U.
S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549





FORM
10-Q





þ
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934


For
      the quarterly period ended March 31,
      2008





 ̈           Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934


For the
transition period from  to .





Commission
File Number 000-1365354





Expedition
Leasing, Inc.





(Exact
name of small business issuer as specified in its charter)





Florida
              (State
      or other jurisdiction of
              incorporation
      or organization)
            20-1112910
              (I.R.S.
      employer
              identification
      number)1Economic
      & Technology Development Zone
              Chengxu
      Village
              Shuangcheng
      Town, Shuangcheng City
              Heilongjiang
      Province, PRC
              (Address
      of principal executive offices and zip code)
              (86)
      0451-88355530
              (Registrant’s
      telephone number, including area
code)





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


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





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





Indicate
by check mark whether the registrant is required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes þ   No
o





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes þ     No
o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.  o





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





Large Accelerated
Filer            
o                                                                           Accelerated
Filer                                    
o


Non-accelerated
filer                 o                                                                         
  Smaller reporting
company                 
 þ





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


Yes o   No
þ





Table of Contents




APPLICABLE
ONLY TO CORPORATE ISSUERS:





As of May
5, 2008, the Registrant had 25,229,800 shares of Common Stock
outstanding.









Table of Contents





EXPEDITION
LEASING, INC.




FORM 10-Q






INDEX




Page NumberSPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTSPART
      I.  FINANCIAL INFORMATIONItem
      1.
            Financial Statements (unaudited)
            1Consolidated Balance Sheet as of March 31,
      2008
            3Consolidated Statements of Operations and Comprehensive
      Income for the Three Months Ended March 31, 2008 and
    2007
            4Consolidated Statements of Cash Flows for the Three Months
      Ended March 31, 2008 and 2007
            5Notes to the Consolidated Financial Statements as of March
      31, 2008
            6Item
      2.
            Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
            17Item
      3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            22Item
      4.
            Controls and Procedures
            22PART
      II.  OTHER INFORMATIONItem
      1.
            Legal Proceedings
            24Item
      1A.
            Risk Factors
            24Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            33Item
      3.
            Defaults Upon Senior Securities
            33Item
      4.
            Submission of Matters to a Vote of Security
      Holders
            33Item
      5.
            Other Information
            33Item
      6.
            Exhibits
            34SIGNATURES











Table of Contents


SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





Some of
the statements made by us in this Quarterly Report on Form 10-Q are
forward-looking in nature, including but not limited to, statements relating to
our future revenue, product development, demand, acceptance and market share,
gross margins, levels of research and development, our management's plans and
objectives for our current and future operations, and other statements that are
not historical facts. Forward-looking statements include, but are not limited
to, statements that are not historical facts, and statements including forms of
the words "intend", "believe", "will", "may", "could", "expect", "anticipate",
"plan", "possible", and similar terms. Actual results could differ materially
from the results implied by the forward looking statements due to a variety of
factors, many of which are discussed throughout this Quarterly Report. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. We undertake no obligation to publicly
release any revisions to these forward-looking statements that may reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events. Factors that could cause actual results to differ
materially from those expressed in any forward-looking statement made by us
include, but are not limited to:




●
            our
      ability to finance our activities and maintain our financial
      liquidity;●
            our
      ability to attract and retain qualified, knowledgeable
      employees;





●
            the
      impact of general economic conditions on our business;●
            postponements,
      reductions, or cancellations in orders from new or existing
      customers;





●
            the
      limited number of potential customers for our products;●
            the
      variability in gross margins on our
products;





●
            our
      ability to develop and market new products
successfully;●
            our
      ability to acquire new customers in the future;
  and





●
            deterioration
      of business and economic conditions in our
  markets.




Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to
update this forward-looking information. Nonetheless, the Company reserves the
right to make such updates from time to time by press release, periodic report
or other method of public disclosure without the need for specific reference to
this Report. No such update shall be deemed to indicate that other statements
not addressed by such update remain correct or create an obligation to provide
any other updates.







In this
document, the words "we," "our," "ours," "us," and “Company” refer to Expedition
Leasing, Inc. and our subsidiaries.





Table of Contents


PART
I.                      FINANCIAL
INFORMATION





ITEM
1.                     FINANCIALSTATEMENTS.






















EXPEDITION LEASING,
INC.




Consolidated
Financial Statements (Unaudited)


For the Three Months
Ended March 31, 2008






















-1-
 Table of Contents


EXPEDITION LEASING,
INC. AND SUBSIDIARIES
  Consolidated
Financial Statements (Unaudited)
 For the Three Months
Ended March 31, 2008


Page(s)Consolidated
      Balance Sheet as of March 31, 2008
              
              3Consolidated
      Statements of Operations and Comprehensive Income for the Three Months
      Ended March 31, 2008 and 2007
              
              4Consolidated
      Statements of Cash Flows for the Three Months Ended March 31, 2008 and
      2007
              
              5Notes
      to the Consolidated Financial Statements as of March 31,
      2008
              
              6




-2-
 Table of Contents








EXPEDITION
      LEASING INC. AND SUBSIDIARIESCONSOLIDATED BALANCE
      SHEETAS OF MARCH 31,
      2008(UNAUDITED)ASSETSCURRENT ASSETSCash
      & cash equivalents
            
            $
            51,469Advance
      to suppliers
            
            
            51,654Inventory
            
            
            146,387Other
      receivables
            
            
            368,314Due from
      officer
            
            
            2,720,582Due from
      related party
            
            
            163,478Total
      current assets
            
            
            3,501,884NONCURRENT ASSETSProperty
      and equipment, net
            
            
            3,871,065Construction in
      progress
            
            
            330,459Intangible
      assets
            
            
            556,538Deferred
      tax asset
            
            
            28,815Total
      noncurrent assets
            
            
            4,786,877TOTAL ASSETS
            
            $
            8,288,761LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT LIABILITIESAccounts
      payable
            
            
            26,633Other
      payables
            
            
            7,631,862Total
      current liabilities
            
            
            7,658,495CONTINGENCIESSTOCKHOLDERS' EQUITYCommon stock, $.00001 par
      value; authorized shares100,000,000;  issued and
      outstanding 25,229,800 shares
            
            
            252Additional paid in
      capital
            
            
            (252
            )Statutory
      reserve
            
            
            75,765Accumulated other
      comprehensive income
            
            
            522,611Retained
      earnings
            
            
            31,890Total
      stockholders' equity
            
            
            630,266TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY
            
            $
            8,288,761


The
accompanying notes are an integral part of these consolidated financial
statements.  -3-
 Table of Contents





EXPEDITION LEASING INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOMEFOR THE THREE MONTHS
      ENDED MARCH 31, 2008(UNAUDITED)Net sales
            
            $
            1,146,218Cost of goods sold
            
            
            (454,673
            )Gross profit
            
            
            691,545Operating expensesSelling
      expenses
            
            
            (5,200
            )General
      and administrative expenses
            
            
            (127,912
            )Total
      operating expenses
            
            
            (133,112
            )Income from operations
            
            
            558,433Non-operating income
      (expenses)Interest
      income
            
            
            102Financial
      expense
            
            
            (491
            )Total
      non-operating expenses
            
            
            (389
            )Net income
            
            
            558,044Other comprehensive
itemForeign
      currency translation
            
            
            326,179Comprehensive Income
            
            $
            884,223Basic and diluted weighted average
      shares outstanding
            
            
            25,229,800Basic and diluted net earnings per
      share
            
            $
            0.02





-4-
 Table of Contents






EXPEDITION LEASING INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENT OF CASH FLOWSFOR
      THE THREE MONTHS ENDED MARCH 31, 2008(UNAUDITED)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                
                $
                558,044Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      and amortization
                
                
                71,033(Increase)
      decrease in current assets:Accounts
      receivable
                
                
                26,185Other
      receivables and advances to suppliers
                
                
                (258,609
                )Inventory
                
                
                59,378Increase
      (decrease) in current liabilities:Accounts
      payable
                
                
                1,232Other
      payables
                
                
                3,584Value
      added tax payable
                
                
                (11,263
                )Net
      cash provided by operating activities
                
                
                449,584CASH
      FLOWS FROM INVESTING ACTIVITIES:Acquisition of property & equipment
                
                
                (20,905
                )Construction in progress
                
                
                (42,919
                )Net
      cash used in investing activities
                
                
                (63,824
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Due
      from officer
                
                
                (432,804
                )Due
      from related party
                
                
                (21,921
                )Net
      cash used in financing activities
                
                
                (454,725
                )EFFECT
      OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS
                
                
                3,194DECREASE
      IN CASH & CASH EQUIVALENTS
                
                
                (68,965
                )CASH
      & CASH EQUIVALENTS, BEGINNING OF PERIOD
                
                
                117,240CASH
      & CASH EQUIVALENTS, END OF PERIOD
                
                $
                51,469Supplemental
      Cash flow data:Income
      tax paid
                
                $
                -Interest
      paid
                
                $
                -
 Table of Contents






-5-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





1.
ORGANIZATION AND DESCRIPTION OF BUSINESS





Expedition
Leasing Inc. (the “Company” or “EXDG”) was incorporated on May 12, 2004 in the
State of Florida.  The Company is engaged in the development,
manufacture and distribution of health and nutritional supplements through its
wholly owned operating subsidiary in the People’s Republic of China (“PRC” of
“China”).





The
Company entered into an exchange agreement with Sinary Bio-Technology Holdings
Group, Inc. (“Sinary”) and its sole shareholder (the “Sinary Stockholder”) on
December 7, 2007, pursuant to which the Company issued 24,725,200 shares of its
common stock to the Sinary Stockholder in exchange for all of the issued and
outstanding common shares of Sinary. Concurrently, Sinary paid $650,000 to
certain former shareholders of the Company, who surrendered an aggregate of
24,725,200 shares of EXDG common stock held by them to the Company for
cancellation. As a result, the Sinary Stockholder currently owns 98% of the
Company. From and after the Closing Date, Sinary became wholly owned subsidiary
of the Company.





Prior to
the acquisition of Sinary, the Company was a non-operating public shell
corporation. Pursuant to Securities and Exchange Commission (“SEC”) rules, the
merger or acquisition of a private operating company into a non-operating public
shell corporation with nominal net assets is considered a capital transaction in
substance, rather than a business combination.  Accordingly, for
accounting purposes, the transaction has been treated as a reverse acquisition
and a recapitalization, and pro-forma information is not presented. Transaction
costs incurred in the reverse acquisition have been charged to
expense.





Sinary
was incorporated under the laws of the State of Nevada on August 31, 2007. On
October 25, 2007, Sinary entered into an equity interests transfer agreement
with the stockholders of Heilongjiang Weikang Biotech Group Co., Ltd.
(“Weikang”), a limited liability company in the PRC to acquire 100% of the
equity interests of Weikang for the sum of 57 million Renminbi (“RMB”), or
approximately 7.6 million US dollars.





Weikang
was incorporated in the Heilongjiang Province, People’s PRC on March 29, 2005,
and formerly known as Heilongjiang Province Weikang Bio-Engineering Co., Ltd.
(“Weikang Bio-Engineering”). Weikang is engaged in development, manufacture and
distribution of health and nutritional supplements in the
PRC.





The
unaudited financial statements have been prepared by the Company,
pursuant to the rules and regulations of the SEC. The information furnished
herein reflects all adjustments (consisting of normal recurring accruals and
adjustments) which are, in the opinion of management, necessary to fairly
present the operating results for the respective periods. Certain information
and footnote disclosures normally present in annual financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted pursuant to such rules and
regulations. These financial statements should be read in conjunction with
the audited financial statements and footnotes included in the
Company’s audited financial statements.  The results for the three
months ended March 31, 2008 are not necessarily indicative of the results to be
expected for the full year ending December 31, 2008.








-6-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Principle
of Consolidation





The
accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Sinary, and the results of operations
of Weikang, Sinary’s wholly-owned subsidiary, from the date of acquisition. All
significant inter-company accounts and transactions have been eliminated in
consolidation.





Use
of Estimates





In
preparing the financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting year. Significant estimates, required by management, include the
recoverability of long-lived assets and the valuation of inventories. Actual
results could differ from those estimates.





Cash
and Cash Equivalents





For
purposes of the statement of cash flows, the Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.





Accounts
Receivable




The
Company’s policy is to maintain reserves for potential credit losses on accounts
receivable.  Management reviews the composition of accounts receivable
and analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves.  There were no accounts
receivable at March 31, 2008.





Inventory





Inventories
are valued at the lower of cost or market with cost determined on a moving
weighted average basis. Cost of work in progress and finished goods comprises
direct material, direct production cost and an allocated portion of production
overheads.




Property
and Equipment





Property
and equipment are stated at cost, net of accumulated depreciation. Expenditures
for maintenance and repairs are expensed as incurred; additions, renewals and
betterments are capitalized.  When property and equipment are retired
or otherwise disposed of, the related cost and accumulated depreciation are
removed from the respective accounts, and any gain or loss is included in
operations. Depreciation of property and equipment is provided using the
straight-line method for substantially all assets with estimated lives ranging
from 3 to 20 years as follows:














-7-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Building
              20
      yearsVehicle
              5
      yearsOffice
      Equipment
              3-7
      yearsProduction
      Equipment
              3-6
      years







Land
Use Right




Right to
use land is stated at cost less accumulated amortization. Amortization is
provided using the straight-line method over 50 years.





Impairment
of Long-Lived Assets




Long-lived
assets, which include property, plant and equipment and intangible assets, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.




Recoverability
of long-lived assets to be held and used is measured by a comparison of the
carrying amount of an asset to the estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated undiscounted future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the assets. Fair value is generally determined using the asset’s
expected future discounted cash flows or market value, if readily
determinable.  Based on its review, the Company believes that, as of
March 31, 2008, there were no significant impairments of its long-lived
assets.




Income
Taxes





The
Company utilizes Statement of Financial Accounting Standards (“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.





The
Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, on January 1, 2007.  As a result of the
implementation of FIN 48, the Company made a comprehensive review of its
portfolio of tax positions in accordance with recognition standards established
by FIN 48.  As a result of the implementation of Interpretation 48,
the Company recognized no material adjustments to liabilities or stockholders
equity. When tax returns are filed, it is highly certain that some positions
taken would be sustained upon examination by the taxing authorities, while
others are subject to uncertainty about the merits of the position taken or the
amount of the position that would be ultimately sustained. The benefit of a tax
position is recognized in the financial statements in the period during which,
based on all





-8-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





available
evidence, management believes it is more likely than not that the position will
be sustained upon examination, including the resolution of appeals or litigation
processes, if any.  Taxpositions taken are not
offset or aggregated with other positions.  Tax positions that meet
the more-likely-than-not recognition threshold are measured as the largest
amount of tax benefit that is more than 50 percent likely of being realized upon
settlement with the applicable taxing authority. The portion of the benefits
associated with tax positions taken that exceeds the amount measured as
described above is reflected as a liability for unrecognized tax benefits in the
accompanying balance sheets along with any associated interest and penalties
that would be payable to the taxing authorities upon examination.





Interest
associated with unrecognized tax benefits are classified as interest expense and
penalties are classified in selling, general and administrative expenses in the
statements of income. The adoption of FIN 48 did not have a material impact on
the Company’s financial statements.





Revenue
Recognition





The
Company's revenue recognition policies are in compliance with SEC Staff
Accounting Bulletin (“SAB”) 104.  Sales revenue is recognized at the
date of shipment to customers when a formal arrangement 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 recorded as unearned revenue.





Sales
revenue represents the invoiced value of goods, net of value-added tax
(“VAT”).  All of the Company’s products that are sold in the PRC are
subject to Chinese value-added tax of 17% of the gross sales
price.  This VAT may be offset by VAT paid by the Company on raw
materials and other materials included in the cost of producing their finished
product. The Company recorded VAT payable and VAT receivable net of payments in
the financial statements. The VAT tax return is filed offsetting the payables
against the receivables.





VAT on
sales and VAT on purchases was approximately $195,000 and $9,300 for the three
months ended March 31, 2008, respectively. Sales and purchases are recorded net
of VAT collected and paid as the Company acts as an agent for the government.
VAT taxes are not affected by the income tax holiday.





Sales
returns and allowances was $0 for the three months ended March 31, 2008. The
Company does not provide unconditional right of return, price protection or any
other concessions to its dealers or other customers.





Cost
of Goods Sold




Cost of
goods sold consists primarily of material costs, employee compensation,
depreciation and related expenses, which are directly attributable to the
production of products. Write-down of inventory to lower of cost or market is
also recorded in cost of goods sold.











-9-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Concentration
of Credit Risk





Financial
instruments that potentially subject the Company to credit risk consist
primarily of accounts receivable and other receivables. The Company does not
require collateral or other security to support these receivables. The Company
conducts periodic reviews of its clients' financial condition and customer
payment practices to minimize collection risk on accounts
receivable.





The
operations of the Company are located in the PRC. Accordingly, the Company's
business, financial condition, and results of operations may be influenced by
the political, economic, and legal environments in the PRC, as well as by the
general state of the PRC economy.





Statement
of Cash Flows





In
accordance with SFAS No. 95, “Statement of Cash Flows,” cash flows from the
Company's operations are calculated based upon the local currencies. As a
result, amounts related to assets and liabilities reported on the statement of
cash flows may not necessarily agree with changes in the corresponding balances
on the balance sheet.





Fair
Value of Financial Instruments





SFAS 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 and Comprehensive Income (Loss)




The
Company’s functional currency is the Renminbi (“RMB”). For financial reporting
purposes, RMB has been translated into United States dollars ("USD") as the
reporting currency. Assets and liabilities are translated at the exchange rate
in effect at the balance sheet date. Revenues and expenses are translated at the
average rate of exchange prevailing during the reporting period. Translation
adjustments arising from the use of different exchange rates from period to
period are included as a component of stockholders' equity as "Accumulated other
comprehensive income". Gains and losses resulting from foreign currency
transactions are included in income. There has been no significant fluctuation
in exchange rate for the conversion of RMB to USD after the balance sheet
date.





The
Company uses SFAS No 130, “Reporting Comprehensive Income”. Comprehensive income
is comprised of net income and all changes to the statements of stockholders’
equity, except those due to investments by stockholders, changes in paid-in
capital and distributions to stockholders. Comprehensive income for the three
months ended March 31, 2008 included net income and foreign currency translation
adjustments.














-10-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Basic
and Diluted Earning Per Share (EPS)





Basic EPS
is computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted EPS is
computed similar to basic net
income per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.
Diluted net earning 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.





Segment
Reporting





SFAS No.
131, "Disclosures 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 financial statements as substantially all of the
Company's operations are conducted in one industry segment. The Company consists
of one reportable business segment.  All of the Company's assets are
located in the PRC.





Research
and Development





Research
and development costs are related primarily to the Company developing its new
health care products. Research and development costs are expenses as incurred.
For the three months ended March 31, 2008 the research and development expense
was $0.




Start-up
Costs




In
accordance with the American Institute of Certified Public Accountants Statement
of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company
expenses all costs incurred in connection with the start-up and organization of
the Company.




New
Accounting Pronouncements





Business
Combinations





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business
Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting
for business combinations. Under SFAS 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141R will change
the accounting treatment for certain specific items, including:





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 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)





2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





·
            Acquisition
      costs will be generally expensed as
incurred;


·
            Noncontrolling
      interests (formerly known as “minority interests” – see SFAS 160
      discussion below) will be valued at fair value at the acquisition
      date;


·
            Acquired
      contingent liabilities will be recorded at fair value at the acquisition
      date and subsequently measured at either the higher of such amount or the
      amount determined under existing guidance for non-acquired
      contingencies;


·
            In-process
      research and development will be recorded at fair value as an
      indefinite-lived intangible asset at the acquisition
  date;


·
            Restructuring
      costs associated with a business combination will be generally expensed
      subsequent to the acquisition date;
and


·
            Changes
      in deferred tax asset valuation allowances and income tax uncertainties
      after the acquisition date generally will affect income tax
      expense.





SFAS 141R
also includes a substantial number of new disclosure requirements. SFAS 141R
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. Earlier adoption is prohibited. Accordingly, since
we are a calendar year-end company we will continue to record and disclose
business combinations following existing GAAP until January 1, 2009. We
expect SFAS 141R will have an impact on accounting for business combinations
once adopted but the effect is dependent upon acquisitions at that
time.





Noncontrolling Interests in
Consolidated Financial Statements – An Amendment of ARB No.
51





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS
160”). SFAS 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements and separate from the parent’s equity. The amount of net
income attributable to the noncontrolling interest will be included in
consolidated net income on the face of the income statement. SFAS 160 clarifies
that changes in a parent’s ownership interest in a subsidiary that do not result
in deconsolidation are equity transactions if the parent retains its controlling
financial interest. In addition, this statement requires that a parent recognize
a gain or loss in net income when a subsidiary is deconsolidated. Such gain or
loss will be measured using the fair value of the noncontrolling equity
investment on the deconsolidation date. SFAS 160 also includes expanded
disclosure requirements regarding the interests of the parent and its
noncontrolling interest. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Like SFAS 141R discussed above, earlier adoption is prohibited. We have not
completed our evaluation of the potential impact, if any, of the adoption of
SFAS 160 on our consolidated financial position, results of operations and cash
flows.





Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB
Statements No. 87, 88, 106, and 132R




In
September 2006, the FASB, issued SFAS, No. 158, “Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB
Statements No. 87, 88, 106, and 132R,” which requires employers to recognize the
underfunded or overfunded status of a defined benefit postretirement plan as an
asset or liability in its statement of financial position and to recognize
changes in the funded status in the year in which the changes occur through
accumulated other comprehensive income. Additionally, SFAS No. 158 requires
employers to measure the funded status of a plan as of the date of its year-end
statement of financial position. The new reporting requirements and related new
footnote disclosure rules of SFAS No. 158 are effective for fiscal years ending
after December 15, 2006. We adopted the provisions of SFAS No. 158 for the year
end 2006, and the effect of recognizing the funded status in accumulated other
comprehensive income was not significant. The new measurement date requirement
applies for fiscal years ending after December 15, 2008.





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 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)







3.
INVENTORY





Inventory
at March 31, 2008 was as follows:





Raw
      materials
            
            $
            90,624packing
      materials
            
            
            31,681Finished
      Goods
            
            
            24,082Total
            
            $
            146,387




4.
PROPERTY AND EQUIPMENT, NET





Property
and equipment consisted of the following at March 31, 2008:





Building
            
            $
            2,822,795Building
      improvements
            
            
            549,646Production
      equipment
            
            
            521,692Office
      furniture and equipment
            
            
            25,774Vehicles
            
            
            66,4023,986,309Less:
      Accumulated depreciation
            
            
            (115,244
            )$
            3,871,065





Depreciation
expense for the three months ended March 31, 2008 was $68,137.





5.
OTHER RECEIVABLES





Other
receivables represent cash advances to employees and sales representatives for
normal business purposes such as advance for traveling expense.





6.
RELATED PARTY TRANSACTIONS




Due
from Officer





Due from
officer represents a refundable deposit made by a Weikang officer on behalf of
Weikang to initiate negotiation on a possible acquisition of a pharmaceutical
factory.





-13-
 Table of Contents
 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)








Due from Related Party





Due from
related party represents accounts receivable arising from sales made to a
related company owned by the Company’s chief executive officer and chairman of
the board of directors who was also a shareholder of Weikang prior to its
acquisition by Sinary.  As of March 31, 2008, due from this related
party was $163,478. Sales to this related party during the three months ended
March 31, 2008 was $31,796.





Sales
to Related Party





During
the three months ended March 31, 2008, the Company made sales to another related
company owned by an individual who was a shareholder of Weikang prior to its
acquisition by Sinary, in the amount of $351,259. The receivables from this
related party was $0 as of March 31, 2008.





7.
INTANGIBLE ASSETS





Intangible
assets mainly consist of land use right. All land in the PRC is government owned
and can not be sold to any individual or company. However, the government grants
the user a “land use right” to use the land. The Company has the right to use
the land for 50 years and is amortizing the right on a straight-line basis for
50 years.




Amortization
expense for three months ended March 31, 2008 was $2,896. Amortization expense
for the next five years is expected to be as follows: $11,500, $11,500, $11,500,
$11,500 and $11,500 respectively.





8. MAJOR
CUSTOMERS AND
VENDORS





Five
major customers who are dealers of the Company accounted for approximately 30%,
25%, 18%, 13% & 11%, respectively, of the Company’s sales for three months
ended March 31, 2008, or 97% of the Company’s net revenue in the
aggregate.  One of these five customers, which accounted for
approximately 30% of the Company’s total sales for the period, is a related
party owned by a shareholder of Weikang.  At March 31, 2008, the total
receivable balance due from these five customers was $0.





Six
vendors collectively provided 70% of the Company’s purchase of raw materials for
three months ended March 31, 2008, individually accounting for approximately
14%, 12%, 12%, 11%, 11% & 10%, respectively, of the purchases.  The
Company did not have accounts payable to these vendors at March 31,
2008.





9.
OTHER PAYABLES





Other
payables mainly consisted of the purchase price of approximately $7,620,000 that
Sinary will pay to Weikang’s shareholder by August 9, 2008for the
acquisition of Weikang.  This payable doesn’t bear any
interest.







-14-
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 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)




10. INCOME
TAXES





Weikang
is exempt from income tax for three years from 2006 through 2008.  Net
income for the three months ended March 31, 2008 would have been lower by
approximately $139,500 if Weikang was not exempt from income taxes.





Weikang
is governed by the Income Tax Law of the PRC concerning the private-run
enterprises, which are generally subject to tax at a statutory rate of 25% (33%
prior to 2008) on income reported in the statutory financial statements after
appropriated tax adjustments.





The
following table reconciles the U.S. statutory rates to the Company’s effective
tax rate for the three months ended March 31, 2008:


US
      statutory rates
            34%Tax
      rate difference
            (9%)Effect
      of tax holiday
            (25%)Tax
      per financial statements
            -





11.
STATUTORY RESERVES





Pursuant
to the new corporate law of the PRC effective January 1, 2006, the Company is
now only required to maintain one statutory reserve by appropriating from its
after-tax profit before declaration or payment of dividends. The statutory
reserve represents restricted retained earnings.





Surplus Reserve
Fund





The
Company is now only required to transfer 10% of its net income, as determined
under PRC accounting rules and regulations, to a statutory surplus reserve fund
until such reserve balance reaches 50% of the Company’s registered capital. The
Company transferred $55,804 to this reserve for the three months ended March 31,
2008.





The
surplus reserve fund is non-distributable other than during liquidation and can
be used to fund previous years’ losses, if any, and may be utilized for business
expansion or converted into share capital by issuing new shares to existing
shareholders in proportion to their shareholding or by increasing the par value
of the shares currently held by them, provided that the remaining reserve
balance after such issue is not less than 25% of the registered
capital.





Common Welfare
Fund





Common
welfare fund is a voluntary fund that the Company can elect to transfer 5% to
10% of its net income to this fund. The Company did not make any contribution to
this fund for the three months ended March 31, 2008 and 2007,
respectively.





This fund
can only be utilized on capital items for the collective benefit of the
Company’s employees, such as construction of dormitories, cafeteria facilities,
and other staff welfare facilities. This fund is non-distributable other than
upon liquidation.





12.
CONTINGENCIES




The
Company’s operations in the PRC are subject to specific considerations and
significant risks not typically associated with companies in the North America
and Western Europe. These include risks associated with, among others, the
political, economic and legal environments and foreign currency exchange. The
Company’s operations may be adversely affected by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation,
among other things.





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 EXPEDITION
LEASING INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 (UNAUDITED)






The
Company’s sales, purchases and expenses transactions are denominated in RMB and
all of the Company’s assets and liabilities are also denominated in RMB. The RMB
is not freely convertible into foreign currencies under the current law. In
China, foreign exchange transactions are required by law to be transacted only
by authorized financial institutions. Remittances in currencies other than RMB
may require certain supporting documentation in order to affect the
remittance.





13.
COMPARATIVE PRO FORMA CONSOLIDATED STATEMENT OF INCOME





On
October 25, 2007, Sinary entered into an equity interests transfer agreement
with the owners of Weikang to acquire 100% of the equity interests of Weikang
for the sum of 57 million RMB, or approximately 7.6 million US dollars (the
“Acquisition Price”).





The pro
forma financial information of the consolidated statement of income of the
Company as if the acquisition of Sinary and Weikang had occurred as of the
beginning of the 2007 is presented below:





For
      the three months ended March 31, 2007
            
            
            
            
            
            
            
            Pro
      forma
            
            
            Pro
      formaSinary
            
            
            Weikang
            
            
            Adjustments
            
            
            ConsolidatedNet
      Revenue
            
            $
            -
            
            
            $
            993,937
            
            
            $
            -
            
            
            $
            993,937Cost
      of Revenue
            
            
            -
            
            
            
            502,599
            
            
            
            -
            
            
            
            502,599Gross
      Profit
            
            
            -
            
            
            
            491,338
            
            
            
            -
            
            
            
            491,338Operating
      expenses:Selling
      expenses
            
            
            -
            
            
            
            7,558
            
            
            
            -
            
            
            
            7,558General
      and administrative expenses
            
            
            -
            
            
            
            66,837
            
            
            
            (5,116
            )
            
            
            61,721Total
      operating expenses
            
            
            -
            
            
            
            74,395
            
            
            
            (5,116
            )
            
            
            69,279Income
      from operations
            
            $
            -
            
            
            $
            416,943
            
            
            $
            5,116
            
            
            $
            422,059Non-operating
      income (expenses):
            
            
            -
            
            
            
            (41)
            
            
            
            
            
            
            
            (41)Other
      expense
            
            
            -
            
            
            
            (41)
            
            
            
            -
            
            
            
            (41)Net
      income
            
            $
            -
            
            
            $
            416,902
            
            
            $
            5,116
            
            
            $
            422,018Basic
      and diluted weighted average shares outstanding
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            25,229,800Basic
      and diluted net earnings per share
            
            $
            -
            
            
            $
            -
            
            
            $
            
            
            
            $
            0.02








-16-
 Table of Contents





ITEM
2.       MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.





The
following discussion and analysis of our financial condition and results of
operations for the three months ended March 31, 2008 should be read in
conjunction with the Financial Statements and corresponding notes included in
this Quarterly Report on Form 10-Q. Our discussion includes forward-looking
statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations, and intentions. Actual results and
the timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including those
set forth under the Risk Factors and Special Note Regarding Forward-Looking
Statements in this report. We use words such as “anticipate,” “estimate,”
“plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,”
“may,” “will,” “should,” “could,” and similar expressions to identify
forward-looking statements.





Overview





Expedition
Leasing, Inc. was incorporated in Florida on May 12, 2004. On December 7, 2007,
we acquired SinaryBio-Technology
Holdings Group, Inc. (“Sinary”), a Nevada corporation and, as a result, Sinary’s
wholly owned subsidiary Weikang Bio-Technology Group
Co., Ltd. (“Weikang”), a limited liability
company in the People’s Republic of China
(“China”or “PRC”), by way of the
exchange of 24,725,200 shares of our common stock for 100% of the issued and
outstanding common stock of Sinary. We accounted for this share exchange
transaction as a reverse acquisition and recapitalization and, as a result, our
consolidated financial statements include the historical assets and liabilities
of Sinary in our capital structure. Please see Note 1 to our unaudited
consolidated financial statements included in this report for further details of
this stock exchange transaction. (Please see the risk factors
concerning the acquisition of Weikang under the sections titled “Risks Related to Our
Corporate Structure”and “Risks Related to an
Investment in Our Securities”in the Risk Factor section
of this current report beginning onpage24.)





Having no
substantive operation of its own, Sinary, through Weikang, engages in the
research, development, manufacturing, marketing, and sales ofhealth and nutritional
supplements inChina. Weikang is
located in Heilongjiang Province in Northeastern China, with our principal
office and manufacturing facility located in the Economic and Technology
Development Zone in the city of Shuangcheng, approximately 42 kilometers south
of the provincial capital Harbin. All of our products are Chinese herbal-based
health and nutritional supplements. We actively seek to maintain and improve the
quality of its products, and since April 2006, Weikang has implemented the
“GB/T19001-2000 idt ISO9001:2000” quality assurance management system to all of
its manufacturing processes.





We
currently manufacture and distribute a series of internally developed health
supplements under a Chinese trade name which English transliteration is
“Rongrun”. The “Rongrun”-line presently include seven products. We also
developed two new products during the end of 2007, which have been approved by
the Heilongjiang Department of Health.





Recent
Events





On March
14, 2008, our board of directors approved resolutions (1) to effect a
reincorporation of our company to the State of Nevada by means of a merger (the
“Reincorporation Merger”) with and into Weikang Bio-Technology Group Company,
Inc., a Nevada corporation and our wholly owned subsidiary incorporated for the
purpose of the reincorporation (“Weikang Nevada”), with Weikang Nevada as the
surviving entity; and (2) to adopt the Weikang Bio-Technology Group Company,
Inc. 2008 Stock Incentive Plan (the “2008 Plan”) which authorizes awards of
options (both incentive stock options and non-qualified stock options), awards
of stock and the granting of bonus stock to our employees, officers and
directors, as well as our consultants, independent contractors and
advisors.On May 12,
2008, the holder of a majority of our issued and outstanding capital stock
adopted and approved both of the Reincorporation Merger and the 2008 Plan
resolutions. The Reincorporation Merger will become effective upon the filing of
Articles of Merger with the Secretary of State of Florida and the Secretary of
State of Nevada. The 2008 Plan is anticipated to become effective in early June
2008.


-17-
 Table of Contents


Critical
Accounting Policies and Estimates





Our
management's discussion and analysis of our financial condition and results of
operations are based on our combined financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported net sales and expenses
during the reporting periods. On an ongoing basis, we evaluate our estimates and
assumptions. We base our estimates on historical experience and on various other
factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.





While our
significant accounting policies are more fully described in Note 2 to our
combined financial statements, we believe that the following accounting policies
are the most critical to aid you in fully understanding and evaluating this
management discussion and analysis:





Basis
of Presentation on Principle of Consolidation





The
accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Sinary, and the results of operations
of Weikang, Sinary’s wholly-owned subsidiary, from the date of Sinary’s
acquisition of Weikang. All significant inter-company accounts and transactions
have been eliminated in consolidation.





Accounts
Receivable




The
Company’s policy is to maintain reserves for potential credit losses on accounts
receivable. Management reviews the composition of accounts receivable and
analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves.





Inventories





Inventories
are valued at the lower of cost or market with cost determined on a moving
weighted average basis. Cost of work in progress and finished goods comprises
direct material, direct production cost and an allocated portion of production
overheads.




Property
and Equipment





Property
and equipment are stated at cost, net of accumulated depreciation. Expenditures
for maintenance and repairs are expensed as incurred; additions, renewals and
betterments are capitalized. When property and equipment are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets with estimated lives ranging from 3 to 20
years as follows:





Building
            20
      yearsVehicle
            5
      yearsOffice
      Equipment
            3-7
      yearsProduction
      Equipment
            3-6
      years





Revenue
Recognition





The
Company's revenue recognition policies are in compliance with Securities and
Exchange Commission (SEC) Staff Accounting Bulletin (“SAB”) 104. Sales revenue
is recognized at the date of shipment to customers when a formal arrangement
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 recorded as unearned revenue.


-18-
 Table of Contents




Sales revenue represents the invoiced value of goods, net of value-added tax
(“VAT”). All of the Company’s products that are sold in the PRC are subject to
Chinese value-added tax of 17% of the gross sales price. This VAT may be offset
by VAT paid by the Company on raw materials and other materials included in the
cost of producing their finished product. The Company recorded VAT payable and
VAT receivable net of payments in the financial statements. The VAT tax return
is filed offsetting the payables against the receivables.





Foreign
Currency Translation and Comprehensive Income (Loss)




The
Company’s functional currency is the Renminbi (“RMB”). For financial reporting
purposes, RMB has been translated into United States dollars ("USD") as the
reporting currency. Assets and liabilities are translated at the exchange rate
in effect at the balance sheet date. Revenues and expenses are translated at the
average rate of exchange prevailing during the reporting period. Translation
adjustments arising from the use of different exchange rates from period to
period are included as a component of stockholders' equity as "Accumulated other
comprehensive income". Gains and losses resulting from foreign currency
transactions are included in income. There has been no significant fluctuation
in exchange rate for the conversion of RMB to USD after the balance sheet
date.





The
Company uses SFAS No 130, “Reporting Comprehensive Income”. Comprehensive income
is comprised of net income and all changes to the statements of stockholders’
equity, except those due to investments by stockholders, changes in paid-in
capital and distributions to stockholders. Comprehensive income for the three
months ended March 31, 2008 included net income and foreign currency translation
adjustments.





Recent
Accounting Pronouncements





Business
Combinations





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business
Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting
for business combinations. Under SFAS 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141R will change
the accounting treatment for certain specific items, including:





·
            Acquisition
      costs will be generally expensed as incurred;·
            Noncontrolling
      interests (formerly known as “minority interests” - see SFAS 160
      discussion below) will be valued at fair value at the acquisition
      date;





·
            Acquired
      contingent liabilities will be recorded at fair value at the acquisition
      date and subsequently measured at either the higher of such amount or the
      amount determined under existing guidance for non-acquired
      contingencies;·
            In-process
      research and development will be recorded at fair value as an
      indefinite-lived intangible asset at the acquisition
  date;





·
            Restructuring
      costs associated with a business combination will be generally expensed
      subsequent to the acquisition date; and·
            Changes
      in deferred tax asset valuation allowances and income tax uncertainties
      after the acquisition date generally will affect income tax
      expense.





SFAS 141R
also includes a substantial number of new disclosure requirements. SFAS 141R
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. Earlier adoption is prohibited. Accordingly, since
we are a calendar year-end company we will continue to record and disclose
business combinations following existing GAAP until January 1, 2009. We
expect SFAS 141R will have an impact on accounting for business combinations
once adopted but the effect is dependent upon acquisitions at that
time.


-19-
 Table of Contents




Noncontrolling
Interests in Consolidated Financial Statements - An Amendment of ARB No.
51





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS
160”). SFAS 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements and separate from the parent’s equity. The amount of net
income attributable to the noncontrolling interest will be included in
consolidated net income on the face of the income statement. SFAS 160 clarifies
that changes in a parent’s ownership interest in a subsidiary that do not result
in deconsolidation are equity transactions if the parent retains its controlling
financial interest. In addition, this statement requires that a parent recognize
a gain or loss in net income when a subsidiary is deconsolidated. Such gain or
loss will be measured using the fair value of the noncontrolling equity
investment on the deconsolidation date. SFAS 160 also includes expanded
disclosure requirements regarding the interests of the parent and its
noncontrolling interest. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Like SFAS 141R discussed above, earlier adoption is prohibited. We have not
completed our evaluation of the potential impact, if any, of the adoption of
SFAS 160 on our consolidated financial position, results of operations and cash
flows.





Results
of Operations





Comparison
of Three Months Ended March 31, 2008 and March 31, 2007.





On
October 25, 2007, Sinary entered into an equity interests transfer agreement
with the owners of Weikang to acquire 100% of the equity interests of Weikang
for the sum of 57 million RMB, or approximately 7.6 million US dollars (the
“Acquisition Price”). The pro forma financial information of the consolidated
statement of income of the Company as if the acquisition of Sinary and Weikang
had occurred as of the beginning of the 2007 is presented in Note 13 to our
unaudited consolidated financial statements included in this
report.





The
following table summarizes our results of operations. The table and the
discussion below should be read in conjunction with the audited financial
statements and the notes thereto appearing elsewhere in this
report.





Three
      Months Ended March 31,2008
      (unaudited)
            
            2007
      (unaudited pro forma)(in
      U.S. Dollars, except for percentages)Revenues
            
            $
            1,146,218
            
            100
            %
            $
            993,937
            100
            %Cost
      of Revenues
            
            
            454,673
            
            40
            %
            
            502,599
            51
            %Gross
      Profit
            
            $
            691,545
            
            60
            %
            $
            491,338
            49
            %Operating
      Expense
            
            $
            133,112
            
            12
            %
            $
            69,279
            7
            %Income
      From Operations
            
            $
            558,433
            
            48
            %
            $
            422,059
            42
            %Other
      Expenses
            
            $
            (389)
            
            -
            %
            $
            (41)
            -
            %Income
      tax expenses
            
            $
            -
            
            -
            %
            $
            -
            -
            %Net
      Income
            
            $
            558,044
            
            48
            %
            $
            422,018
            42
            %





Revenues. During the three
months ended March 31, 2008, we had revenues of $1.15 million as compared to
revenues of $0.99 million for the three months ended March 31, 2007, an increase
of approximately 15.3%. This increase is attributable to increased demand from
our dealers and distributors. We believe that our sales will continue to grow
because we are looking to strengthen our sales force by increasing the number of
distributors, improving the quality of our products and continuing developing
new products that our management believes will be well accepted by the
market.





-20-
 Table of Contents




Cost of Revenues. Cost of
revenues decreased $47,926 or 10%, from $502,599 for the three months ended March 31,
2007 to $454,673 for the same period in 2008. The decrease was mainly due to our
efforts on improving manufacturing efficiency by utilizing our workers more
efficiently and by getting lower prices from our vendors for raw materials. We
had decrease in cost of revenue as a percentage of net revenues for the three
months ended March 31, 2008, approximately 40% as compared to approximately 51%
for the three months ended March 31, 2007, which was attributable to increased
production volume with decreased average production cost.





Gross Profit. Gross profit
was $691,545 for the three months ended March 31, 2008 as compared to $491,338
for the same period in 2007, representing gross margins of approximately 60% and
49% of revenues, respectively. The increase in our gross profits was mainly due
to decrease in cost of revenue as a percentage of net revenue.





Operating
Expenses.Total operating expenses consists of selling,
general and administrative expenses of $133,112 for the three months ended March
31, 2008 as compare to $69,279 for the three months ended March 31, 2007, an
increase of $63,833 or 92%. This moderate increase is associated in proportion
with our increased sales and production. Selling expenses, approximately $5,200
and $7,500 for three months ended March 31, 2008 and 2007, respectively, are
mainly consist of salaries for our salespeople and freight expense. General and
administrative expenses were approximately $128,000 and $62,000 for three months
ended March 31, 2008 and 2007, respectively.  The increase in general
and administrative expense of $66,000 was mainly due to increased auditing
expense of $62,000 while it was $nil for the same period of 2007.





Net Income. Our net income
for the three months ended March 31, 2008 was $558,044 as compared to $422,018
for the same period in 2007. While this is in part due to increased sales
volume, we also continued to benefit from our exemption from income tax. Our
management believes that net income will continue to increase by continuing to
maintain the quality of our existing products, add new products and improve our
manufacturing efficiency.





Liquidity and Capital Resources





As of
March 31, 2008, the Company had cash and cash equivalents of approximately
$51,469, other current assets of approximately $3.45 million, and current
liabilities of approximately $7.66 million. Negative working capital amounted to
$4.16 million at March 31, 2008. The ratio of current assets to current
liabilities was 0.46-to-1 at the year ended March 31, 2008. The negative working
capital and 0.46-to-1 ratio of current assets are primarily related to other
payable of approximately $7,620,000 that Sinary will pay to the owners of
Weikang on or before August 9, 2008, which is non-interest bearing.




The
following is a summary of cash provided by or used in each of the indicated
types of activities during the period ended March 31, 2008:




(unaudited)Cash provided by (used
      in):Operating
      Activities
            
            $
            449,584Investing
      Activities
            
            
            (63,824
            )Financing
      Activities
            
            
            454,725




We believe we have sufficient cash to continue our current business throughout
2008 due to increased sales revenue and net income.





We do not
believe that inflation had a significant negative impact on our results of
operations during 2008.





Foreign
Exchange Rates





All of
our sales are denominated in Renminbi (“RMB”). As a result, changes in the
relative values of U.S. Dollars and RMB affect our reported levels of revenues
and profitability as the results are translated into U.S.


-21-
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Dollars
for reporting purposes. Fluctuations in exchange rates between the
U.S. dollar and RMB affect our gross and net profit margins and could
result in foreign exchange and operating losses.





Our
results of operations and cash flow are translated at average exchange rates
during the period, and assets and liabilities are translated at the unified
exchange rate as quoted by the People’s Bank of China at the end of the period.
Translation adjustments resulting from this process are included in accumulated
other comprehensive income in our statement of shareholders’ equity. We recorded
net foreign currency gains of $326,179 during the first three months of fiscal
2008. We have not used any forward contracts, currency options or borrowings to
hedge our exposure to foreign currency exchange risk. We cannot predict the
impact of future exchange rate fluctuations on our results of operations and may
incur net foreign currency losses in the future.





Our
financial statements are expressed in U.S. dollars but the functional
currency of our operating subsidiary is RMB. The value of your investment in our
stock will be affected by the foreign exchange rate between U.S. dollars
and RMB. To the extent we hold assets denominated in U.S. dollars,
including the net proceeds to us from this offering, any appreciation of the RMB
against the U.S. dollar could result in a change to our statement of
operations and a reduction in the value of our U.S. dollar denominated
assets. On the other hand, a decline in the value of RMB against the
U.S. dollar could reduce the U.S. dollar equivalent amounts of our
financial results, the value of your investment in our company and the dividends
we may pay in the future, if any, all of which may have a material adverse
effect on the price of our stock.





The
exchange rates used to translate amounts in RMB into U.S. Dollars for the
purposes of preparing the consolidated financial statements or otherwise stated
in this MD&A were as follows:





March
      31, 2008Balance
      sheet items, except for the registered and paid-up capital, as of March
      31
            
            USD0.1425:RMB1Amounts
      included in the statement of operations, statement of changes in
      stockholders’ equity and statement of cash flows for the period January 1,
      2008 to March 31, 2008
            
            USD0.1396:RMB1





Off-Balance
Sheet Arrangements




We have
not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as
stockholder’s equity or that are not reflected in our consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in
assets transferred to an unconsolidated entity that serves as credit, liquidity
or market risk support to such entity. We do not have any variable interest in
any unconsolidated entity that provides financing, liquidity, market risk or
credit support to us or engages in leasing, hedging or research and development
services with us.





ITEM 3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS





Not
      Applicable





ITEM
4.               CONTROLS
AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





As of
March 31, 2008, we carried out an evaluation, under the supervision and with the
participation of our management, including our chief executive officer and our
chief financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our chief executive
officer and chief financial officer concluded that our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) were effective.


-22-
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Management’s
Assessment of Significant Deficiency in Internal Control over Financial
Reporting





In our
annual report on Form 10-K for the year ended December 31, 2007, we reported
certain significant deficiency in our accounting and finance personnel.
Specifically, although our accounting staff is professional
and experienced in accounting requirements andprocedures generally accepted in the PRC, management has
determined that they require substantial training and assistance in U.S. GAAP
matters so as to meet with the higher demands of being a U.S. public company.
Our management’s assessment of the effectiveness of internal control over
financial reporting is that this significant deficiency continues to exist as of
March 31, 2008. In order to correct such deficiency, we are committed to hiring
additional accounting and operations personnel and engaging outside contractors
with technical accounting expertise, as needed, and reorganizing the accounting
and finance department to ensure that accounting personnel with adequate
experience, skills and knowledge relating to complex, non-routine transactions
are directly involved in the review and accounting evaluation of our complex,
non-routine transactions.





We
believe that the foregoing steps will remediate the significant deficiency
identified above, and we will continue to monitor the effectiveness of these
steps and make any changes that our management deems appropriate.





Changes
in Internal Control over Financial Reporting





There
were no changes in our internal control over financial reporting (as defined in
Rule 13a-15(f) of the Securities Exchange Act of 1934) during the quarter ended
March 31, 2008 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.











-23-
 Table of Contents


PART
II.                      OTHER
INFORMATION





ITEM 1.   LEGAL PROCEEDINGS





None





ITEM 1A.  RISK FACTORS





You
should carefully consider the risks described below together with all of the
other information included in this Annual Report before making an investment
decision with regard to our securities. The statements contained in or
incorporated into this offering that are not historic facts are forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in or implied by
forward-looking statements. If any of the following risks actually occurs, our
business, financial condition or results of operations could be harmed. In that
case, the trading price of our common stock could decline, and you may lose all
or part of your investment.





Risks
Relating to Our Business




Our
limited operating history makes it difficult to evaluate our future prospects
and results of operations.




We have a
limited operating history. Although Weikang commenced operations in 2005, the
company was a developmental stage company until May 2006 when it began selling
its products. Accordingly, you should consider our future prospects in light of
the risks and uncertainties experienced by early stage companies such as
ours  in China. Some of these risks and uncertainties relate to our
ability to:




·
            maintain
      our market position in the health supplements business in
      China;·
            offer
      new and innovative products to attract and retain a larger customer
      base;





·
            attract
      additional customers and increase spending per
customer;·
            increase
      awareness of our brand and continue to develop user and customer
      loyalty;





·
            respond
      to competitive market conditions;·
            respond
      to changes in our regulatory
environment;





·
            manage
      risks associated with intellectual property rights;·
            maintain
      effective control of our costs and
expenses;





·
            raise
      sufficient capital to sustain and expand our business;·
            attract,
      retain and motivate qualified personnel;
and





·
            upgrade
      our technology to support additional research and development of new
      products.





If we are
unsuccessful in addressing any of these risks and uncertainties, our business
may be materially and adversely affected.








-24-
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We
may need additional financing to execute our business
plan.




The
revenues from the production and sale of health supplements products and the
projected revenues from these products may not be adequate to support our
expansion and product development programs. We may need substantial additional
funds to build new production facilities, pursue further research and
development, obtain regulatory approvals, market our products, and file,
prosecute, defend and enforce our intellectual property rights. We may seek
additional funds through public or private equity or debt financing, strategic
transactions and/or from other sources. We could enter into collaborative
arrangements for the development of particular products that would lead to our
relinquishing some or all of our rights to the related technology or
products.




There are
no assurances that future funding will be available to us on favorable
terms or at all. If additional funding is not obtained, we will need to reduce,
defer or cancel development programs, planned initiatives or overhead
expenditures, to the extent necessary. The failure to fund our capital
requirements would have a material adverse effect on our business, financial
condition and results of operations.




Our
certificates, permits, and licenses are subject to governmental control and
renewal, and Weikang will not be able to operate if they are not
maintained.





Weikang
has attained the certificates, permits, and licenses required for the
manufacturing, processing and distribution of health supplement products in the
PRC. In the event that we are not able to renew the certificates, permits and
licenses, all or part of our operations may be terminated. Furthermore, if
escalating compliance costs associated with governmental standards and
regulations restrict or prohibit any part of our operations, it may adversely
affect our operation and profitability.





Our
profitability will be adversely affected if we lose preferential tax
treatment.





Weikang
is exempt from income tax for a period of three years. The preferential tax
concession was granted by the Shuangcheng Municipal Government and is set to
expire in 2008, and there is no assurance that the preferential treatment can be
renewed or if another similar tax concession may be granted. Weikang’s tax
liabilities will increase and its profits may accordingly decline once the
current income tax exemption expires.





We
cannot guarantee the protection of our intellectual property
rights.





To protect the reputation of
our products, we have applied for registration of our trademarks in the PRC
where our sole operating business is located. Please refer to the paragraph
headed
“Intellectual
Property”in the
Business section of this current report on page 4.





Presently,
all of our products are sold under the brand name “Rongrun”. Since we
launched our products in May 2006, we have not experienced any infringements of
such trademark for sales of health supplement products. However, there is no
assurance that there will not be any infringement of our brand name or other
trademarks or counterfeiting of our products in the future. Should any such
infringement or counterfeiting occur, our reputation and business may be
adversely affected. We may also incur significant expenses and substantial
amount of time and effort to enforce our intellectual property rights in the
future. Such diversion of our resources may adversely affect our existing
business and future expansion plan.





We
rely on a few suppliers and any disruption with our suppliers could have an
adverse effect on our business.




We have
developed good working relationships with a limited number of suppliers for our
raw materials that are otherwise generally available. Although we believe that
alternative suppliers are available to supply materials, should any of these
suppliers terminate its business arrangements with us or increase the prices of
materials supplied by these suppliers, it could delay product shipments and
adversely affect our business operations and profitability.




-25-
 Table of Contents





We
are subject to the environmental protection laws of the PRC, which may result in
restrictions on our operations or liabilities for pollution.




Our
manufacturing process may produce by-products such as effluent, gases and noise,
which are harmful to the environment. We are subject to multiple laws governing
environmental protection, such as “The Law on Environmental Protection in the
PRC” and “The Law on Prevention of Effluent Pollution in the PRC”, as well as
standards set by the relevant governmental bodies determining the classification
of different wastes and proper disposal. China is experiencing substantial
problems with environmental pollution. Accordingly, it is likely that the
national, provincial and local governmental agencies will adopt stricter
pollution controls. There can be no assurance that future changes in
environmental laws and regulations will not impose costly compliance
requirements on us or otherwise subject us to future liabilities. Our business’s
profitability may be adversely affected if additional or modified environmental
control regulations are imposed upon us.





We
may suffer as a result of product liability or defective products.





We may
produce products which, despite proper testing, inadvertently have an adverse
pharmaceutical effect on the health of individuals. The existing PRC laws and
regulations do not require us to maintain third party liability insurance to
cover product liability claims. However, if a product liability claim is brought
against us, it may, regardless of merit or eventual outcome, result in damage to
our reputation, breach of contract with our customers, decreased demand for our
products, costly litigation, product recalls, loss of revenue, and the inability
to commercialize our some products. We currently are not aware of any existing
or anticipated product liability claims with respect to our
products.





There
are no conclusive studies regarding the medical benefits of nutritional
supplements.





We
currently manufacture, market and distribute seven products: (1) Rongrun Youth
Keeping Capsules; (2) Rongrun Energy Keeping Capsules; (3) Rongrun Vitamin Sugar
Capsules; (4) Rongrun Intestine Cleansing Capsules; (5) Rongrun Artery Cleansing
Capsules; (6) Rongrun Royal Jelly Extract; and (7) Rongrun Kidney Boost Tonic.
Some of the ingredients in our current products (and we anticipate in our future
products) are vitamins, minerals, herbs and other substances for which there is
not a long history of human consumption. Although we believe all of our products
to be safe when taken as directed by us, there is little experience with human
consumption of certain of these product ingredients in concentrated form. In
addition, we are highly dependent upon consumers' perception of the safety and
quality of our products as well as similar products distributed by other
companies. We could be adversely affected in the event any of our products or
any similar products distributed by other companies should prove or be asserted
to be harmful to consumers. In addition, because of our dependence upon consumer
perceptions, adverse publicity associated with illness or other adverse effects
resulting from consumers' failure to consume our products as we suggest or other
misuse or abuse of our products or any similar products distributed by other
companies could have a material adverse effect on the results of our operations
and financial condition.





The
manufacture and distribution of nutritional supplements could result in product
liability claims.





We, like
any other retailer, distributor and manufacturer of products that are designed
to be ingested, face an inherent risk of exposure to product liability claims in
the event that the use of our products results in injury. Such claims may
include, among others, that our products contain contaminants or include
inadequate instructions as to use or inadequate warnings concerning side effects
and interactions with other substances. While we may obtain product liability
insurance in the future, we may not be able to obtain such insurance at a
reasonable cost, or, if available, cannot assure that it will be adequate
to cover liabilities. We do not anticipate obtaining contractual indemnification
from parties supplying raw materials or marketing our products. In any event,
any such indemnification if obtained will be limited by our terms and, as a
practical matter, to the creditworthiness of the indemnifying party. In the
event that we do not have adequate insurance or contractual indemnification,
product liabilities relating to defective products could have a material adverse
effect on our operations and financial conditions.




-26-
 Table of Contents




Adverse
publicity due to unfavorable research findings in connection with our products
could adversely affect our sales and financial
condition.




We
believe the growth experienced by the nutritional supplement market is based in
part on national media attention regarding scientific research suggesting
potential health benefits from regular consumption of certain vitamins and other
nutritional products. Such research has been described in major medical
journals, magazines, newspapers and television programs. The scientific research
to date is preliminary.





In the
future, scientific research and/or publicity may not be favorable to the
nutritional supplement market or any particular product, or may be inconsistent
with earlier favorable research or publicity. Future reports of research that
are perceived as less favorable or that question earlier research could
have a material adverse effect on our operations and financial condition.
Because of our dependence upon consumer perceptions, adverse publicity
associated with illness or other adverse effects resulting from the consumption
of our products or any similar products distributed by other companies could
have a material adverse effect on our operations. Such adverse publicity could
arise even if the adverse effects associated with such products resulted from
consumers' failure to consume such products as directed. In addition, we may not
be able to counter the effects of negative publicity concerning the efficacy of
our products. Any such occurrence could have a negative effect on our
operations.





Risks
Related to Our Corporate Structure




If
we are unable to timely remit the purchase price for the acquisition of Weikang,
the approval and designation of Weikang as a foreign investment enterprise and
Sinary as the 100% owner of Weikang may be revoked, and the acquisition of
Weikang may be deemed void.





Pursuant
to the Transfer Agreement, Sinary agreed to acquire 100% of the equity interests
of Weikang from its owners for RMB 57 million (the “Acquisition Price”).
Under applicable PRC regulations, the acquisition is deemed completed as of
November 9, 2007 (the “Issuance Date”), when
the Heilongjiang Office of the State Administration for Industry and Commerce
issued a business license to Weikang as a foreign invested enterprise, with
Sinary as the 100% owner of Weikang’s registered capital, after approval of the
acquisition by the Heilongjiang Provincial Government on November 6, 2007.
Sinary initially had three months from the Issuance Date to remit the
Acquisition Price, under the payment term of the Transfer Agreement and in
accordance with the requirements of applicable PRC regulations. Sinary has
subsequently been approved an extension until August 9, 2008 to remit the
Acquisition Price. If we are unable to remit the Acquisition Price
by August 9, 2008, we cannot guarantee that we will be able to secure the
necessary governmental approval for a further extension, nor can we
determine, at this time, the length of the extension we may receive
assuming that we are able to secure the necessary governmental approval. In the
event that we are unable to timely remit the Acquisition Price, the Heilongjiang
Provincial Government and Heilongjiang Office of the State Administration for
Industry and Commerce may revoke the approval and license of Weikang as a
foreign invested enterprise, and Sinary as the 100% owner of Weikang, thereby
voiding the acquisition. In the event that the acquisition is voided, we will
not be the owner of any equity interests in Weikang, and as a result, Weikang
will no longer be our operating business. Should this occur, we may seek to
acquire the equity interests of Weikang through other means, although we cannot
guarantee that we will do so, nor can we guarantee that we will be successful if
we do.





PRC
laws and regulations governing our business are uncertain. If we are found to be
in violation, we could be subject to sanctions. In addition, changes in such PRC
laws and regulations may materially and adversely affect our
business.




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




-27-
 Table of Contents


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





Risks
Related to Doing Business in China




Adverse
changes in economic and political policies of the PRC government could have a
material adverse effect on the overall economic growth of China, which could
adversely affect our business.




Substantially
all of our business operations are conducted in China. Accordingly, our results
of operations, financial condition and prospects are subject to a significant
degree to economic, political and legal developments in China. China's economy
differs from the economies of most developed countries in many respects,
including with respect to the amount of government involvement, level of
development, growth rate, control of foreign exchange and allocation of
resources. While the PRC economy has experienced significant growth in the past
20 years, growth has been uneven across different regions and among various
economic sectors of China. The PRC government has implemented various measures
to encourage economic development and guide the allocation of resources. Some of
these measures benefit the overall PRC economy, but may also have a negative
effect on us. For example, our financial condition and results of operations may
be adversely affected by government control over capital investments or changes
in tax regulations that are applicable to us. Since early 2004, the PRC
government has implemented certain measures to control the pace of economic
growth. Such measures may cause a decrease in the level of economic activity in
China, which in turn could adversely affect our results of operations and
financial condition.





Uncertainties
with respect to the PRC legal system could adversely affect us.




We
conduct our business primarily through our affiliated Chinese entity, Weikang.
Our operations in China are governed by PRC laws and regulations. We are
generally subject to laws and regulations applicable to foreign investments in
China and, in particular, laws applicable to wholly foreign-owned enterprises.
The PRC legal system is based on written statutes. Prior court decisions may be
cited for reference but have limited precedential value.




Since
1979, PRC legislation and regulations have significantly enhanced the
protections afforded to various forms of foreign investments in China. However,
China has not developed a fully integrated legal system and recently enacted
laws and regulations may not sufficiently cover all aspects of economic
activities in China. In particular, because these laws and regulations are
relatively new, and because of the limited volume of published decisions and
their nonbinding nature, the interpretation and enforcement of these laws and
regulations involve uncertainties. In addition, the PRC legal system is based in
part on government policies and internal rules (some of which are not published
on a timely basis or at all) that may have a retroactive effect. As a result, we
may not be aware of our violation of these policies and rules until some time
after the violation. In addition, any litigation in China may be protracted and
result in substantial costs and diversion of resources and management
attention.




You
may experience difficulties in effecting service of legal process, enforcing
foreign judgments or bringing original actions in China based on United States
or other foreign laws against us, our management or the experts named in this
current report.




We
conduct substantially all of our operations in China and substantially all of
our assets are located in China. In addition, most of our senior executive
officers reside within China. As a result, it may not be possible to effect
service of process within the United States or elsewhere outside of China upon
our senior executive officers, including with respect to matters arising under
U.S. federal securities laws or applicable state securities laws. Moreover, our
PRC counsel has advised us that the PRC does not have treaties with the United
States or many other countries providing for the reciprocal recognition and
enforcement of judgment of courts.


-28-
 Table of Contents




Governmental
control of currency conversion may affect the value of your
investment.




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





Fluctuation
in the value of RMB may have a material adverse effect on your
investment.




The value
of RMB against the U.S. dollar and other currencies may fluctuate and is
affected by, among other things, changes in political and economic conditions.
Our revenues and costs are mostly denominated in RMB, while a significant
portion of our financial assets are denominated in U.S. dollars. Our revenue is
based entirely on that generated by our affiliated entity in China. Any
significant fluctuation in value of RMB may materially and adversely affect our
cash flows, revenues, earnings and financial position, and the value of, and any
dividends payable on, our stock in U.S. dollars. For example, an appreciation of
RMB against the U.S. dollar would make any new RMB denominated investments or
expenditures more costly to us, to the extent that we need to convert U.S.
dollars into RMB for such purposes. An appreciation of RMB against the U.S.
dollar would also result in foreign currency translation losses for financial
reporting purposes when we translate our U.S. dollar denominated financial
assets into RMB, as RMB is our reporting currency.





We
face risks related to health epidemics and other outbreaks.




Our
business could be adversely affected by the effects of SARS or another epidemic
or outbreak. China reported a number of cases of SARS in April 2004. Any
prolonged recurrence of SARS or other adverse public health developments in
China may have a material adverse effect on our business operations. For
instance, health or other government regulations adopted in response may require
temporary closure of our production facilities or of our offices. Such closures
would severely disrupt our business operations and adversely affect our results
of operations. We have not adopted any written preventive measures or
contingency plans to combat any future outbreak of SARS or any other
epidemic.




Risks
Related to an Investment in Our Securities




In
the event the acquisition of Weikang is voided, the price of our common stock
may be dramatically and adversely impacted.





From and
after the Closing of the Share Exchange Transaction, Weikang is our only
operating business, from which all of our revenues are derived. Although
Sinary’s acquisition of Weikang is deemed completed as of November 9, 2007 (the
“Issuance
Date”), when the Heilongjiang Office of the State Administration for
Industry and Commerce issued a license, following approval of the acquisition
transaction from the Heilongjiang Provincial Government, that designates Weikang
as a foreign invested enterprise and Sinary as the 100% owner of Weikang’s
registered capital, Sinary has not yet remitted the acquisition price for
Weikang (the “Acquisition Price”)
as of the date of this current report. While we initially had three months from
the Issuance Date to remit the Acquisition Price, and have been approved an
extension until August 9, 2008, there is no guarantee that we will be able to do
so in a timely manner. If we are unable to timely remit the Acquisition Price
pursuant to the Transfer Agreement and in accordance with applicable PRC
regulations, the acquisition of Weikang may be voided. As a result, we will
not own of any equity interests in Weikang, and Weikang will no longer be
our operating business. Should this occur, our revenues will be negatively
impacted, as we will have to exclude those of Weikang, which, in
turn, may cause a dramatic decrease the price of our common
stock.


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To
date, we have not paid any cash dividends and no cash dividends will be paid in
the foreseeable future.




We do not
anticipate paying cash dividends on our common stock in the foreseeable future
and we may not have sufficient funds legally available to pay dividends. Even if
the funds are legally available for distribution, we may nevertheless decide not
to pay any dividends. We intend to retain all earnings from our
operations.




The
application of the "penny stock" rules could adversely affect the market price
of our common stock and increase your transaction costs to sell those
shares.




As long
as the trading price of our common shares is below $5 per share, the open-market
trading of our common shares will be subject to the "penny stock" rules. The
"penny stock" rules impose additional sales practice requirements on
broker-dealers who sell securities to persons other than established customers
and accredited investors (generally those with assets in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of securities and have received the
purchaser's written consent to the transaction before the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
broker-dealer must deliver, before the transaction, a disclosure schedule
prescribed by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. These additional burdens
imposed on broker-dealers may restrict the ability or decrease the willingness
of broker-dealers to sell our common shares, and may result in decreased
liquidity for our common shares and increased transaction costs for sales and
purchases of our common shares as compared to other securities.





Our
common shares are thinly traded and, you may be unable to sell at or near ask
prices or at all if you need to sell your shares to raise money or otherwise
desire to liquidate your shares.




We cannot
predict the extent to which an active public market for our common stock will
develop or be sustained. However, we do not rule out the possibility of applying
for listing on the Nasdaq National Market or other exchanges.




Our
common shares have historically been sporadically or "thinly-traded" on the
“Over-the-Counter Bulletin Board”, meaning that the number of persons interested
in purchasing our common shares at or near bid prices at any given time may be
relatively small or non-existent. This situation is attributable to a number of
factors, including the fact that we are a small company which is relatively
unknown to stock analysts, stock brokers, institutional investors and others in
the investment community that generate or influence sales volume, and that even
if we came to the attention of such persons, they tend to be risk-averse and
would be reluctant to follow an unproven company such as ours or purchase or
recommend the purchase of our shares until such time as we became more seasoned
and viable. As a consequence, there may be periods of several days or more when
trading activity in our shares is minimal or non-existent, as compared to a
seasoned issuer which has a large and steady volume of trading activity that
will generally support continuous sales without an adverse effect on share
price. We cannot give you any assurance that a broader or more active public
trading market for our common stock will develop or be sustained, or that
current trading levels will be sustained.




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The
market price for our common stock is particularly volatile given our status as a
relatively small company with a small and thinly traded “float” and lack of
current revenues that could lead to wide fluctuations in our share price. The
price at which you purchase our common stock may not be indicative of the price
that will prevail in the trading market. You may be unable to sell your common
stock at or above your purchase price if at all, which may result in substantial
losses to you.




The
market for our common shares is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
The volatility in our share price is attributable to a number of factors. First,
as noted above, our common shares are sporadically and/or thinly traded. As a
consequence of this lack of liquidity, the trading of relatively small
quantities of shares by our shareholders may disproportionately influence the
price of those shares in either direction. The price for our shares could, for
example, decline precipitously in the event that a large number of our common
shares are sold on the market without commensurate demand, as compared to a
seasoned issuer which could better absorb those sales without adverse impact on
its share price. Secondly, we are a speculative or "risky" investment due to our
lack of revenues or profits to date and uncertainty of future market acceptance
for our current and potential products. As a consequence of this enhanced risk,
more risk-adverse investors may, under the fear of losing all or most of their
investment in the event of negative news or lack of progress, be more inclined
to sell their shares on the market more quickly and at greater discounts than
would be the case with the stock of a seasoned issuer. The following factors may
add to the volatility in the price of our common shares: actual or anticipated
variations in our quarterly or annual operating results; adverse outcomes,
additions or departures of our key personnel, as well as other items discussed
under this "Risk Factors" section, as well as elsewhere in this Current Report.
Many of these factors are beyond our control and may decrease the market price
of our common shares, regardless of our operating performance. We cannot make
any predictions or projections as to what the prevailing market price for our
common shares will be at any time, including as to whether our common shares
will sustain their current market prices, or as to what effect that the sale of
shares or the availability of common shares for sale at any time will have on
the prevailing market price.




Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (3) boiler room practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by
selling broker-dealers; and (5) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. Our management is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities. The occurrence of these patterns or practices
could increase the volatility of our share price.





Volatility
in our common share price may subject us to securities litigation.




The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its
securities. We may, in the future, be the target of similar litigation.
Securities litigation could result in substantial costs and liabilities and
could divert management's attention and resources.




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Our
corporate actions are substantially controlled by a single
stockholder.
  As a
result of the share exchange transaction with Sinary, the Sinary Stockholder
currently owns approximately 98% of our outstanding common shares, representing
approximately 98% of our voting power. This




The
elimination of monetary liability against our directors, officers and employees
under Florida law and the existence of indemnification rights to our directors,
officers and employees may result in substantial expenditures by us and may
discourage lawsuits against our directors, officers and employees.




Our
articles of incorporation contain specific provisions that eliminate the
liability of our directors for monetary damages to our company and shareholders,
and we are prepared to give such indemnification to our directors and officers
to the extent provided by Florida law. We may also have contractual
indemnification obligations under our employment agreements with our officers.
The foregoing indemnification obligations could result in our company incurring
substantial expenditures to cover the cost of settlement or damage awards
against directors and officers, which we may be unable to recoup. These
provisions and resultant costs may also discourage our company from bringing a
lawsuit against directors and officers for breaches of their fiduciary duties,
and may similarly discourage the filing of derivative litigation by our
shareholders against our directors and officers even though such actions, if
successful, might otherwise benefit our company and shareholders.




Legislative
actions, higher insurance costs and potential new accounting pronouncements may
impact our future financial position and results of operations.




There
have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and
there may potentially be new accounting pronouncements or additional regulatory
rulings that will have an impact on our future financial position and results of
operations. The Sarbanes-Oxley Act of 2002 and other rule changes as well as
proposed legislative initiatives following the Enron bankruptcy are likely to
increase general and administrative costs and expenses. In addition, insurers
are likely to increase premiums as a result of high claims rates over the past
several years, which we expect will increase our premiums for insurance
policies. Further, there could be changes in certain accounting rules. These and
other potential changes could materially increase the expenses we report under
generally accepted accounting principles, and adversely affect our operating
results.





The
market price for our stock may be volatile.




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




·
            actual
      or anticipated fluctuations in our quarterly operating
      results;·
            changes
      in financial estimates by securities research
  analysts;





·
            conditions
      in pharmaceutical and agricultural markets;·
            changes
      in the economic performance or market valuations of other pharmaceutical
      companies;





·
            announcements
      by us or our competitors of new products, acquisitions, strategic
      partnerships, joint ventures or capital commitments;·
            addition
      or departure of key personnel;





·
            fluctuations
      of exchange rates between RMB and the U.S. dollar;·
            intellectual
      property litigation;





·
            general
      economic or political conditions in
China.




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




We
may need additional capital, and the sale of additional shares or other equity
securities could result in additional dilution to our shareholders.




We
believe that our current cash and cash equivalents, anticipated cash flow from
operations and the net proceeds from a proposed offering will be sufficient to
meet our anticipated cash needs for the near future. We may, however, require
additional cash resources due to changed business conditions or other future
developments, including any investments or acquisitions we may decide to pursue.
If our resources are insufficient to satisfy our cash requirements, we may seek
to sell additional equity or debt securities or obtain a credit facility. The
sale of additional equity securities could result in additional dilution to our
shareholders. The incurrence of indebtedness would result in increased debt
service obligations and could result in operating and financing covenants that
would restrict our operations. We cannot assure you that financing will be
available in amounts or on terms acceptable to us, if at all.




If
we fail to maintain an effective system of internal controls, we may not be able
to accurately report our financial results or prevent fraud.




We will
be subject to reporting obligations under the U.S. securities laws. The
Securities and Exchange Commission, or the SEC, as required by Section 404 of
the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to
include a management report on such company's internal controls over financial
reporting in its annual report, which contains management's assessment of the
effectiveness of our internal controls over financial reporting. In addition, an
independent registered public accounting firm must attest to and report on
management's assessment of the effectiveness of our internal controls over
financial reporting. Our management may conclude that our internal controls over
our financial reporting are not effective. Moreover, even if our management
concludes that our internal controls over financial reporting are effective, our
independent registered public accounting firm may still decline to attest to our
management's assessment or may issue a report that is qualified if it is not
satisfied with our controls or the level at which our controls are documented,
designed, operated or reviewed, or if it interprets the relevant requirements
differently from us. Our reporting obligations as a public company will place a
significant strain on our management, operational and financial resources and
systems for the foreseeable future. Effective internal controls, particularly
those related to revenue recognition, are necessary for us to produce reliable
financial reports and are important to help prevent fraud. As a result, our
failure to achieve and maintain effective internal controls over financial
reporting could result in the loss of investor confidence in the reliability of
our financial statements, which in turn could harm our business and negatively
impact the trading price of our stock. Furthermore, we anticipate that we will
incur considerable costs and use significant management time and other resources
in an effort to comply with Section 404 and other requirements of the
Sarbanes-Oxley Act.





We
will incur increased costs as a result of being a public company.




As a
public company, we will incur significant legal, accounting and other expenses
that we did not incur as a private company. In addition, the Sarbanes-Oxley Act,
as well as new rules subsequently implemented by SEC have required changes in
corporate governance practices of public companies. We expect these new rules
and regulations to increase our legal, accounting and financial compliance costs
and to make certain corporate activities more time-consuming and costly. In
addition, we will incur additional costs associated with our public company
reporting requirements. We are currently evaluating and monitoring developments
with respect to these new rules, and we cannot predict or estimate the amount of
additional costs we may incur or the timing of such costs.


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ITEM
2.                 UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None





ITEM
3.            DEFAULTS
UPON SENIOR SECURITIES





None





ITEM
4.                     SUBMISSION OF MATTERS TO A VOTE OF
SECURITYHOLDERS





Reference
is made to our Information Statement on Form DEF14C filed with the SEC on May
14, 2008, and the information contained in the Information Statement is
incorporated herein by reference





ITEM
5.                     OTHER
INFORMATION





None








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ITEM 6.  EXHIBITS





The
following exhibits are filed herewith:





Exhibit No.
            Description2.1
            Share
      Exchange Agreement among Expedition Leasing Inc. (“Expedition Leasing”),
      certain stockholders of Expedition Leasing, Sinary Bio-Technology Holding
      Group, Inc. (“Sinary”) and the sole stockholder of Sinary dated December
      7, 2007 (1)2.2
            Equity
      Transfer Agreement between Sinary and the owners of 100% of the registered
      equity of Heilongjiang Weikang Bio-Technology Group Co., Ltd. (“Weikang”)
      dated October 25, 2007 (1)3.1
            Articles
      of Incorporation of Expedition Leasing as filed with the State of Florida
      (2)3.2
            Articles
      of Amendment to Articles of Incorporation of Expedition Leasing as filed
      with the State of Florida (2)3.3
            Amended
      and Restated Articles of Incorporation of Expedition Leasing as filed with
      the State of Florida (2)3.4
            Bylaws
      of Expedition Leasing (2)22.1
            Information
      Statement on Form DEF14C (3)31.1
            Certifications
      pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
      of 1934, as amended, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 *31.2
            Certifications
      pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
      of 1934, as amended, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 *32.1
            Certifications
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 *32.2
            Certifications
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 *


* Filed
herewith.





(1)
            Filed
      as an exhibit to the Registrant’s Current Report on Form 8-K filed with
      the SEC on December 10, 2007 and incorporated herein by
      reference.





(2)
            Filed
      as an exhibit to the Registrant’s Registration Statement on Form SB-2
      filed with the SEC on June 30, 2006 and incorporated herein by
      reference.





(3)
            Filed
      with the SEC on May 14, 2008 and incorporated herein by
      reference.


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SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.











May 15,
      2008
            EXPEDITION
      LEASING, INC.By:
            /s/
      Ying WangYin
      Wang
              Chief
      Executive Officer
              (Principal
      Executive Officer)