UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549






FORM
10-KSB/A


Amendment
No. 2






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





For
      the fiscal year ended December 31,
2007





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





For
      the transition period from
                  
      to





Commission
File Number: 000-50029





CHINA HEALTH RESOURCE,
INC.


f/k/a/
VOICE DIARY INC.


(Name
of Small Business Issuer in its Charter)


__________________




Delaware
            73-1629948(State
      or Other Jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
      No.)





343 Sui Zhou Zhong
Road


Sui Ning, Si Chuan Province,
P.R. China


(Address
of Principal Executive Offices)





+(86-825)
239-1788


(Issuer’s
Telephone Number)




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




Title
      of each class
            
            Name
      of each exchange on which registeredNone
            
            Not
      Applicable














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


Common
Stock, Class A & Class B, $.01 par value





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




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




Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
    YesxNo  ̈




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  x




The
Registrant’s revenues for its fiscal year ended December 31, 2007 were
$725,529.





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the issuer computed by reference to the close price of $.011
reported by brokers, as of April 14, 2008, was approximately
$901,636.





At April
14, 2008, in connection with the original filing of the registrant’s Annual
Report on Form 10-KSB, the registrant had outstanding 104,288,894 shares of par
value $.01 Class A Common Stock, of which approximately 81,966,906 shares were
held by non-affiliates, and 2,000 shares of par value $.01 Class B Common Stock,
of which none was held by non-affiliates.





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








DOCUMENTS
INCORPORATED BY REFERENCE:





None.




-2-




EXPLANATORY NOTE
  In
accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), we are filing this abbreviated Amendment No. 2 to
the Annual Report on Form 10-KSB (this “Form 10-KSB/A No. 2”) of China Health
Resource, Inc. f/k/a Voice Diary Inc. (the “Company”) for the fiscal year ended
December 31, 2007, previously filed with the Securities and Exchange Commission
(the “SEC”) on April 14, 2008 (the “2007 Form 10-KSB”), as amended by Amendment
No. 1, filed with the SEC on November 13, 2008, to effect the amendments
described below:
 
 (a)
                Part II, Item 7 -
      Financial Statements.  The Consolidated Statement of
      Equity (Deficit) for fiscal year 2007 and related footnotes have been
      retroactively restated to reflect the recapitalization, including all
      common stock amounts, in the periods affected;
  and
 
 (b)
                Part II, Item 8A -
      Controls and Procedures.  The disclosure in this Item has
      amended in light of the changes necessary to the registrant’s financial
      statements.
 
 In
addition, as required by Rule 12b-15 under the Exchange Act, new certifications
by the Company’s Principal Executive Officer and our Principal Financial and
Accounting Officer (the “Certifying Officers”) are being filed as exhibits to
this Form 10-KSB/A No. 2.
 
 Except
for the amendment described above, this Form 10-KSB/A No. 2 does not revise,
update, or in any way affect any information or disclosure contained in the 2007
Form 10-KSB and we have not updated the disclosures contained herein to reflect
events that occurred at a later date. Accordingly, this Form 10-KSB/A No. 2
should be read in conjunction with our SEC filings made subsequent to the 2007
Form 10-KSB.
 
 Part II, Item 7 - Financial
Statements.
  Item 7 - Financial Statements of the
2007 Form 10-KSB and related footnotes are hereby amended and restated to read
in its entirety as follows:
 
 The
consolidated financial statements include the accounts of Yin Fa, our wholly
owned subsidiary. The following selected financial data for the years ended
December 31, 2007 and 2006 is derived from our consolidated financial
statements, and should be read in conjunction with the consolidated financial
statements and related notes presented as a separate section commencing on page
F-1.
  -3-
 
 December 31,2007
              
              
              2006Balance
      SheetTotal
      Assets
              
              $
              3,941,487
              
              
              $
              1,649,617Total
      Liabilities
              
              
              978,935
              
              
              
              1,295,742Total
      Stockholders’ Equity
              
              
              2,962,552
              
              
              
              353,875Total
      Liabilities and Stockholders’ Equity
              
              
              3,941,487
              
              
              
              1,649,617Statements
      of Operations
  For
      years endedDecember 31,2007
              
              
              2006Revenue
              
              $
              725,529
              
              
              $
              1,038,528Operating
      Expenses
              
              
              724,453
              
              
              
              775,148Other
      Income
              
              
              230,225
              
              
              
              205,777Net
      Loss from Continued Operations
              
              
              (226,048
              )
              
              
              (303,694
              )Net
      Loss per Common ShareBasic
              
              
              **
              
              
              
              **Fully
      Diluted
              
              
              **
              
              
              
              **Weighted
      Average Common Shares OutstandingBasic
              
              
              87,369,637
              
              
              
              61,727,755Fully
      Diluted
              
              
              95,247,029
              
              
              
              82,412,993
 ** Less
than $.01
  -4-
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and Stockholders of China Health Resource, Inc.
 (FKA
Voice Diary Inc.) and Subsidiary
 
 We have
audited the accompanying balance sheets of China Health Resource, Inc. (FKA
Voice Diary Inc.) and Subsidiary (a Delaware corporation) as of December 31,
2007 and 2006 and related statements of operations, stockholders’ deficit, and
cash flows for the years ending December 31, 2007 and 2006. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of China Health Resource, Inc. and
Subsidiary (a Delaware corporation) as of December 31, 2007 and 2006 and the
results of its operations and its cash flows for years ended December 31, 2007
and 2006 in conformity with accounting principles generally accepted in the
United States of America.
  The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. The Company has suffered recurring losses and has
yet to generate an internal cash flow that raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note I. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  /s/ Lake & Associates,
CPA’s LLC
 Lake
& Associates, CPA’s LLC
 Boca
Raton, Florida
 April 10,
2008 except for Note O
 
 Except
for Footnote O, which was dated November 7, 2008
  F-1
  China
      Health Resource, Inc. and SubsidiaryConsolidated
      Balance SheetsAs
      of December 31, 2007 and 2006
  ASSETS
              
              2007
              
              
              2006CURRENT
      ASSETSCash
      and Cash Equivalents
              
              $
              36,127
              
              
              $
              179,868Accounts
      Receivable
              
              
              460,414
              
              
              
              388,079Note
      Receivable-Related Party
              
              
              628,390
              
              
              
              192,093Employee
      Advances
              
              
              7,197
              
              
              
              -Prepaid
      Expenses
              
              
              2,143,827
              
              
              
              351,343Inventory
              
              
              61,918
              
              
              
              6,104TOTAL
      CURRENT ASSETS
              
              
              3,337,873
              
              
              
              1,117,487FIXED
      ASSETSProperty,
      Plant, and Equipment
              
              
              717,831
              
              
              
              586,508Accumulated
      Depreciation
              
              
              (114,217
              )
              
              
              (54,379
              )TOTAL
      NET FIXED ASSETS
              
              
              603,614
              
              
              
              532,129TOTAL
      ASSETS
              
              $
              3,941,487
              
              
              $
              1,649,617LIABILITIES
      AND EQUITYCURRENT
      LIABILITIESAccounts
      Payable and Accrued Liabilities
              
              $
              207,957
              
              
              $
              893,208Other
      Payables
              
              
              -
              
              
              
              12,806Due
      to Shareholder
              
              
              83,258
              
              
              
              -Taxes
      Payable
              
              
              98,996
              
              
              
              3,061Notes
      Payable - Current Portion
              
              
              588,724
              
              
              
              185,471TOTAL
      CURRENT LIABILITIES
              
              
              978,935
              
              
              
              1,094,546LONG-TERM
      LIABILITIESNotes
      Payable
              
              
              -
              
              
              
              201,196TOTAL
      LONG-TERM LIABILITIES
              
              
              -
              
              
              
              201,196TOTAL
      LIABILITIES
              
              
              978,935
              
              
              
              1,295,742STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      Stock Class A ( 500,000,000 Shares Authorized,99,288,894
      Issued and Outstanding, par value $0.01)
              
              
              992,888
              
              
              
              636,036Common
      Stock Class B ( 8,344 shares authorized,2,000
      Issued and Outstanding, par value $0.01)
              
              
              20
              
              
              
              20Additional
      Paid in Capital
              
              
              2,195,469
              
              
              
              (212,578
              )Accumulated
      Other Comprehensive Income
              
              
              76,117
              
              
              
              15,292Retained
      Earnings (Deficit)
              
              
              (301,942
              )
              
              
              (75,894
              )TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)
              
              
              2,962,552
              
              
              
              353,875TOTAL
      LIABILITIES AND EQUITY
              
              $
              3,941,487
              
              
              $
              1,649,617The
      accompanying notes are an integral part of these financial
      statements.
  F-2
  China
      Health Resource, Inc. and SubsidiaryConsolidated
      Statement of OperationsFor
      the Years Ended December 31, 2007 and
2006
  2007
              
              
              2006REVENUESSales
              
              $
              725,529
              
              
              $
              1,038,528Cost
      of Sales
              
              
              401,480
              
              
              
              769,852GROSS
      PROFIT
              
              
              324,049
              
              
              
              268,676OPERATING
      EXPENSESSelling,
      General, and Administrative
              
              
              663,448
              
              
              
              721,465Interest
      Expense
              
              
              37,743
              
              
              
              25,081Distribution
      Costs
              
              
              23,262
              
              
              
              28,602TOTAL
      OPERATING EXPENSES
              
              
              724,453
              
              
              
              775,148OPERATING
      INCOME (LOSS)
              
              
              (400,404
              )
              
              
              (506,472
              )OTHER
      INCOME / (EXPENSES)Non-Operating
      Expenses
              
              
              -
              
              
              
              (1,241
              )Government
      Grants
              
              
              230,225
              
              
              
              207,018TOTAL
      OTHER INCOME / (EXPENSE)
              
              
              230,225
              
              
              
              205,777NET
      INCOME (LOSS) BEFORE TAXES
              
              
              (170,179
              )
              
              
              (300,695
              )INCOME
      TAX EXPENSE
              
              
              55,869
              
              
              
              2,999NET
      INCOME (LOSS) FROM CONTINUED OPERATIONS
              
              
              (226,048
              )
              
              
              (303,694
              )INCOME
      FROM DISCONTINUED OPERATIONS
              
              
              -
              
              
              
              148,461NET
      INCOME (LOSS)
              
              
              (226,048
              )
              
              
              (155,233
              )OTHER
      COMPREHENSIVE INCOME (LOSS)Foreign
      Currency Translation (Loss) Gain
              
              
              60,825
              
              
              
              -COMPREHENSIVE
      INCOME (LOSS)
              
              $
              (165,223
              )
              
              $
              (155,233
              )WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDINGBasic
              
              
              87,369,637
              
              
              
              61,727,755Fully
      Diluted
              
              
              95,247,029
              
              
              
              82,412,993NET
      LOSS PER COMMON SHAREBasic
              
              
              **
              
              
              
              **Fully
      Diluted
              
              
              **
              
              
              
              ****
      Less than $.01The
      accompanying notes are an integral part of these financial
      statements.
  F-3
  China
      Health Resource, Inc. and SubsidiaryConsolidated
      Statement of Cash FlowsFor
      the Years Ended December 31, 2007 and
2006
  2007
              
              
              2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Income After Income Tax
              
              $
              (226,048
              )
              
              $
              (155,233
              )Adjustments
      to Reconcile Net Income toNet
      Cash Used in Operating Activities:Common
      Stock Issued for Services
              
              
              2,074,346
              
              
              
              -Waiver
      of Subscription Receivable
              
              
              -
              
              
              
              10,000Depreciation
              
              
              59,838
              
              
              
              27,747Accounts
      Receivable
              
              
              (72,335
              )
              
              
              (38,519
              )Employee
      Advances
              
              
              (7,197
              )
              
              
              -Prepaid
      Expenses
              
              
              (1,792,484
              )
              
              
              (351,343
              )Inventory
              
              
              (55,814
              )
              
              
              83.670Accounts
      Payable and Accrued Liabilities
              
              
              (14,303
              )
              
              
              859,661Other
      payable
              
              
              (12,806
              )
              
              
              (80,501
              )Tax
      payable
              
              
              95,934
              
              
              
              3,060NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
              
              
              49,131
              
              
              
              356,703CASH
      FLOWS FROM INVESTING ACTIVITIES:Issuance
      of Note Receivable
              
              
              (436,297
              )
              
              
              (192,093
              )Proceeds
      from Notes Receivable
              
              
              433
              
              
              
              -Reverse
      merger with Yin Fa
              
              
              -
              
              
              
              4,416Purchase
      of property, plant, and equipment
              
              
              (131,323
              )
              
              
              (383,668
              )NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
              
              
              (567,187
              )
              
              
              (571,346
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from Issuance of Short-Term Note
              
              
              219,040
              
              
              
              -Proceeds
      from Shareholder Loan
              
              
              83,258
              
              
              
              -Retirement
      of Common Stock
              
              
              -
              
              
              
              (74,000
              )Proceeds
      from Issuance of Common Stock
              
              
              -
              
              
              
              400,000Note
      Payable from Related Party
              
              
              11,192
              
              
              
              44,055NET
      CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              313,490
              
              
              
              370,055FOREIGN
      CURRENCY TRANSLATION
              
              
              60,825
              
              
              
              14,306NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              (143,741
              )
              
              
              169,718CASH
      AND CASH EQUIVALENTS:Beginning
      of Period
              
              
              179,868
              
              
              
              10,150End
      of Period
              
              $
              36,127
              
              
              $
              179,868SUPPLEMENTAL
      CASH FLOW INFORMATION:Common
      Stock Issued for Settlement of Certain Accounts Payable
              
              $
              699,554
              
              
              $
              -Common
      Stock Issued for Services
              
              $
              2,074,346
              
              
              $
              -The
      accompanying notes are an integral part of these financial
      statements.
  F-4
  China
      Health Resource, Inc. and SubsidiaryConsolidated
      Statement of Equity (Deficit)For
      the Years Ended December 31, 2007 and 2006
  Common
      StockClass AShares
              
              
              par value0.01
              
              
              Class BShares
              
              
              par value0.01
              
              
              Additional Paid-inCapital
              
              
              SubscriptionReceivable
              
              
              Retained
                Earnings
                (Deficit)
              
              
              Accumulated
                Other
                Comprehensive
                Income
              
              
              TotalBalances,
      December 31, 2005
              
              
              60,000,000
              
              
              $
              60,000
              
              
              
              2,000
              
              
              $
              20
              
              
              $
              (515,958
              )
              
              $
              (10,000
              )
              
              $
              79,339
              
              
              $
              986-
              
              
              $
              154,387Waiver
      of subscription receivables
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              10,000
              
              
              
              -
              
              
              
              
              
              
              
              10,000Retired
      to treasury
              
              
              
              
              
              
              
              
              
              
              (744
              )
              
              
              (7
              )
              
              
              (73,993
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (74,000
              )Equity
      in reverse merger-Yin Fa
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              4,416
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              4,416Issuance
      in reverse merger with Yin Fa
              
              
              1,931,167
              
              
              
              19,312
              
              
              
              744
              
              
              
              7
              
              
              
              244,681
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              264,000Issuance
      in reverse merger with Yin Fa
              
              
              1,672,437
              
              
              
              16,724
              
              
              
              
              
              
              
              
              
              
              
              119,276
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              136,000Net
      Income (Loss) for the year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (155,233
              )
              
              
              -
              
              
              
              (155,233
              )Other
      comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              14,306
              
              
              
              14,306Balances,
      December 31, 2006
              
              $
              63,603,604
              
              
              $
              636,036
              
              
              $
              2,000
              
              
              $
              20
              
              
              $
              (221,578
              )
              
              $
              -
              
              
              $
              (75,894
              )
              
              $
              15,292
              
              
              $
              353,875Issuance
      for services rendered
              
              
              13,000,000
              
              
              
              130,000
              
              
              
              
              
              
              
              
              
              
              
              569,554
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              699,554Issuance
      for services rendered
              
              
              2,000,000
              
              
              
              20,000
              
              
              
              -
              
              
              
              -
              
              
              
              31,225
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              51,225Issuance
      of stock due to conversion
              
              
              20,685,238
              
              
              
              206,852
              
              
              
              (2,000
              )
              
              
              (20
              )
              
              
              (206,832
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Issuance
      for services
              
              
              -
              
              
              
              -
              
              
              
              2,000
              
              
              
              20
              
              
              
              2,023,101
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,023,121Net
      Income (Loss) for the period
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (226,048
              )
              
              
              -
              
              
              
              (226,048
              )Other
      comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              60,825
              
              
              
              60,825Balances,
      December 31, 2007
              
              $
              99,288,842
              
              
              $
              992,888
              
              
              $
              2,000
              
              
              $
              20
              
              
              $
              2,195,469
              
              
              $
              -
              
              
              $
              (301,942
              )
              
              $
              76,117
              
              
              $
              2,962,552The
      accompanying notes are an integral part of these financial
      statements.
  F-5
 China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Business
Activity
 
 China
Health Resource Inc., f/k/a Voice Diary Inc. (the “Company” or “CHRI”) was
incorporated in the State of Delaware on February 26, 2002. In June and July
2002, the Company acquired approximately 99% of the outstanding shares of Voice
Diary Ltd., an Israeli corporation (“VDL”), through the exchange of shares of
the Company with former shareholders of the Subsidiary. VDL was disposed of on
August 22, 2006 pursuant to the agreement between the Company, VDL and Arie
Hinkis, the former president of the Company. On May 21, 2007, the Company
changed its name to “China Health Resource Inc.”.
 
 On June
13, 2006, CHRI (“acquiree”) executed a Plan of Exchange with Sui Ning Shi Yin Fa
Bai Zhi Chan Ye You Xian Gong Si, a corporation organized and existing under the
laws of the Peoples’ Republic of China (“Yin Fa” or ‘acquirer”), the
shareholders of Yin Fa (the “Yin Fa Shareholders”) and the Majority Shareholder
of the CHRI, pursuant to which six simultaneous transactions were consummated at
closing, as follows: (1) settlement of the liabilities of CHRI, (2) a deposit of
7,977,023 (pre-split) new shares of Class A Common Stock and 2,000 new shares of
Class B Common Stock via hand delivery by Mr. Hinkis in exchange for a payment
of $264,000 in cash , (3) a deposit of 1,305,000 (pre-split) shares of Class A
Common Stock via hand delivery by Mr. Hinkis in exchange for a payment of
$136,000 in cash, (4) the issuance of  30,000,000 (post-split)
investment shares of Class A Common Stock of the Registrant to the Yin Fa
shareholders pursuant to Regulation S under the Securities Act of 1933, as
amended, in exchange for all of the shares of registered capital of Yin Fa, (5)
vending out the CHRI subsidiary after closing, and (6) retirement of 744 shares
of Class B Common Stock owned Mr. Hinkis at closing against payment of $74,000
and settlement of all unpaid salaries and severance pay to Mr. Hinkis in the
amount of $100,000, of which both amounts was taken from the payment made to
CHRI for the issued shares.
 The Plan
of Exchange was consummated on August 22, 2006; as a result, Yin Fa became a
wholly-owned subsidiary of CHRI. The transaction was treated for accounting
purposes as a capital transaction and recapitalization by the accounting
acquirer and as a re-organization by the accounting acquiree.
 
 Accordingly,
the consolidated financial statements include the following:
 
 (1)
              The
      balance sheet consists of the net assets of the acquirer at historical
      cost and the net assets of the acquiree at historical
  cost.(2)
              The
      statement of operations includes the operations of the acquirer for the
      periods presented and the operations of the acquiree from the date of the
      merger.
  Yin Fa
was founded on April 24, 2001 in China.  The main business plan
includes the manufacturing, processing, and sales of Dahurian Angelica Root
(DAR) and its related products.  DAR is one of the major herbs used in
Chinese traditional medicines.  In 2004 and 2005, the company and
Sichuan Yingfa Resource Development Co., Ltd., (Sichuan) began the process of
applying for Good Agricultural Practice of Medical Plants and Animals (GAP) for
DAR. The project passed the inspection of the State Food and Drug Administration
(SFDA), and the SFDA made the final, official announcement on February 26,
2006.
  F-6
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
 Business
Activity- cont’d
  A GAP
certificate means that the planning, quality, and manufacturing of
DAR
 meet a
high and certifiable standard.  The GAP certificate is in the name of
Sichuan and the company manages the processing and sales of DAR.
 CHRI and
its wholly owned subsidiary Yin Fa are hereafter referred to as (the
“Company”).
 
 Basis of
Presentation
  The
financial statements included herein were prepared under the accrual basis of
accounting.
 
 Cash and Cash
Equivalents
  For
purposes of the Consolidated Statement of Cash Flows, the Company considers
liquid investments with an original maturity of three months or less to be cash
equivalents.
 
 Management’s Use of
Estimates
  The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
 
 Revenue
Recognition
  Revenue
is recognized at the time the product is delivered and title has passed to the
customer. Cash discounts are recognized as an expense in the period in which it
actually occurs.  Sales allowances are recorded as a reduction of
revenue in the period in which they occur. Revenue is presented net of
returns.
 
 Comprehensive Income
(Loss)
  The
Company adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income,” which establishes standards for the reporting and display of
comprehensive income and its components in the consolidated financial
statements.
 
 Foreign
Currencies
  Assets
and liabilities denominated in respective functional currencies are translated
into United States Dollars at the exchange rate as of the balance sheet
date.  The share capital and retained earnings are translated at
exchange rates prevailing at the time of the transactions. Revenues, costs, and
expenses denominated in respective functional currencies are translated into
United States Dollars at the weighted average exchange rate for the period. The
effects of foreign currencies translation adjustments are included as a separate
component of accumulated other comprehensive income.
  F-7
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
  Company’s Future Operations
Are Dependent on Foreign Operations
  The
Company’s future operations and earnings will depend on the results of the
Company’s operations in China. There can be no assurance that the Company will
be able to successfully conduct such operations, and a failure to do so would
have a material adverse effect on the Company’s financial position, results of
operations, and cash flows.
 Company’s
Future Operations Are Dependent on Foreign Operations- cont’d
 
 Also, the
success of the Company’s operations will be subject to numerous contingencies,
some of which are beyond management’s control. These contingencies include
general and regional economic conditions, prices for the Company’s
products,
 competition,
and changes in regulation. Since the Company is dependent on international
operations, specifically those in China, the Company will be subject to various
additional political, economic, and other uncertainties. Among other risks, the
Company’s operations will be subject to the risks of restrictions on transfer of
funds; export duties, quotas, and embargoes; domestic and international customs
and tariffs; changing taxation policies; foreign exchange restrictions; and
political conditions and governmental regulations.
 
 Inventory
  Inventory
includes raw material, package material, low-value consumables and merchandise.
The Company adopts perpetual inventory system and inventories are recorded at
actual cost.  Raw material, package material and merchandise are
priced at cost upon acquisition, and with the weighted average method upon
issuance and shipment. Low-value consumables are amortized at 50% of the amount
upon application and amortized an additional 50% upon obsolescence.
 
 Property, Plant, and
Equipment
  Property,
plant, and equipment are recorded at cost, less accumulated depreciation and
impairment.  Repairs and maintenance expenditures, which are not
considered improvements and do not extend the useful life of property, plant,
and equipment, are expensed as incurred. The cost and related accumulated
depreciation, applicable to sold or no longer in service property, plant, and
equipment, are eliminated from the accounts and any gain or loss is included in
the statement of operations.
 
 Depreciation
is calculated to write-off the cost or basis of the property, plant, and
equipment over their estimated useful lives for the date on which they become
fully operational and after taking into account their estimated residual values
(salvage value), using the straight-line method, at the following rates per
year:
 
 Equipment
              Straight-line
      for 5 to 20 years with a 3% salvage
value
 Building
              Straight-line
      for 20 years with a 5% salvage
value
 
 The
Company recognizes an impairment loss on property, plant, and equipment when
evidence, such as the sum of expected future cash flows (undiscounted and
without interest charges), indicates that future operations will not produce
sufficient revenue to cover the related future costs, including depreciation,
and when the carrying amount of the asset cannot be realized through
sale.  Measurement of the impairment loss is based on the fair value
of the assets.
  F-8
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
  Income
Taxes
 
 Income
taxes are provided in accordance with Statement of Financial Accounting
Standards (SFAS) No. 109, “Accounting for Income
Taxes.”A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net operating loss
carry forwards.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that, and some portion or the entire
deferred tax asset will not be realized.  Deferred tax assets and
liabilities are adjusted for the effect of changes in tax laws and rates on the
date of enactment.
  Fair Value of Financial
Instruments
 
 The
carrying amounts reported in the consolidated balance sheet for cash, accounts
receivable, accounts payable, and loans payable approximate fair value based on
the short-term maturity of these instruments.  The carrying value of
the Company’s long-term debt approximated its fair value based on the current
market conditions for similar debt instruments.
 
 Accounts
Receivable
  Accounts
receivable are stated at estimated net realizable value.  Accounts
receivable are comprised of balances due from customers net of estimated
allowances for uncollectible accounts.  In determining the
collectablility of the account, historical trends are evaluated and specific
customer issues are reviewed to arrive at appropriate allowances.
 
 Impairment of Long-Lived
Assets
  The
Company evaluated the recoverability of its property and equipment, and other
assets in accordance with Statements of Financial Accounting Standards (SFAS)
No. 121, “Accounting for the
Impairment of Long-Lived Assets to be Disposed of,” which requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds the estimated future undiscounted cash flows attributable
to such assets or the business to which such intangible assets
relate.
 
 Stock-Based
Compensation
  Employee
stock-based compensation is accounted for in accordance with Accounting
Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees” (“APB 25”) and the FASB interpretations thereof. Pursuant to
those accounting pronouncements, compensation is recorded for share options
granted to employees at the date of grant based on the difference between the
exercise price of the options and the market value of the underlying shares at
that date. Due to the terms of the grants, the fair value of the compensation in
accordance with SFAS No. 123R, "Accounting for Stock-Based
Compensation" approximates the values computed in accordance with APB No.
25. Stock-based compensation to non-employees is accounted for in accordance
with SFAS No. 123R. Under both accounting pronouncements, as part of the
necessary computations, management is required to estimate the fair value of the
underlying shares. Fair value has generally been determined by management, as
the price at which the Company's shares were issued at the most recent prior
placement of the Company's Common Stock. Since the Company was approved for
listing on the Over the Counter Bulletin Board - fair value is determined
according to stock market price. The timing of the grant and measurement of
stock-based awards will not have a material effect on the Company's results of
operations and financial position.  Since no stock-based awards
exist.
  F-9
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
 Recently Issued Accounting
Pronouncements
  In
February 2007, the FASB issued Statement of Financial Accounting Standard No.
159, “The Fair Value Option
for Financial Assets and Financial Liabilities” (“SFAS No. 159”). This
statement permits entities to choose to measure many financial instruments and
certain other items at fair value. Companies should report unrealized gains and
losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. This statement is effective as of the beginning
of an entity’s first fiscal year that begins after November 15, 2007. The
Company is currently assessing the potential impact, if any, for the adoption of
SFAS No.159 on its consolidated financial statements.
 
 In
December 2007, the FASB issued two new statements: (a.) SFAS No. 141(revised
2007), Business
Combinations, and (b.) No. 160, Noncontrolling Interests in
Consolidated Financial Statements. These statements are effective for
fiscal years beginning after December 15, 2008 and the application of these
standards will improve, simplify and converge internationally the accounting for
business combinations and the reporting of noncontrolling interests in
consolidated financial statements. The Company is in the process of evaluating
the impact, if any, on SFAS 141 (R) and SFAS 160 and does not anticipate that
the adoption of these standards will have any impact on its consolidated
financial statements.
 
 (a.)  SFAS
No. 141 (R) requires an acquiring entity in a business combination to: (i)
recognize all (and only) the assets acquired and the liabilities assumed in the
transaction, (ii) establish an acquisition-date fair value as the measurement
objective for all assets acquired and the liabilities assumed, and (iii)
disclose to investors and other users all of the information they will need to
evaluate and understand the nature of, and the financial effect of, the business
combination, and, (iv) recognize and measure the goodwill acquired in the
business combination or a gain from a bargain purchase.
 
 (b.) SFAS
No. 160 will improve the relevance, comparability and transparency of financial
information provided to investors by requiring all entities to: (i) report
noncontrolling (minority) interests in subsidiaries in the same manner, as
equity but separate from the parent’s equity, in consolidated finan
 
 NOTE B - SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the period ended December 31, 2007 and
2006 is summarized as follows:
 
 Cash paid
during the period ended December 31, 2007 and 2006 for interest and income
taxes:
  2007
                
                
                2006Income
      Taxes
                
                $
                -0-
                
                
                
                -0-Interest
                
                $
                -0-
                
                
                
                -0-
   F-10
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE C - SEGMENT
REPORTING
 
 In June
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related Information.”
  This
statement requires companies to report information about operating segments in
interim and annual consolidated financial statements.  It also
requires segment disclosures about products and services, geographic areas, and
major customers.  The Company determined that it did not have any
separately reportable operating segments as of December 31, 2007 and
2006.
 
 NOTE D - NOTE
RECEIVABLE
 
 As of
December 31, 2006, the company has a note receivable from a related-party with a
total balance due of $192,093. The note is due on May 29, 2007 with interest at
6.12%.
 
 As of
December 31, 2007, the company has a note receivable from a related-party with a
total balance due of $191,660. The note is due on May 29, 2007 with interest at
6.12%.
 
 As of
December 31, 2007, the company has a note receivable from a related-party with a
total balance due of $436,730. The note is due on December 31,
2008.
 
 NOTE E - NOTES PAYABLE -
CURRENT AND LONG-TERM
 
 As of
December 31, 2007 and 2006, notes payable consist of the following:
  2007
                
                
                2006Secured
      note payable to an unrelated party.Bearing
      6.3 % interest Principal payments due12/31/2008
      one payment of $ 198,270
                
                $
                198,270
                
                
                
                370,940Unsecured
      note payable –unrelated partyBearing
      10.925 % interest Principal payment due09/20/2008
                
                $
                219,040
                
                
                
                -0-Unsecured
      note payable –unrelated partyBearing
      2.4 % interest Principal payments due
                
                $
                171,414
                
                
                
                -0-10/31/2008TOTAL
                
                $
                588,724
                
                
                
                370,940
  F-11
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE E - NOTES PAYABLE -
CURRENT AND LONG-TERM (CONT'D)
 Future
payments on note due as follow:
 
 Before
      December 31, 2008
                
                
                588,724
                
                
                
                198,270TOTAL
                
                $
                588,724
                
                
                $
                198,270
  NOTE F -
COMMITMENTS
 
 The
Company leases its warehouse for approximately $1,478 per year, which expires
March 14, 2008.
  Future
      annual lease payments are as follows:March
      15, 2007 to March 14, 2008
              
              $
              1,478TOTAL
              
              $
              1,478
  The
Company leases farm land of approximately 861,000 sq feet from a cooperative of
farmers.  The lease expires in December 2017. Total Rent Expense for
December 31, 2007 was $6,455.
  Future
      annual lease payments are as follows:Year
      Ending December 31, 2008
              
              $
              6,4552009
              
              
              6,4552010
              
              
              6,4552011
              
              
              6,4552012
              
              
              6,4552013
      and beyond
              
              
              32,275TOTAL
              
              $
              64,550
  The
Company leases its office space of approximately 3,600 sq feet for sales and
marketing.  The lease commences in July 2007 and expires in June 2027.
Total Rent Expense for the year ended December 31, 2007
was $34,719.
 
 Future
      annual lease payments are as follows:
  Year
      Ending December 31, 2008
              
              $
              46,2922009
              
              
              46,2922010
              
              
              46,2922011
              
              
              53,7852012
              
              
              62,750TOTAL
              
              $
              1,999,975
 
 F-12
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE G - RELATED-PARTY
TRANSACTIONS
 
 The
former shareholders of the Company were Sichuan Suining Yingfa Resource
Development Group Co., Ltd., Suining Yingfa Construction Materials Company Ltd,
and Sichuan Yingfa Resource Development Co., Ltd. (the Yingfa group). According
to the Temporary Resolution of the Shareholders' Meeting of the Company held on
January 20, 2006, the company has had a capital restructuring as mentioned in
Note L.  Related-party transactions between the Company and Yingfa
group from 2004 to January 20, 2006 are listed below:
 
 Related-Party
Transactions- cont’d
 
 The GAP
certificate is owned by the Yingfa Group, namely Sichuan Yingfa Resource
Development Co., Ltd. GAP is a quality standard for agricultural products such
as DAR.  The GAP certificate means high and certifiable standard. The
Company is the virtual manufacturer and seller of DAR.
 
 The
Company trademark for its “Bailing Capsules” is “Zhiwang” which Sichuan owns and
has applied for registration.  Sichuan is waiting for approval by
State Industrial and Commercial Administration General Bureau Trademark
Bureau.
 
 The
office building was purchased from the Yingfa group. The land use right of the
building was transferred from the Yingfa group to the Company.
 
 Government
grants and loans were obtained by the Yingfa group.
 
 As of
December 31, 2006, the company has a note receivable from a related-party with a
total balance due of $192,093. The note is due on May 29, 2007 with interest at
6.12%.
 
 As of
December 31, 2007, the company has a note receivable from a related-party with a
total balance due of $191,660. The note is due on May 29, 2007 with interest at
6.12%.
 
 As of
December 31, 2007, the company has a note receivable from a related-party with a
total balance due of $436,730. The note is due on December 31,
2008.
 
 On August
15, 2007, the Company's Board of Directors approved to pay for the total rent of
a 20-year leasing property by the issuance of 2,000 shares of Class B Common
Stock to Lian, Xiao Jian, the owner of a property. Pursuant to the terms and
conditions of the Contract of Lease Property, dated June 29, 2007, the total
payment of the rent for 20 years leasing period is $2,023,121 and the leasing
property is approximately 3,600 square feet. The lease commences in July 2007
and expires in June 2027. Total rent expense for the year ended December 31,
2007 was $23,146.
  F-13
 China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE H -COMPREHENSIVE
INCOME
 
 Statement
of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income,” establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income as defined
includes all changes in equity during a period from non-owner sources.
Accumulated comprehensive income, as presented in the accompanying statement of
changes in stockholders’ equity consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income is not
included in the computation of income tax expense or benefit. For the years
ended December 31, 2007 and 2006, total comprehensive income was $60,825 and
$14,306, respectively.
  NOTE I - GOING
CONCERN
 
 As shown
in the accompanying audited financial statements, the Company has a deficit book
value and a negative cash flow from operations that have placed substantial
doubt as to whether the Company can continue as a going concern. The ability of
the Company to continue as a going concern is dependent on developing
operations, increasing revenues, and obtaining new capital. Management has
enacted a plan to raise capital and increase sales.
  NOTE J - INCOME
TAXES
  Due to
operating losses, there was no provision for current federal or state income
taxes for the year ended December 31, 2007.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s deferred tax asset at December 31, 2007 consists of net operating loss
carry-forward calculated using prevailing PRC tax rates equating to
approximately $85,000 less a valuation allowance in the amount of $85,000.
Because of the Company’s lack of earnings history, the deferred tax asset has
been fully offset by a valuation allowance. The valuation allowance increased
(decreased) by approximately $85,000 compared to the same period in 2006 due to
reorganization.
 
 Utilization
of the net operating losses may be subject to certain annual limitations due to
changes in control. This may result in the expiration of net operating losses
before full utilization.
 
 The
Company’s total deferred tax asset as of December 31, 2007 is as
follows:
  2007
              
              
              2006Net
      operating loss carry-forwards
              
              $
              85,000
              
              
              $
              -0-Valuation
      Allowance
              
              
              (85,000
              )
              
              
              (-0-
              )$
              -0-
              
              
              $
              -0-Prevailing
      PRC tax rate
              
              
              15
              %
              
              
              15
              %
  F-14
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE J - INCOME TAXES
(CONT'D)
  The
Company is subject to income taxes on an entity basis, on income arising in, or
derived from the tax jurisdiction in which it is domiciled and operates. The
corporate has no income taxes accrued as of December 31, 2007 due to operating
losses.
  Income
Taxes- cont’d
 
 The
Company is subject to income taxes on an entity basis, on income arising in, or
derived from the tax jurisdiction in which it is domiciled and operates. The
corporate income taxes accrued as of December 31, 2006 were $2,999.
  NOTE K -PLANT AND
EQUIPMENT, NET
  Plant and
equipment, net as of December 31, 2007 and 2006 consists of the
following:
 
 2007
              
              
              2006Building
              
              $
              400,995
              
              
              $
              400,995Furniture,
      fixture and equipment
              
              
              316,836
              
              
              
              185,475717,831
              
              
              
              586,470Less:
      accumulated depreciation
              
              
              (114,217
              )
              
              
              (54,379
              )Plant
      and equipment, net
              
              $
              603,614
              
              
              $
              532,091
 
 Depreciation
expense for the year ended December 31, 2007 and 2006 respectively was $59,838
and $6,427.
  NOTE L -EQUITY
TRANSACTIONS
  On July
10, 2006, the Company issued 7,977,023 new shares of Class A Common Stock and
2,000 new shares of Class B Common Stock in exchange for a payment of $264,000
in cash, in reliance upon exemptions from the registration requirements of
Section 5 of the Securities Act of 1933, as amended (the “Act”), pursuant
to Section 4(2) of the Act and Rule 506 promulgated there
under.
 
 On August
22, 2006, Arie Hinkis, the former president of the Company, returned 744 shares
of Class B Common Stock against payment of $74,000 and settlement of all unpaid
salaries and severance pay to Mr. Hinkis in the amount of $100,000, both amounts
will be taken from the payment made to VDYI for the aforesaid issued
shares.
  F-15
 China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE L -EQUITY TRANSACTIONS
(CONT'D)
  On
November 10, 2006, the Company issued 333,000,000 new shares of Class A Common
Stock (the effect of 30,000,000 shares after consideration of the proposed
11.1:1 reverse split), to the Yin Fa shareholders pursuant to Regulation S under
the Securities Act of 1933, as amended, in exchange for all of their shares of
registered capital of Yin Fa, pursuant to the Plan of Exchange, dated June 13,
2006.
 
 On
January 10, 2007, the Company issued 6,500,000 shares of Class A Common stock
for payment of consulting services to several companies and individuals. The
fair value of this stock issuance was determined using the fair value of the
Company’s common stock on the grant date or the specific terms of the applicable
consulting agreements and booked pro rata due to the service periods. The
Company calculated a stock-based compensation cost of total $699,554 and
recognized $212,896 for the year ended December 31, 2007. As of December 31,
2007, a deferred compensation is amounted to $143,852 and amortized on the
straight-line method over the contract periods.
 
 On
February 2, 2007, the Company issued 1,000,000 shares of Class A Common stock
for payment of consulting services to Greentree Financial Group, Inc. for
services in connection with general management consulting and advisory
services.
  The fair
value of this stock issuance was determined using the fair value of the
Company’s common stock on the grant date or the specific terms of the applicable
consulting agreements and booked pro rata due to the service periods. The
Company calculated a stock-based compensation cost of total $51,225 and
recognized $51,225 for the year ended December 31, 2007.
 
 On June
8, 2007, Deng Shu Lan, the former president of Yin Fa, resigned from all
positions in Yin Fa. Pursuant to an oral termination agreement, Deng Shu
Lan transferred Zheng Zhimin, the new Vice President of Yin Fa, 2,000 shares of
Class B Common stock of the Company, which were converted into 10,342,593 Class
A Common Stock on July 9, 2007.
 
 On July
23, 2007, the Company effected a forward stock split of the Company's Class A
Common Stock, pursuant to the Delaware General Corporation Law, "no dissenters'
rights under the Delaware General Corporation Law are afforded to the Company's
stockholders as a result of the adoption of this resolution", exchanging one (1)
existing shares of Class A Common Stock for two (2) shares of post forward split
Class A Common Stock. The number of outstanding shares of the Company’s Class A
common stock was increased from 49,644,447 to 99,288,894 shares and par value of
its Class A common stock was unchanged at $0.01.
 
 On August
15, 2007, the Company's Board of Directors approved to pay for the total rent of
a 20-year leasing property by the issuance of 2,000 shares of Class B Common
Stock to Lian, Xiao Jian, the owner of a property. Pursuant to the terms and
conditions of the Contract of Lease Property, dated June 29, 2007, the total
payment of the rent for 20 years leasing period is $2,023,121 and the leasing
property is approximately 3,600 square feet. The lease commences in July 2007
and expires in June 2027. Total rent expense for the year ended December 31,
2007 was $23,146.
  F-16
  China
      Health Resource, Inc. and SubsidiaryNotes
      to Audited Financial StatementsFor
      the Years Ended December 31, 2007 and 2006
 NOTE M - REVERSE STOCK
SPLITS
 
 A common
stock reverse split of 11.1 for 1 was effective October 1, 2006. All common
stock amounts in the accompanying financial statements issued on or before the
date of the reverse stock split have been restated retroactively to reflect this
capitalization change.
  NOTE N –SUBSEQUENT
EVENT
 
 On
February 5, 2008, the Company issued 5,000,000 shares of Class A Common stock
for payment of consulting services to a company. The fair value of this stock
issuance was determined using the fair value of the Company’s common stock on
the grant date or the specific terms of the applicable consulting agreements and
will be booked pro rata due to the service periods.
 
 NOTE O - SUBSEQUENT DISCOVERY
OF ERROR
 
 On
November 7, 2008 the company discovered an error in its financial
statements.  The company was required to reset its historical equity
as of the result of the reverse merger that occurred during 2006.
  F-17
 
 Part II, Item 8A - Controls
and Procedures.
 
 Disclosure Controls and
Procedures.
 
 We maintain disclosure controls and
procedures designed to ensure that information required to be disclosed in
reports filed under the Exchange Act is recorded, processed, summarized and
reported within the specified time periods. Our Certifying Officers are
responsible for maintaining our disclosure controls and procedures. The controls
and procedures established by us are designed to provide reasonable assurance
that information required to be disclosed by the issuer in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and
that it is accumulated and communicated to our management, including the
Certified Officers, as appropriate to allow timely decisions regarding required
disclosure.
 
 In light of the amendments required to
the Company’s 2007 Form 10-KSB, our Certifying Officers have concluded that such
disclosure controls and procedures were not effective as of December 31, 2007.
In reaching this conclusion, the Certifying Officers noted the inadvertent
omissions necessitating amendments to our 2007 Form 10-KSB. We have remedied
this deficiency in our disclosure controls and procedures by implementing
additional controls and procedures designed to ensure completeness and more
effective control over disclosures.
 
 Management’s Report on
Internal Control Over Financial Reporting.
 
 Our management is responsible for
establishing and maintaining adequate internal control over financial reporting
as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act for the
Company. Due to its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements under all potential
conditions. Therefore, effective internal control over financial reporting
provides only reasonable, and not absolute, assurance that a restatement of our
financial statements would be prevented or detected.
 
 Under the supervision and with the
participation of our management, including our Certifying Officers, we conducted
an assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2007. The assessment was based on the criteria
established in the Internal
Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, including
the need to prepare and file subsequent amendments to the Company’s 2007 Form
10-KSB, management concluded that our internal controls over financial reporting
were not effective as of December 31, 2007.  Management determined
that the error related to its accounting for the recapitalization/reverse merger
in 2006 constituted a material weakness and is working with our reporting
accountants and auditors to strengthen the Company’s internal controls and
procedures going forward to ensure that our internal control over financial
reporting is effective.
 
 Changes in Internal Control
Over Financial Reporting.
 
 There were no changes in our internal
control over financial reporting that occurred during the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
 
 This annual report does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to
attestation by our registered public accounting firm pursuant to temporary rules
of the Commission that permit us to provide only management's report in this
annual report.
  
  Part
III, Item 13-
Exhibits.
 
 (a)
                Financial
      Statements.
 
 1.
                The
      following financial statements of the Company are included in Part II,
      Item 7:
  Report
      of independent Registered Public Accounting Firm
                F-1Consolidated
      Balance Sheet-December 31, 2007 and 2006
                F-2Consolidated
      Statements of Operations - For years ended December 31, 2007 and
      2006
                F-3Consolidated
      Statements of Cash Flows - For years ended December 31, 2007 and
      2006
                F-4Consolidated
      Statements of Equity (Deficit) - For years ended December 31, 2007 and
      2006
                F-5Notes
      to Audited Financial Statements
                F-6
      to F-17
 2.
                Exhibits
  14.1.
                Code
      of Ethics*31.1.
                Rule
      13a-14(a)/15d-14(a) Certifications of Chief Executive
    Officer31.2.
                Rule
      13a-14(a)/15d-14(a) Certifications of Chief Financial
    Officer32.1.
                Section
      1350 Certifications of Chief Executive Officer32.2.
                Section
      1350 Certifications of Chief Financial
Officer
 *
              Incorporated
      by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-KSB
      for the fiscal year ended December 31,
2006.
 
 (b)
                Reports
      on Form 8-K
  1.
                On
      February 6, 2007, we filed a current report on Form 8-K to announce the
      change of its certifying
accountant.**
 
 2.
                On
      March 6, 2007, we filed a current report on Form 8-K to announce that we
      entered into an Exclusive Import-Export Agency Agreement with DongUi
      Cosmetics Co. ("DongUi"), a corporation organized and existing under the
      laws of the Republic of Korea (South Korea), for business development in
      South Korea.***
 
 3.
                On
      April 20, 2007, we filed a current report on Form 8-K to announce that we
      entered into an Exclusive Agency Agreement with Chengdu Derentang
      Pharmaceutical Ltd.("Derentang"), a corporation organized and existing
      under the laws of the People's Republic of China, for the sales of
      DAR.
 
 4.
                On
      June 21, 2007, we filed a current report on Form 8-K to announce that we
      executed a 1 for 2 forward stock split of our Class A Common Stock, which
      took effective at July 23, 2007.
 
 5.
                On
      July 23, 2007, we filed a current report on Form 8-K to announce the
      resignation of Deng, Shu Lan, the former president of Yin Fa, and the
      stock transfer for the 2,000 shares of our Class B Common
      Stock.
 
 6.
                On
      August 31, 2007, we filed a current report on Form 8-K to announce the
      issuance of 2,000 shares of Class B Common Stock for the rental payment of
      a 20-year leasing property.
  
  SIGNATURES
  
 In accordance with Section 13 or 15(d)
of the Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
 
 
 CHINA HEALTH
      RESOURCE, INC., f/k/a VOICE DIARY INC.Dated: March 5,
      2009
                By:
                /s/ Chen,
      JiangChen, JiangChief
      Executive Officer and Director
                  (Principal
      Executive Officer)Dated:
      March 5, 2009
                By:
                /s/
      Zhou, YiZhou, YiChief
      Financial Officer and Director
                  (Principal
      Financial and Accounting Officer)
 Dated: March 5,
      2009
                By:
                /s/ Wang, JiayinWang,
    JiayinPresident
      and DirectorDated:
      March 5, 2009
                By:
                /s/
      Wang, BingWang,
BingDirector
  Dated: March 5,
      2009
                  By:
                  /s/ Wang, GeweiWang,
      GeweiDirector
 
  EXHIBIT
INDEX
  Exhibit
      No.
              Description14.1
              Code
      of Ethics*
 31.1
              Certification
      of Chief Executive Officer
 31.2
              Certification
      of Chief Financial Officer
 32.1
              Section
      1350 Certifications of Chief Executive
Officer
 32.2
              Section
      1350 Certifications of Chief Financial
Officer
 
 *
              Incorporated
      by reference to Exhibit 14.1 to the Company’s
      Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2006.