SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
 (Mark One)

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

For the Fiscal Year Ended December 31, 2007
OR
     ( )  TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

Commission File No.   None

                          TONGJI HEALTHCARE GROUP, INC.
                    ----------------------------------------
                 (Name of Small Business Issuer in its charter)

              Nevada                                       None
      ---------------------------               ------------------------------
     (State of incorporation)                (IRS Employer Identification No.)

          No.5 Beiji Road,
          Nanning, Guangxi, China                               N/A
----------------------------------------------            ---------------
   (Address of Principal Executive Office)                   Zip Code

Registrant's telephone number, including Area Code: 0086-771-2020000 Securities
registered pursuant to Section 12(b) of the Act: None Securities registered
pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

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

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-25 of the Exchange Act):

                                    Yes [ ]    No [X]

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

As of March 31, 2007 the Company's common stock was not publicly traded. The
aggregate market value of the voting stock held by non-affiliates of the Company
on March 31, 2007 was approximately $16,550,000.

The Company's revenues from continuing operations for the most recent fiscal
year were $2,330,026.

As of March 31, 2008 the Company had 15,652,557 issued and outstanding shares of
common stock.

<PAGE>


ITEM 1.     DESCRIPTION OF BUSINESS

      We operate a general hospital with 105 licensed beds. Our hospital offers
care and treatment in the areas of surgery, internal medicine, ophthalmology,
orthopaedics, medical cosmetology, urology, dentistry, gynecology, pediatrics,
rehabilitation and emergency care.

      Our emergency room is open 24 hours a day and all of our rooms are air
conditioned.

       As is common in China, we generate revenues from providing both medical
treatment and the sale of drugs and medications. We purchase all drugs and
medications which we use and sell from Guangxi Tongji Medicine Co., Ltd., an
affiliated company, at prevailing market prices. Drugs and medications are sold
only to our patients.

      Our hospital, which was originally owned by the Nanning Erqing Collective
Industrial Union, has been in operation since 1957. In September 2000, Li-Yu
Chen, one of our principal shareholders, and Guangxi Tongji Medicine Co., Ltd.,
a company controlled by our President, acquired the hospital. During 2006,
Guangxi Tongji Medicine Co., Ltd. distributed its shares in the hospital to its
shareholders. We redomiciled our company as a Nevada corporation since it was
our belief that being a U.S. corporation will be helpful since investors are
more familiar with U.S. corporations, and are more likely to invest in them, as
opposed to Chinese corporations.

      Our hospital is certified as a provider of Medicare services by the
Nanning municipal government and the Guangxi provincial government. Maintaining
the qualifications for acceptance of Medicare patients is very important as
revenue from Medicare patients accounted for 41% of total hospital income in
2006. The Medicare accreditation is valid for only one year and must be renewed
on an annual basis.

      Our Medicare agreements with the Nanning municipal government and the
Guangxi provincial government require that we adhere to prescribed standards for
patient care and treatment.

      The amounts we are permitted to charge Medicare patients are based upon a
variety of factors, including our cost of providing services and fixed rates for
services and medications.

      The majority of healthcare providers in China are government owned and
operate at a low level of efficiency. We believe many government-owned hospitals
will be privatized in future. In addition, and according to China Hospital
Administration Association, there are approximately 1500 private hospitals in
China, most of which are independent of each other. The high degree of
fragmentation presents an opportunity for acquisition and economies of scale.

       We plan to acquire other hospitals and companies involved in the
healthcare industry in China using cash and shares of our common stock.
Substantial capital may be needed for these acquisitions and we may need to
raise additional funds through the sale of our common stock, debt financing or
other arrangements. We do not have any commitments or arrangements from any
person to provide us with any additional capital. Additional capital may not be
available to us, or if available, on acceptable terms, in which case we would
not be able to acquire other hospitals or businesses in the healthcare industry.


                                       2
<PAGE>

Competition

      We compete with eleven government owned hospitals and three privately
owned hospitals in the city of Nanning. We believe that our ability to
effectively compete will be the result of:

     o    Providing advanced medical facilities and comfortable environments
     o    Maintaining the highest level of professional healthcare
     o    Maintaining  competitive  prices for medical  treatment  and drugs and
          medications.

      PRC Laws and Regulations Affecting Our Business

      Healthcare providers in China are required to comply with many laws and
regulations at the national and local government levels. These laws and
regulations include the following:

     o    we must register with and maintain an operating license from the local
          Administration  of  Health.  We are  subject  to  review  by the local
          administration  of health at least once every three years.  If we fail
          to meet the standards listed below, our license may be revoked.

     o    the Licensed Physician Act requires that we only hire doctors who have
          been licensed by he PRC government.

     o    all drugs  and  medications  used in our  hospital  must be  prepared,
          transported, and used under the supervision of our internal Commission
          of Drug Affairs Management.

     o    all waste  material  from our  hospital  must be  properly  collected,
          sterilized, deposited, transported and disposed of. We are required to
          keep  records of the  origin,  type and amount of all waste  materials
          generated by our hospital.

     o    We must have at least 20 beds and at least 14 medical professionals on
          staff, including three doctors and five nurses.;

     o    We must provide medical services in a variety of areas, including:

               o    Surgery
               o    Internal Medicine
               o    Gynecology
               o    Emergency Care
               o    Ophthalmology
               o    Traditional Chinese Medicine
               o    Medical Imaging
               o    Physical Therapy

     o    we must establish and follow protocols to prevent medical malpractice.
          The protocols require us to:


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<PAGE>

     o    insure that patients are  adequately  informed  before they consent to
          medical operations or procedures;

     o    maintain  complete  medical  records which are available for review by
          the patient, physicians and the courts;

     o    voluntarily  report  any event of  malpractice  to a local  government
          agency;

     o    support  the  medical  services  we  provide  in  any   administrative
          investigation or litigation.

      If we fail to comply with applicable laws and regulations, we could suffer
penalties, including the loss of our license to operate.

       Before we can acquire a hospital or a company in the healthcare field in
China we will be required to submit an application to PRC Ministry of Commerce.
As part of the application we must submit a number of documents, including:

     o    our financial  statements and the financial  statements of the company
          we propose to acquire.

     o    a copy of the business license of the company we propose to acquire,

     o    evidence  that the  shareholders  of the company we propose to acquire
          have approved the transaction,

     o    an appraisal,  conducted by an independent  party, of the value of the
          company we propose to acquire.

      Our agreements with the Nanning Municipal and the Guangxi Provincial
Medicare Funds requires us to:

     o    Timely deal with any patient complaints;
     o    Follow the Basic Medical Treatment Insurance procedures of the City of
          Nanning and the Guangxi Province;
     o    Report any accident to the Medicare Funds within 72 hours;
     o    Determine if patients are eligible for coverage by the Medicare Funds;
     o    Control costs by refraining from unnecessary treatments or procedures;
     o    Discharge  inpatients when their medical condition allows so as not to
          prolong their stay in the hospital.

      Our agreements are renewed annually if approved by the Medicare funds.


                                       4
<PAGE>

The PRC Legal System

      The PRC legal system is a civil law system. Unlike the common law system,
the civil law system is based on written statutes in which decided legal cases
have little value as precedents. In 1979, the PRC began to promulgate a
comprehensive system of laws and has since introduced many laws and regulations
to provide general guidance on economic and business practices in the PRC and to
regulate foreign investment. Progress has been made in the promulgation of laws
and regulations dealing with economic matters such as corporate organization and
governance, foreign investment, commerce, taxation and trade. The promulgation
of new laws, changes of existing laws and the abrogation of local regulations by
national laws could have a negative impact on our business and business
prospects. In addition, as these laws, regulations and legal requirements are
relatively recent, their interpretation and enforcement involve significant
uncertainty.

      However, and subject to limitations on converting currency and statutory
reserve requirements, we do not believe there are any limitations concerning our
ability to access the assets held by Tongji Hospital, a PRC corporation which is
our wholly owned subsidiary.

Taxes

      In accordance with the relevant laws and regulations of PRC our income tax
rate would typically be 33%. However we have received a waiver from the taxing
authorities in the PRC for corporate income tax for the years ended 2004, 2005
and 2006. In 2007 we were taxed at the normal rate of 33%.

      In addition, we would normally be required to pay a tax of 5% of the
income derived from providing medical treatment plus city construction and
educational taxes equal to 7% and 3% respectively, of the business tax. We have
accrued these taxes for 2005 but are exempt from these taxes for 2006, 2007 and
2008.

Required Statutory Reserve Funds

      In accordance with current Chinese laws, regulations and accounting
standards, we are required to set aside as a general reserve at least 10% of our
respective after-tax profits. Appropriations to the reserve account are not
required after these reserves have reached 50% of our registered capital. These
reserves are created to fund potential operating losses and are not
distributable as cash dividends. We are also required to set aside between 5% to
10% of our after-tax profits to the statutory public welfare reserve. In
addition and at the discretion of our directors, we may set aside a portion of
our after-tax profits for enterprise expansion funds, staff welfare and bonus
funds and a surplus reserve. These statutory reserves and funds can only be used
for specific purposes and may not be used for dividends.

Political and Trade Relations with the United States

     Political  and trade  relations  between  the U.S.  and the PRC  government
during the past five  years have been  volatile  and may  continue  to be in the
future.  There can be no assurance that the political and trade ramifications of


                                       5
<PAGE>

these causes of volatility or the emergence of new causes of volatility will not
cause difficulties in our operations in the PRC marketplace.

Economic Reform Issues

      The PRC is transitioning from a planned economy to a market economy. While
the PRC government has pursued economic reforms since its adoption of the
open-door policy in 1978, a large portion of the PRC economy is still operating
under five-year plans and annual state plans. Through these plans and other
economic measures, such as control on foreign exchange, taxation and
restrictions on foreign participation in the domestic market of various
industries, the PRC government exerts considerable direct and indirect influence
on the economy. Many of the economic reforms carried out by the PRC government
are unprecedented or experimental, and are expected to be refined and improved.

      Other political, economic and social factors can also lead to further
readjustment of such reforms. This refining and readjustment process may not
have a positive effect on our operations or future business development. Our
operating results may be adversely affected by changes in the PRC's economic and
social conditions as well as by changes in the policies of the PRC government,
such as changes in laws and regulations (or the interpretation of laws or
regulations), measures which may be introduced to control inflation, changes in
the interest rate or method of taxation, and the imposition of additional
restrictions on currency conversion.

     There can be no  assurance  that the reforms to the PRC's  economic  system
will continue or that we will not be adversely  affected by changes in the PRC's
political,  economic,  and social  conditions  and by changes in policies of the
government,  such as  changes  in laws and  regulations,  measures  which may be
introduced  to control  inflation,  changes  in the rate or method of  taxation,
imposition of additional  restrictions  on currency  conversion  and  remittance
abroad, and reduction in tariff protection and other import restrictions.

Currency Conversion and Exchange

     The currency in the PRC is designated as the Renminbi ("RMB"). Although the
RMB/U.S.  dollar exchange rate has been relatively stable in the past five years
there can be no  assurance  that the exchange  rate will not become  volatile or
that  the RMB  will not be  officially  devalued  against  the  U.S.  dollar  by
direction of the PRC government.

     Exchange rate  fluctuations,  because of our foreign  currency  denominated
assets and  liabilities,  may reduce the value in U.S.  dollars of our net fixed
assets  and  the  amount  of our  earnings.  We do  not  engage  in any  hedging
activities in order to minimize the effect of exchange rate risks.

     The PRC  government  imposes  control over the  conversion of Renminbi into
foreign currencies. Under the current unified floating exchange rate system, the
People's Bank of China publishes an exchange rate, which we refer to as the PBOC
exchange rate,  based on the previous  day's dealings in the inter-bank  foreign
exchange market.  Financial institutions  authorized to deal in foreign currency
may enter  into  foreign  exchange  transactions  at  exchange  rates  within an
authorized  range  above or below the PBOC  exchange  rate  according  to market
conditions.


                                       6
<PAGE>

      Although we do not intend to pay dividends, any inability to convert RMB
into U.S.$ will limit our ability to pay dividends in the future.

Employees

      As of March 31, 2008 we employed licensed physicians, nurses, medical
professionals, and employees in administration and finance. None of our
employees are represented by a labor union or similar collective bargaining
organization. We believe that our relations with our employees are good.

ITEM 2.     DESCRIPTION OF PROPERTY

Facilities

      We lease our two hospital buildings from Guangxi Tongji Medicine Co., Ltd,
a company controlled by our President. The lease on the buildings expires in
December 2008.


ITEM 3.     LEGAL PROCEEDINGS

      We are not involved in any legal proceedings.


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

      None.


ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCK- HOLDER MATTERS.
            -----------------------------------------------------------
      In November  2007 our common  stock  started  trading on the OTC  Bulletin
Board under the symbol "TONJ". The following shows the high and low prices for
our common stock for the periods indicated.

      Quarter Ended                 High          Low
      -------------                 ----          ---

        12/31/07                   $5.00         $0.90

      During the three months ended March 31, 2008 only 1,000 of our shares
traded on the OTC Bulletin Board.

      As of March 31, 2008 we had 243 record shareholders and 15,652,557
outstanding shares of common stock. All of our outstanding shares are eligible
for sale pursuant to Rule 144.


                                       7
<PAGE>

     In general,  under Rule 144 as currently in effect, a person who is not one
of our officers,  directors, or principal shareholders,  and who has owned their
shares for at least six months,  may sell their shares without limitation in the
public market.

     Holders  of common  stock  are  entitled  to  receive  dividends  as may be
declared by our Board of  Directors.  The Board of Directors is not obligated to
declare a dividend and it is not anticipated that dividends will ever be paid.

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

      You should read the following discussion and analysis of our financial
condition and results of operations in conjunction with our financial statements
and the related notes included elsewhere in this report. Our financial
statements have been prepared in accordance with U.S. GAAP. In addition, our
financial statements and the financial data included in this report reflect our
reorganization and have been prepared as if our current corporate structure had
been in place throughout the relevant periods. The following discussion and
analysis contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those projected in
the forward-looking statements.

                                    Overview

      We were organized as a Nevada corporation on December 19, 2006. On
December 27, 2006 we issued 15,652,557 shares of our common stock to acquire all
outstanding shares of Nanning Tongji Hospital Co., Ltd., which we refer to as
"Tongji Hospital," a PRC company which was formed in October 30, 2003. The
purpose of the transaction was to redomicile us as a Nevada corporation. Unless
otherwise indicated, all references to us throughout this report includes the
operations of Tongji Hospital.

      Our critical accounting policies, as well as recent accounting
pronouncements which apply to us, are described in Note 2 to our financial
statements which are included as part of this prospectus.

Results of Operation
--------------------

      Material changes of items in our Statement of Operations for the year
ended December 31, 2007, as compared to the year ended December 31, 2006, are
discussed below.

      Patient Service Revenue: The increase in revenues was the result of more
patients being treated by our hospital, due to our increased reputation as being
a preferred provider of health care services in the region, and a change in our
patient mix. In 2007 the percentage of inpatients increased from 26 to 29%.
Generally, we receive greater revenue from an inpatient, as opposed to an
outpatient, due to the length of the stay and the services provided to an
inpatient.

      Gross profit: The decrease in our gross profit percentage in 2007 was the
result of higher inventory costs.


                                       8
<PAGE>

      Operating Expenses: Selling and promotion expenses increased due to more
amounts spent on promoting on the company's service and products. General and
administrative expenses increased since we treated more patients in 2007.
Depreciation, amortization and expenses increased as a result of additions to
property, plant and equipment.

      Material changes of items in our Statement of Operations for the year
ended December 31, 2006, as compared to the year ended December 31, 2005, are
discussed below.

      Patient Service Revenue: The increase in revenues was the result of more
patients being treated by our hospital, due to our increased reputation as being
a preferred provider of health care services in the region, and a change in our
patient mix. In 2006 the percentage of inpatients increased from 26 to 38%.
Generally, we receive greater revenue from an inpatient, as opposed to an
outpatient, due to the length of the stay and the services provided to an
inpatient.

       Gross profit: The increase in gross profit was the result of higher gross
revenues and a decrease in the cost of medical supplies. The cost of medical
supplies decreased due to better terms from our vendors.

       Operating Expenses: Selling and promotion expenses decreased due to less
amounts spent on meals and entertainment. General and administrative fees
declined due to technological upgrades allowing us to reduce the number of
employees in administration. Depreciation, amortization and expenses increased
mainly due to the depreciation and amortization of new medical equipment.

Trends, Events and Uncertainties

      The China Ministry of Health, as well as other related agencies, have
proposed changes to the prices we can charge for medical services, drugs and
medications. We cannot predict the impact of these proposed changes since the
changes are not fully defined and we do not know whether those proposed changes
will ever be implemented or when they may take effect.

      In accordance with the relevant laws and regulations of PRC our income tax
rate would typically be 33%. However we have received a waiver from the taxing
authorities in the PRC for corporate income tax for the years ended 2004, 2005
and 2006. In 2007 we were taxed at the normal rate of 33%.

      In addition, we would normally be required to pay a tax of 5% of the
income derived from providing medical treatment plus city construction and
educational taxes equal to 7% and 3% respectively, of the business tax. We
accrued these taxes for 2005 but are exempt from these taxes for 2006, 2007 and
2008.

      Other than the factors listed above we do not know of any trends, events
or uncertainties that have had or are reasonably expected to have a material
impact on our net sales or revenues or income from continuing operations. Our
business is not seasonal in nature.



                                       9
<PAGE>

Accounting Estimates
--------------------

      In the United States most hospitals have contracts with health insurance
companies which provide that patients with health insurance will be charged
reduced rates for healthcare services. Reduced rates are also charged for
Medicare and Medicaid patients. Although the patient is billed for the services
provided by the hospital at the higher rate normally charged to patients without
insurance the amount billed is reduced by the charges paid by the insurance
carrier and by the difference (sometimes known as the "contractual allowance")
between the normal rate for the services and the reduced rate which the hospital
estimates it will receive from Medicare, Medicaid and insurance companies.

      For financial reporting purposes, hospitals in the United States record
revenues based upon established billing rates less adjustments for contractual
allowances. Revenues are recorded based upon the estimated amounts due from the
patients and third-party payors, including federal and state agencies (under the
Medicare and Medicaid programs) managed care health plans, health insurance
companies, and employers. Estimates of contractual allowances under third-party
payor arrangements are based upon the payment terms specified in the related
contractual agreements. Third-party payor contractual payment terms are
generally based upon predetermined rates per diagnosis, per diem rates, or
discounted fee-for-service rates.

      Due to the complexities involved in determining amounts ultimately due
under reimbursement arrangements with a large number of third-party payors,
which are often subject to interpretation, the reimbursement actually received
by U.S. hospitals for health care services is sometimes different from their
estimates.

      The medical system in China is different than that in the United States.
Private medical insurance is not generally available to the Chinese population
and as a result services and medications provided by our hospital are usually
paid for in cash or by the Medicare agencies of the Nanning municipal government
and the Guangxi provincial government. Our billing system automatically
calculates the reimbursements to which we are entitled based upon regulations
promulgated by the Medicare agencies. We bill the Medicare agencies directly for
services provided to patients coved by the Medicare programs. Since we bill the
Medicare agencies directly, our gross revenues are not reduced by contractual
allowances.

      Since we only deal with the Nanning municipal and the Guangxi provincial
Medicare agencies we are familiar with their regulations pertaining to
reimbursements. As a result, there is normally no material difference between
the amounts we bill and the amounts we receive for services provided to Medicare
patients.

Liquidity and Capital Resources
-------------------------------

      The following shows our material sources and (uses) of cash during the
periods presented:



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<PAGE>

                                                             December 31,
                                                          2007         2006
                                                          ----         ----

     Cash provided by operations                       $397,701     $134,656
     Purchase of medical equipment                      (42,973)     (54,706)
     Sale of equipment                                  621,077           --
     Additions to medical building                   (1,038,876)          --
     Net loans (to) or from related parties            (303,887)     (99,319)
     Capital lease payments                             (22,348)          --
     Other                                                1,395        7,009
     Cash on hand at beginning of year                       --       12,360

Future payments due on our material contractual obligations as of December 31,
2006 are as follows:

   Item                         Total     2008       2009     2010    Thereafter
   ----                         -----     ----       ----     ----    ----------

   Medical Buildings Lease    $ 25,903  $ 25,903        --       --        --
   Capital Leases           $1,069,623  $366,728  $366,728 $336,167

      Except as shown above, as of December 31, 2007 we did not have any
material capital requirements.

      Virtually all of our accounts receivable at December 31, 2007 and December
31, 2006 were due from the Nanning and Guangxi Medicare agencies. The age of our
account receivables as of December 31, 2007 and 2006 is shown below:

                                           December 31, 2007   December 31, 2006
                                           -----------------   -----------------

  Less than 30 days old                             37%               38%
31 to 60 days old                                   26%               22%
  61 to 90 days old                                 21%               14%
  Over 90 days old                                  16%               26%

      As of December 31, 2007 our accounts receivable were approximately 12% of
our revenues for the year. In comparison, our accounts receivable at December
31, 2006 were 16% of our revenues for the year. The decrease in our accounts
receivable is primarily the result of two factors. First, during 2007 revenues
from Medicare patients decreased 8% over 2006. Since we bill the government
Medicare funds for services provided to Medicare patients, receivables result
from these services. In contrast, self-pay patients normally pay at the time the
service is provided. Second, during 2007 we had a 8% decrease in the number of
inpatients treated. A larger receivable often results for services provided to
inpatients covered by Medicare since we normally receive greater revenues for
these services than for services provided to outpatients.

      A receivable is recorded as a bad debt and is written off if it is more
than 90 days old and we consider it to be uncollectable. During the years ended
December 31, 2007 and 2006 we did not write off any bad debts.


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<PAGE>

      Income from our operations has been, and is expected to be in the future,
our primary source of cash.

      We do not have any off-balance sheet items reasonably likely to have a
material effect on our financial condition.

ITEM 7.     FINANCIAL STATEMENTS

See the financial statements attached to and made a part of this report.

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURES

       Effective December 14, 2007 Michael Pollack CPA resigned as our certified
public accountant. Mr. Pollack audited our financial statements for the fiscal
years ended December 31, 2006 and 2005. The reports of Mr. Pollack for these
fiscal years did not contain an adverse opinion, or disclaimer of opinion and
were not qualified or modified as to audit scope, accounting principles or
uncertainty. During our two most recent fiscal years and subsequent interim
period ended December 14, 2007 there were no disagreements with Mr. Pollack on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Mr. Pollack, would have caused him to make reference to such
disagreements in his report.

      Effective February 14, 2008 we hired Wen Jiang & Company PC as our
independent registered public accounting firm.

      Wen Jiang & Company did not provide us with advice regarding the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
our financial statements, that was an important factor considered by us in
reaching a decision as to an accounting, auditing or financial reporting issue.
During the two most recent fiscal years and subsequent interim period ended
February 14, 2008, we did not consult with Wen Jiang & Company regarding any
matter that was the subject of a disagreement or a reportable event as defined
in the regulations of the Securities and Exchange Commission.

      Effective February 21, 2008 Wen Jiang & Company resigned as our
independent certified public accountants since they did not believe they could
complete the audit of our financial statements prior to April 15, 2008. Wen
Jiang & Company did not audit our financial statements. During our two most
recent fiscal years and subsequent interim period ended February 21, 2008 there
were no disagreements with Wen Jiang & Company on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures, which disagreements, if not resolved to the satisfaction of Wen
Jiang & Company, would have caused them to make reference to such disagreements
in any report they may have issued on our financial statements.


                                       12
<PAGE>

      Effective  February  29,  2008 we hired  Kabani & Company,  Inc.  as our
independent registered public accounting firm.

      Kabani & Company did not provide us with advice regarding the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on our financial
statements, that was an important factor considered by us in reaching a decision
as to an accounting, auditing or financial reporting issue. During the two most
recent fiscal years and subsequent interim period ended February 29, 2008, we
did not consult with Kabani & Company regarding any matter that was the subject
of a disagreement or a reportable event as defined in the regulations of the
Securities and Exchange Commission.

ITEM 8A.    CONTROLS AND PROCEDURES

      Yun-hui Yu, our President and Chief Executive Officer and Wei-dong Huang,
our Chief Financial and Accounting Officer, have evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this report; and in their opinion our disclosure controls and procedures are
effective to ensure that material information relating to us, including our
consolidated subsidiaries, is made known to them by others within those
entities, particularly during the period in which this report is being prepared,
so as to allow timely decisions regarding required disclosure. There have been
no changes in our internal controls over financial reporting that occurred
during the quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting. As a result,
no corrective actions with regard to significant deficiencies or material
weakness in our internal controls were required.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting and for the assessment of the effectiveness of
internal control over financial reporting. As defined by the Securities and
Exchange Commission, internal control over financial reporting is a process
designed by, or under the supervision of our principal executive officer and
principal financial officer and implemented by our Board of Directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of our financial
statements in accordance with U.S. generally accepted accounting principles.

Our internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect our transactions and dispositions of our
assets; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of our financial statements in accordance with
U.S. generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorizations of our
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.


                                       13
<PAGE>

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In connection with the preparation of our annual financial statements,
management has undertaken an assessment of the effectiveness of our internal
control over financial reporting as of December 31, 2007, based on criteria
established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission, or the COSO Framework.
Management's assessment included an evaluation of the design of our internal
control over financial reporting and testing of the operational effectiveness of
those controls.

Based on this evaluation, management has concluded that our internal control
over financial reporting was effective as of December 31, 2007.

This annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our independent
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report on internal control in this annual
report.

ITEM 8B.     OTHER INFORMATION

      Not applicable

ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS.
            -------------------------------------------------------------

     The names, ages and positions held by our executive  officers and directors
are listed below.

     Name              Age       Position
     ----              ---       --------

     Yun-hui Yu         44       President, Chief Executive Officer and
                                   Chairman of the Board of Directors
     Wei-dong Huang     37       Chief Financial and Accounting Officer
     Jin-song Zhang     39       Chief Administrative Officer
     Jing-xi Lv         61       Vice president and a Director
     Jia-lin Zhang      66       Vice president and a Director
     Lin Lin            61       Vice president and a Director
     Xiang-wei Zeng     64       Vice president and a Director

Directors serve in such capacity until the next annual meeting of our
stockholders and until their successors have been elected and qualified. Our
officers serve at the discretion of our Board of Directors, until their death,
or until they resign or have been removed from office.


                                       14
<PAGE>

      Yun-hui Yu is our founder and has been our Chief Executive Officer,
President and one of our directors since October 2003. Since October 1999 Mr. Yu
has also been the Chief Executive Officer and a director of Guangxi Tongji
Medicine Co., Ltd., an affiliated company which operates pharmacies in China.
Mr. Yu received his bachelor's degree in medicine from the First Military
Medical University of the People's Liberation Army of China in August 1984. Mr.
Yu holds a license as a physician from the Chinese Ministry of Health.

      Wei-dong Huang has been our Chief Financial and Accounting Officer since
May of 2006. Between April 2005 and May 2006 Mr. Huang was vice project general
manager at the Capital Hotel Group. Between April 2004 and March 2005, Mr. Huang
was the financial director at the Changsha InBev Baisha Beer Group, a brewery in
China. Between November 2002 and April of 2004, Mr. Huang was vice president at
Jingfang Investment & Management Consulting Co., Ltd. Between November 1996 and
November 2002 Mr. Huang was the financial controller at Blue Ribbon Beer Brewery
Co., Ltd, a brewery in China. Mr. Huang received his master's degree from
Capital University of Economics and Business in July of 1995. Mr. Huang holds a
license as a certified public accountant from the Chinese Institute of Certified
Public Accountants and is licensed as a securities broker with the Securities
Association of China.

      Jin-song Zhang has been our Chief Administrative Officer since February
2006. Between August 2000 and January 2006 Mr. Jing-song was a director in the
Naning New & High Tech Industrial Development Zone administration commission.
Mr. Zhang received his bachelor's degree in engineering from the Electronic
Engineering Institute of the Peoples Liberation Army in August 1987.

      Jing-xi Lv has been one of our vice presidents since January 2004. In
October 2006 Mr. Lv became one of our directors. Between July 1973 and December
2003 Mr. Lv was an orthopaedic surgeon at the Nanning No.1 People's Hospital.
Mr. Lv received his bachelor's degree from Guangxi Medicine University in August
1968 and holds a license as a physician from the Chinese Ministry of Health.

      Jia-lin Zhang has been one of our vice presidents since October 2004. In
October 2006 Mr. Zhang became one of our directors. Between 1964 and October
2004, Mr. Zhang was a surgeon at several hospitals, including the People's
Hospital of Du'an county and the Red Cross Hospital. Mr. Zhang received his
bachelor's degree from Guangxi Medicine University in August 1964 and holds a
license as physician from the Chinese Ministry of Health.

      Lin Lin has been one of our vice presidents since May 2005. In October
2006 Mr. Lin became one of our directors. Between February 1977 and May 2005 Mr.
Lin was the director of Internal Medicine at the Guangxi Ethical Hospital. Mr.
Lin received a bachelor's degree from Guangxi Medicine University in July 1968
and holds a license as a physician from the Chinese Ministry of Health.

      Xiang-wei Zeng has been one of our vice presidents since March 2005. In
October 2006 Mr. Zeng became one of our directors. Between 2000 and December
2004, Mr. Zeng was the director of physicians at the Guanxi Medicine University
Hospital. Mr. Zeng received his bachelor's degree from Guangxi Medicine
University in July of 1967 and holds a license as a physician from the Chinese
Ministry of Health.


                                       15
<PAGE>

      None of our directors are independent as that term is defined by Rule 4200
of the NASDAQ Marketplace Rules.

      Yun-hui Yu and Li Yu Chen, one of our principal shareholders, may be
considered our parents and promoters, as those terms are defined by the
Seurities and Exchange Commission.

ITEM 10.    EXECUTIVE COMPENSATION
            ----------------------

Summary Compensation Table

      The following table shows the compensation paid or accrued during the two
years ended December 31, 2007 to Yunhui Yu, Tongji' Chief Executive Officer.
None of our executive officers or directors received compensation in excess of
$100,000 during our past two fiscal years.

                                                                  All
                                                                 Other
                                                                 Annual
                                                Stock   Option  Compen-
Name and Principal     Fiscal  Salary  Bonus    Awards  Awards   sation
  Position              Year     (1)    (2)      (3)      (4)     (5)      Total
------------------     ------  ------  -----    ------  ------  -------   ------

Yunhui Yu, Chief        2007
 Executive Officer      2006      --      --        --      --       --       --


(1)  The dollar value of base salary (cash and non-cash) received.
(2)  The dollar value of bonus (cash and non-cash) received.
(3)  During the periods covered by the table,  the value of our shares issued as
     compensation for services to the persons listed in the table.
(4)  The value of all stock options  granted  during the periods  covered by the
     table.
(5)  All other  compensation  received that we could not properly  report in any
     other column of the table.

      Stock Options. We have not granted any stock options to any of our
officers or directors and do not have any stock option plans in effect as of
March 31, 2008. In the future, we may grant stock options to our officers,
directors, employees or consultants.

      Long-Term Incentive Plans. We do not provide our officers or employees
with pension, stock appreciation rights, long-term incentive or other plans and
have no intention of implementing any of these plans for the foreseeable future.

      Employee Pension, Profit Sharing or other Retirement Plans. We do not have
a defined benefit, pension plan, profit sharing or other retirement plan,
although we may adopt one or more of such plans in the future.


                                       16
<PAGE>

      Compensation of Directors. Our directors do not receive any compensation
pursuant to any standard arrangement for their services as directors.

Transactions with related parties and recent sales of unregistered securities.

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

     The following table shows, as of March 31, 2008, the common stock ownership
of (i) each person  known by us to be the  beneficial  owner of five  percent or
more of our common stock,  (ii) each officer and director and (iii) all officers
and directors as a group.  Except as otherwise  indicated,  each person has sole
voting and  investment  power with  respect to the shares of common stock shown,
and all ownership is of record and beneficial.

                                                Number           Percent
      Name and Address                         of Shares         of Class
      ----------------                         ---------         --------

      Yun-hui Yu                              7,000,000             45%
      No. 5 Beiji Road
      Nanning, China 530011

      Wei-dong Huang                             32,600               *
      No. 5 Beiji Road
      Nanning, China 530011

      Jin-song Zhang                             72,000               *
      No. 5 Beiji Road
      Nanning, China 530011

      Jing-xi Lv                                 10,000               *
      Dormitories 32-402 of Nanning #1
      Hospital, Jingwen Road
      Nanning, China

      Jia-lin Zhang                               2,000               *
      Longxiangju Num.201, Qingxiu Village,
      Qingshan Road
      Nanning, China

      Lin Lin                                     1,000               *
      Mingxiu East Road 232-15-1
      Nanning, China

      Xiang-wei Zeng                                 --              --
      Jiangnan District
      Nanning, China



                                       17
<PAGE>


                                                Number           Percent
      Name and Address                         of Shares         of Class
      ----------------                         ---------         --------

      Li-Yu Chen                              3,000,000 (1)       19.2%
      Jinhu Road #22
      Mingdu Park 32221
      Nanning, China

      All officers and directors as           7,117,600           45.5%
         a group (7 persons)

 (1) Li-Yu Chen is the wife of Yun-hui Yu.

  *   Less than 10%

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
            ----------------------------------------------

      In December 2006 we acquired all of the outstanding shares of Tongji
Hospital, a PRC corporation, in exchange for the issuance of 15,652,557 shares
of our common stock to the former shareholders of Tongji Hospital. The purpose
of this transaction was to redomicile us as a Nevada corporation. In connection
with this transaction, the following officers, directors and their affiliates
received shares of our common stock:

      Name                            Number of Shares Received
      ----                            -------------------------

      Yun-hui Yu                            7,000,000
      Wei-dong Huang                           32,600
      Jin-song Zhang                           72,000
      Jing-xi Lv                               10,000
      Jia-lin Zhang                             2,000
      Lin Lin                                   1,000
      Li-Yu Chen (1)                        3,000,000

(1) Li-yu Chen is the wife of Yun-hui Yu.

      We lease our two hospital buildings from Guangxi Tongji Medicine Co., Ltd.
The lease on the buildings expires in December 2008.

       We also purchase all drugs and medications which we use and sell from
Guangxi Tongji Medicine Co., Ltd., at prevailing market prices.

      We have  advanced  funds to Nanning  Tongji Chain  Pharmacy Co., Ltd. to
assist in their  operations.  As of December 31, 2007 and 2006 Nanning  Tongji
Chain Pharmacy Co., Ltd. owed us $1,397,080 and $122,649 respectively.


                                       18
<PAGE>

      Guangxi  Tongji  Medicince  Co.  Ltd.  has loaned us money which we have
used in our  operations.  As of  December  31,  2007 and 2006 we owed  Guangxi
Tongji Medicine Co. Ltd., $118,946 and  $328,614, respectively.

      Yun-hui Yu, our Chief Executive Officer and one of our directors, has also
loaned us money which we have used in our operations. As of December 31, 2007
and 2006 we owed Mr. Yu $1,563,584 and $91,168, respectively.

      The amounts we have borrowed and received accrue interest at a rate of 6%
per annum, which exceeds the interest rate in the PRC for similar borrowings.

      Yun-Hui Yu owns 90% of the  capital  stock of Guangxi  Tongji  Medicince
Co.  Ltd.  Guangxi  Tongji  Medicine  Co.  owns 90% of  Nanning  Tongji  Chain
Pharmacy Co., Ltd.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K
            --------------------------------

Number    Exhibit
------    -------

   2      Plan of Merger                                                *

   3.1    Articles of Incorporation                                     *

   3.2    Bylaws                                                        *

   10.1   Employment Contracts                                          *

   10.2   Hospital Lease                                                *

   10.3   Agreement with Guangxi Tongji Medicine Co., Ltd.              *

   10.4   Agreement for Medicare Service - The Management Center of
          Social Medical Treatment Insurance of Nanning.                *

   10.5   Agreement for Medicare Service - Social Security Department
          of Guangxi Zhuang Municipality                                *

   21.    Subsidiaries                                                  *

23.1  Rule 13a-14(a) Certifications

23.2  Section 1350 Certifications

*    Incorporated  by reference to the same exhibit filed with our  registration
     statement on Form SB-2 (File No. 333-140645).



                                       19
<PAGE>


ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES
            --------------------------------------

      Michael Pollack CPA, audited our financial statements for the fiscal years
ended December 31, 2005 and 2006. The following table shows the aggregate fees
we were billed during the two years ended 2007 and 2006 by Mr. Pollack.

                                               2006             2007
                                               ----             ----

      Audit Fees                             $36,000          $38,000
      Audit-Related Fees                          --              --
      All Other Fees                              --              --

Audit fees represent amounts billed for the audit of our annual financial
statements and the reviews of the financial statements included in our Forms
10-Q for the fiscal year. Before we engaged Mr. Pollack to render audit
services, the engagement was approved by our Directors.

Kabani & Company audited our financial statements for the fiscal year ended
December 31, 2007. Since we did not hire Kabani & Company until February 2008,
Kabani did not bill us for any fees during 2007.



                                       20
<PAGE>


                          TONGJI HEALTHCARE GROUP, INC.
                        Consolidated Financial Statements
                     Years Ended December 31, 2007 and 2006








                                    Contents

Reports of Independent Registered Public Accounting Firms              F-1 & F-2

Consolidated Financial Statements:

    Consolidated Balance Sheet as of December 31, 2007                      F-3

    Consolidated Statements of Income for the years ended
       December 31, 2007 and 2006                                           F-4

    Consolidated Statements of Cash Flows for the years ended
       December 31, 2007 and 2006                                           F-5

    Consolidated Statement of Stockholders' Equity for the years ended
       December 31, 2007 and 2006                                           F-6


    Notes to Consolidated Financial Statements                              F-7








<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



      To the Stockholders and Board of Directors
      Tongji Healthcare Group, Inc.


      We have audited the accompanying consolidated balance sheet of Tongji
      Healthcare Group, Inc. as of December 31, 2007, and the related
      consolidated statement of operations, consolidated shareholders' Deficit,
      and consolidated cash flows for the year ended December 31, 2007. These
      consolidated financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these
      consolidated financial statements based on our audit.

      We conducted our audit of these consolidated statements in accordance with
      the standards of the Public Company Accounting Oversight Board (United
      States). Those standards require that we plan and perform the audit to
      obtain reasonable assurance about whether the financial statements are
      free of material misstatement. An audit includes examining, on a test
      basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating
      the overall financial statement presentation. We believe that our audit
      provides 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 Tongji Healthcare
      Group, Inc. as of December 31, 2007, and the results of their operations
      and cash flows for the year ended December 31, 2007 in conformity with
      accounting principles generally accepted in the United States of America.



      /s/ Kabani & Company, Inc.

      Los Angeles, California
      March 25, 2008


                                      F-2
<PAGE>


                          TONGJI HEALTHCARE GROUP, INC.
                           CONSOLIDATED BALANCE SHEET
                             AS OF DECEMBER 31, 2007

                                     ASSETS
Current Assets
   Cash and cash equivalents                                  $   23,165
   Accounts receivable,  net                                     287,593
   Due from related party                                      1,516,026
   Inventory, net                                                152,242
   Prepaid expenses and other current assets                      32,779
                                                           ---------------
Total Current Assets                                           2,011,806

Property and Equipment, net                                    1,067,161

Other Assets
   Capital Lease Deposit                                         143,945
   Prepaid - Building lease                                    1,081,640
                                                           ---------------
Total Other Assets                                             1,225,585
                                                           ---------------
TOTAL ASSETS                                               $   4,304,551
                                                           ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
   Accounts payable and accrued expenses                   $     418,368
   Due to related parties                                      1,563,842
   Other payable                                                 161,350
   Short term bank loan                                          411,270
   Deferred Gain on sale & lease back                            104,329
   Capital Lease Obiligation-short term                          293,394
                                                           ---------------
Total Current Liabilities                                      2,952,554
                                                           ---------------

Long Term Liabiliteis
   Capital Lease Obligation                                      642,968
   Deferred Gain on sale & lease back                            199,964
                                                           ---------------
Total Long Term Liabilities                                      842,932
                                                           ---------------
Total Liabilities                                              3,795,486

STOCKHOLDERS' EQUITY
   Preferred stocks; $0.001 par value, 20,000,000
    shares authorized and 0 share issued and outstanding               -
   Common stocks; $0.001 par value, 100,000,000 shares
    authorized and 15,652,557 shares issued and outstanding
    respectively                                                  15,653
   Additional paid in capital                                    347,347
   Statutory reserve                                              41,812
   Retained earnings                                              61,079
   Accumulated other comprehensive income                         43,174
                                                           ---------------
Total Stockholders' Equity                                       509,065
                                                           ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $   4,304,551



                                       F-3

<PAGE>

                          TONJI HEALTHCARE GROUP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

                                               For the years ended
                                                   December 31
                                    -------------------------------------------
                                            2007                  2006
                                    --------------------- ---------------------

PAITIENT SERVICE REVENUE               $  2,330,026          $  1,666,641

Cost of Revenue                           1,279,636               795,031
                                    --------------------- ---------------------

GROSS PROFIT                              1,050,390               871,610
                                    --------------------- ---------------------

OPERATING EXPENSES
Selling expenses                            660,350               412,746
General and administrative expenses         135,880               119,363
Depreciation, amortization and
impairment                                  168,300               133,887
                                    --------------------- ---------------------
Total operating expenses                    964,530               665,996
                                    --------------------- ---------------------
INCOME FROM OPERATIONS                       85,860               205,614
                                    --------------------- ---------------------
OTHER INCOME(EXPENSE)
Other income(expense)                        (6,128)               21,372
Interest income, net of expense             (20,090)
                                    --------------------- ---------------------
Total Other Income (Expense)                (26,219)               21,372
                                    --------------------- ---------------------
NET INCOME BEFOREINCOME TAXES                59,641               184,242
                                    --------------------- ---------------------
Provision for Income Taxes                  (10,002)                    -

NET INCOME                                   49,639               184,242
Foreign currency translation gain            32,870                 7,009
                                    --------------------- ---------------------
COMPEREHENSIVE INCOME                    $   82,509           $   191,251
                                    ===================== =====================
NET INCOME PER BASIC AND
DILUTED SHARES                           $    0.003           $      0.01
                                    ===================== =====================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OF OUTSTANDING             15,652,557            15,652,557
                                    ===================== =====================

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                      F-4
<PAGE>


                          TONJI HEALTHCARE GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

                                                           2007          2006
                                                       ------------   ---------
 Cash flows from operating activities:
     Net income                                        $   49,639    $  184,242
                                                       ------------   ---------
 Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                         168,300      133,887
     Allowance for doubtful accounts                       37,579        9,196
     Change in assets and liabilities:
     (Increase) in accounts receivable                    (32,337)    (183,915)
     (Increase) in inventory                              (45,913)      32,070
     (Increase) decrease in capital lease deposit        (143,945)       5,120
     (Increase) decrease in prepaid expense and             3,228            -
     (increase) in other assets                                 -      (24,542)
     Increase in accounts payable and
      accrued expenses                                    (38,234)     (21,402)
     Increase in unearned revenue                         292,263            -
     Increase in other payables                           107,122            -
                                                       ------------   ---------
                  Total adjustment                        (49,586)     348,062
                                                       ------------   ---------
 Net Cash Provided By Operating Activities                397,701      134,656
                                                       ------------   ---------
 Cash flows from investing activities:
   (Acquisitions) of property, plant and equipment        (42,973)     (54,706)
   Disposals of property, plant and equipment             621,077            -
   Payments of construction and lease back             (1,038,876)           -
   Advances to related parties                          1,007,937       30,131
                                                       ------------   ---------

Net Cash provided by (used in) Investing Activities       547,165      (24,575)
                                                       ------------   ---------
Cash flows from financing activities:
   Proceeds(Payments) from(to) loans                      395,010            -
   Payments of capital lease                              (22,348)           -
   Advances from related parties                       (1,311,824)    (129,450)
                                                       ------------   ---------
Net Cash used in Financing Activities                    (939,161)    (129,450)
                                                       ------------   ---------
Effects of foreign currency translation                     1,395        7,009
                                                       ------------   ---------
Net Increase (decrease)  in Cash and Cash Equivalents       7,100      (12,360)

Cash and Cash Equivalents-Beginning of Period              16,065       28,425
                                                       ------------   ---------
Cash and Cash Equivalents-Ending of Period                 23,165       16,065
                                                       ============   =========
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Income taxes paid                                   $        -     $      -
                                                       ============   =========
   Interest paid                                       $   12,586     $      -
                                                       ============   =========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      F-5
<PAGE>


                          TONGJI HEALTHCARE GROUP, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  FOR THE YEAR ENDED DECEMBER 31, 2007 AND 2006

<TABLE>
<S>                             <C>           <C>            <C>         <C>           <C>          <C>            <C>

                                                                                               Accumulated
                                                         Additional                               Other           Total
                               Number     Common Stock    Paid In     Statutory     Retained   Comprehensive   Shareholders'
                              Of Shares      Stock        Capital      Reserve       Earning      Income          Equity
                              ---------   ------------   ----------   ---------     --------   -------------   -------------

Balance December 31,
2005                          3,000,000      363,000             -            -     (130,990)        3,295         235,305
                            ------------  -----------  ------------  -----------  -----------  ------------  --------------
Shares cancelled in
merger with Tongji,
Inc.                         (3,000,000)    (363,000)            -            -            -             -        (363,000)

Shares issued in
reverse merger with
Tongji Healthcare
Group, Inc.                  15,652,557       15,653       347,347            -            -             -         363,000

Allocation of
statutory reserves                    -            -             -       36,848      (36,848)            -               -

Net income for the
year ended December
31, 2006                              -            -             -            -      184,242         7,009         191,251
                            ------------  -----------  ------------  -----------  -----------  ------------  --------------
Balance December 31,
2006                         15,652,557       15,653       347,347       36,848       16,404        10,304         426,556

Transfer of
statutory reserves                    -            -             -        4,964       (4,964)            -               -

Net income for the
year ended December
31, 2007                              -            -             -            -       49,639        32,870          82,509
                            ------------  -----------  ------------  -----------  -----------  ------------  --------------
Balance December 31,
2007                         15,652,557   $   15,653       347,347   $   41,812       61,079        43,174   $     509,065
                            ============  ===========  ============  ===========  ===========  ============  ==============

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-6
<PAGE>



                          TONGJI HEALTHCARE GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION

Nanning Tongji Hospital, Inc. ("NTH") was established in Nanning in the province
of Guangxi of the  Peoples  Republic  of China  ("PRC")  by the  Nanning  Tongji
Medical Co. Ltd. and an individual on October 30, 2003.

NTH is the largest private hospital modernized and comprehensive in combining
medical treatment, scientific research, teaching, prevention, and health care
together. It is an assigned hospital for medical insurance in Nanning and
Guangxi. NTH contains specialties in the areas of internal medicine, surgery,
gynecology, pediatrics, emergency medicine, ophthalmology, medical cosmetology,
rehabilitation, dermatology, otolaryngology, traditional Chinese medicine,
medical imaging, anesthesia, acupuncture, physical therapy, health examination,
and prevention. NTH is a 105-bed modern hospital containing 4 operating rooms,
with Paramount beds installed from Japan, as well as the most advanced medical
equipment worldwide from Japan, USA, Germany and France.

On December 19, 2006, the officers of NTH filed Articles of Incorporation in the
State of Nevada which was approved December 19, 2006 to create Tongji Healthcare
Group, Inc. a Nevada corporation (the "Company") and also established Tongji,
Inc., a Colorado corporation ("Tongji") a wholly owned subsidiary of the
Company.

On December 27, 2006, Tongji acquired 100% of the equity in NTH pursuant to an
Agreement and Plan of. Pursuant to the acquisition of NTH, it became the wholly
owned subsidiary of Tongji. The Company incorporated with 50,000,000 shares of
common stock and 20,000,000 shares of preferred stock both with a par value of
$0.001. The Company issued 15,652,557 shares of common stock to the shareholders
of NTH in exchange for 100% of the issued and outstanding shares of NTH.
Thereafter and for purposes of these consolidated financial statements the
"Company" and "NTH" are used to refer to the operations of Nanning Tongji
Hospital Co. Ltd.

The acquisition of NTH is accounted for as a reverse acquisition under the
purchase method of accounting since the shareholders of NTH obtained control of
the consolidated entity. Accordingly, the reorganization of the two companies is
recorded as a recapitalization of NTH, with NTH being treated as the continuing
operating entity. The historical financial statements presented herein will be
those of NTH.

According to the PRC Regulation of Healthcare Institutions, hospitals shall be
subject to register with the Administration of Health of the local government to
obtain their license for hospital service operation. The Company received its
renewed operation license from Nanning's government in May of 2005, and this
license remains valid until the next scheduled renewing date of May 2008.


                                      F-7
<PAGE>

Other existing regulations having material effects on the Company's business
include those dealing with physician's licensing, usage of medicine and
injection, public security in health and medical advertising.

As the Company maintains a facility with an excess of 100 beds, they must have
their license renewed at least every three years. The Company is also obligated
to provide free service or dispatch their physicians or employees for public
assistance. In the US this is commonly referred to as charity care. The Company
has a very small percentage of their service for this area.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Tongji Healthcare
Group, Inc. and its wholly owned subsidiaries Tongji, Inc. and Nanning Tongji
Hospital, Inc. All significant intercompany accounts and transactions have been
eliminated in consolidation. Use of Estimates The preparation of 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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. On an
on-going basis, the Company evaluates its estimates, including, but not limited
to, those related to depreciation, bad debts, income taxes and contingencies.
Actual results could differ from those estimates.

Economic and Political Risks

The Company's operations are conducted in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state
of the PRC economy. The Company's operations in the PRC are subject to special
considerations and significant risks not typically associated with companies in
North America and Western Europe. These include risks associated with, among
others, the political, economic and legal environment and foreign currency
exchange. The Company's results may be adversely affected by changes in
governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion, remittances abroad, and rates and methods of
taxation, among other things.

Cash and Cash Equivalents

The Company considers all all liquid investments with a maturity of three months
or less from the date of purchase that are readily convertible into cash to be
cash equivalents.


                                      F-8
<PAGE>


Comprehensive Income

Statement of financial accounting standards No. 130, Reporting comprehensive
income (SFAS No. 130), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements.

Inventory

Inventory is valued at the lower of cost (using the weighted average method) or
market. Inventory consists of Chinese and western medicines and pharmaceuticals.
The Management compares the cost of inventories with the market value and
allowance is made for writing down their inventories to market value, if lower.

Fair Value of Financial Instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.

Foreign Currency Translation

The Company's functional currency is that of the PRC which is the Chinese
Renminbi (RMB). The reporting currency is that of the US Dollar. Capital
accounts of the consolidated financial statements are translated into United
States dollars from RMB at their historical exchange rates when the capital
transactions occurred. Assets and liabilities are translated at the exchange
rates as of the balance sheet date. Income and expenditures are translated at
the average exchange rate of the year. The RMB is not freely convertible into
foreign currency and all foreign currency exchange transactions must take place
through authorized institutions. No representation is made that the RMB amounts
could have been, or could be, converted into US dollar at the rates used in
translation.

The Company records these translation adjustments as accumulated
other comprehensive income (loss). Gains and losses from foreign currency
transactions are included in other income (expense) in the results of
operations. For the year ended December 31, 2007 and 2006, the Company recorded
approximately $32,870 and $7,009 in transaction gains as a result of currency
translation.

Revenue Recognition

The Company's revenue recognition policies are in compliance with Staff
Accounting Bulletin (SAB) 104. Sales revenue is recognized at the date of
shipment to customers or services has been rendered when a formal arrangement


                                      F-9
<PAGE>

exists, the price is fixed or determinable, the delivery is completed, no other
significant obligations of the Company exist and collectibility is reasonably
assured. Payments received before all of the relevant criteria for revenue
recognition are satisfied are recorded as unearned revenue.

The Company generates revenue from the individuals as well as third-party
payers, including PRC government programs and insurance providers, under which
the hospital is paid based upon several methodologies including established
charges, the cost of providing services, predetermined rates per diagnosis,
fixed per diem rates or discounts from established charges. Revenues are
recorded at estimated net amounts due from patients, third-party payers and
others for healthcare services provided at the time the service is provided.
Revenues for pharmaceutical drug sales are recognized upon the drug being
administered to a patient or at the time a prescription is filled for a patient
that contain an executed prescription slip by a registered physician.

Revenues are recorded at estimated net amounts due from patients and government
Medicare funds. The Company's accounting system calculates the expected amounts
payable by the government Medicare funds. The Company bills for services
provided to Medicare patients through a medical card (the US equivalent to an
insurance card). The Company normally receives 90% of the billed amount within
90 days with the remaining 10% upon approval by the end of the year by the PRC
government. However, there have not been significant differences between the
amounts the Company bills the government Medicare funds and the amounts
collected from the Medicare funds.

Accounts Receivable

Accounts receivable are recorded at the estimated net realizable amounts from
government units, insurance companies and patients. Generally, the third-party
payers reimburse the Company on a 30-day cycle, so collections for the Company
has historically not been considered to be an area that exposes the Company to
additional risk. Hospital staff does perform verification of patient coverage
prior to examinations and/or procedures taking place

For  any  Medicare  patient  who  visits  the  hospital  that is  qualified  for
acceptance, the hospital will only include the portion that the social insurance
organization  in the accounts  receivable  and collects the self-pay  portion in
cash at the time of the service.  At times, the pre-determined rate the hospital
will  charge  may be  different  than  the  approved  Medicare  rate,  thus  the
likelihood  of some bad debt can occur.  Management  continues to evaluate  this
estimate on an ongoing basis.

The Company has established a reserve for uncollectibles of $54,549 as of
December 31, 2007.

Advertising Costs

The  Company  expenses  the  costs  associated  with  advertising  as  incurred.
Advertising  expenses for the years ended December 31, 2007 and 2006 of $400,251
and $84,960,  respectively  are included in selling and promotional  expenses in
the statements of income.  Advertising costs include marketing  brochures and an
advertising campaign to the public.


                                      F-10
<PAGE>

Advance to Suppliers

Advances to suppliers represent the cash paid in advance for
purchasing materials utilized in the hospital as well as pharmaceuticals. As at
December 31, 2007 the advance to suppliers amounted to $31,844.

Property and equipment

Peoperty and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, net of the
estimated residual values; equipment - 5 to 10 years (3 to 5% residual value)
and vehicles - 5 years (3% residual value).

When assets are retired or otherwise disposed of, the costs and related
accumulated depreciation are removed from the accounts, and any resulting gain
or loss is recognized in income for the period. The cost of maintenance and
repairs is charged to income as incurred; significant renewals and betterments
are capitalized.

Impairment of Long-Lived Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting provisions of APB Opinion No.
30, "Reporting the Results of Operations for a Disposal of a Segment of a
Business." The Company periodically evaluates the carrying value of long-lived
assets to be held and used in accordance with SFAS 144. SFAS 144 requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amounts. In
that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair market value of the long-lived assets. Loss on
long-lived assets to be disposed of is determined in a similar manner, except
that fair market values are reduced for the cost of disposal. Based on its
review, the Company believes that, as of December 31, 2007 and 2006 there were
no significant impairments of its long-lived assets.

Earnings (Loss) Per Share of Common Stock

Earnings per share is calculated  in accordance  with the Statement of financial
accounting  standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded  Accounting  Principles  Board  Opinion  No.15 (APB 15). Net loss per
share for all periods  presented  has been  restated to reflect the  adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of  common  shares  outstanding.  Diluted  net  loss  per  share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised.  Dilution is computed by applying the treasury stock method. Under
this method,  options and warrants are assumed to be exercised at the  beginning
of the period (or at the time of issuance,  if later),  and as if funds obtained
thereby were used to purchase  common  stock at the average  market price during
the period.


                                      F-11
<PAGE>

The Company has not  granted  any options or warrants  during 2007 or 2006,  and
there are no options or warrants outstanding as of December 31, 2007.

Income Taxes

The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred income taxes are recognized for the
tax consequences in future years of differences between the tax bases of assets
and liabilities and their financial reporting amounts at each period end based
on enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.

In accordance with the relevant tax laws and regulations of PRC and US, the
corporation income tax rate would typically be 33% in the PRC. The Company has
received a waiver (duty free certificate) from the taxing authorities in the PRC
for corporate enterprise income tax for the year ended 2004 through 2006.
Effective 2007, the Company will be taxed at the rate of 33%.

In addition, companies in the PRC are required to pay business taxes consisting
of 5% of income they derive from providing medical treatment and city construct
taxes, and educational taxes are based on 7% and 3% of the business taxes, and
the Company had accrued these taxes for 2005. The Company has received
notification that they are exempt from these taxes for the years ending 2006
through 2008.

Stock-Based Compensation

The Company follows FASB 123R in accounting for its stock based compensation
(see Recent Accounting Pronouncements). This measures compensation expense for
its employee stock-based compensation using the intrinsic-value method. Under
the intrinsic-value method of accounting for stock-based compensation, when the
exercise price of options granted to employees and common stock issuances are
less than the estimated fair value of the underlying stock on the date of grant,
deferred compensation is recognized and is amortized to compensation expense
over the applicable vesting period. The Company for 2007 and 2006 did not grant
any options or warrants that would need to be valued under such method.

On  January  1,  2006,  the  Company  adopted  the  provisions  of FAS No.  123R
"Share-Based  Payment"  ("FAS 123R") which  requires  recognition of stock-based
compensation  expense for all share-based payments based on fair value. Prior to
January  1, 2006,  the  Company  measured  compensation  expense  for all of its
share-based   compensation  using  the  intrinsic  value  method  prescribed  by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees" ("APB 25") and related  interpretations.  The Company has provided
pro forma  disclosure  amounts in accordance  with FAS No. 148,  "Accounting for
Stock-Based  Compensation  -  Transition  and  Disclosure - an amendment of FASB
Statement No. 123" ("FAS 148"),  as if the fair value method  defined by FAS No.
123,  "Accounting for Stock Based  Compensation" ("FAS 123") had been applied to
its stock-based compensation.


                                      F-12
<PAGE>

The Company has elected to use the  modified-prospective  approach method. Under
that  transition  method,  the  calculated  expense  in  2006 is  equivalent  to
compensation  expense for all awards  granted prior to, but not yet vested as of
January 1, 2006,  based on the  grant-date  fair values  estimated in accordance
with the original provisions of FAS 123.  Stock-based  compensation  expense for
all awards granted after January 1, 2006 is based on the grant-date  fair values
estimated in accordance with the provisions of FAS 123R.

Segment Information

Statement of Financial  Accounting  Standards No. 131 ("SFAS 131"),  "Disclosure
About  Segments of an Enterprise  and Related  Information"  requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating  decisions and assessing  performance.  Reportable segments
are based on products  and  services,  geography,  legal  structure,  management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the  Company's  consolidated  financial  statements  as the
Company  consists  of one  reportable  business  segment.  All  revenue  is from
customers in People's Republic of China. All of the Company's assets are located
in People's Republic of China.

Recent Accounting Pronouncements

In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles ("GAAP"), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The management is currently
evaluating the effect of this pronouncement on the consolidated financial
statements.

In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements
No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by
requiring an employer to recognize the over funded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. An employer with publicly traded equity securities is required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after December 15, 2006.

                                      F-13
<PAGE>

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose, at specified
election dates, to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value.
Unrealized gains and losses shall be reported on items for which the fair value


option has been elected in earnings at each subsequent  reporting date. SFAS No.
159 is  effective  for fiscal years  beginning  after  November 15, 2007.  Early
adoption is  permitted  as of the  beginning  of a fiscal year that begins on or
before  November  15,  2007,  provided  the  entity  also  elects  to apply  the
provisions  of SFAS No. 157 "Fair  Value  Measurements"  ("SFAS No.  157").  The
Company is  currently  assessing  the impact  that SFAS No. 159 will have on its
financial statements.

In December  2007,  the FASB issued SFAS No. 160,  "Noncontrolling  Interests in
Consolidated Financial Statements", which is an amendment of Accounting Research
Bulletin ("ARB") No. 51. This statement clarifies that a noncontrolling interest
in a subsidiary is an ownership interest in the consolidated  entity that should
be reported as equity in the consolidated  financial statements.  This statement
changes the way the consolidated  income statement is presented,  thus requiring
consolidated  net income to be  reported  at amounts  that  include  the amounts
attributable to both parent and the noncontrolling  interest.  This statement is
effective for the fiscal years,  and interim  periods within those fiscal years,
beginning  on or after  December  15,  2008.  Based on current  conditions,  the
Company does not expect the adoption of SFAS 160 to have a significant impact on
its results of operations or financial position.

In  December  2007,  the FASB  issued  SFAS No. 141  (revised  2007),  "Business
Combinations."  This  statement  replaces  FASB  Statement  No.  141,  "Business
Combinations."  This statement retains the fundamental  requirements in SFAS 141
that the  acquisition  method of accounting  (which SFAS 141 called the purchase
method)  be used  for  all  business  combinations  and  for an  acquirer  to be
identified for each business combination. This statement defines the acquirer as
the entity  that  obtains  control  of one or more  businesses  in the  business
combination and  establishes the acquisition  date as the date that the acquirer
achieves  control.  This statement  requires an acquirer to recognize the assets
acquired,  the  liabilities  assumed,  and any  noncontrolling  interest  in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited  exceptions  specified in the  statement.  This  statement  applies
prospectively  to business  combinations for which the acquisition date is on or
after the beginning of the first annual  reporting  period beginning on or after
December 15, 2008.  The Company does not expect the adoption of SFAS 160 to have
a significant impact on its results of operations or financial position.

In March,  2008,  the FASB issued FASB  Statement  No. 161,  "Disclosures  about
Derivative Instruments and Hedging Activities".  The new standard is intended to
improve financial reporting about derivative  instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand their
effects on an  entity's  financial  position,  financial  performance,  and cash
flows.  It is effective  for  financial  statements  issued for fiscal years and
interim  periods  beginning  after  November  15, 2008,  with early  application
encouraged.  The new standard also improves  transparency about the location and

                                      F-14
<PAGE>

amounts of  derivative  instruments  in an entity's  financial  statements;  how
derivative  instruments  and  related  hedged  items  are  accounted  for  under
Statement  133; and how derivative  instruments  and related hedged items affect
its financial position, financial performance, and cash flows.

FASB Statement No. 161 achieves these  improvements  by requiring  disclosure of
the fair  values  of  derivative  instruments  and their  gains and  losses in a
tabular format. It also provides more information about an entity's liquidity by
requiring  disclosure  of  derivative  features  that are  credit  risk-related.
Finally,  it requires  cross-referencing  within  footnotes to enable  financial
statement users to locate important.  Based on current  conditions,  the Company
does not expect the  adoption  of SFAS 161 to have a  significant  impact on its
results of operations or financial position.

NOTE 3- PROPERTY & EQUIPMENT

Property & equipment as of December 31, 2007 comprised of following:

                            Estimated                 2007
                              Useful
                              Lives
                             (Years)

Office equipment               5-10                $ 67,652
Medical equipment               5                   994,968
Fixtures                        10                  103,172
Vehicles                        5                    38,171
                                                  ---------


                                                  $1,203,963
Less: accumulated depreciation                      (136,802)
                                                  -----------
Property and equipment, net                       $1,067,161

Depreciation expense charged to operations was $168,300 and $133,887 for the
years ended December 31, 2007 and 2006, respectively.


                                      F-15
<PAGE>

NOTE 4- INVENTORIES

Inventories consisted of the following as of December 31, 2007:

Western medicine                          $141,082
Traditonal Chinese medicine                 11,160
Total                                     $152,242

NOTE 5- PREPAID LEASE

The Company paid $1,081,640 as prepaid lease for a hospital building. The
construction of the hospital building is in progress and is not expected to be
completed within a year. Hence, the prepaid lease had been classified as long
term.

NOTE 6- CAPITAL LEASE OBLIGATIONS:

Lease Deposit

The lease deposit is $143,945 and is due on November 2010.

Deferred Gain on sale and lease back

The total gain on sale and lease back was $304,293. According to SFAS 13
"Accounting for Leases" this gain is deferred and amortized over the Lease term.
Accordingly, $8,350 was amortized during the year ended December 31, 2007.

The deferred revenue outstanding as of December 31, 2007 is as follows :-

      Current            $104,329
      Long term           199,964
                        ------------
                         $304,293
                        ------------




                                      F-16
<PAGE>

Capital Lease Obligations

In 2007, the Company leased various equipments under capital leases expiring in
2010. The assets and liabilities under capital leases are recorded at the lower
of the present value of the minimum lease payments or the fair value of the
asset. The assets are depreciated over the lesser of their related lease terms
or their estimated productive lives. Depreciation of assets under capital leases
is included in depreciation expense for the twelve months ended December 31,
2007.

Aggregate minimum future lease payments under capital leases as of December 31,
2007 for each of the next five years are as follows:

      2008:             $366,728
      2009:             $366,728
      2010:             $336,167

Capital lease obligations represent the following at December 31, 2007:

                                                                      2007
                                                               ----------------
Total minimum lease payments                                   $    1,069,623
Less : Interest expense relating to future periods                   (133,261)
Present value of the minimum lease payments                           936,362
Less: current portion                                                (293,394)
                                                               ----------------
Non-current portion                                            $      642,968
                                                               ================

Following is a summary of fixed assets held under capital leases at December 31,
2007

                                                                        2007
                                                               ----------------
Medical Equipment                                            $       959,630
Less: accumulated depreciation                                       (27,959)
                                                               ----------------
Net                                                                  931,671
                                                               ================
NOTE 7- OTHER PAYABLE

Other payable as of December 31, 2007 consists of the following:

         Advance from customers                 17,325

         Welfare payable                        78,873

         Other payable                          65,152
                                             ----------
         Total                               $  161,350
                                             ==========


                                      F-17
<PAGE>

NOTE 8 - SHORT TERM LOANS

In July 2007, the Company borrowed short term loan from a financial  institution
in PRC for  $137,090  (RMB 1 million).  In August  2007,  the  Company  borrowed
another short term loan from the same financial  institution in PRC for $274,180
(RMB 2 million).  Both the above loans are  guaranteed by the Tongji Group.  The
debt accrues  interest at the banks benchmark rate plus 20 basis points (ranging
between 8.21% and 8.75%).  The debt has a maturity of one year and is secured by
the Company's assets.

The interest  expenses were $14,255 and $0 for the years ended December 31, 2007
and 2006.

NOTE 9- STOCKHOLDERS' EQUITY

Common Stock

As of December  31,  2007,  the Company has  100,000,000  shares of common stock
authorized with a par value of $0.001.

The Company issued  15,652,557 shares of common stock in exchange of 100% of the
authorized  capital of Nanning Tongji Hospital Co. Ltd.  (CHINA) in 2006.  There
were no shares issued in 2007.

The Company has not  granted  any options or warrants  during 2007 or 2006,  and
there are no options or warrants outstanding as of December 31, 2007.

Preferred Stock

As of December 31, 2007,  the Company has 20,000,000  shares of preferred  stock
authorized  with  a par  value  of  $0.001.  There  are  no  shares  issued  and
outstanding.

Statutory Reserves

As stipulated by the Company Law of the People's Republic of China (PRC), net
income after taxation can only be distributed as dividends after appropriation
has been made for the following:

i.    Making up cumulative prior years' losses, if any;

ii.   Allocations to the "Statutory surplus reserve" of at least 10% of income
      after tax, as determined under PRC accounting rules and regulations, until
      the fund amounts to 50% of the Company's registered capital;

iii.  Allocations of 5-10% of income after tax, as determined under PRC
      accounting rules and regulations, to the Company's "Statutory common
      welfare fund", which is established for the purpose of providing employee
      facilities and other collective benefits to the Company's employees; and

                                      F-18
<PAGE>

iv.   Allocations to the discretionary surplus reserve, if approved in the
      stockholders' general meeting.

Pursuant to the new Corporate Law effective on January 1, 2006, there is now
only one "Statutory surplus reserve" requirement. The reserve is 10 percent of
income after tax, not to exceed 50 percent of registered capital.

The Company has appropriated $5,950 and $36,848 as reserve for the statutory
surplus reserve and welfare fund for the years ended December 31, 2007, and
2006, respectively.

NOTE 10- PROVISION FOR INCOME TAXES

In accordance with the relevant tax laws and regulations of PRC, the corporate
income tax rate is 33%. As noted, the corporate income tax for 2004 through 2006
was 0% due to the Company's receipt of a waiver (tax relief) from the PRC
government as they acquired a previous government-owned hospital and privatized
it and improved it. Commencing, 2007, the corporate tax rate will be 33%.
Income tax for the years ended December 31, 2007 and 2006 is summarized as
follows:

                                2007        2006
                           ----------- -------------
Current:
  U.S.A :-
     Federal               $       -    $       -
       State                       -            -
   PRC - current              10,002            -
                           ----------- -------------
    Deferred tax asset        12,000            -
                           ----------- -------------
   Less: Valuation
    allowance                (12,000)           -
                           ----------- -------------
Income tax expense
  (benefit)                $  10,002    $       -
                           =========== =============


                                      F-18
<PAGE>

A reconciliation of the effective income tax rate is as follows:

                                            2007         2006
                                           -----         -----

Tax at Statutory rate                        33%            0%

Foreign tax rate difference                 (16)%           0
                                          -------        -----
                                             17%           0%
                                          ======        =====

                                      F-19


<PAGE>

NOTE 11- RELATED PARTY TRANSACTIONS

Due from Related Party

The Company has entered into an agreement with Nanning Tongji Chain Pharmacy Co.
Ltd.  whereby  the  Company  from time to time will  advance  amounts to Nanning
Tongji Chain  Pharmacy  Co.,  Ltd. to assist them in their  operations.  The two
companies have common major  shareholders.  The advanced amounts accrue interest
at a rate of 6% per annum.  The amount  receivable  as of  December  31, 2007 is
$1,397,080.  Accrued  interest  receivable  on this  agreement  of $43,735 as of
December 31, 2007, is included in due from related party.

The Company has entered into an agreement with Guangxi Tongji  Medicine Co. Ltd.
whereby the  Company  from time to time will  advance  amounts to assist them in
their operations. The two companies have common major shareholders. The advanced
amounts accrue interest at a rate of 6% per annum.  The amount  receivable as of
December  31, 2007 to Guangxi  Tongji  Medicine  Co. Ltd was  $118,946.  Accrued
interest  receivable  on this  agreement of $18,690 as of December 31, 2007,  is
included in due to related party.

Due to Related Parties

The Company has entered into an agreement with the Chairman and the  shareholder
of the Company whereby the Company from time to time will be advanced amounts to
assist them in their operations.  The advanced amounts accrue interest at a rate
of 6% per  annum.  As of  December  31,  2007  $1,563,842  was  payable to their
Chairman and shareholder.  Accrued interest payable on this agreement of $20,559
as of December 31, 2007, is included in due to related party.

Rental

The Company has entered into a lease agreement for their hospital with Guangxi
Tongji Medicine Co. Ltd that expires December 2008. Monthly rentals are
16,438.86 per month (RMB). Included in due to related parties as of December 31,
2007 is $94,979 in amounts that are currently due. Based on the exchange rate at
December 31, 2007, minimum lease payments are as follows:

Period ending December 31, 2008           $25,903

NOTE 12 - MAJOR CUSTOMERS AND SUPPLIERS

The Company had four suppliers that accounted for 45%, 12% and 11% of purchase
for the year ended December 31, 2007. Accounts payable from these major
suppliers were $79,785, $24,383 and $0 respectively at December 31, 2007.

The Company does not have any major customers for the year ended December 31,
2007 as the customers are mostly patients.



                                      F-20



<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned,  thereunto
duly authorized on the 9th day of April 2008.

                                TONGJI HEALTHCARE GROUP, INC.


                                By:  /s/ Yun-hui Yu
                                    -----------------------------------------
                                      Yun-hui Yu, President and Chief
                                      Executive Officer

                                By:  /s/ Wei-dong Huang
                                    ------------------------------------------
                                     Wei-dong   Huang,   Chief   Financial   and
                                     Accounting Officer


      Pursuant to the requirements of the Securities Act of l934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature                        Title                Date


/s/ Yun-hui Yu                  Director           April 9, 2008
--------------------------
Yun-hui Yu


/s/ Jing-xi Lv                  Director           April 9, 2008
--------------------------
Jing-xi Lv


/s/ Jia-lin Zhang               Director           April 9, 2008
--------------------------
Jia-lin Zhang


/s/ Lin Lin                     Director           April 9, 2008
--------------------------
Lin Lin


/s/ Xiang-wei Zeng              Director           April 9, 2008
--------------------------
Xiang-wei Zeng




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                          TONGJI HEALTHCARE GROUP, INC.


                                   FORM 10-KSB

                                    EXHIBITS



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