----

----

| x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|----------------------------------------------------------------------------------------|

|  ̈ | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|--------|-----------------------------------------------------------------------------------------|

| NEVADA                                                        | 84-0605867                          |
|---------------------------------------------------------------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. EmployerIdentification No.) |

|                              |                                                            |                                |   |
|-----------------------------------|-----------------------------------------------------------------|-------------------------------------|--------|
| Large accelerated filer |  ̈                                                          | Accelerated filer              | x      |
| Non-accelerated filer             |  ̈  (Do not check if a smaller reporting company) | Smaller reporting company |  ̈ |

|                                |   |                            |
|-------------------------------------|--------|---------------------------------|
| Title of each class of common stock |   | Outstanding as of June 30, 2009 |
| Preferred Stock, $0.001 par value   |   | 1,000,000                       |
| Common Stock, $0.001 par value      |   | 78,301,439                      |

----

----

----

|                                                                                                            |     |
|-----------------------------------------------------------------------------------------------------------------|----------|
| PART I – FINANCIAL INFORMATION                                                                            |  3  |
|                                                                                                            |     |
| ITEM 1 – FINANCIAL STATEMENTS                                                                        |  3  |
|                                                                                                            |     |
| ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  21 |
|                                                                                                            |     |
| ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  |  30 |
|                                                                                                            |     |
| ITEM 4 – CONTROLS AND PROCEDURES                                                                     |  30 |
|                                                                                                            |     |
| PART II – OTHER INFORMATION                                                                               |  31 |
|                                                                                                            |     |
| ITEM 1 – LEGAL PROCEEDINGS                                                                           |  31 |
|                                                                                                            |     |
| ITEM 1A – RISK FACTORS                                                                               |  31 |
|                                                                                                            |     |
| ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                 |  31 |
|                                                                                                            |     |
| ITEM 3 – DEFAULTS UPON SENIOR SECURITIES                                                             |  31 |
|                                                                                                            |     |
| ITEM 4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                         |  31 |
|                                                                                                            |     |
| ITEM 5 – OTHER INFORMATION                                                                           |  31 |
|                                                                                                            |     |
| ITEM 6 – EXHIBITS                                                                                    |  31 |

----

|                                                         |   | JUNE 30,2009 |                                                             |   | DECEMBER 31,2008 |   |
|--------------------------------------------------------------|--------|--------------|------------------------------------------------------------------|--------|------------------|--------|
|                                                         |   | (UNAUDITED)  |                                                             |   |             |   |
| CURRENT ASSETS                                               |   |         |                                                             |   |             |   |
| Cash and cash equivalents                                    |   | $            | 100,730,402                                                      |   |             | $      | 70,636,510 |   |
| Accounts receivable, net of reserve of $505,433 and $226,330 |   |         |                                                             |   |             |   |   |   |
| at June 30, 2009 and December 31, 2008, respectively         |   |         | 31,396,881                                                       |   |             |   | 36,982,167 |   |
| Inventories, net                                             |   |         | 16,829,834                                                       |   |             |   | 13,042,123 |   |
| Advances to suppliers                                        |   |         | 3,135,694                                                        |   |             |   | 3,593,979 |   |
| Notes receivable                                             |   |         | 81,075                                                           |   |             |   | 708,076 |   |
| Refundable deposit                                           |   |         | -                                                                |   |             |   | 6,396,996 |   |
| Deferred tax assets                                          |   |         | 421,660                                                          |   |             |   | 347,216 |   |
| Other current assets                                         |   |         | 937,087                                                          |   |             |   | 744,903 |   |
| Total Current Assets                                         |   |         | 153,532,633                                                      |   |             |   | 132,451,970 |   |
|                                                         |   |         |                                                             |   |             |   |   |   |
| LONG-TERM ASSETS                                             |   |         |                                                             |   |             |   |   |   |
| Property, plant and equipment, net                           |   |         |          96,151,689 |   |             |   | 98,154,443 |   |
| Land use rights, net                                         |   |         |       148,301,203                  |   |             |   | 148,988,870 |   |
| Deposit for long-term assets                                 |   |         | 6,717,514                                                        |   |             |   | 6,347,174 |   |
| Construction in progress                                     |   |         | 25,871,656                                                       |   |             |   | 25,385,835 |   |
| Deferred tax assets                                          |   |         | 1,327,627                                                        |   |             |   | 1,313,832 |   |
| Other intangible assets, net                                 |   |         | 21,146,928                                                       |   |             |   | 23,690,440 |   |
| Goodwill                                                     |   |         | 28,543,226                                                       |   |             |   | 28,543,226 |   |
| Long-term investment and advance                             |   |         | 55,452,267                                                       |   |             |   | 54,963,064 |   |
| Unamortized financing cost                                   |   |         | 3,751,838                                                        |   |             |   | 4,215,983 |   |
| Total Long-Term Assets                                       |   |         | 387,263,948                                                      |   |             |   | 391,602,867 |   |
|                                                         |   |         |                                                             |   |             |   |   |   |
| TOTAL ASSETS                                                 |   | $            | 540,796,581                                                      |   |             | $      | 524,054,837 |   |

----

|                                                                                                          |   | JUNE 30,2009 |              |   | DECEMBER 31,2008 |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------------|-------------------|--------|------------------|--------|
|                                                                                                          |   | (UNAUDITED)  |              |   |             |   |
| CURRENT LIABILITIES                                                                                           |   |         |              |   |             |   |
| Accounts payable                                                                                              |   | $            | 12,548,451        |   |             | $      | 12,287,887 |   |
| Notes payables                                                                                                |   |         | 3,011,486         |   |             |   | 3,262,877 |   |
| Other payables and accrued expenses                                                                           |   |         | 14,251,673        |   |             |   | 19,766,652 |   |
| Taxes payable                                                                                                 |   |         | 625,261           |   |             |   | 420,671 |   |
| Short-term bank loans                                                                                         |   |         | 6,720,430         |   |             |   | 7,140,148 |   |
| Current portion of long-term bank loans                                                                       |   |         | 59,396            |   |             |   | 58,659 |   |
| Other liabilities                                                                                             |   |         | 2,511,295         |   |             |   | 2,253,440 |   |
| Deferred tax liability                                                                                        |   |         | 1,121,738         |   |             |   | 846,026 |   |
| Total Current Liabilities                                                                                     |   |         | 40,849,730        |   |             |   | 46,036,360 |   |
|                                                                                                          |   |         |              |   |             |   |   |   |
| LONG-TERM LIABILITIES                                                                                         |   |         |              |   |             |   |   |   |
| Long-term bank loans, net of current portion                                                                  |   |         | 774,641           |   |             |   | 804,521 |   |
| Long-term notes payable                                                                                       |   |         | -                 |   |             |   | 269,908 |   |
| Deferred tax liabilities                                                                                      |   |         | 15,963,766        |   |             |   | 16,083,768 |   |
| Convertible notes                                                                                             |   |         | 115,000,000       |   |             |   | 115,000,000 |   |
| Total Long-Term Liabilities                                                                                   |   |         | 131,738,407       |   |             |   | 132,158,197 |   |
| TOTAL LIABILITIES                                                                                             |   |         | 172,588,137       |   |             |   | 178,194,557 |   |
|                                                                                                          |   |         |              |   |             |   |   |   |
| COMMITMENTS                                                                                                   |   |         |              |   |             |   |   |   |
|                                                                                                          |   |         |              |   |             |   |   |   |
| EQUITY                                                                                                        |   |         |              |   |             |   |   |   |
| SHAREHOLDERS’ EQUITY                                                                                    |   |         |              |   |             |   |   |   |
| Preferred stock, $0.001 par value; 2,000,000 shares authorized;                                               |   |         |              |   |             |   |   |   |
| 1,000,000 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively                  |   |         | 1,000             |   |             |   | 1,000 |   |
| Common stock, $0.001 par value; 150,000,000 shares authorized;                                                |   |         |              |   |             |   |   |   |
| 78,301,439 and 78,249,264 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively. |   |         | 78,301            |   |             |   | 78,249 |   |
| Common stock to be issued                                                                                     |   |         | 311,999           |   |             |   | 376,335 |   |
| Prepaid forward repurchase contract                                                                           |   |         | (29,998,616       | )      |             |   | (29,998,616 | ) |
| Additional paid-in capital                                                                                    |   |         | 196,752,860       |   |             |   | 195,741,544 |   |
| Retained earnings (the restricted portion of retained earnings is $29,532,699                                 |   |         |              |   |             |   |   |   |
| at June 30, 2009 and December 31, 2008, respectively)                                                         |   |         | 171,019,548       |   |             |   | 149,923,681 |   |
| Accumulated other comprehensive income                                                                        |   |         | 29,510,788        |   |             |   | 29,086,006 |   |
| Total Shareholders’ Equity                                                                              |   |         | 367,675,880       |   |             |   | 345,208,199 |   |
| NON-CONTROLLING INTEREST                                                                                      |   |         | 532,564           |   |             |   | 652,081 |   |
| TOTAL EQUITY                                                                                                  |   |         |  368,208,444 |   |             |   | 345,860,280 |   |
| TOTAL LIABILITIES AND EQUITY                                                                                  |   | $            | 540,796,581       |   |             | $      | 524,054,837 |   |

----

|                                                         |   | THREE MONTHS ENDEDJUNE 30, |       |   | SIX MONTHS ENDEDJUNE 30, |   |
|--------------------------------------------------------------|--------|----------------------------|------------|--------|--------------------------|--------|
|                                                         |   | 2009                       |       |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |
| REVENUES                                                     |   | $                          | 71,222,037 |   |                     | $      | 59,010,005 |   |   | $ | 117,299,227 |   |   | $ | 97,778,603 |   |
| COST OF GOODS SOLD                                           |   |                       | 29,594,923 |   |                     |   | 18,928,447 |   |   |   | 47,255,261 |   |   |   | 31,406,083 |   |
| GROSS PROFIT                                                 |   |                       | 41,627,114 |   |                     |   | 40,081,558 |   |   |   | 70,043,966 |   |   |   | 66,372,520 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Selling and marketing                                        |   |                       | 9,396,129  |   |                     |   | 7,687,892 |   |   |   | 14,607,631 |   |   |   | 12,717,600 |   |
| Advertising                                                  |   |                       | 7,779,936  |   |                     |   | 7,452,231 |   |   |   | 13,347,293 |   |   |   | 11,846,572 |   |
| General and administrative                                   |   |                       | 4,315,714  |   |                     |   | 5,253,274 |   |   |   | 8,881,357 |   |   |   | 9,165,957 |   |
| Depreciation and amortization                                |   |                       | 1,850,274  |   |                     |   | 1,010,461 |   |   |   | 3,709,189 |   |   |   | 1,987,671 |   |
| Total operating expenses                                     |   |                       | 23,342,053 |   |                     |   | 21,403,858 |   |   |   | 40,545,470 |   |   |   | 35,717,800 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| INCOME FROM OPERATIONS                                       |   |                       | 18,285,061 |   |                     |   | 18,677,700 |   |   |   | 29,498,496 |   |   |   | 30,654,720 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES       |   |                       | (173,258   | )      |                     |   | (640,008 | ) |   |   | 264,536 |   |   |   | (641,067 | ) |
| INTEREST INCOME (EXPENSE), NET                               |   |                       | (1,620,069 | )      |                     |   | (30,616 | ) |   |   | (3,199,338 | ) |   |   | (13,769 | ) |
| OTHER INCOME (EXPENSE), NET                                  |   |                       | (16,329    | )      |                     |   | (255,770 | ) |   |   | (114,938 | ) |   |   | (356,502 | ) |
| INCOME BEFORE INCOME TAXES                                   |   |                       | 16,475,405 |   |                     |   | 17,751,306 |   |   |   | 26,448,756 |   |   |   | 29,643,382 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| INCOME TAXES                                                 |   |                       | 3,369,107  |   |                     |   | 3,891,614 |   |   |   | 5,472,406 |   |   |   | 6,361,562 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                                   |   |                       | 13,106,298 |   |                     |   | 13,859,692 |   |   |   | 20,976,350 |   |   |   | 23,281,820 |   |
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING  INTEREST |   |                       | 123,068    |   |                     |   | - |   |   |   | 119,517 |   |   |   | - |   |
| NET INCOME ATTRIBUTABLE TO CONTROLLING  INTEREST   |   |                       | 13,229,366 |   |                     |   | 13,859,692 |   |   |   | 21,095,867 |   |   |   | 23,281,820 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME                                   |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation gain, net of tax                |   |                       | 46,316     |   |                     |   | 5,154,761 |   |   |   | 424,782 |   |   |   | 12,089,196 |   |
| TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX                 |   |                       | 46,316     |   |                     |   | 5,154,761 |   |   |   | 424,782 |   |   |   | 12,089,196 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                                         |   | $                          | 13,275,682 |   |                     | $      | 19,014,453 |   |   | $ | 21,520,649 |   |   | $ | 35,371,016 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME PER SHARE                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| BASIC                                                        |   | $                          | 0.18       |   |                     | $      | 0.18 |   |   | $ | 0.28 |   |   | $ | 0.30 |   |
| DILUTED                                                      |   | $                          | 0.17       |   |                     | $      | 0.18 |   |   | $ | 0.28 |   |   | $ | 0.30 |   |
|                                                         |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| BASIC                                                        |   |                       | 74,582,920 |   |                     |   | 78,223,659 |   |   |   | 74,560,809 |   |   |   | 78,207,405 |   |
| DILUTED                                                      |   |                       | 88,815,593 |   |                     |   | 78,223,659 |   |   |   | 86,939,711 |   |   |   | 78,208,181 |   |

----

|                                                                              |   | Six Months EndedJune 30, |        |
|-----------------------------------------------------------------------------------|--------|-------------------------------|-------------|
|                                                                              |   | 2009                          |        |   | 2008 |   |
|                                                                              |   |                          |        |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                             |   |                          |        |   |   |   |
| Net income                                                                        |   | $                             | 20,976,350  |   |   | $ |  23,281,820 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                          |        |   |   |   |   |   |
| Depreciation and amortization                                                     |   |                          | 6,445,556   |   |   |   | 4,641,379 |   |
| Amortization of financing cost                                                    |   |                          | 464,145     |   |   |   | - |   |
| Amortization of deferred consulting expenses                                      |   |                          | -           |   |   |   | 104,500 |   |
| Provision for (reversal of) doubtful accounts                                     |   |                          | 278,602     |   |   |   | (140,250) |   |
| Changes in provision for slow moving inventories                                  |   |                          | 53,605      |   |   |   | (175,627) |   |
| Deferred taxes                                                                    |   |                          | 67,471      |   |   |   | 714,100 |   |
| Common stock to be issued for services                                            |   |                          | 80,000      |   |   |   | 68,000 |   |
| Stock option compensation expense                                                 |   |                          | 673,035     |   |   |   | 374,019 |   |
| Independent director stock compensation                                           |   |                          | 194,000     |   |   |   | 182,333 |   |
| Loss on disposal of assets                                                        |   |                          | 4,745       |   |   |   | (7,657) |   |
| Equity in  (income) loss from unconsolidated entities                   |   |                          | (264,536)   |   |   |   | 641,101 |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| Changes in operating assets and liabilities:                                      |   |                          |        |   |   |   |   |   |
| (Increase) Decrease In:                                                           |   |                          |        |   |   |   |   |   |
| Accounts receivable                                                               |   |                          | 5,307,187   |   |   |   | (697,207) |   |
| Notes receivable                                                                  |   |                          | 627,001     |   |   |   | 1,567,744 |   |
| Inventories                                                                       |   |                          | (3,841,052) |   |   |   | (6,538,693) |   |
| Advances to suppliers and prepaid expenses                                        |   |                          | 458,285     |   |   |   | 1,324,457 |   |
| Other current asset                                                               |   |                          | (192,184)   |   |   |   | 1,208,187 |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| Increase (Decrease) In:                                                           |   |                          |        |   |   |   |   |   |
| Accounts payable                                                                  |   |                          | 260,564     |   |   |   | 1,235,110 |   |
| Other payables and accrued expenses                                               |   |                          | (5,514,977) |   |   |   | 495,796 |   |
| Taxes payable                                                                     |   |                          | 204,590     |   |   |   | 922,717 |   |
| Other liabilities                                                                 |   |                          | 257,855     |   |   |   | (827,080) |   |
| Net cash provided by operating activities                                         |   |                          | 26,540,242  |   |   |   | 28,374,749 |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                             |   |                          |        |   |   |   |   |   |
| Purchases of construction in progress                                             |   |                          | (535,881)   |   |   |   | (223,742) |   |
| Purchases of property, plant and equipment                                        |   |                          | (149,837)   |   |   |   | (391,877) |   |
| Purchase of land use right                                                        |   |                          | (757,187)   |   |   |   | - |   |
| Purchases of other intangible assets                                              |   |                          | -           |   |   |   | (95,900) |   |
| Refundable deposit                                                                |   |                          | 6,396,996   |   |   |   | (2,888,960) |   |
| Deposit for long-term assets                                                      |   |                          | (361,375)   |   |   |   | (34,852,986) |   |
| Proceeds from disposal of plant and equipment                                     |   |                          | 620         |   |   |   | - |   |
| Investments in and advances to equity investments                                 |   |                          | (172,812)   |   |   |   | (19,657,535) |   |
| Net cash used in investing activities                                             |   |                          | 4,420,524   |   |   |   | (58,111,000) |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                              |   |                          |        |   |   |   |   |   |
| Proceeds from bank loans                                                          |   |                          | 4,817,870   |   |   |   | 3,524,627 |   |
| Repayments of bank loans                                                          |   |                          | (5,276,275) |   |   |   | (3,551,083) |   |
| Repayment of capital lease                                                        |   |                          | -           |   |   |   | (10,011) |   |
| Proceeds from notes payable                                                       |   |                          | 4,363,367   |   |   |   | - |   |
| Deferred financing costs                                                          |   |                          | -           |   |   |   | (290,000) |   |
| Repayment of notes payable                                                        |   |                          | (4,889,392) |   |   |   | (61,951) |   |
| Net cash used in financing activities                                             |   |                          | (984,430)   |   |   |   | (388,418) |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| NET INCREASE  (DECREASE) IN CASH AND CASH EQUIVALENTS                   |   |                          | 29,976,336  |   |   |   | (30,124,669) |   |
| Effect of exchange rate changes on cash                                           |   |                          | 117,556     |   |   |   | 8,187,869 |   |
| Cash and cash equivalents, beginning of year                                      |   |                          | 70,636,510  |   |   |   | 166,410,075 |   |
|                                                                              |   |                          |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |   | $                             | 100,730,402 |   |   | $ | 144,473,275 |   |

----

|   | ●  | Persuasive evidence of an arrangement exists, |
|--------|---------------|-----------------------------------------------|

|   | ●  | Delivery has occurred or services have been rendered, |
|--------|---------------|-------------------------------------------------------|

|   | ●  | The seller's price to the buyer is fixed or determinable, and |
|--------|---------------|---------------------------------------------------------------|

|   | ● | Collectability is reasonably assured. |
|--------|---------|---------------------------------------|

----

|                                      | 2009   |   | 2008   |
|-------------------------------------------|--------|--------|--------|
| Quarter end RMB : US$ exchange rate       | 6.8448 |   | 6.8718 |
| Average quarterly RMB : US$ exchange rate | 6.8452 |   | 6.9470 |

|                                 |   | Three Months Ended June 30,(Unaudited) |       |   | Six Months Ended June 30,(Unaudited) |   |
|--------------------------------------|--------|----------------------------------------|------------|--------|--------------------------------------|--------|
|                                 |   | 2009                                   |       |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Revenue from pharmaceutical products |   | $                                      | 58,438,805 |   |                                 | $      | 49,792,442 |   |   | $ | 93,118,274 |   |   | $ | 81,651,824 |   |
| Revenue from nutraceutical products  |   |                                   | 9,523,090  |   |                                 |   | 9,217,563 |   |   |   | 18,435,483 |   |   |   | 16,126,779 |   |
| Total manufacturing revenue          |   |                                   | 67,961,895 |   |                                 |   | 59,010,005 |   |   |   | 111,553,757 |   |   |   | 97,778,603 |   |
| Distribution revenue                 |   |                                   | 3,260,142  |   |                                 |   | - |   |   |   | 5,745,470 |   |   |   | - |   |
|                                 |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total revenue                        |   | $                                      | 71,222,037 |   |                                 | $      | 59,010,005 |   |   | $ | 117,299,227 |   |   | $ | 97,778,603 |   |

----

|                                          |   | Three Months Ended June 30,(Unaudited) |       |   | Six Months Ended June 30,(Unaudited) |   |
|-----------------------------------------------|--------|----------------------------------------|------------|--------|--------------------------------------|--------|
|                                          |   | 2009                                   |       |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Operating income from pharmaceutical products |   | $                                      | 15,047,340 |   |                                 | $      | 14,882,775 |   |   | $ | 22,810,346 |   |   | $ | 24,114,990 |   |
| Operating income from nutraceutical products  |   |                                   | 3,660,073  |   |                                 |   | 3,794,925 |   |   |   | 7,100,972 |   |   |   | 6,539,730 |   |
| Total manufacturing operating income          |   |                                   | 18,707,413 |   |                                 |   | 18,677,700 |   |   |   | 29,911,318 |   |   |   | 30,654,720 |   |
| Distribution operating income                 |   |                                   | (422,352   | )      |                                 |   | - |   |   |   | (412,822 | ) |   |   | - |   |
|                                          |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total operating income                        |   | $                                      | 18,285,061 |   |                                 | $      | 18,677,700 |   |   | $ | 29,498,496 |   |   | $ | 30,654,720 |   |

|          |   | June 30,2009 |        |   | December 31,2008 |   |
|---------------|--------|--------------|-------------|--------|------------------|--------|
|          |   | (Unaudited)  |        |   |             |   |
| Manufacturing |   | $            | 341,538,501 |   |             | $      | 312,146,154 |   |
| Distribution  |   |         | 51,880,830  |   |             |   | 52,445,008 |   |
| Corporate     |   |         | 147,377,250 |   |             |   | 159,463,675 |   |
|          |   |         |        |   |             |   |   |   |
| Total assets  |   | $            | 540,796,581 |   |             | $      | 524,054,837 |   |

|   | · | Level 1—defined as observable inputs such as quoted prices in active markets; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      |                                   | Fair Value Measurements at Reporting Date Using                 |                                            |
|---------------------------|----------------------------------------|-----------------------------------------------------------------|-------------------------------------------------|
|                      | Carrying value as ofJune 30, 2009 | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) | Significant OtherObservableInputs(Level 2) | SignificantUnobservable Inputs(Level 3) |   |
| Cash and cash equivalents | $100,730,402                           | $100,730,402                                                    | -                                               | - |   |

----

|                                                     |   | Three Months Ended June 30,(Unaudited) |       |   | Six Months Ended June 30,(Unaudited) |   |
|----------------------------------------------------------|--------|----------------------------------------|------------|--------|--------------------------------------|--------|
|                                                     |   | 2009                                   |       |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
|                                                     |   |                                   |       |   |                                 |   |   |   |   |   |   |   |
| Numerator:                                               |   |                                   |       |   |                                 |   |   |   |   |   |   |   |
| Net income attributable to controlling interest          |   | $                                      | 13,229,366 |   |                                 | $      | 13,859,692 |   |   | $ | 21,095,867 |   |   | $ | 23,281,820 |   |
| Interest expense on convertible securities, net of taxes |   |                                   | 1,437,500  |   |                                 |   | - |   |   |   | 2,875,000 |   |   |   | - |   |
| Amortization of  financing costs, net of taxes |   |                                   | 232,072    |   |                                 |   | - |   |   |   | 464,145 |   |   |   | - |   |
| Net income, as adjusted                                  |   | $                                      | 14,898,938 |   |                                 | $      | 13,859,692 |   |   | $ | 24,435,012 |   |   | $ | 23,281,820 |   |
|                                                     |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                             |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding – Basic        |   |                                   | 74,582,920 |   |                                 |   | 78,223,659 |   |   |   | 74,560,809 |   |   |   | 78,207,405 |   |
| Effect of dilutive instruments:                          |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Convertible notes                                        |   |                                   | 14,232,673 |   |                                 |   | - |   |   |   | 12,378,902 |   |   |   | - |   |
| Warrants                                                 |   |                                   |       |   |                                 |   | - |   |   |   |   |   |   |   | 776 |   |
| Weighted average shares outstanding - Diluted            |   |                                   | 88,815,593 |   |                                 |   | 78,223,659 |   |   |   | 86,939,711 |   |   |   | 78,208,181 |   |

----

|                                        |   | June 30,2009 |                              |    | December 31,2008 |   |
|---------------------------------------------|--------|--------------|-----------------------------------|---------|------------------|--------|
|                                        |   | (Unaudited)  |                              |    |             |   |
| Raw materials                               |   | $            |     5,853,906 |    |             | $      | 5,569,981 |   |
| Work in progress                            |   |         |     3,575,441 |    |             |   | 2,350,291 |   |
| Finished goods                              |   |         |     7,621,784 |    |             |   | 5,289,280 |   |
|                                        |   |         | 17,051,131                        |    |             |   | 13,209,552 |   |
| Less: provision for slow moving inventories |   |         | (221,297                          | )  |             |   | (167,429 | ) |
| Inventories, net                            |   | $            | 16,829,834                        |    |             | $      | 13,042,123 |   |

|                           |   | June 30,2009 |        |   | December 31,2008 |   |
|--------------------------------|--------|--------------|-------------|--------|------------------|--------|
|                           |   | (Unaudited)  |        |   |             |   |
| Cost of land use rights        |   | $            | 153,185,732 |   |             | $      | 152,297,695 |   |
| Less: Accumulated amortization |   |         | (4,884,529) |   |             |   | (3,308,825 | ) |
| Land use rights, net           |   | $            | 148,301,203 |   |             | $      | 148,988,870 |   |

----

|                               |   | June 30,2009 |                                                |   | December 31,2008 |   |
|------------------------------------|--------|--------------|-----------------------------------------------------|--------|------------------|--------|
|                               |   | (Unaudited)  |                                                |   |             |   |
| At cost:                           |   |         |                                                |   |             |   |
| Buildings                          |   | $            | 91,319,664                                          |   |             | $      | 91,261,579 |   |
| Machinery and equipment            |   |         | 20,839,094                                          |   |             |   | 20,665,315 |   |
| Motor vehicles                     |   |         |       1,568,875       |   |             |   | 1,568,059 |   |
| Office equipment                   |   |         |        1,619,985 |   |             |   | 1,543,300 |   |
| Other equipment                    |   |         | 482,682                                             |   |             |   | 482,097 |   |
| Leasehold improvement              |   |         | 29,190                                              |   |             |   | 29,150 |   |
|                               |   |         | 115,859,490                                         |   |             |   | 115,549,500 |   |
| Less : Accumulated depreciation    |   |         |                                                |   |             |   |   |   |
| Buildings                          |   |         | (5,892,719                                          | )      |             |   | (4,732,906 | ) |
| Machinery and equipment            |   |         |  (11,658,463                                   | )      |             |   | (10,782,285 | ) |
| Motor vehicles                     |   |         | (1,107,398                                          | )      |             |   | (998,535 | ) |
| Office equipment                   |   |         | (900,090                                            | )      |             |   | (771,630 | ) |
| Other equipment                    |   |         | (127,238                                            | )      |             |   | (91,078 | ) |
| Leasehold improvement              |   |         | (21,893                                             | )      |             |   | (18,623 | ) |
|                               |   |         |      (19,707,801           | )      |             |   | (17,395,057 | ) |
| Property, plant and equipment, net |   | $            | 96,151,689                                          |   |             | $      | 98,154,443 |   |

|                           |   | June 30,2009 |                                                 |    | December 31,2008 |   |
|--------------------------------|--------|--------------|------------------------------------------------------|---------|------------------|--------|
|                           |   | (Unaudited)  |                                                 |    |             |   |
| At cost:                       |   |         |                                                 |    |             |   |
| Product licenses               |   | $            |        15,507,205 |    |             |   | 15,485,939 |   |
| Trademarks                     |   |         |    10,573,160                         |    |             |   | 10,558,660 |   |
| Patents                        |   |         | 4,802,768                                            |    |             |   | 4,796,179 |   |
| Proprietary technology         |   |         | 282,051                                              |    |             |   | 281,664 |   |
| Software                       |   |         |    73,740                             |    |             |   | 73,640 |   |
|                           |   |         | 31,238,924                                           |    |             |   | 31,196,082 |   |
| Less: Accumulated amortization |   |         | (10,091,996                                          | )  |             |   | (7,505,642 | ) |
| Other intangible assets, net   |   | $            | 21,146,928                                           |    |             |   | 23,690,440 |   |

----

|                                          |   | Six Months Ended June 30,         |        |
|-----------------------------------------------|--------|-----------------------------------|-------------|
|                                          |   | 2008 Pro Forma Combined |        |
| Revenues                                      |   | $                                 | 142,966,318 |   |
| Income from Operations                        |   |                              | 30,655,809  |   |
| Net Income attribute to controlling interest  |   |                              | 23,462,078  |   |
| Net Income Per Share                          |   |                              |        |   |
| Basic                                         |   | $                                 | 0.30        |   |
| Diluted                                       |   | $                                 | 0.30        |   |
| Weighted Average number of shares outstanding |   |                              |        |   |
| Basic                                         |   |                              | 78,207,405  |   |
| Diluted                                       |   |                              | 78,208,181  |   |

----

|                              |   | June 30,2009 |                                                          |   | December 31,2008 |   |
|-----------------------------------|--------|--------------|---------------------------------------------------------------|--------|------------------|--------|
|                              |   | (Unaudited)  |                                                          |   |             |   |
| Cost of investments:              |   |         |                                                          |   |             |   |
| CAXG                              |   | $            | 18,000,000                                                    |   |             | $      | 18,000,000 |   |
| Nuo Hua Affiliate                 |   |         | 32,999,023                                                    |   |             |   | 32,999,023 |   |
| Jinji Printing printing           |   |         | 86,067                                                        |   |             |   | 86,067 |   |
| Share of equity income (loss):    |   |         |                                                          |   |             |   |   |   |
| CAXG                              |   |         |     (2,413,141                            | )      |             |   | (1,580,344 | ) |
| Nuo Hua Affiliate                 |   |         |       1,916,070                 |   |             |   | 773,415 |   |
| Jinji Printing                    |   |         | 43,940                                                        |   |             |   | 42,303 |   |
| Advances:                         |   |         |                                                          |   |             |   |   |   |
| CAXG                              |   |         |       4,702,130                 |   |             |   | 4,520,209 |   |
| Jinji Printing                    |   |         |          118,178 |   |             |   | 122,391 |   |
|                              |   |         |                                                          |   |             |   |   |   |
| Long-term investment and advances |   | $            | 55,452,267                                                    |   |             | $      | 54,963,064 |   |

|                                                         |   | Three Months EndedJune 30, 2009(Unaudited) |     |   | Six Months EndedJune 30, 2009(Unaudited) |   |
|--------------------------------------------------------------|--------|--------------------------------------------|----------|--------|------------------------------------------|--------|
| Equity in income from Nuo Hua Affiliate                      |   | $                                          | 601,970  |   |                                     | $      | 1,095,873 |   |
| Equity in loss from CAXG                                     |   |                                       | (775,272 | )      |                                     |   | (832,797 | ) |
| Equity in income from Jinji Printing                         |   |                                       | 44       |   |                                     |   | 1,460 |   |
| Total equity in earnings (loss) from unconsolidated entities |   | $                                          | (173,258 | )      |                                     | $      | 264,536 |   |

----

|   | · | Total offering is $115,000,000 aggregate principal amount of 5.00% Convertible Senior Notes due on July 15, 2015. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Interest at 5.00% per year, payable semiannually in arrears in cash. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | The Notes are convertible, at the option of the holder, at any time prior to the close of business on the second business day preceding the maturity date based on an initial conversion rate of 107.6195 shares per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $9.29 per share. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The conversion rate is subject to certain adjustments. In particular, holders who convert their Notes in connection with certain fundamental changes may be entitled to a make whole premium in the form of additional shares of our common stock. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Holders may require the Company to purchase all or a portion of their Notes on July 15, 2013 for cash at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the purchase date. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If a fundamental change occurs, holders will have the right to require the Company to purchase for cash all or any portion of their Notes. The fundamental change purchase price will be 100% of the principal amount of the Notes to be purchased plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Notes will be direct unsecured, unsubordinated obligations and will rank equal in right of payment to all of the Company’s existing and future unsecured and unsubordinated indebtedness. The Notes will be effectively subordinated to all of the Company’s existing and future secured indebtedness. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   |   |     |      |   |                                     |   |
|----------------------------------------|--------|----------|-----------|--------|------------------------------------------|--------|
|                                   |   | Activity |      |   | Weighted AverageExercise Price |   |
| Outstanding as of January 1, 2009 |   |     | 2,421,257 |   |                                     | $      | 8.58 |   |
| Granted                                |   |     | 1,027,100 |   |                                     |   | 4.01 |   |
| Exercised                              |   |     | -         |   |                                     |   | — |   |
| Cancelled                              |   |     | -         |   |                                     |   | — |   |
|                                   |   |     |      |   |                                     |   |   |   |
| Outstanding as of June 30, 2009        |   |     | 3,448,357 |   |                                     | $      | 7.22 |   |

----

|                     |   |   | Options Outstanding |      |      | Options Exercisable          |   |
|--------------------------|--------|--------|---------------------|-----------|-----------|------------------------------|--------|
| Range of Exercise Prices |   |   | Number ofShares     |      |      | WeightedAverageExercisePrice |   |   | Weighted AverageRemainingContractual Life(in years) |   |   | Number ofShares |   |   | WeightedAverageExercisePrice |   |
| $8.54 - $10.74           |   |   |                | 969,500   |      |                         | $      | 10.04 |   |   |   | 3 |   |   |   | 325,900 |   |   | $ | 10.32 |   |
| $4.95 - $8.35            |   |   |                | 1,451,757 |      |                         | $      | 7.62 |   |   |   | 4 |   |   |   | 227,451 |   |   | $ | 8.35 |   |
| $0.87                    |   |   |                | 1,027,100 |      |                         | $      | 4.01 |   |   |   | 5 |   |   |   | - |   |   |   |   |   |
|                     |   |   |                |      | 3,448,357 |                         |   |   |   |   |   |   |   |   |   |   | 553,351 |   |   |   |   |   |

----

|                        |   | Three Months Ended June 30,(Unaudited) |       |   | Six Months Ended June 30,(Unaudited) |    |
|-----------------------------|--------|----------------------------------------|------------|--------|--------------------------------------|---------|
|                        |   | 2009                                   |       |   | 2008                                 |    |   | 2009 |   |   | 2008 |   |
| Computed "expected" expense |   | $                                      | 5,357,620  |   |                                 | $       | 5,265,036 |   |   | $ | 7,850,070 |   |   | $  | 8,636,155 |   |
| Favorable tax rate effect   |   |                                   | (2,143,027 | )      |                                 |    | (1,389,576 | ) |   |   | (3,533,330 | ) |   |   | (2,258,254 | ) |
| Permanent difference        |   |                                   | 154,514    |   |                                 |    | 16,154 |   |   |   | 1,155,666 |   |   |   | (16,339 | ) |
| Income tax expense          |   | $                                      | 3,369,107  |   |                                 | $  | 3,891,614 |   |   | $ | 5,472,406 |   |   | $ | 6,361,562 |   |

|     |   | Three Months Ended June 30,(Unaudited) |      |   | Six Months Ended June 30 ,(Unaudited) |    |
|----------|--------|----------------------------------------|-----------|--------|---------------------------------------|---------|
|     |   | 2009                                   |      |   | 2008                                  |    |   | 2009 |   |   | 2008 |   |
| Current  |   | $                                      | 3,478,167 |   |                                  | $       | 3,866,137 |   |   | $ | 5,660,450 |   |   | $ | 6,415,276 |   |
| Deferred |   |                                   | (109,060  | )      |                                  |    | 25,477 |   |   |   | (188,044 | ) |   |   | (53,714 | ) |
| Total    |   | $                                      | 3,369,107 |   |                                  | $  | 3,891,614 |   |   | $ | 5,472,406 |   |   | $  | 6,361,562 |   |

----

|                                       |   | June 30,2009 |                             |   | December 31,2008 |   |
|--------------------------------------------|--------|--------------|----------------------------------|--------|------------------|--------|
|                                       |   | (Unaudited)  |                             |   |             |   |
| Deferred tax assets                        |   |         |                             |   |             |   |
| Current                                    |   |         |                             |   |             |   |
| Bad debts                                  |   | $            |  102,720                    |   |             | $      | 9,651 |   |
| Other costs                                |   |         |  318,940                    |   |             |   | 337,565 |   |
| Total current deferred tax assets          |   |         | 421,660                          |   |             |   | 347,216 |   |
| Non-current                                |   |         |                             |   |             |   |   |   |
| Bad debts                                  |   |         | 216,391                          |   |             |   | 216,094 |   |
| Amortization                               |   |         | 176,529                          |   |             |   | 164,313 |   |
| Other costs                                |   |         | 859,815                          |   |             |   | 858,636 |   |
| Stock provision                            |   |         | 32,128                           |   |             |   | 32,083 |   |
| Depreciation                               |   |         | 42,764                           |   |             |   | 42,706 |   |
| Total non-current deferred tax assets      |   |         | 1,327,627                        |   |             |   | 1,313,832 |   |
| Total deferred tax assets                  |   | $            | 1,749,287                        |   |             | $      | 1,661,048 |   |
| Deferred tax liabilities                   |   |         |                             |   |             |   |   |   |
| Current                                    |   |         |                             |   |             |   |   |   |
| Over accrual of welfare                    |   | $            | (114,997                         | )      |             | $      | (114,840 | ) |
| Boke acquisition                           |   |         | (943,828                         | )      |             |   | (667,096 | ) |
| CCXA acquisition                           |   |         | 5,943                            |   |             |   | 45,704 |   |
| Other                                      |   |         | (68,856                          | )      |             |   | (109,794 | ) |
| Total current deferred tax liabilities     |   |         | (1,121,738                       | )      |             |   | (846,026 | ) |
| Non-current                                |   |         |                             |   |             |   |   |   |
| Over accrual of welfare                    |   |         |     (18,308  | )      |             |   | (18,283 | ) |
| Amortization                               |   |         |    (325,743       | )      |             |   | (291,034 | ) |
| Depreciation                               |   |         |     (180,526 | )      |             |   | (130,803 | ) |
| Government grant                           |   |         | (948,492                         | )      |             |   | (1,019,319 | ) |
| GLP acquisition                            |   |         | (3,836,552                       | )      |             |   | (3,831,290 | ) |
| CCXA acquisition                           |   |         | (4,396,103                       | )      |             |   | (4,429,843 | ) |
| Boke acquisition                           |   |         | (2,714,259                       | )      |             |   | (2,985,975 | ) |
| Others                                     |   |         | (238,806                         | )      |             |   | (166,351 | ) |
| Other comprehensive income                 |   |         | (3,304,977                       | )      |             |   | (3,210,870 | ) |
| Total non-current deferred tax liabilities |   |         | (15,963,766                      | )      |             |   | (16,083,768 | ) |
| Total deferred tax liabilities             |   |         | (17,085,504                      | )      |             |   | (16,929,794 | ) |
| Net deferred tax liabilities               |   | $            | (15,336,217                      | )      |             | $      | (15,268,746 | ) |

----

|                                                    |   | Six Months Ended June 30,(Unaudited) |      |
|---------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                    |   | 2009                                 |      |   | 2008 |   |
| Tax holiday effect                                      |   | $                                    | 3,533,330 |   |   | $ | 2,258,254 |   |
| Basic net income per share excluding tax holiday effect |   | $                                    | 0.24      |   |   | $ | 0.27 |   |

----

----

|                                                         |   | Three Months EndedJune 30, |       |   | Three Months EndedJune 30, |   |
|--------------------------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|
|                                                         |   | 2009                       |       |   | 2008                       |   |   | 2009 |   |   | 2008 |   |
| REVENUES                                                     |   | $                          | 71,222,037 |   |                       | $      | 59,010,005 |   |   |   | 100 | % |   |   | 100 | % |
| COST OF GOODS SOLD                                           |   |                       | 29,594,923 |   |                       |   | 18,928,447 |   |   |   | 41. 6 |   |   |   | 32.1 |   |
| GROSS PROFIT                                                 |   |                       | 41,627,114 |   |                       |   | 40,081,558 |   |   |   | 58.4 |   |   |   | 67.9 |   |
| Selling and marketing                                        |   |                       | 9,396,129  |   |                       |   | 7,687,892 |   |   |   | 13.2 |   |   |   | 13.0 |   |
| Advertising                                                  |   |                       | 7,779,936  |   |                       |   | 7,452,231 |   |   |   | 10.9 |   |   |   | 12.6 |   |
| General and administrative                                   |   |                       | 4,315,714  |   |                       |   | 5,253,274 |   |   |   | 6.1 |   |   |   | 8.9 |   |
| Depreciation and amortization                                |   |                       | 1,850,274  |   |                       |   | 1,010,461 |   |   |   | 2.6 |   |   |   | 1.7 |   |
|    Total operating expenses                   |   |                       | 23,342,053 |   |                       |   | 21,403,858 |   |   |   | 32.8 |   |   |   | 36.2 |   |
| INCOME FROM OPERATIONS                                       |   |                       | 18,285,061 |   |                       |   | 18,677,700 |   |   |   | 25.6 |   |   |   | 31.7 |   |
| Equity in earnings from unconsolidated entities              |   |                       | (173,258   | )      |                       |   | (640,008 | ) |   |   | (0.2 | ) |   |   | (1.1 | ) |
| Interest income (expense), net                               |   |                       | (1,620,069 | )      |                       |   | (30,616 | )  |   |   | (2.3 | ) |   |   | (0.1 | ) |
| Other expense, net                                           |   |                       | (16,329    | )      |                       |   | (255,770 | ) |   |   | (0.0 | ) |   |   | (0.4 | ) |
| INCOME BEFORE INCOME TAXES                                   |   |                       | 16,475,405 |   |                       |   | 17,751,306 |   |   |   | 23.1 |   |   |   | 30.1 |   |
| Income taxes                                                 |   |                       | 3,369,107  |   |                       |   | 3,891,614 |   |   |   | 4.7 |   |   |   | 6.6 |   |
| NET INCOME                                                   |   |                       | 13,106,298 |   |                       |   | 13,859,692 |   |   |   | 18.4 |   |   |   | 23.5 |   |
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING  INTEREST |   |                       | 123,068    |   |                       |   | - |   |   |   | 0.2 |   |   |   | - |   |
| NET INCOME ATTRIBUTABLE TO CONTROLLING  INTEREST   |   | $                          | 13,229,366 |   |                       | $      | 13,859,692 |   |   |   | 18.6 | % |   |   | 23.5 | % |
|                                                         |   |                       |       |   |                       |   |   |   |   |   |   |   |   |   |   |   |

----

|                                 |   | Three Months EndedJune 30, |                   |   | Increase/(Decrease) |   |       | Increase/(Decrease) |
|--------------------------------------|--------|----------------------------|------------------------|--------|---------------------|--------|------------|---------------------|
|                                 |   | 2009                       |                   |   | 2008                |   |
| Revenue from pharmaceutical products |   | $                          |   58,438,805 |   |                | $      | 49,792,442 |                |   | $ |   8,646,363 |   |   |   | 17.4 | .% |
| Revenue from nutraceutical products  |   |                       |   9,523,090  |   |                |   | 9,217,563  |                |   |   |      305,527 |   |   |   | 3.3 | % |
| Total manufacturing revenue          |   |                       | 67,961,895             |   |                |   | 59,010,005 |                |   |   | 8,951,890 |   |   |   | 15.2 | % |
| Distribution revenue                 |   |                       | 3,260,142              |   |                |   | -          |                |   |   | 3,260,142 |   |   |   | 100 | % |
| Total revenue                        |   | $                          | 71,222,037             |   |                | $      | 59,010,005 |                |   | $ | 12,212,032 |   |   |   | 20.7 | % |

| · | The sales of our prescription pharmaceutical products increased from $20,425,161 during the second quarter of 2008 to $25,163,884 in the same period of 2009, or a 23.2% increase. This is primarily due to the increase in sales of our prescription formulated Jinji capsule and CCXA prescription pharmaceutical products despite the decreasein sales of our SHL products. The overall increase in sales was supported by our continuous marketing efforts, increase in products offering, effective pricing strategy, as well as expanding coverage to the previously unaddressed rural market; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The sales of our OTC pharmaceutical products increased from $29,367,281 to $33,274,921. This was attributable to the increase in sales of our Boke and GLP products as a result of improved recognition of our product supported by our marketing campaigns. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | Three Months EndedJune 30, |                  |   |   |   |       |                |   |
|--------------------------|--------|----------------------------|-----------------------|--------|--------|--------|------------|---------------------|--------|
|                     |   | 2009                       |                  |   | 2008   |   |       | Increase/(Decrease) |   |   | Increase/(Decrease) |   |
| Pharmaceutical products  |   | $                          | 22,576,349            |   |   | $      | 15,307,572 |                |   | $ |  7,268,777 |   |   |   | 47.5% |   |
| Nutraceutical products   |   |                       |   3,871,851 |   |   |   | 3,620,875  |                |   |   |   250,976 |   |   |   | 6.9% |   |
| Total manufacturing cost |   |                       | 26,448,200            |   |   |   | 18,928,447 |                |   |   | 7,519,753 |   |   |   | 39.7% |   |
| Distribution cost        |   |                       | 3,146,723             |   |   |   | -          |                |   |   | 3,146,723 |   |   |   | 100% |   |
| Total cost               |   | $                          | 29,594,923            |   |   | $      | 18,928,447 |                |   | $ | 10,666,476 |   |   |   | 56.4% |   |

----

|                           |   | Three Months EndedJune 30, |      |   |   |   |      |                |
|--------------------------------|--------|----------------------------|-----------|--------|--------|--------|-----------|---------------------|
|                           |   | 2009                       |      |   | 2008   |   |      | Increase/(Decrease) |   |   | Increase/(Decrease) |
| Promotional materials and fees |   | $                          | 5,526,908 |   |   | $      | 4,084,853 |                |   | $ | 1,442,055 |   |   |   | 35.3 |   | % |
| Payroll                        |   |                       | 1,338,517 |   |   |   | 1,395,716 |                |   |   | (57,199 | ) |   |   | (4.1 | )  | % |
| Shipping                       |   |                       | 1,039,217 |   |   |   | 618,512   |                |   |   |     420,705 |   |   |   | 68.0 |   | % |
| Traveling                      |   |                       | 647,184   |   |   |   | 501,722   |                |   |   |     145,462 |   |   |   | 29.0 |   | % |
| Sales conference               |   |                       | 581,019   |   |   |   | 610,511   |                |   |   | (29,492 | ) |   |   | (4.8 | )  | % |
| Offices supplies               |   |                       | 195,641   |   |   |   | 270,765   |                |   |   | (75,124 | ) |   |   | (27.7 | )  | % |
| Other expenses                 |   |                       | 67,643    |   |   |   | 205,813   |                |   |   | (138,170 | ) |   |   | (67.1 | )  | % |
| TOTAL                          |   | $                          | 9,396,129 |   |   | $      | 7,687,892 |                |   | $ | 1,708,237 |   |   |   | 22.2 |   | % |

| · | Promotional materials and fees increased 35.3% from $4,084,853 to $5,526,908 during the second quarter of 2009 as compared to the same quarter of 2008. This was primarily due to the increase in our promotion activities and initiatives to support the continuous growth of our revenue. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Shipping increased 68% from $618,512 to $1,039,217 during the second quarter of 2009 as compared to the same quarter of 2008. This was primarily due to the increase of net sales. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                           |   | Three Months EndedJune 30, |      |   |   |   |      |                |   |
|------------------------------------------------|--------|----------------------------|-----------|--------|--------|--------|-----------|---------------------|--------|
|                                           |   | 2009                       |      |   | 2008   |   |      | Increase/(Decrease) |   |   | Increase/ (Decrease) |   |
| Payroll                                        |   | $                          | 938,173   |   |   | $      | 1,122,654 |                |   | $ | (184,481 | ) |   |   | (16.4 | )% |
| Directors’ remuneration                  |   |                       | 661,141   |   |   |   | 756,313   |                |   |   | (95,172 | ) |   |   | (12.6 | )% |
| Professional fees - accounting                 |   |                       | 421,669   |   |   |   | 432,875   |                |   |   | (11,206 | ) |   |   | (2.6 | )% |
| Research and development                       |   |                       | 354,651   |   |   |   | 272,977   |                |   |   | 81,674 |   |   |   | 29.9 |  % |
| Staff welfare and insurance                    |   |                       | 311,198   |   |   |   | 496,508   |                |   |   | (185,310 | ) |   |   | (37.3 | )% |
| Provision for bad debts                        |   |                       | 372,294   |   |   |   | (140,344  | )                   |   |   | 512,638 |   |   |   | 365.3 |  % |
| Trip and traveling                             |   |                       | 268,556   |   |   |   | 269,306   |                |   |   | (750 | ) |   |   | (0.3 | )% |
| Office supplies                                |   |                       | 172,863   |   |   |   | 183,792   |                |   |   | (10,929 | ) |   |   | (5.9 | )% |
| Vehicles and utilities                         |   |                       | 120,128   |   |   |   | 118,593   |                |   |   | 1,535 |   |   |   | 1.3 |  % |
| Stock compensation - management and consult    |   |                       | 144,463   |   |   |   | 48,000    |                |   |   | 96,463 |   |   |   | 201.0 |  % |
| Professional fees – legal and consulting |   |                       | 104,065   |   |   |   | 796,558   |                |   |   | (692,493 | ) |   |   | (86.9 | )% |
| Investors relation and listing expenses        |   |                       | 64,234    |   |   |   | 86,414    |                |   |   | (22,180 | ) |   |   | (25.7 | )% |
| Office rental                                  |   |                       | 16,497    |   |   |   | 51,842    |                |   |   | (35,345 | ) |   |   | (68.2 | )% |
| Other expenses                                 |   |                       | 365,782   |   |   |   | 757,786   |                |   |   | (392,004 | ) |   |   | (51.7 | )% |
| TOTAL                                          |   | $                          | 4,315,714 |   |   | $      | 5,253,274 |                |   | $ | (937,560 | ) |   |   | (17.8 | )% |

----

| · | Legal and consulting related professional fees decreased by $692,493, or 86.9% as compared to the same quarter during 2008. We incurred increased fees during the second quarter of 2008, due to fund raising activities undertaken during that time. We did not have any fund raising activities during the second quarter of 2009 ; and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Payroll expenses decreased by $184,481, or 16.4% and Staff welfare and insurance expenses decreased by $185,310, or 37.3% as compared to the same quarter during 2008. These reflect the Company’s increased efforts in optimization of human resource management and cost control; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Research and development increased by $81,674, or 29.9%, as compared to the same period of 2008, due to our increased R&D effort on new products and existing products enhancement; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | Six Months EndedJune 30, |        |   | Six Months EndedJune 30, |    |
|--------------------------------------------------------------|--------|--------------------------|-------------|--------|--------------------------|---------|
|                                                         |   | 2009                     |        | 2008   |                     |    | 2009 |   |   | 2008 |   |
| REVENUES                                                     |   | $                        | 117,299,227 |   |                     |  $ | 97,778,603 |   |   |   | 100 | % |   |   | 100 | % |
| COST OF GOODS SOLD                                           |   |                     | 47,255,261  |   |                     |    | 31,406,083 |   |   |   | 40.3 |   |   |   | 32.1 |   |
| GROSS PROFIT                                                 |   |                     | 70,043,966  |   |                     |    | 66,372,520 |   |   |   | 59.7 |   |   |   | 67. 9 |   |
| Selling and marketing                                        |   |                     | 14,607,631  |   |                     |    | 12,717,600 |   |   |   | 12.5 |   |   |   | 13.0 |   |
| Advertising                                                  |   |                     | 13,347,293  |   |                     |    | 11,846,572 |   |   |   | 11.3 |   |   |   | 12.1 |   |
| General and administrative                                   |   |                     | 8,881,357   |   |                     |    | 9,165,957 |   |   |   | 7.6 |   |   |   | 9.4 |   |
| Depreciation and amortization                                |   |                     | 3,709,189   |   |                     |    | 1,987,671 |   |   |   | 3.1 |   |   |   | 2.0 |   |
|    Total operating expenses                   |   |                     | 40,545,470  |   |                     |    | 35,717,800 |   |   |   | 34.5 |   |   |   | 36.5 |   |
| INCOME FROM OPERATIONS                                       |   |                     | 29,498,496  |   |                     |    | 30,654,720 |   |   |   | 25.2 |   |   |   | 31.4 |   |
| Equity in earnings from unconsolidated entities              |   |                     | 264,536     |   |                     |    | (641,067 | ) |   |   | 0.2 |   |   |   | (0.7 | ) |
| Interest income (expense), net                               |   |                     | (3,199,338  | )      |                     |    | (13,769 | ) |   |   | (2.7 | ) |   |   | (0.0 | ) |
| Other expense, net                                           |   |                     | (114,938    | )      |                     |    | (356,502 | ) |   |   | (0.1 | ) |   |   | (0.4 | ) |
| INCOME BEFORE INCOME TAXES                                   |   |                     | 26,448,756  |   |                     |    | 29,643,382 |   |   |   | 22.6 |   |   |   | 30.3 |   |
| Income taxes                                                 |   |                     | 5,472,406   |   |                     |    | 6,361,562 |   |   |   | 4.7 |   |   |   | 6.5 |   |
| NET INCOME                                                   |   |                     | 20,976,350  |   |                     |    | 23,281,820 |   |   |   | 17.9 |   |   |   | 23.8 |   |
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING  INTEREST |   |                     | 119,517     |   |                     |    | - |   |   |   | 0.1 |   |   |   | - |   |
| NET INCOME ATTRIBUTABLE TO CONTROLLING  INTEREST   |   | $                   | 21,095,867  |   |                     | $       | 23,281,820 |   |   |   | 18.0 | % |   |   | 23.8 | % |

----

|                                 |   | Six Months EndedJune 30, |        |   | Increase/(Decrease) |   |       | Increase/(Decrease) |
|--------------------------------------|--------|--------------------------|-------------|--------|---------------------|--------|------------|---------------------|
|                                 |   | 2009                     |        |   | 2008                |   |
| Revenue from pharmaceutical products |   | $                        | 93,118,274  |   |                | $      | 81,651,824 |                |   | $ | 11,466,450 |   |   |   | 14.0 | % |
| Revenue from nutraceutical products  |   |                     | 18,435,483  |   |                |   | 16,126,779 |                |   |   | 2,308,704 |   |   |   | 14.3 | % |
| Total manufacturing revenue          |   |                     | 111,553,757 |   |                |   | 97,778,603 |                |   |   | 13,775,154 |   |   |   | 14.1 | % |
| Distribution revenue                 |   |                     | 5,745,470   |   |                |   | -          |                |   |   | 5,745,470 |   |   |   | 100 | % |
| Total revenue                        |   | $                        | 117,299,227 |   |                | $      | 97,778,603 |                |   | $ | 19,520,624 |   |   |   | 20 | % |

| · | The sales of our prescription pharmaceutical products increased from $34,577,339 during the first six months of 2008 to $41,367,074 in the same period of 2009, or a 19.6% increase. This is primarily due to the increase in sales of our prescription formulated Jinji capsule and CCXA prescription pharmaceutical products despite the decreasein sales of our SHL products. The overall increase in sales was supported by our continuous marketing efforts, increase in products offering, effective pricing strategy, as well as expanding coverage to the previously unaddressed rural market; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The sales of our OTC pharmaceutical products increased from $47,074,485 to $51,751,200, or a 9.9% increase. This was attributable to the increase in sales of our Boke products as a result of improved recognition of our product supported by our marketing campaigns. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Sales of our Protein Peptide series of products increased by 9%, from $15,165,287 during the six months ended June 30 of 2008 to $16,526,267 in the same period of 2009. This increase was mainly attributed to the increase in sales of peptide coffee and peptide powder through our expanded distribution network; and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Sales of our nutraceutical beverage series increased by 126.1% from $834,804 during the six months ended June 30 of 2008 to $1,887,510 during the first quarter of 2009. This increase was mainly attributed to new beverage products launched during the six months ended June 30 of 2009. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | Six Months EndedJune 30, |       |   |   |   |       |                |   |
|--------------------------|--------|--------------------------|------------|--------|--------|--------|------------|---------------------|--------|
|                     |   | 2009                     |       |   | 2008   |   |       | Increase/(Decrease) |   |   | Increase/(Decrease) |   |
| Pharmaceutical products  |   | $                        | 34,294,274 |   |   | $      | 25,097,208 |                |   | $ | 9,197,066 |   |   |   | 36.6% |   |
| Nutraceutical products   |   |                     | 7,424,764  |   |   |   | 6,308,875  |                |   |   | 1,115,889 |   |   |   | 17.7% |   |
| Total manufacturing cost |   |                     | 41,719,038 |   |   |   | 31,406,083 |                |   |   | 10,312,955 |   |   |   | 32.8% |   |
| Distribution cost        |   |                     | 5,536,223  |   |   |   | -          |                |   |   | 5,536,223 |   |   |   | 100% |   |
| Total cost               |   | $                        | 47,255,261 |   |   | $      | 31,406,083 |                |   | $ | 15,849,178 |   |   |   | 50.5% |   |

----

|                           |   | Six Months EndedJune 30, |       |   |   |   |       |                |   |
|--------------------------------|--------|--------------------------|------------|--------|--------|--------|------------|---------------------|--------|
|                           |   | 2009                     |       |   | 2008   |   |       | Increase/(Decrease) |   |   | Increase/(Decrease) |
| Promotional materials and fees |   | $                        | 7,412,340  |   |   | $      | 5,483,559  |                |   | $ | 1,928,781 |   |   |   | 35.2 |  % |
| Payroll                        |   |                     | 2,724,892  |   |   |   | 2,808,937  |                |   |   | (84,045 | ) |   |   | (3.0 | )% |
| Shipping                       |   |                     | 1,854,302  |   |   |   | 1,464,589  |                |   |   | 389,713 |   |   |   | 26.6 |  % |
| Traveling                      |   |                     | 1,266,864  |   |   |   | 1,337,513  |                |   |   | (70,649 | ) |   |   | (5.3 | )% |
| Sales conference               |   |                     | 840,942    |   |   |   | 787,214    |                |   |   | 53,728 |   |   |   | 6.8 |  % |
| Offices supplies               |   |                     | 310,324    |   |   |   | 470,484    |                |   |   | (160,160 | ) |   |   | (34.0 | )% |
| Other expenses                 |   |                     | 197,967    |   |   |   | 365,304    |                |   |   | (167,337 | ) |   |   | (45.8 | )% |
| TOTAL                          |   | $                        | 14,607,631 |   |   | $      | 12,717,600 |                |   | $ | 1,890,031 |   |   |   | 14.9 |  % |

| · | Promotional materials and fees increased 35.2% from $5,483,559 to $7,412,340 during the six months ended June 30, 2009 as compared to the same period of 2008. This was primarily due to the increase in our promotion activities and initiatives to support the continuous growth of our revenue. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Shipping increased 26.6% from $1,464,589 to $1,854,302 during the first two quarters of 2009 as compared to the same quarters of 2008. This was primarily due to the increase of net sales.. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                           |   | Six Months EndedJune 30, |      |   |   |   |      |                |   |
|------------------------------------------------|--------|--------------------------|-----------|--------|--------|--------|-----------|---------------------|--------|
|                                           |   | 2009                     |      |   | 2008   |   |      | Increase/(Decrease) |   |   | Increase/ (Decrease) |
| Payroll                                        |   | $                        | 1,597,265 |   |   | $      | 1,865,961 |                |   | $ | (268,696 | ) |   |   | (14.4 | )% |
| Directors’ remuneration                  |   |                     | 1,228,002 |   |   |   | 1,159,684 |                |   |   | 68,318 |   |   |   | 5.9 |  % |
| Professional fees – accounting           |   |                     | 1,428,197 |   |   |   | 1,190,877 |                |   |   | 237,320 |   |   |   | 19.9 |  % |
| Research and development                       |   |                     | 631,996   |   |   |   | 488,413   |                |   |   | 143,583 |   |   |   | 29.4 |  % |
| Staff welfare and insurance                    |   |                     | 618,679   |   |   |   | 820,920   |                |   |   | (202,241 | ) |   |   | (24.6 | )% |
| Trip and traveling                             |   |                     | 496,382   |   |   |   | 530,767   |                |   |   | (34,385 | ) |   |   | (6.5 | )% |
| Office supplies                                |   |                     | 328,400   |   |   |   | 362,364   |                |   |   | (33,964 | ) |   |   | (9.4 | )% |
| Vehicles and utilities                         |   |                     | 267,625   |   |   |   | 281,504   |                |   |   | (13,879 | ) |   |   | (4.9 | )% |
| Provision for bad debts                        |   |                     | 276,371   |   |   |   | (143,109  | )              |   |   | 419,480 |   |   |   | (293.1 | )% |
| Stock compensation - Management and consult    |   |                     | 248,463   |   |   |   | 104,500   |                |   |   | 143,963 |   |   |   | 137.8 |  % |
| Professional fees – legal and consulting |   |                     | 236,913   |   |   |   | 847,855   |                |   |   | (610,942 | ) |   |   | (72.1 | )% |
| Investors relation and listing expenses        |   |                     | 145,234   |   |   |   | 146,065   |                |   |   | (831 | ) |   |   | (0.6 | )% |
| Office rental                                  |   |                     | 49,882    |   |   |   | 112,402   |                |   |   | (62,520 | ) |   |   | (55.6 | )% |
| Other expenses                                 |   |                     | 1,327,948 |   |   |   | 1,397,754 |                |   |   | (69,806 | ) |   |   | (5.0 | )% |
| TOTAL                                          |   | $                        | 8,881,357 |   |   | $      | 9,165,957 |                |   | $ | (284,600 | )  |   |   | (3.1 | )% |

| · | Accounting related professional fees increased by $237,320, or 20% as compared to the same period of 2008, due primarily to the increase in audit fees relating to our increased number of subsidiaries being audited; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Legal and consulting related professional fees decreased by $610,942, or 72.1% as compared to the same period during 2008. We incurred increased fees during the second quarter of 2008, due to fund raising activities undertaken during that time. We did not have any fund raising activities during the second quarter of 2009 ; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Payroll expenses decreased by $268,696, or 14.4% and Staff welfare and insurance expenses decreased by $202,241, or 24.6% as compared to the same quarter during 2008. These reflect the Company’s increased efforts in optimization of human resource management and cost control; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Research and development increased by $143,583, or 29.4%, as compared to the same period of 2008, due to our increased R&D effort on new products and existing products enhancement; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Exhibit No. | Description                                                                                                                                                              |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        | Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a – 14(a) of the Securities Exchange Act, as amended                     |
| 31.2        | Certification of Acting Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a – 14(a) of the Securities Exchange Act, as amended              |
| 32.1        | Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. 1350, as adopted. |

----

----

| Exhibit No. | Description                                                                                                                                                              |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        | Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a – 14(a) of the Securities Exchange Act, as amended                     |
| 31.2        | Certification of Acting Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a – 14(a) of the Securities Exchange Act, as amended              |
| 32.1        | Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. 1350, as adopted. |

----