial
Officer concluded that the Company’s disclosure controls and procedures were
effective and designed to ensure that material information required to be
disclosed by the Company in the reports that if files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and regulations and accumulated and
communicated to them as appropriate to allow timely decisions regarding required
disclosure.
  Management’s
Report on Internal Control over Financial Reporting
  Management
is responsible for establishing and maintaining adequate “internal control over
financial reporting” as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act.  Internal control over financial reporting refers to the
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer, and effected by our 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 principles, and
includes those policies and procedures that:
  i.
              pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of our
      assets;ii.
              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 are being made
      only in accordance with authorizations of our management and directors;
      andiii.
              provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on our financial
statements.
  As of
December 31, 2009 and as reported in our 10-K filing, management used the
framework set forth in the report entitled “Internal Control – Integrated
Framework” published by the Committee of Sponsoring Organizations of the Tread
way commission to evaluate the effectiveness of our internal control over
financial reporting. Based on its evaluation, our management concluded that at
June 30, 2010 there is a material weakness in internal control over financial
reporting.  A material weakness is a deficiency, or a combination of
control deficiencies, in internal control over financial reporting such that
there is a reasonable possibility that a material misstatement of the Company’s
annual or interim financial statements will not be prevented or detected on a
timely basis.
  The
Company’s material weakness in its internal control over financial reporting
relates to the monitoring and review of work performed in the preparation of
audit and financial statements, footnotes, and financial data provided to the
Company’s registered public accounting firm in connection with the annual
audit.  All of our financial reporting is carried out by the finance
manager and experienced outside consultants. The lack of accounting staff
results in a lack of segregation of duties necessary for an effective system of
internal control.  The material weakness identified did not result in
the restatement of any previously reported financial statements for 2009 and up
to June 30, 2010 or any other related financial disclosure, nor does management
believe that it had any effect on the accuracy of the Company’s financial
statements for the current reporting period.
  16
  In order
to mitigate this material weakness to the fullest extent possible, all quarterly
and annual financial reports are reviewed by the Chief Executive Officer and the
Board of Directors for reasonableness.  All unexpected results are
investigated.  At any time, if it appears that any control can be
implemented to continue to mitigate such weakness, it is immediately
implemented. We intend to implement appropriate procedures for monitoring and
review the work performed by our finance manager and outside consultants. The
Company is seeking a permanent placement for the Chief Financial Officer
position.
  During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.
  Part
      II
              OTHER
      INFORMATIONItem
      1
              Legal
      ProceedingsNoneItem
      2
              Market
      for Common Equity and Related Stockholder
  Matters
  The
Company’s common stock trades on OTC Bulletin Board’s (OTCBB) quotation system.
There has not been any sale of any unregistered securities for the period ended
June 30, 2010.
  Item
      3
                Defaults
      upon Senior SecuritiesNoneItem
      4
                Submission
      of Matters to a Vote of Security HoldersNoneItem
      5
                Other
      InformationNone  17
  Item
      6
                Exhibits(a)
                Exhibits
 31
              Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232
              Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
  (b)
                Reports
      on form 8-K
 The
Company filed the following reports on Form 8-K during the quarter for which the
report is filed.
  1. Form
8-K filed on April 19, 2010 announcing (i) the cancellation of the amended and
restated Green Planet preferred stock purchase agreement was cancelled, (ii) One
Bio returned to us the 5,101 shares of our preferred stock, and (iii) we
returned to One Bio the 1,004,808 shares of One Bio common stock that had been
issued to us.
  2. Form
8-K filed on April 19, 2010 announcing that we granted One Bio an option to
acquire 100% of Elevated Throne Overseas, Ltd., our 100% owned BVI subsidiary.
In the event One Bio exercises this option, the closing of the transaction will
be subject to the approval of our stockholders.
  18
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned; thereunto duly authorized this 13th day
of August, 2010.
  GREEN PLANET
      BIOENGINEERING CO., LTD.Date:
      August 23, 2010
                By:
                /s/ Min
      ZhaoMin
      ZhaoChief Executive
      Officer(Principal
      Executive Officer and Principal Financial Officer)