UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

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

For the fiscal year ended December 31, ~~2017~~2018

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

For the transition period from________________________ to _________________________

Commission file number 0-21384

YBCC, INC.

(Exact name of registrant as specified in its charter)

Nevada	8980	13-3367421
(State or other jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

17800 CASTLETON ST. STE 386, CITY OF INDUSTRY, CA	91748
618 Brea Canyon Rd. Suite A, Walnut, California	91789
(Address of principal executive offices)	(Zip code)

626-213-3945

(Registrant’s telephone number, including area code)

International Packaging and Logistics Group, Inc.

(Former name, former address and former fiscal year, if changed since last report)

Title of each class	Name of each exchange on which registered
Common stock, par value $0.001 per share	None
Convertible Preferred stock, Series A, par value $0.0001 per share	None

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

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ ☐ No ☒

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of June 30, ~~2017~~2018, the aggregate market value of the shares of the Registrant’s common stock held by non-affiliates was $21,~~819~~703,~~622~~522 based upon the closing price ($0.4829) of such shares as quoted on the OTC Markets as of June 30, ~~2017~~2018. Shares of the Registrant’s common stock held by each executive officer and director and each by each person who owns 10 percent or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates of the Registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There was a total of 9,894,214 shares of of the registrant’s common stock outstanding as of April 215, ~~2018~~2019.

DOCUMENTS INCORPORATED BY REFERENCE

~~Table~~TABLE ofOF ~~Contents~~CONTENTS

		Page
	PART I
Item 1.	Description of Business.	13
Item 1A.	Risk Factors.	711
Item 1B.	Unresolved Staff Comments.	1927
Item 2.	Properties.	1927
Item 3.	Legal Proceedings.	1927
Item 4.	Mine Safety Disclosures.	1927
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	2028
Item 6.	Selected Financial Data.	2230
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2230
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	2534
Item 8.	Financial Statements and Supplementary Data.	2534
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	2534
Item 9A.	Controls and Procedures.	2534
Item 9B.	Other Information.	2635
	PART III
Item 10.	Directors, Executive Officers, and Corporate Governance.	2736
Item 11.	Executive Compensation.	2838
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	3039
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	3039
Item 14.	Principal Accountant Fees and Services.	3141
Item 15.	Exhibits, Financial Statement Schedules.	3241
Index to Financial Statements		F-1

PART I

ITEM 1.

Description of Business

Overview

On August 31, 2016, YBCC, Inc. (“YBCC” or the “Company”) through its subsidiary, YibaoConfucian Co. Ltd. (“YibaoHK”) entered into a series of contractual arrangements with Shandong Confucian Biologics Co., Ltd. (“Confucian”) which is a limited liability company headquartered in, and organized under the laws of the PRC. Confucian is a manufacture and research based bio-science company. It has a large capacity to manufacture tablets, granule, oral liquid, powders, soft gels and capsules products. Confucian distributes its products through its own network and white label products. It also has access to a member-based distribution system operated by an affiliated company.

The Company through its subsidiaries possesses manufacturing permits for food product, hygienic products, sanitary products, and health products. The Company's main business includes: research and development of chondroitin and garlic oil; trading, cold storage, and pretreating of garlic, fruit, and vegetables products; trading of chemical products (excluding hazardous chemicals); import and export of goods and technology (excluding those restricted by government); and, the manufacturing and sale of health products including powder, granules, tablets, hard capsule, and soft capsule products.

History

YBCC

YBCC, formerly known as International Packaging and Logistics Group (“IPLO”), was originally incorporated as Interactive Medical Technologies, Ltd., on June 2, 1986 in the state of Delaware. On April 17, 2008, IPLO was redomiciled from the State of Delaware to the State of Nevada.

Effective February 3, 1998, Interactive Medical Technologies, Ltd., changed its name to Kaire Holdings Incorporated, which was changed again on May 28, 2008 to International Packaging and Logistics Group, Inc.

On July 2, 2007, IPLO through its wholly-owned subsidiary, YesRx.com (“YesRx”), acquired all the outstanding shares of H&H Glass, Inc. (“H&H Glass”), in exchange for 3,915,000 shares of its common stock in a reverse triangular merger.

On May 15, 2016, the Company and Xiuhua Song (the “Purchaser”) entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which IPLO (the “Seller”) sold to the Purchaser, and the Purchaser purchased from the Seller an aggregate of 3,915,000 newly issued shares of IPLO Common Stock (the “Shares”). The Shares represented 87% of the issued and outstanding shares of Common Stock. On July 1, 2016, this transaction was completed.

On July 1, 2016, Standard Resources Ltd. (“Standard”), previously IPLO’s majority stockholder, and IPLO entered into a share purchase agreement (“H&H Vend Out”) whereby Standard cancelled 3,915,000 shares of IPLO common stock held by it in exchange for all of the outstanding shares of H&H Glass. The H&H Glass Vend Out was completed on August 31, 2016.

On July 1, 2016, the Company executed an Exchange Agreement with Yibaoccyb Ltd., a British Virgin Islands limited liability company (“Yibaoccyb”) and the Yibaoccyb Shareholders. On August 31, 2016, Yibaoccyb became a 51% owned subsidiary of the Company. Yibaoccyb owns 100% of YibaoConfucian Co., Ltd. (“YibaoHK”), a Hong Kong company. YibaoHK will own 100% of Shenzhen Confucian Biologics Co. Ltd. (yet to be formed, “Yibao”), which will be a wholly foreign-owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”). On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Confucian. Our relationship with Confucian is governed by a series of contractual agreements. We do not own any equity interest in Confucian.3

On December 22, 2016, the Company amended its Certificate of Incorporation (the “Amendment”). As a result of the Amendment, the Company’s corporate name changed from International Packaging and Logistics Group, Inc. to YBCC, Inc. Effective December 22, 2016, the Registrant’s ticker symbol changed from IPLO to YBAO.

YIBAOCCYB

Yibaoccyb is a limited liability company incorporated under the laws of the British Virgin Islands on May 30, 2016. On August 31, 2016, Yibaoccyb became a 51% owned subsidiary of IPLO. Yibaoccyb, in turn, is the sole owner of YibaoHK. Other than 100% of the issued and outstanding shares of YibaoHK, Yibaoccyb has no other assets or operations.

YIBAOHK

YibaoHK is a limited liability company incorporated under the laws of the Hong Kong on June 15, 2016. YibaoHK was formed by Yibaoccyb. YibaoHK will be the sole owner of Yibao (yet to be formed). On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Confucian.

YIBAO

Yibao, a wholly foreign owned enterprise under the laws of the PRC is in the process of being established. All of the issued and outstanding shares of Yibao will be held by YibaoHK. The principal purpose of Yibao will be to manage, hold and own rights in the business of Confucian and other potential PRC businesses. Other than management contracts with the aforementioned companies and related activities, Yibao is expected to have no other separate operations of its own.

CONFUCIAN

PRC law currently has limits on foreign ownership of certain companies. To comply with these foreign ownership restrictions, we operate our businesses in China through Confucian which is a limited liability company headquartered in China and organized under the laws of China. Confucian has the licenses and approvals necessary to operate our businesses in China. We have contractual arrangements with Confucian and their respective shareholders pursuant to which we provide these companies with technology consulting and other general business operation services. Through these contractual arrangements, we also have the ability to substantially influence these companies’ daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder approval. As a result of these contractual arrangements, which enable us to control Confucian, we are considered the primary beneficiary of Confucian. Accordingly, we consolidate the results, assets and liabilities of Confucian in our financial statements.

The following chart summarizes our organizational and ownership structure as of December 31, ~~2017~~2018:

Going Concern

As described in auditor’s report on our consolidated financial statements, our auditors have included a “going concern” provision in their opinion on our consolidated financial statements, expressing substantial doubt that we can continue as an ongoing business for the next twelve months.

CONTRACTUAL ARRANGEMENTS WITH CONFUCIAN AND THEIR SHAREHOLDERS

Our relationships with the Confucian and their shareholders are governed by a series of contractual arrangements between YibaoHK, and Confucian, which is the operating company of the Yibao Group in the PRC. Under PRC laws, each of YibaoHK and Confucian is an independent legal person and none of them is exposed to liabilities incurred by the other parties. The contractual arrangements constitute valid and binding obligations of the parties of such agreements. Each of the contractual arrangements and the rights and obligations of the parties thereto are enforceable and valid in accordance with the laws of the PRC. Other than pursuant to the contractual arrangements between YibaoHK and Confucian described below, Confucian does not transfer any other funds generated from its respective operations to any other member of the Yibao Group. On August 31, 2016, we entered into the following contractual arrangements (“VIE Agreements”) with Confucian:

Consulting Services Agreement. Pursuant to the exclusive consulting services agreements between YibaoHK and Confucian, YibaoHK has the exclusive right to provide to Confucian general business operation services, including advice and strategic planning, as well as consulting services related to the technological research and development of dietary supplements and related products (the “Services”). Under this agreement, YibaoHK owns the intellectual property rights developed or discovered through research and development, in the course of providing the Services, or derived from the provision of the Services. Confucian pays a quarterly consulting service fees in Renminbi (“RMB”) to Yibaoccyb that is equal to all of Confucian’s profits for such quarter.

Operating Agreement. Pursuant to the operating agreement among YibaoHK, Confucian and all shareholders of Confucian (collectively the “Shandong Confucian Biologics Shareholders”), YibaoHK provides guidance and instructions on Confucian’s daily operations, financial management and employment issues. Confucian Shareholders must designate the candidates recommended by YibaoHK as their representatives on the boards of directors of each of Confucian. YibaoHK has the right to appoint senior executives of Confucian. In addition, YibaoHK agrees to guarantee Confucian’ performance under any agreements or arrangements relating to Confucian’ business arrangements with any third party. Confucian, in return, agrees to pledge their accounts receivable and all of their assets to YibaoHK. Moreover, Confucian agrees that without the prior consent of YibaoHK, Confucian will not engage in any transactions that could materially affect their respective assets, liabilities, rights or operations, including, without limitation, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of their assets or intellectual property rights in favor of a third party or transfer of any agreements relating to their business operation to any third party. The term of this agreement is ten (10) years from August 31, 2016 and may be extended only upon YibaoHK’s written confirmation prior to the expiration of this agreement, with the extended term to be mutually agreed upon by the parties.

Equity ~~Pledge~~ Pledge Agreement. Under the equity pledge agreement between Confucian Shareholders and YibaoHK, Confucian ~~Shareholders~~ Shareholders pledged all of their equity interests in Confucian to YibaoHK to guarantee Confucian’ performance of their obligations under the consulting services agreement. If Confucian or Confucian Shareholders breaches their respective contractual obligations, YibaoHK, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Confucian Shareholders also agreed that upon occurrence of any event of default, YibaoHK shall be granted an exclusive, irrevocable power of attorney to take actions in the place and stead of Confucian Shareholders to carry out the security provisions of the equity pledge agreement and take any action and execute any instrument that YibaoHK may deem necessary or advisable to accomplish the purposes of the equity pledge agreement. Confucian Shareholders agreed not to dispose of the pledged equity interests or take any actions that would prejudice YibaoHK’s interest. The equity pledge agreement will expire two (2) years after Confucian’ obligations under the consulting services agreements have been fulfilled.

Option Agreement. Under the option agreement between Confucian Shareholders and YibaoHK, Confucian Shareholders irrevocably granted YibaoHK or its designated person an exclusive option to purchase, to the extent permitted under PRC law, all or part of the equity interests in Confucian for the cost of the initial contributions to the registered capital or the minimum amount of consideration permitted by applicable PRC law. YibaoHK or its designated person has sole discretion to decide when to exercise the option, whether in part or in full. The term of this agreement is ten (10) years from August 31, 2016 and may be extended prior to its expiration by written agreement of the parties.

Voting Rights Proxy Agreement. Pursuant to the proxy agreement between Confucian Shareholders and YibaoHK, Confucian Shareholders agreed to irrevocably grant a person to be designated by YibaoHK with the right to exercise Confucian Shareholders’ voting rights and their other rights, including the attendance at and the voting of Confucian Shareholders’ shares at shareholders’ meetings (or by written consent in lieu of such meetings) in accordance with applicable laws and its Articles of Association, including but not limited to the rights to sell or transfer all or any of his equity interests of Confucian, and appoint and vote for the directors and Chairman as the authorized representative of the shareholders of Confucian. The proxy agreement may be terminated by joint consent of the parties or upon 30-day written notice from YibaoHK.

CONFUCIAN BUSINESS

History

Confucian was founded under the laws of the People's Republic of China on October 31, 2012. Confucian is located in Food Industrial Park inside the economic development Zone of JinXiang County, Ji’ning City in the province of Shandong in China. Confucian is a limited liability company.

~~Overview~~6

Confusion is a manufacture and research-based bio-science company. It has a large capacity to manufacture tablets, granule, oral liquid, powders, soft gels and capsules products. Confucian distributes its products through its own network and white label products. It also has access to a member-based distribution system operated by an affiliated company.Overview

4Confusion is a manufacture and research-based bio-science company. It has a large capacity to manufacture tablets, granule, oral liquid, powders, soft gels and capsules products. Confucian distributes its products through its own network and white label products. It also has access to a member-based distribution system operated by an affiliated company.

Confusion possesses manufacturing permits for food product, hygienic products, sanitary products, and health products. Confusion's main business includes: technology study and transfer of chondroitin and garlic oil; trading, cold storage, and pretreating of garlic, fruit, and vegetables products; trading of chemical products (excluding hazardous chemicals); import and export of goods and technology (excluding those restricted by government); the manufacturing and sale of health products including powder, granules, tablets, hard capsule, and soft capsule products.

Ownership

During the phase of incorporation, Qingbao Kong accounted for 51% of the initial equity, Xiuhua Song accounted for 49%.

In 2013, Xiuhua Song transferred her 49% of equity to WenXiu Song.

In March 2016, Qingbao Kong transferred his 51% of equity to Hengchun Zhang.

As of today, the Company’s equity is owned 51% by Hengchun Zhang and 49% by Wenxiu Song.

Product Overview

The Company’s main products can be divided into three groups: health food products, hygienic products, and ~~hygienic~~beauty products.

Health Food Products

· Phytocholesterol ~~tableting~~tabletting candy,

Phytosterol has strong anti-inflammatory effects to the human body, which can inhibit the absorption of cholesterol for human and biochemical synthesis of cholesterol. ~~Additionally,~~Promote ~~it can promote~~ the degradation and metabolism of cholesterol. Phytosterol can be used for prevention & therapy of coronary atherosclerosis heart disease. ItIn ~~has the potential for~~ treating ulcers, skin squamous carcinoma and cervical cancer has obvious curative effect. ~~Phytosterol~~ ~~may~~Can promote wound healing, make muscle proliferation, enhance capillary circulation.; ~~Phytosterol~~also ~~may~~can be used as blocking agent of formation of gallstones.

· Polydextrose ~~tableting~~tabletting candy,

~~Polydextrose~~Regulating ~~is used for regulating~~ blood lipid, ~~in order to~~ reduce fat accumulation preventing the fat.

~~· Dunaliella Salina Haematococcus Pluvialis tableting candy,~~7

· Dunaliella ~~Salina~~salina ~~Haematococcus Pluvialis~~haematococcus ispluvialis ~~used~~tabletting ~~to replenishing the body's astaxanthin~~candy, ~~natural carotene and variety of minerals. It has an effect on antioxidant activity, protect skin, protect vision and improve immunity.~~

·Replenishing ~~Dunaliella~~the ~~Salina~~body's astaxanthin, Natural ~~Gum~~carotene ~~Base~~and ~~Candy~~variety of minerals, have a great effect of antioxidant activity, protect skin, protect vision and improve immunity.

· Dunaliella salina isGum ~~rich~~Base ~~in antioxidant needed by the human body health~~candy, ~~resistance to radiation and enhance human immunity of natural carotenoids and 70 kinds of minerals and trace elements.~~

·Dunaliella ~~Haematococcus~~salina ~~Pluvialis~~is ~~Gum~~rich ~~Candy~~in antioxidant needed by the human body health, resistance to radiation and enhance human immunity of natural carotenoids and 70 kinds of minerals and trace elements.

~~The~~· ~~main component of~~ Haematococcus ~~Pluvialis is astaxanthin.~~pluvialis ItGum ~~has six anti-aging effect protect the skin; protect eye health; helps to support the cardiovascular system; maintain a healthy joints and connective tissue; and~~candy, ~~increase strength and endurance.~~

·The ~~Fish~~main ~~Oil~~components ~~Gum~~of ~~Candy~~Haematococcus Pluvialis is astaxanthin. It has nine anti-aging effect: can be Anti-aging and protect the skin; Protect the eye health; helps to support the cardiovascular system, maintain a healthy joints and connective tissue; increases strength and endurance.

· Fish Oil ~~adjusts~~Gum ~~the blood liquid which may~~candy, ~~prevent blood clots, cerebral thrombosis, cerebral hemorrhage and stroke. Additionally, fish oil may prevent arthritis, Alzheimer’s disease, improve the memory and vision, and control presbyopia.~~

·Adjusting ~~Earthworm~~blood ~~Protein~~liquid, ~~tableting~~prevent ~~Candy~~blood clots, cerebral thrombosis, cerebral hemorrhage and stroke; prevent arthritis and alzheimer's disease, improve the memory and vision, control presbyopia.

· Earthworm Protein istabletting ~~used to improve blood circulation~~candy, ~~inhibit platelet aggregation, reduce glucose concentrations, and prevent blood clots. It may be a control efficiency for coronary heart disease, arteriosclerosis, and other hematologic disorders.~~

5Improve blood circulation, inhibiting platelet aggregation, reduce glucose concentrations, prevent blood clots, has the very good control efficiency for coronary heart disease, arteriosclerosis, and other hematologic disorders.

· Collagen Protein ~~tableting~~tabletting candy,

~~Collagen~~It ~~Protein~~ is rich in glycine, proline ~~hydroxyproline~~ hydroxyproline and other amino acid needed for human body. ~~Collagen~~Have ~~protein~~a ~~may~~good ~~have~~health acare ~~beneficial~~ effect for skin, hair, bones and muscles.

Krill Oil Gum candy,

~~Krill~~It ~~Oil~~ is rich in EPA and DHA. ~~This may~~Enhancing ~~have beneficial~~ health effects, including cardiovascular, nerve, bones, joints, vision, ~~and~~ skin care, etc.

· Phosphatidylserine ~~tableting~~tabletting candy,

~~Phosphatidylserine~~Improve ~~may improve~~ the function of brain; help to repair the ~~brain~~injure byof ~~promoting~~brain; promote the recovery of ~~brain~~brainfag; ~~and~~protect central nervous system. ~~Phosphatidylserine~~Used ~~can be used~~ for auxiliary treatment dementia and ~~age~~agedness ~~related~~ memory loss.

· Milk Powder ~~tableting~~tabletting candy,.

Milk ~~powder~~ tablet is akind of leisure food. Supplement of the nutrition ~~supplement~~of human needed in specific environment.

~~Hygienic Products~~8

~~The~~Hygienic ~~hygienic product line includes the following products:~~Products

·The ~~Feminine~~hygienic ~~Gel~~product ~~products~~line ~~for~~includes ~~women,~~the following products:

~~Anti-bacteria~~· ~~product~~Gel ~~used as an auxiliary treatment~~ for ~~vaginal bacterial.~~women,

· Anti-bacteria product. Auxiliary treatment bacterial, ~~skin~~mould ~~liquid~~sex vaginitis.

~~Anti-bacteria~~· ~~liquids~~Skin ~~used~~comfortable ~~for skin sterilization. Inhibit the bromhidrosis and relief beriberi itch.~~liquid

~~Confucian~~Anti-bacteria ~~owns a 100,000 stage purification workshops , advanced production lines and manufacturing equipment~~product. ~~The~~Used ~~Company has additional capacity~~ for ~~OEM processing~~sterilization, antibacterial of ~~tablets,~~skin. ~~hard~~Inhibit ~~capsules,~~the ~~soft~~bromhidrosis ~~capsules,~~and ~~oral~~relief ~~liquid,~~beriberi ~~granules, and powders~~itch.

~~Plan~~Confucian owns 100,000 stage purification workshops, advanced production lines and manufacturing equipment. The Company has a higher capacity for OEM processing of tablets, hard capsules, soft capsules, oral liquid, granules, and powders.

ByBeauty following the Company motto of being “passionate for the health industry, bringing together the world's resources, focusing on consumer demand, and creating a win-win situation ‘, the Company is eager to develop businesses in the international health and pharmaceutical market.products

~~The~~· Company’s near-term goal is to reach breakeven within a 6-month period time. In order to reach such goal, the Company is increasing its sales and production volume through arrangements and networking with its existing customers and its affiliated companies. Additionally, it plans to increase the size of its sales department to develop new customers.Shampoo

~~The~~Shampoo ~~Company’s~~that ~~ultimate goal~~ is ~~to make~~rich ~~the business profitable and competitive~~ in ~~the~~triticum ~~international health and pharmaceutical market. To achieve such goal~~vulgare, ~~the Company~~ ~~needs~~hydrolyzed tolupine ~~cooperate with other businesses having capital~~protein, ~~market,~~silk ~~technology,~~collagen orand ~~products~~organ oil. ~~Additionally,~~It ~~the~~helps ~~Company needs~~ to ~~recruit sufficient~~repair ~~workforce~~hair and ~~talents~~gives ~~and~~a ~~actively~~visible ~~develop new technology and new products through research and development~~shine.

~~Market~~· ~~Overview~~Conditioner

~~Domestic~~Conditioner ~~Markets~~that is rich in triticum vulgare, hydrolyzed lupine protein, silk collagen and organ oil. It helps to nourish and moisturize hair.

~~Through~~· ~~the~~Peptides ~~member~~skin ~~based~~care ~~distribution network, the Company has access to the major markets in Jining City area and most other cities in the Shandong province.~~set

~~International~~This ~~Market~~set includes moisturizer, eye cream, lotion, serum, facial cleanser. It encourages collagen production for more youthful looking skin.

Currently international markets show an interest in Chinese herb medicine. For instance, European and US companies in the food industry use advanced technology to extract ginkgo biloba, then add it in gum, chocolate, and other health foods. The Company focuses on product diversification and innovation. It plans to sell its produces in well-known retail stores in Europe and US, such as Walmart.Plan

6By following the Company motto of being “passionate for the health industry, bringing together the world's resources, focusing on consumer demand, and creating a win-win situation,” the Company is eager to develop businesses in the international health and pharmaceutical market.

~~Market~~The ~~Opportunity~~Company’s near-term goal is to reach breakeven within a 6-month period time. In order to reach such goal, the Company is increasing its sales and production volume through arrangements and networking with its existing customers and its affiliated companies. Additionally, it plans to increase the size of its sales department to develop new customers.

~~Consumers~~The ~~are~~Company’s ~~increasingly~~ultimate ~~concerned~~goal ~~about~~is to ~~their~~make ~~own~~the ~~health.~~business ~~The~~profitable ~~spending~~and oncompetitive ~~health-related~~in ~~products~~the ~~has~~international ~~increased~~health ~~year~~and bypharmaceutical ~~year,~~market. ~~and~~To ~~the~~achieve ~~demand~~such ~~for~~goal, ~~nutrition~~the ~~and~~Company needs ~~health~~to ~~food is~~cooperate ~~high.~~with ~~According~~other tobusinesses ~~the~~having ~~international~~capital, ~~standard~~market, ~~classification~~technology, ~~medicine~~or ~~and~~products. ~~health~~Additionally, ~~care~~the isCompany ~~one~~needs ofto ~~the~~recruit sufficient ~~world's~~workforce ~~fastest~~and ~~growing trade~~talents ~~sectors.~~and ~~Sales~~actively ofdevelop ~~health~~new ~~food~~technology isand ~~currently~~new ~~experiencing~~products athrough ~~rapid~~research ~~annual~~and ~~growth~~development.

In China, the health products market is expanding along with the growth of economy and acceleration of aged population. People used to see health products as optional. Now they are necessities of daily life. The sixty and older group is expected to keep growing fast. The elderly group tends to draw attention to nutrition and health product, which will boost the development of the health market. In addition, young people are beginning to pay more attention to their heath, and health food and products are the new powerful impetus. Therefore, the Company believes it will be able to take advantage of this increased demand.9

~~Competition~~Market Overview

AtDomestic present, Chinese health food manufacturers are mainly concentrated in Shandong, Jiangsu, Zhejiang, Anhui, Ningxia and a few other regions. Although in recent years, the health and production conditions of the eastern coastal areas have been improved to some extent. Overall, China’s nutrition and health food businesses are small scale, use outdated technology, and lack brand recognition.Markets

~~Intellectual~~Through ~~Property~~the member based distribution network, the Company has access to the major markets in Jining City area and most other cities in the Shandong province.

~~Confucian~~International ~~is actively planning research and development activities in order to patent these products.~~Market

~~Government~~Currently, ~~Regulation~~international markets show an interest in Chinese herb medicine. For instance, European and US companies in the food industry use advanced technology to extract ginkgo biloba, then add it in gum, chocolate, and other health foods. The Company focuses on product diversification and innovation. It plans to sell its produces in well-known retail stores in Europe and US, such as Walmart.

~~The~~Market great social demand of nutrition and health care products has led to a policy of governmental support. In December 2011, the Nutrient agency released “125 Development Plan for Food Industry”, in which nutrition and health care products manufacturing was first listed as the most important development within the industry. In addition, “the opinions of State Council on Promoting Health Development of Service Industry” published in 2013, “Notice on Promoting Health and Pension Services” published in 2014, and “Chinese Food and Nutrition Development Program” published in 2014 all had positive effects on the development of health products industry.Opportunity

~~Employees~~Consumers are increasingly concerned about their own health. The spending on health-related products has increased year by year, and the demand for nutrition and health food is high. According to the international standard classification, medicine and health care is one of the world's fastest growing trade sectors. Sales of health food is currently experiencing a rapid annual growth.

~~Confucian~~In ~~currently~~China, ~~has~~the 51health ~~full~~products ~~time~~market ~~employees,~~is ~~including~~expanding 2along ~~management~~with ~~employees,~~the 11growth ~~office~~of ~~employees~~economy ~~handling~~and ~~finance~~acceleration of aged population. People used to see health products as optional. Now they are necessities of daily life. The sixty and ~~administrative~~older ~~functions,~~group 5is ~~scientific~~expected ~~researchers~~to keep growing fast. The elderly group tends to draw attention to nutrition and health product, which will boost the development of the health market. In addition, young people ~~technicians;~~are beginning to pay more attention to their heath, and 33health ~~production~~food ~~workers~~and products are the new powerful impetus. Therefore, the Company believes it will be able to take advantage of this increased demand.

~~Property~~Competition

~~YBCC’s~~At ~~corporate~~present, ~~headquarters~~Chinese ~~are located~~health atfood ~~17800~~manufacturers are ~~Castleton~~mainly ~~St.~~concentrated ~~Ste~~in ~~386~~Shandong, ~~City~~Jiangsu, ofZhejiang, ~~Industry~~Anhui, ~~California~~Ningxia ~~91748.~~and ~~YBCC~~a ~~rents~~few ~~approximately~~other ~~983~~regions. ~~square~~Although ~~feet~~in ofrecent ~~office space~~years, ~~for~~the ~~its~~health and ~~headquarters.~~production ~~The~~conditions ~~lease~~of ~~began~~the oneastern ~~September~~coastal 1,areas ~~2016~~have ~~and~~been ~~expires~~improved onto ~~September~~some 1extent. Overall, ~~2018.~~China’s Asnutrition ofand health ~~December~~food ~~31,~~businesses ~~2017~~are small scale, ~~the total~~use ~~monthly~~outdated ~~base~~technology, ~~rent~~and islack ~~$2,923~~brand recognition.

~~Confucian~~Intellectual is located in Food Industrial Park inside the economic development Zone of JinXiang County, Jining City in the province of Shandong in China. It has three land use rights with the total cost of approximately $736,632. One land use right expires in 2063, while the other two land use rights expire in 2065. It has nearly 30,000 square meters standardized plant facilities.Property

~~Litigation~~Confucian is actively planning research and development activities in order to patent these products.

~~There~~Government ~~are no known potential litigation matters.~~Regulation

7The great social demand of nutrition and health care products has led to a policy of governmental support. In December 2011, the Nutrient agency released “125 Development Plan for Food Industry”, in which nutrition and health care products manufacturing was first listed as the most important development within the industry. In addition, “the opinions of State Council on Promoting Health Development of Service Industry” published in 2013, “Notice on Promoting Health and Pension Services” published in 2014, and “Chinese Food and Nutrition Development Program” published in 2014 all had positive effects on the development of health products industry.

~~ITEM 1A. RISK FACTORS~~10

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

~~Risks~~Confucian ~~Related~~currently tohas ~~Our~~42 ~~Industry~~full time employees, including 2 management employees, 9 office employees handling finance and administrative functions, 3 scientific researchers and technicians; and 28 production workers.

~~The loss of Confucian as our operating business would have a material adverse effect on our business and the price of our common stock.~~Property

We have no equity ownership interest in Confucian. Our ability to control Confucian and consolidate its financial results is through a series of contractual agreements between it and YibaoHK. Management of Confucian is affiliates of us and the stockholders of Confucian are also our stockholders. Thus, the VIE Agreements were not entered into as a result of armsYBCC’s ~~length~~corporate ~~negotiations~~headquarters ~~because the parties to the agreement~~ are ~~under common control. Ms. Song, our CEO and Chairman has control over of the shares of Confucian and of our common stock.~~ ~~The~~located ~~VIE~~at ~~Agreements~~618 ~~may~~Brea beCanyon ~~terminated upon the termination of the business of Confucian~~Rd. ~~Any~~Suite ~~other termination would be a breach of the agreement. While the Company believes that the VIE Agreements are legal and enforceable under PRC law~~A, these affiliates control the parties to the VIE Agreements and it could be possible for them to cause Confucian to breach the VIE Agreements and our unaffiliated investors would have little or no recourse because of the inherent difficulties in enforcing their rights since all our assets are located in the PRC. (SeeWalnut, ~~PRC laws~~California ~~and regulations governing Confucian' current business are sometimes vague and uncertain~~91789.) In the event that management of Confucian decides to breach the VIE Agreements, the risk of loss of the affiliated shareholders of Confucian could be lower than unaffiliated investors and the interests of the management and shareholders of Confucian would be in conflict with the interest of our other stockholders.

~~Our~~Confucian ~~businesses~~is ~~are~~located ~~subject~~in toFood ~~fluctuations~~Industrial inPark ~~operating~~inside ~~results~~the ~~due~~economic todevelopment ~~general~~Zone ~~economic~~of ~~conditions~~JinXiang County, ~~specific~~Jining ~~economic~~City ~~conditions~~ in the ~~industries~~province of Shandong in ~~which~~China. itIt ~~operates~~has ~~and~~three land use rights with the total cost of approximately $743,864. One land use right expires in 2063, while the other ~~external~~two ~~forces~~land use rights expire in 2065. It has nearly 30,000 square meters standardized plant facilities.

~~Our businesses and operations could be affected by the following, among other factors:~~Litigation

-There ~~changes~~are inno ~~general~~known ~~economic~~potential ~~conditions and specific conditions in industries in which our businesses operate that can result in the deferral or reduction of purchases by end-use customers;~~litigation matters.

-ITEM ~~the~~1A. ~~size,~~Risk ~~timing and cancellation of significant orders, which can be non-recurring;~~Factors

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

-Risks ~~announcements,~~Related ~~introductions~~to ~~and~~Our ~~transitions of new products by us or our competitors;~~Industry

-The ~~deferrals~~loss of ~~customer~~Confucian ~~orders~~as inour ~~anticipation~~operating business ofwould ~~new~~have ~~products~~a ormaterial ~~product~~adverse ~~enhancements~~effect ~~introduced~~on byour usbusiness orand the price of our ~~competitors;~~common stock.

-We ~~changes~~have no equity ownership interest in Confucian. ~~pricing~~Our ability to control Confucian and consolidate its financial results is through a series of contractual agreements between it and YibaoHK. Management of Confucian is affiliates of us and the stockholders of Confucian are also our stockholders. Thus, the VIE Agreements were not entered into as a result of arms’ length negotiations because the parties to the agreement are under common control. Ms. Song, our CEO and Chairman has control over of the shares of Confucian and of our common stock. The VIE Agreements may be terminated upon the termination of the business of Confucian. Any other termination would be a breach of the agreement. While the Company believes that the VIE Agreements are legal and enforceable under PRC law, these affiliates control the parties to the VIE Agreements and it could be possible for them to cause Confucian to breach the VIE Agreements and our unaffiliated investors would have little or no recourse because of the inherent difficulties in ~~response~~enforcing their rights since all our assets are located in the PRC. (See, PRC laws and regulations governing Confucian' current business are sometimes vague and uncertain.) In the event that management of Confucian decides to ~~competitive~~breach ~~pricing~~the ~~actions;~~VIE Agreements, the risk of loss of the affiliated shareholders of Confucian could be lower than unaffiliated investors and the interests of the management and shareholders of Confucian would be in conflict with the interest of our other stockholders.

~~- supply constraints;~~11

-Our ~~the~~businesses ~~level~~are ofsubject ~~expenditures~~to onfluctuations in ~~research~~operating ~~and~~results ~~development~~due ~~and~~to ~~sales~~general economic conditions, specific economic conditions in the industries in which it operates and other ~~marketing~~external ~~programs;~~forces.

-Our ~~our~~businesses ~~ability~~and operations tocould ~~achieve~~be ~~targeted~~affected ~~cost~~by ~~reductions;~~the following, among other factors:

- ~~rising~~changes ~~interest~~in ~~rates;~~general economic conditions and specific conditions in industries in which our businesses operate that can result in the deferral or reduction of purchases by end-use customers;

- ~~excess~~the ~~facilities.~~size, timing and cancellation of significant orders, which can be non-recurring;

8- market acceptance of new products and product enhancements;

~~Confucian’s~~- ~~failure~~announcements, tointroductions ~~compete effectively~~and ~~may~~transitions ~~adversely~~of ~~affect~~new ~~our~~products ~~ability~~by tous ~~generate~~or ~~revenue.~~our competitors;

~~Confucian~~- ~~competes~~deferrals ~~with other companies, many~~ of ~~whom~~customer ~~are~~orders ~~developing~~in oranticipation ~~can be expected to develop products similar to Confucian. Confucian’s market is a large market with many competitors. Many~~ of its competitors are more established than Confucian is, and have significantly greater financial, technical, marketing and other resources than it presently possesses. Some of Confucian’s competitors have greater name recognition and a larger customer base. These competitors may be able to respond more quickly to new products or ~~changing~~product ~~opportunities~~enhancements ~~and~~introduced ~~customer requirements~~by ~~and~~us may be able to undertake more extensive promotional activities, offer more attractive terms to customers, and adopt more aggressive pricing policies. We cannot assure you that Confucian will be able to compete effectively with current or ~~future~~ ~~competitors~~our ~~or that the competitive pressures it faces will not harm it business.~~competitors;

We- ~~may~~changes ~~not~~in bepricing ~~able~~in response to ~~effectively control~~competitive ~~and~~pricing ~~manage the growth of Confucian.~~actions;

If- ~~Confucian’s~~supply business and markets grow and develop, it will be necessary for us to finance and manage expansion in an orderly fashion. An expansion would increase demands on its existing management, workforce and facilities. Failure to satisfy such increased demands could interrupt or adversely affect its operations and cause delay in production and delivery of its pharmaceutical prescription, over the counter and medical nutrient products as well as administrative inefficiencies.constraints;

We- ~~may~~the ~~require~~level ~~additional~~of ~~financing in~~expenditures ~~the~~on ~~future~~research and adevelopment ~~failure~~and tosales ~~obtain~~and ~~such~~marketing ~~required financing will inhibit Confucian’s ability to grow.~~programs;

~~The~~- ~~continued growth of Confucian’s business may require additional funding from time to time which we expect to raise in private placements of~~ our ~~equity~~ability ~~or debt securities with accredited investors or by offering our securities for sale pursuant~~ to anachieve ~~effective registration~~targeted ~~statement~~cost on a market where our common stock is traded. The proceeds of these funding will be forwarded to Confucian and accounted for as a loan to Confucian and eliminated during consolidation. The proceeds would be used for general corporate purposes of Confucian, which could include acquisitions, investments, repayment of debt and capital expenditures among other things. We may also use the proceeds to repurchase our capital stock or for our corporate overhead expenses. If we borrow funds we expect to be the primary obligor on any debt. Obtaining additional funding would be subject to a number of factors including market conditions, operating performance and investor sentiment, many of which are outside of our control. These factors could make the timing, amount, terms and conditions of additional funding unattractive or unavailable to us.reductions;

~~Our~~- ~~management~~rising ~~believes~~interest ~~that~~rates; ~~Confucian currently has sufficient funds from working capital to meet its current operating costs over the next 6 months.~~and

~~The~~- ~~terms~~excess ~~of any future financing may adversely affect your interest as stockholders~~facilities.

IfConfucian’s wefailure ~~require~~to ~~additional financing in~~compete ~~the~~effectively ~~future, we~~ may ~~be required to incur indebtedness or issue equity securities, the terms of which may~~ adversely affect ~~your interests in us. For example, the issuance of additional indebtedness may be senior in right of payment to your shares upon~~ our ~~liquidation.~~ Inability addition, indebtedness may be under terms that make the operation of Confucian's business more difficult because the lender's consent could be required before we take certain actions. Similarly, the terms of any equity securities we issue may be senior in right of payment of dividends to ~~your~~generate ~~common stock and may contain superior rights and other rights as compared to your common stock~~revenue. ~~Further, any such issuance of equity securities may dilute your interest in us.~~

WeConfucian ~~may~~competes ~~engage~~with inother ~~future acquisitions~~companies, ~~that~~many ~~could~~of ~~dilute~~whom ~~the~~are ~~ownership~~developing ~~interests~~or can be expected to develop products similar to Confucian. Confucian’s market is a large market with many competitors. Many of ~~our~~its ~~stockholders~~competitors are more established than Confucian is, ~~cause~~and ushave significantly greater financial, technical, marketing and other resources than it presently possesses. Some of Confucian’s competitors have greater name recognition and a larger customer base. These competitors may be able to ~~incur~~respond ~~debt~~more quickly to new or changing opportunities and ~~assume~~customer requirements ~~contingent~~and ~~liabilities~~may be able to undertake more extensive promotional activities, offer more attractive terms to customers, and adopt more aggressive pricing policies. We cannot assure you that Confucian will be able to compete effectively with current or future competitors or that the competitive pressures it faces will not harm it business.

We may review acquisition and strategic investment prospects that we believe would complement the current product offerings of Confucian, augment its market coverage or enhance its technical capabilities, or otherwise offer growth opportunities. From time to time we review investments in new businesses and expect to make investments in, and to acquire, businesses, products, or technologies in the future. We expect that when we raise funds from investors for any of these purposes we will be either the issuer or the primary obligor while the proceeds will be forwarded to Confucian and accounted for as a loan to Confucian and eliminated during consolidation. In the event of any future acquisitions, we could:12

·We ~~issue~~may ~~equity~~not ~~securities~~be ~~which~~able ~~would~~to ~~dilute~~effectively control ~~current~~and ~~stockholders’~~manage the ~~percentage~~growth ~~ownership;~~of Confucian.

·If ~~incur~~Confucian’s ~~substantial~~business ~~debt;~~and markets grow and develop, it will be necessary for us to finance and manage expansion in an orderly fashion. An expansion would increase demands on its existing management, workforce and facilities. Failure to satisfy such increased demands could interrupt or adversely affect its operations and cause delay in production and delivery of its pharmaceutical prescription, over the counter and medical nutrient products as well as administrative inefficiencies.

·We ~~assume~~may ~~contingent~~require ~~liabilities;~~additional orfinancing in the future and a failure to obtain such required financing will inhibit Confucian’s ability to grow.

·The ~~expend~~continued ~~significant~~growth ~~cash~~of Confucian’s business may require additional funding from time to time which we expect to raise in private placements of our equity or debt securities with accredited investors or by offering our securities for sale pursuant to an effective registration statement on a market where our common stock is traded. The proceeds of these funding will be forwarded to Confucian and accounted for as a loan to Confucian and eliminated during consolidation. The proceeds would be used for general corporate purposes of Confucian, which could include acquisitions, investments, repayment of debt and capital expenditures among other things. We may also use the proceeds to repurchase our capital stock or for our corporate overhead expenses. If we borrow funds we expect to be the primary obligor on any debt. Obtaining additional funding would be subject to a number of factors including market conditions, operating performance and investor sentiment, many of which are outside of our control. These factors could make the timing, amount, terms and conditions of additional funding unattractive or unavailable to us.

9Our management believes that Confucian currently has sufficient funds from working capital to meet its current operating costs over the next 6 months.

~~These~~The ~~actions~~terms ~~could have a material adverse effect on our operating results or the price~~ of ~~our~~any ~~common~~future ~~stock. Moreover, even if we do obtain benefits in the form of increased~~financing ~~sales and earnings, there~~ may beadversely aaffect ~~lag~~your ~~between~~interest ~~the~~as ~~time when the expenses associated with an acquisition are incurred and the time when we recognize such benefits~~stockholders. ~~Acquisitions and investment activities also entail numerous risks, including:~~

·If ~~difficulties~~we require additional financing in the future, ~~assimilation~~we may be required to incur indebtedness or issue equity securities, the terms of ~~acquired~~which ~~operations~~may adversely affect your interests in us. For example, ~~technologies~~the issuance of additional indebtedness may be senior in right of payment to your shares upon our liquidation. In addition, indebtedness may be under terms that make the operation of Confucian's business more difficult because the lender's consent could be required before we take certain actions. Similarly, the terms of any equity securities we issue may be senior in right of payment of dividends to your common stock and~~/or~~ ~~products;~~may contain superior rights and other rights as compared to your common stock. Further, any such issuance of equity securities may dilute your interest in us.

·We ~~unanticipated~~may ~~costs~~engage ~~associated~~in ~~with~~future acquisitions that could dilute the ~~acquisition~~ownership orinterests ~~investment~~of ~~transaction;~~our stockholders, cause us to incur debt and assume contingent liabilities.

·We may review acquisition and strategic investment prospects that we believe would complement the ~~diversion~~current product offerings of ~~management’s~~Confucian, ~~attention~~augment its market coverage or enhance its technical capabilities, or otherwise offer growth opportunities. From time to time we review investments in new businesses and expect to make investments in, and to acquire, businesses, products, or technologies in the future. We expect that when we raise funds from ~~other~~investors ~~business~~for ~~concerns;~~any of these purposes we will be either the issuer or the primary obligor while the proceeds will be forwarded to Confucian and accounted for as a loan to Confucian and eliminated during consolidation. In the event of any future acquisitions, we could:

· ~~adverse~~issue ~~effects~~equity onsecurities ~~existing~~which ~~business~~would ~~relationships~~dilute ~~with~~current ~~suppliers~~stockholders’ ~~and~~percentage ~~customers~~ownership;

· ~~risks~~incur ~~associated~~substantial ~~with entering markets in which Confucian has no or limited prior experience~~debt;

· ~~the~~assume ~~potential~~contingent ~~loss of key employees of acquired organizations~~liabilities; ~~and~~or

· ~~substantial~~expend ~~charges~~significant ~~for the amortization of certain purchased intangible assets, deferred stock compensation or similar items~~cash.

We cannot ensure that we will be able to successfully integrate any businesses, products, technologies, or personnel that we might acquire in the future and our failure to do so could have a material adverse effect on our and/or Confucian' business, operating results and financial condition.13

WeThese ~~are~~actions ~~responsible~~could ~~for~~have ~~the~~a ~~indemnification~~material adverse effect on our operating results or the price of our ~~officers~~common stock. Moreover, even if we do obtain benefits in the form of increased sales and ~~directors~~earnings, there may be a lag between the time when the expenses associated with an acquisition are incurred and the time when we recognize such benefits. Acquisitions and investment activities also entail numerous risks, including:

~~Our~~· ~~certificate~~difficulties ofin ~~incorporation provides for~~ the ~~indemnification~~assimilation ~~and/or exculpation~~ of ~~our~~acquired ~~directors~~operations, ~~officers,~~technologies ~~employees, agents~~ and/or other entities which deal with it to the maximum extent provided, and under the terms provided, by the laws and decisions of the courts of the state of Nevada. Since we do not hold any indemnification insurance, these indemnification provisions could result in substantial expenditures, which we may be unable to recoup, which could adversely affect our business and financial conditions. Xiuhua Song, our Chairman of Board, President, Chief Executive Officer, and Chief Financial Officer are key personnel with rights to indemnification under our certificate of incorporation.products;

We· ~~may~~unanticipated ~~not~~costs ~~have~~associated ~~adequate~~with ~~internal accounting controls. While we have certain internal procedures in our budgeting, forecasting and in~~ the ~~management~~acquisition ~~and~~or ~~allocation of~~investment ~~funds, our internal controls may not be adequate.~~transaction;

We· ~~are~~the ~~constantly~~diversion ~~striving~~of tomanagement’s ~~improve~~attention ~~our internal~~from ~~accounting~~other ~~controls.~~business We expect to continue to improve our internal accounting control for budgeting, forecasting, managing and allocating our funds and to better account for them as we grow. There is no guarantee that such improvements will be adequate or successful or that such improvements will be carried out on a timely basis. If we do not have adequate internal accounting controls, we may not be able to appropriately budget, forecast and manage our funds, we may also be unable to prepare accurate accounts on a timely basis to meet our continuing financial reporting obligations and we may not be able to satisfy our obligations under US securities laws.concerns;

~~Confucian is~~· ~~dependent on certain key personnel and loss of these key personnel could have a material~~ adverse ~~effect~~effects on ~~our~~existing business, ~~financial~~relationships ~~condition~~with suppliers and ~~results of operations.~~customers;

~~Our~~· ~~success~~risks ~~is,~~associated towith aentering ~~certain~~markets extent, attributable to the management, sales and marketing, and manufacturing expertise of key personnel at Confucian. Xiuhua Song, our President, Chief Executive Officer and Chairman of the Board, performs key functions in ~~the~~which ~~operation of our and~~ Confucian's ~~business. There~~has ~~can be~~ no assurance that Confucian will be able to retain these officers after the term of their employment contracts expire. The loss of these officers could have a material adverse effect upon our business, financial condition, and results of operations. Confucian must attract, recruit and retain a sizeable workforce of technically competent employees. We do not carry key man life insurance for any of our key personnel or ~~personnel~~limited atprior ~~Confucian nor do we foresee purchasing such insurance to protect against a loss of key personnel and the key personnel of Confucian.~~experience;

10· the potential loss of key employees of acquired organizations; and

We· ~~and~~substantial ~~Confucian~~charges ~~are dependent upon the services of Mrs. Song,~~ for the ~~continued~~amortization ~~growth and operation~~ of ~~our~~certain ~~company~~purchased ~~because~~intangible ofassets, ~~her~~deferred ~~experience~~stock incompensation ~~the industry and her personal and business contacts in China. Although we have no reason to believe that Mrs. Song will discontinue her services with us~~ or ~~Confucian,~~similar ~~the interruption or loss of her services would adversely affect our ability to effectively run Confucian's business and pursue its business strategy as well as our results of operations~~items.

~~Confucian~~We ~~may~~cannot ~~not~~ensure that we will be able to ~~hire~~ ~~and~~successfully ~~retain~~integrate ~~qualified~~any ~~personnel~~businesses, toproducts, ~~support~~technologies, ~~its~~or ~~growth~~personnel ~~and~~that ifwe itmight isacquire ~~unable~~in tothe ~~retain~~future orand ~~hire~~our ~~these~~failure to ~~personnel~~do inso ~~the~~could ~~future,~~have ~~its~~a ~~ability to~~material ~~improve~~adverse ~~its~~effect ~~products~~on our and/or ~~implement its~~Confucian' business, ~~objectives~~operating ~~could~~results beand ~~adversely~~financial ~~affected~~condition.

~~Competition~~We ~~for~~are ~~senior~~responsible ~~management~~for ~~and senior personnel in~~ the ~~PRC is intense, the pool of qualified candidates in the PRC is very limited, and Confucian may not be able to~~indemnification ~~retain the services~~ of ~~its senior executives or senior personnel, or attract and retain high-quality senior executives or senior personnel in the future. This failure could materially and adversely affect~~ our ~~future~~officers ~~growth~~ and ~~financial condition~~directors. ~~Confucian expects to hire additional sales and plant personnel throughout fiscal year 2017 in order to accommodate its growth.~~

IfOur ~~Confucian~~certificate ~~fails~~of incorporation provides for the indemnification and/or exculpation of our directors, officers, employees, agents and other entities which deal with it to ~~increase~~the ~~its~~maximum extent provided, and under the terms provided, by the laws and decisions of the courts of the state of Nevada. Since ~~brand~~we ~~recognition~~do not hold any indemnification insurance, itthese ~~may~~indemnification ~~face~~provisions ~~difficulty~~could result in ~~obtaining~~substantial ~~new~~expenditures, ~~customers~~which we ~~and~~may be unable to recoup, which could adversely affect our business ~~partners~~and financial conditions. Xiuhua Song, our Chairman of Board, President, Chief Executive Officer, and Chief Financial Officer are key personnel with rights to indemnification under our certificate of incorporation.

We ~~believe~~may ~~that~~not ~~establishing,~~have ~~maintaining and~~adequate ~~enhancing Confucian’s brand in a cost-effective manner is critical to achieving widespread acceptance of Confucian’s~~internal ~~current~~accounting ~~and~~controls. ~~future~~While ~~products~~we ~~and~~have ~~services~~certain ~~and~~internal isprocedures ~~an important element~~ in ~~Confucian's~~our ~~effort~~budgeting, toforecasting ~~increase its customer base~~ and ~~obtain new business partners. We believe that the importance of brand recognition will increase as competition~~ in ~~Confucian’s market develops. Some of Confucian’s potential competitors already have well-established brands in~~ the ~~pharmaceutical~~management ~~promotion~~ and ~~distribution industry. Successful promotion~~ allocation of ~~Confucian’s brand will depend largely on its ability to maintain a sizeable and active customer base~~funds, ~~its~~our ~~marketing~~internal ~~efforts~~controls ~~and its ability to provide reliable and useful products and services at competitive prices. Brand promotion activities~~ may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses Confucian incurs in building its brand. If Confucian fails to successfully promote and maintain its brand, or if Confucian incurs substantial expenses in an unsuccessful attempt to promote and maintain its brand, it may fail to attract enough new customers or retain its existing customers to the extent necessary to realize a sufficient return on its brand-building efforts, in which case Confucian's business, operating results and financial condition, further ours would be ~~materially adversely affected~~adequate.

~~Confucian's~~We ~~operating~~are ~~results~~constantly ~~may~~striving to improve our ~~fluctuate~~internal accounting controls. We expect to continue to improve our internal accounting control for budgeting, forecasting, managing and allocating our funds and to better account for them as we grow. There is no guarantee that such improvements will be adequate or successful or that such improvements will be carried out on a ~~result~~timely ofbasis. ~~factors~~If ~~beyond~~we ~~its~~do ~~control~~not have adequate internal accounting controls, we may not be able to appropriately budget, forecast and manage our funds, we may also be unable to prepare accurate accounts on a timely basis to meet our continuing financial reporting obligations and we may not be able to satisfy our obligations under US securities laws.

~~Confucian's operating results may fluctuate significantly in the future as a result of a variety of factors, many of which are beyond its control. These factors include:~~14

·Confucian is ~~the~~dependent ~~costs~~on certain key personnel and loss of ~~raw~~these key personnel could have a material adverse effect on our business, financial condition and ~~development;~~results of operations.

·Our success is, to a certain extent, attributable to the ~~relative~~management, ~~speed~~sales and ~~success~~marketing, ~~with~~and ~~which~~manufacturing expertise of key personnel at Confucian. Xiuhua Song, our President, Chief Executive Officer and Chairman of the Board, performs key functions in the operation of our and Confucian's business. There can ~~obtain~~be no assurance that Confucian will be able to retain these officers after the term of their employment contracts expire. The loss of these officers could have a material adverse effect upon our business, financial condition, and ~~maintain~~results ~~customers~~of operations. Confucian must attract, ~~merchants~~recruit and ~~vendors~~retain a sizeable workforce of technically competent employees. We do not carry key man life insurance for ~~its~~any ~~products;~~of our key personnel or personnel at Confucian nor do we foresee purchasing such insurance to protect against a loss of key personnel and the key personnel of Confucian.

·We ~~capital~~and ~~expenditures~~Confucian are dependent upon the services of Mrs. Song, for ~~equipment;~~the continued growth and operation of our company because of her experience in the industry and her personal and business contacts in China. Although we have no reason to believe that Mrs. Song will discontinue her services with us or Confucian, the interruption or loss of her services would adversely affect our ability to effectively run Confucian's business and pursue its business strategy as well as our results of operations.

·Confucian ~~marketing~~may not be able to hire and ~~promotional~~retain ~~activities~~qualified personnel to support its growth and ~~other~~if ~~costs;~~it is unable to retain or hire these personnel in the future, its ability to improve its products and implement its business objectives could be adversely affected.

·Competition ~~changes~~for senior management and senior personnel in the PRC is intense, the pool of qualified candidates in the PRC is very limited, and Confucian’s ~~pricing~~may ~~policies~~not be able to retain the services of its senior executives or senior personnel, ~~suppliers~~or attract and ~~competitors;~~retain high-quality senior executives or senior personnel in the future. This failure could materially and adversely affect our future growth and financial condition. Confucian expects to hire additional sales and plant personnel throughout fiscal year 2017 in order to accommodate its growth.

·If ~~the~~Confucian ~~ability~~fails ofto ~~Confucian’s~~increase ~~suppliers~~its brand torecognition, ~~provide~~it ~~products~~may face difficulty in aobtaining ~~timely~~new ~~manner~~customers toand ~~its~~business ~~customers;~~partners.

·We ~~changes~~believe that establishing, maintaining and enhancing Confucian’s brand in ~~operating~~a cost-effective manner is critical to achieving widespread acceptance of Confucian’s current and future products and services and is an important element in Confucian's effort to increase its customer base and obtain new business partners. We believe that the importance of brand recognition will increase as competition in Confucian’s market develops. Some of Confucian’s potential competitors already have well-established brands in the pharmaceutical promotion and distribution industry. Successful promotion of Confucian’s brand will depend largely on its ability to maintain a sizeable and active customer base, its marketing efforts and its ability to provide reliable and useful products and services at competitive prices. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses; Confucian incurs in building its brand. If Confucian fails to successfully promote and maintain its brand, or if Confucian incurs substantial expenses in an unsuccessful attempt to promote and maintain its brand, it may fail to attract enough new customers or retain its existing customers to the extent necessary to realize a sufficient return on its brand-building efforts, in which case Confucian's business, operating results and financial condition, further ours would be materially adversely affected.

·Confucian's ~~increased~~operating ~~competition~~results inmay fluctuate ~~Confucian’s~~as ~~markets;~~a ~~and~~result of factors beyond its control.

·Confucian's ~~other~~operating ~~general~~results ~~economic~~may ~~and~~fluctuate significantly ~~seasonal~~in the future as a result of a variety of factors, many of which are beyond its control. These factors include:

11· the costs of raw material and development;

· the relative speed and success with which Confucian ~~faces~~can ~~risks~~obtain ~~related~~and ~~to product~~maintain ~~liability~~customers, ~~claims.~~merchants and vendors for its products;

~~Confucian~~· ~~does~~capital ~~not~~expenditures ~~maintain~~for product liability insurance. It faces the risk of loss because adverse publicity associated with product liability lawsuits, whether or not such claims are valid. It may not be able to avoid such claims. Although product liability lawsuits in the PRC are rare, and Confucian has not to date experienced significant failure of its products, there is no guarantee that it will not face such liability in the future. This liability could be substantial and the occurrence of such loss or liability may have a material adverse effect on its business, financial condition and prospects.equipment;

~~Confucian faces marketing risks.~~15

~~Newly~~· ~~developed~~marketing ~~dietary supplements~~ and ~~technologies~~ ~~may~~promotional ~~not~~activities ~~be compatible with market needs. Because markets for drugs differentiate geographically inside China, Confucian must develop~~ and ~~manufacture~~other its products to accurately target specific markets to ensure product sales. If Confucian fails to invest in extensive market research to understand the health needs of consumers in different geographic areas, it may face limited market acceptance of its products, which could have material adverse effect on its sales and earnings.costs;

We· ~~face~~changes ~~risks relating to difficulty~~ in ~~defending~~Confucian’s ~~intellectual~~pricing ~~property~~policies, ~~rights~~suppliers ~~from~~and ~~infringement.~~competitors;

~~Our~~· ~~success depends on protection of~~ the ~~current~~ ~~and~~ability ~~future technologies and products~~ of Confucian’s ~~and~~suppliers ~~its ability~~ to ~~defend its~~provide ~~intellectual property rights. Confucian has filed for copyright protection for the various names and brands of its~~ products ~~sold~~ in ~~the~~a ~~PRC.~~timely ~~However,~~manner ~~it is possible for its competitors~~ to ~~develop similar competitive products even though it has taken steps to protect~~ its ~~intellectual~~ ~~property. If we fail to protect Confucian’s intellectual property adequately, competitors may manufacture and market products similar to Confucian.~~customers;

~~Confucian~~· ~~also~~changes ~~relies on trade secrets, non-patented proprietary expertise and continuing technological innovation that it shall seek to protect,~~ in ~~part,~~operating by entering into confidentiality agreements with licensees, suppliers, employees and consultants. These agreements may be breached and there may not be adequate remedies in the event of a breach. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements. Moreover, its trade secrets and proprietary technology may otherwise become known or be independently developed by its competitors. If patents are not issued with respect to products arising from research, Confucian may not be able to maintain the confidentiality of information relating to these products.expenses;

We· ~~face~~increased ~~risks~~competition ~~relating~~in ~~to third parties that may claim that~~ Confucian’s ~~infringes~~markets; ~~on their proprietary rights~~ and ~~may prevent Confucian from manufacturing and selling certain of its products.~~

~~There~~· ~~has~~other ~~been~~general ~~substantial~~economic ~~litigation in the pharmaceutical industry with respect to the manufacturing, use~~ and ~~sale~~seasonal ~~of new products~~factors. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. We and/or Confucian may be required to commence or defend against charges relating to the infringement of patent or proprietary rights. Any such litigation could:

~~· require~~ Confucian orfaces usrisks related to product ~~incur~~liability ~~substantial expense, even if covered by insurance or are successful in the litigation;~~claims.

·Confucian ~~require~~does not maintain product liability insurance. It faces the risk of loss because adverse publicity associated with product liability lawsuits, whether or not such claims are valid. It may not be able to avoid such claims. Although product liability lawsuits in the PRC are rare, and Confucian has not to ~~divert~~date experienced significant ~~time~~failure of its products, there is no guarantee that it will not face such liability in the future. This liability could be substantial and ~~effort~~the occurrence of such loss or liability may have a material adverse effect on its ~~technical~~business, ~~and~~financial ~~management~~condition ~~personnel;~~and prospects.

~~· result in the loss of~~ Confucian’s faces ~~rights~~marketing ~~to develop or make certain products; and~~risks.

·Newly ~~require~~developed dietary supplements and technologies may not be compatible with market needs. Because markets for drugs differentiate geographically inside China, Confucian must ordevelop usand manufacture its products to ~~pay~~accurately ~~substantial~~target ~~monetary~~specific ~~damages~~markets orto ~~royalties~~ensure product sales. If Confucian fails to invest in ~~order~~extensive market research to ~~license~~understand ~~proprietary~~the ~~rights~~health ~~from~~needs ~~third~~of ~~parties~~consumers in different geographic areas, it may face limited market acceptance of its products, which could have material adverse effect on its sales and earnings.

~~Although~~We ~~patent~~face ~~and~~risks ~~intellectual~~relating property disputes within our have often been settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and could include the long-term payment of royalties. These arrangements may be investigated by regulatory agencies and, if improper, may be invalidated. Furthermore, the required licenses may not be made available to ~~Confucian on acceptable terms.~~difficulty ~~Accordingly, an adverse determination~~ in adefending ~~judicial~~intellectual orproperty ~~administrative~~rights ~~proceeding or a failure to obtain necessary licenses could prevent Confucian~~ from ~~manufacturing and selling some of its products or increase its costs to market these products~~infringement.

12Our success depends on protection of the current and future technologies and products of Confucian and its ability to defend its intellectual property rights. Confucian has filed for copyright protection for the various names and brands of its products sold in the PRC. However, it is possible for its competitors to develop similar competitive products even though it has taken steps to protect its intellectual property. If we fail to protect Confucian’s intellectual property adequately, competitors may manufacture and market products similar to Confucian.

InConfucian ~~addition,~~also ~~when~~relies ~~seeking~~on ~~regulatory~~trade secrets, ~~approval~~non-patented ~~for~~proprietary ~~some~~expertise ~~of its~~and ~~products,~~continuing ~~Confucian~~technological isinnovation ~~required~~that toit ~~certify~~shall seek to ~~regulatory authorities~~protect, ~~including~~in ~~the~~part, ~~SFDA~~by ~~that~~entering ~~such~~into ~~products~~confidentiality doagreements ~~not~~with ~~infringe~~licensees, ~~upon~~suppliers, ~~third~~employees ~~party~~and ~~patent rights~~consultants. ~~Filing~~These aagreements ~~certification~~may ~~against~~be abreached ~~patent~~and ~~gives~~there may ~~the~~not ~~patent~~be ~~holder the~~adequate ~~right~~remedies toin ~~bring~~the event of a ~~patent~~breach. ~~infringement~~Disputes ~~lawsuit~~may ~~against~~arise ~~Confucian.~~concerning ~~Any~~the ~~lawsuit~~ownership ~~would~~of ~~delay~~intellectual property or the ~~receipt~~applicability of ~~regulatory approvals~~confidentiality agreements. AMoreover, ~~claim~~its oftrade ~~infringement~~secrets and ~~the~~proprietary ~~resulting~~technology ~~delay~~may ~~could~~otherwise ~~result~~become inknown or ~~substantial~~be ~~expenses~~independently ~~and~~developed ~~even prevent Confucian~~by its competitors. If patents are not issued with respect to products arising from ~~manufacturing~~research, ~~and~~Confucian may ~~selling~~not ~~certain~~be able to maintain the confidentiality of ~~its~~ information relating to these products.

Confucian’s launch of a product prior to a final court decision or the expiration of a patent held by a third party may result in substantial damages to Confucian or us. If Confucian is found to infringe a patent held by a third party and become subject to such damages, these damages could have a material adverse effect on the results of its operations and financial condition.16

We face risks ~~related~~relating to ~~research~~third parties that may claim that Confucian infringes on their proprietary rights and ~~the~~may ~~ability~~prevent toConfucian ~~develop~~from ~~new~~manufacturing and selling certain of its products.

~~Our~~There ~~growth~~has ~~and~~been ~~survival~~substantial ~~depends~~litigation ~~on Confucian’s~~in ~~ability~~the pharmaceutical industry with respect to ~~consistently~~the ~~discover~~manufacturing, ~~develop~~use and ~~commercialize~~sale of new products. ~~and~~These ~~find~~lawsuits ~~new~~relate ~~and~~to ~~improve~~the onvalidity and ~~existing~~infringement ~~technologies~~of ~~and platforms.~~patents Asor ~~such,~~proprietary ~~if Confucian~~rights ~~fails~~of tothird ~~make~~parties. ~~sufficient~~We ~~investments~~and/or inConfucian ~~research,~~may be ~~attentive~~required to ~~consumer~~commence ~~needs~~ or ~~does~~defend against ~~not~~charges ~~focus~~relating onto the ~~most~~infringement ~~advanced~~of ~~technologies, its~~patent ~~current~~or ~~and~~proprietary ~~future~~rights. ~~products~~Any ~~could~~such belitigation ~~surpassed by more effective or advanced products of other companies.~~could:

~~Risk~~· ~~Related~~require To Confucian~~’s Industry~~ or us to incur substantial expense, even if covered by insurance or are successful in the litigation;

~~Confucian’s~~· ~~certificates,~~require ~~permits, and~~Confucian ~~licenses related~~ to ~~its~~divert ~~operations~~significant ~~are~~time ~~subject to governmental control~~ and ~~renewal~~effort ~~and failure to obtain renewal will cause all or part~~ of its ~~operations~~technical toand bemanagement ~~terminated.~~personnel;

~~Confucian~~· isresult ~~subject~~in tothe ~~various~~loss ~~PRC~~of ~~laws and~~Confucian’s ~~regulations~~rights ~~pertaining~~ to ~~our~~develop ~~industry.~~or ~~Confucian~~make ~~has~~certain ~~attained certificates, permits, and licenses required for the operation of a dietary supplement enterprise and the manufacturing of our~~ products; ~~in the PRC.~~and

~~Confucian~~· ~~intends~~require ~~to apply for renewal of these health food production permits prior to expiration. During the renewal process,~~ Confucian ~~will~~or beus ~~re-evaluated by the appropriate governmental authorities and must comply with the then prevailing standards and regulations which may change from time~~ to ~~time.~~pay Insubstantial ~~the~~monetary ~~event~~damages ~~that~~or itroyalties isin ~~not~~order ~~able~~ to ~~renew~~license ~~the~~proprietary ~~certificates,~~rights ~~permits~~from ~~and~~third ~~licenses, all or part of its operations may be terminated~~parties. Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of its operations, it may adversely affect its operation and our profitability.

~~According~~Although topatent ~~Drug~~and ~~Administration~~intellectual ~~Law~~property ofdisputes within our have often been settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and could include the ~~PRC~~long-term payment of royalties. These arrangements may be investigated by regulatory agencies and, ~~its~~if ~~implemental~~improper, ~~rules~~may be invalidated. Furthermore, ~~SFDA~~the ~~approvals~~required licenses may not be ~~suspended~~made available to Confucian on acceptable terms. Accordingly, an adverse determination in a judicial or ~~revoked~~administrative ~~prior~~proceeding toor ~~the~~a ~~expiration~~failure ~~date~~to ~~under~~obtain ~~circumstances~~necessary licenses could ~~that~~prevent ~~include:~~Confucian from manufacturing and selling some of its products or increase its costs to market these products.

·In ~~producing~~addition, ~~counterfeit~~when ~~medicine~~seeking regulatory approval for some of its products, Confucian is required to certify to regulatory authorities, including the SFDA that such products do not infringe upon third party patent rights. Filing a certification against a patent gives the patent holder the right to bring a patent infringement lawsuit against Confucian. Any lawsuit would delay the receipt of regulatory approvals. A claim of infringement and the resulting delay could result in substantial expenses and even prevent Confucian from manufacturing and selling certain of its products.

·Confucian’s ~~producing~~launch ~~inferior~~of ~~quality~~a ~~products~~product prior to a final court decision or the expiration of a patent held by a third party may result in substantial damages to Confucian or us. If Confucian is found to infringe a patent held by a third party and become subject to such damages, these damages could have a material adverse effect on the results of its operations and financial condition.

·We ~~failing~~face risks related to ~~meet~~research and the ~~drug~~ability ~~GMP~~to ~~standards;~~develop new products.

·Our ~~purchasing~~growth ~~medical~~and ~~ingredients~~survival ~~used~~depends inon ~~the~~Confucian’s ability ~~production~~to ofconsistently discover, develop and commercialize new products ~~sources~~and ~~that~~find donew and improve on existing technologies and platforms. As such, if Confucian fails to make sufficient investments in research, be attentive to consumer needs or does not ~~have~~focus aon ~~Pharmaceutical~~the ~~Manufacturing~~most ~~Permit~~advanced technologies, its current and future products could be surpassed by more effective or ~~Pharmaceutical~~advanced products ~~Trade~~of ~~Permit;~~other companies.

~~· fraudulent reporting of results or product samples in application process,~~17

·Risk ~~failing~~Related toTo ~~meet drug labeling and direction standards,~~Confucian’s Industry

·Confucian’s ~~bribing~~certificates, ~~doctors~~permits, and orlicenses ~~hospital~~related ~~personnel~~to its operations are subject to ~~entice~~governmental ~~them~~control and renewal and failure to ~~use~~obtain ~~products,~~renewal will cause all or part of its operations to be terminated.

·Confucian ~~producing~~is ~~pharmaceuticals~~subject ~~for~~to ~~use~~various orPRC ~~resale~~laws and byregulations ~~companies~~pertaining ~~that~~to ~~are~~our ~~not~~industry. ~~approved~~Confucian byhas ~~the~~attained ~~SFDA~~certificates, orpermits, and licenses required for the operation of a dietary supplement enterprise and the manufacturing of our products in the PRC.

·Confucian intends to apply for renewal of these health food production permits prior to expiration. During the ~~approved~~renewal ~~drug~~process, ~~has~~Confucian awill ~~serious~~be ~~side~~re-evaluated ~~effect~~by the appropriate governmental authorities and must comply with the then prevailing standards and regulations which may change from time to time. In the event that it is not able to renew the certificates, permits and licenses, all or part of its operations may be terminated. Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of its operations, it may adversely affect its operation and our profitability.

13According to Drug Administration Law of the PRC and its implemental rules, SFDA approvals may be suspended or revoked prior to the expiration date under circumstances that include:

If· ~~Confucian’s~~producing ~~products~~counterfeit ~~fail to receive regulatory approval or are severely limited in these products' scope of use~~medicine, ~~it may be unable to recoup considerable research and development expenditures.~~

~~Confucian’s~~· ~~research~~producing ~~and~~inferior ~~development of~~quality ~~pharmaceutical~~ products ~~is subject to the regulatory approval of the SFDA in China. The regulatory approval procedure for pharmaceuticals can be quite lengthy~~, costly, and uncertain. Depending upon the discretion of the SFDA, the approval process may be significantly delayed by additional clinical testing and require the expenditure of resources not currently available; in such an event, it may be necessary for Confucian to abandon its application. Even where approval of the product is granted, it may contain significant limitations in the form of narrow indications, warnings, precautions, or contra-indications with respect to conditions of use. If approval of Confucian’s product is denied, abandoned, or severely limited in terms of the scope of products use, it may result in the inability to recoup considerable research and development expenditures.

~~Price~~· ~~control~~failing ~~regulations~~to ~~may~~meet ~~decrease Confucian’s~~the ~~profitability.~~drug GMP standards;

~~The~~· ~~laws~~purchasing ofmedical ~~the~~ingredients ~~PRC~~used ~~provide for the government to fix and adjust prices. The prices of certain medicines Confucian distributes, including those listed~~ in the ~~Chinese~~production ~~government's catalogue~~ of medications that are reimbursable under China's social insurance program, or the Insurance Catalogue, are subject to control by the relevant state or provincial price administration authorities. The PRC establishes price levels for products ~~based~~ onsources ~~market~~that ~~conditions,~~do ~~average~~not ~~industry~~have ~~cost, supply and demand and social responsibility. In practice, price control with respect to these medicines sets~~ a ~~ceiling~~Pharmaceutical onManufacturing ~~their~~Permit ~~retail~~or ~~price.~~Pharmaceutical ~~The~~Trade actual price of such medicines set by manufacturers, wholesalers and retailers cannot historically exceed the price ceiling imposed by applicable government price control regulations. Although, as a general matter, government price control regulations have resulted in drug prices tending to decline over time, there has been no predictable pattern for such decreases.Permit;

~~None~~· offraudulent ~~our~~reporting ~~products~~of ~~are~~results ~~subject to price controls. It is possible that products may be subject to price control,~~ or ~~that~~product ~~price~~samples ~~controls may be increased~~ in ~~the~~application ~~future. To the extent that Confucian’s products are subject to price control~~process, its revenue, gross profit, gross margin and net income will be affected since the revenue we derive from Confucian’s sales will be limited and it may face no limitation on its costs. Further, if price controls affect both Confucian’s revenue and costs, its ability to be profitable and the extent of our profitability will be effectively subject to determination by the applicable regulatory authorities in the PRC.

~~Adverse~~· ~~publicity~~failing ~~associated~~to ~~with Confucian’s products, ingredients~~meet ordrug ~~network~~labeling ~~marketing~~and ~~program,~~direction ~~or those of similar companies~~standards, ~~could harm its financial condition and operating results.~~

~~The~~· ~~results~~bribing ofdoctors ~~Confucian’s~~or ~~operations may~~hospital bepersonnel ~~significantly~~to ~~affected~~entice bythem ~~the~~to ~~public's~~use ~~perception of Confucian’s product and similar companies. This perception is dependent upon opinions concerning:~~products,

· ~~the~~producing ~~safety~~pharmaceuticals ~~and~~for ~~quality~~use ofor ~~its~~resale ~~products~~by ~~and~~companies ~~ingredients;~~that are not approved by the SFDA, or

· the ~~safety~~approved ~~and~~drug ~~quality~~has ofa ~~similar~~serious ~~products~~side ~~and ingredients distributed by other companies; and~~effect.

·If ~~its~~Confucian’s ~~sales~~products ~~force~~fail to receive regulatory approval or are severely limited in these products' scope of use, it may be unable to recoup considerable research and development expenditures.

~~Adverse~~Confucian’s ~~publicity~~research ~~concerning~~and ~~any actual~~development orof ~~purported~~pharmaceutical ~~failure~~products ofis ~~Confucian~~subject to ~~comply~~the ~~with~~regulatory ~~applicable~~approval ~~laws~~of ~~and~~the ~~regulations~~SFDA ~~regarding~~in ~~product~~China. ~~claims~~The regulatory approval procedure for pharmaceuticals can be quite lengthy, costly, and ~~advertising~~uncertain. Depending upon the discretion of the SFDA, ~~good~~the approval process may be significantly ~~manufacturing~~delayed ~~practices,~~by oradditional ~~other~~clinical ~~aspects~~testing and require the expenditure of resources not currently available; in such an event, it may be necessary for Confucian’s ~~business~~to abandon its application. Even where approval of the product is granted, ~~whether~~it ormay ~~not~~contain ~~resulting~~significant limitations in ~~enforcement~~the ~~actions~~form of narrow indications, warnings, precautions, or contra-indications with respect to conditions of use. ~~the~~If ~~imposition~~approval of ~~penalties~~Confucian’s product is denied, ~~could~~abandoned, ~~have~~or anseverely ~~adverse~~limited ~~effect~~in onterms of the ~~goodwill~~scope of ~~Confucian~~products ~~and~~use, ~~could~~it ~~negatively~~may result ~~affect~~in ~~its~~the ~~sales~~inability to recoup considerable research and ~~ability~~ ~~generate~~development ~~revenue~~expenditures.

In addition, Confucian’s consumers' perception of the safety and quality of its products and ingredients as well as similar products and ingredients distributed by other companies can be significantly influenced by media attention, publicized scientific research or findings, widespread product liability claims and other publicity concerning Confucian’s products or ingredients or similar products and ingredients distributed by other companies. Adverse publicity, whether or not accurate or resulting from consumers' use or misuse of Confucian’s products, that associates consumption of its products or ingredients or any similar products or ingredients with illness or other adverse effects, questions the benefits of Confucian’s or similar products or claims that any such products are ineffective, inappropriately labeled or have inaccurate instructions as to their use, could negatively impact its reputation or the market demand for Confucian’s products.18

14Price control regulations may decrease Confucian’s profitability.

IfThe ~~Confucian~~laws ~~fails~~of tothe ~~develop~~PRC ~~new~~provide for the government ~~products~~to ~~with~~fix ~~high~~and ~~profit~~adjust ~~margins~~prices. The prices of certain medicines Confucian distributes, ~~and~~including ~~its~~those ~~high~~listed ~~profit~~in ~~margin~~the ~~products~~Chinese government's catalogue of medications that are ~~substituted~~reimbursable byunder ~~competitor~~China's social insurance program, or the Insurance Catalogue, are subject to control by the relevant state or provincial price administration authorities. The PRC establishes price levels for products based on market conditions, ~~our~~average ~~gross~~industry cost, supply and demand and social responsibility. In practice, price control with ~~net~~respect ~~profit~~to ~~margins~~these ~~will~~medicines besets ~~adversely~~a ~~affected~~ceiling on their retail price. The actual price of such medicines set by manufacturers, wholesalers and retailers cannot historically exceed the price ceiling imposed by applicable government price control regulations. Although, as a general matter, government price control regulations have resulted in drug prices tending to decline over time, there has been no predictable pattern for such decreases.

~~There~~None isof noour ~~assurance~~products ~~that Confucian will~~are besubject ~~able~~ to ~~sustain its profit margins in the future~~price controls. ~~The~~It ~~supplement industry~~ is ~~very~~possible ~~competitive,~~that ~~and~~products ~~there~~ may be ~~pressure~~ subject to ~~reduce~~price ~~sale~~control, ~~prices~~or ofthat ~~products~~price ~~without~~controls amay ~~corresponding~~be ~~decrease~~increased in the ~~price of raw materials~~future. ~~In addition, the supplement industry~~ inTo ~~China is highly competitive and new products are constantly being introduced to~~ the ~~market.~~extent Inthat ~~order to increase the sales of~~ Confucian’s products ~~and~~are ~~expand~~subject ~~its market, it may be forced~~ to ~~reduce~~price ~~prices~~control, its inrevenue, ~~the~~gross ~~future~~profit, ~~leading to a decrease in~~ gross ~~profit~~ margin. ~~The research~~ and ~~development~~net income ofwill ~~new~~be ~~products~~affected ~~and~~since ~~technologies~~the isrevenue ~~costly~~we ~~and~~derive ~~time~~from ~~consuming, and there are no assurances that~~ Confucian’s ~~research~~sales ~~and development of new products~~ will ~~either~~ be ~~successful~~limited orand ~~completed~~it ~~within~~may ~~the~~face ~~anticipate~~no ~~timeframe,~~limitation ifon its ~~ever~~costs. atFurther, ~~all.~~if ~~There~~price iscontrols noaffect ~~assurance~~both ~~that~~ Confucian’s ~~competitors'~~revenue ~~new~~and ~~products~~costs, its ~~technologies,~~ability ~~and~~to ~~processes~~be ~~will not~~profitable ~~render~~and ~~its existing products obsolete or non-competitive. To~~ the extent ~~that~~of ~~Confucian~~our ~~fails~~profitability towill ~~develop~~be ~~new~~effectively ~~products~~subject ~~with~~to ~~high profit~~determination ~~margins and its high profit margin products are substituted~~ by ~~competitors'~~the ~~products,~~applicable ~~our~~regulatory ~~gross~~authorities ~~profit~~in ~~margins will~~the ~~be adversely affected~~PRC.

~~Risks~~Adverse ~~Related~~publicity Toassociated ~~Doing~~with Confucian’s products, ingredients ~~Business~~or Innetwork ~~The~~marketing program, or those of similar companies, could harm its financial condition and operating ~~PRC~~results.

~~Changes~~The inresults ~~the policies~~ of ~~the~~Confucian’s ~~PRC~~operations ~~government~~may ~~could~~be ~~have~~significantly aaffected ~~significant~~by ~~impact upon~~ the ~~business~~public's weperception ~~may~~of beConfucian’s ~~able~~product toand ~~conduct~~similar incompanies. ~~the~~This ~~PRC~~perception ~~and~~is dependent ~~the~~upon ~~profitability~~opinions ~~of such business.~~concerning:

~~Confucian’s~~· ~~business operations may be adversely affected by~~ the ~~current~~safety and ~~future~~quality ~~political environment in the PRC. The PRC has operated as a socialist state since the mid-1900s and is controlled by the Communist Party~~ of ~~China.~~its ~~The~~products ~~Chinese government exerts substantial influence~~ and control over the manner in which we and it must conduct our business activities. The PRC has only permitted provincial and local economic autonomy and private economic activities since 1988. The government of the PRC has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy, particularly the pharmaceutical industry, through regulation and state ownership. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters. Under current leadership, the government of the PRC has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is no assurance, however, that the government of the PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.ingredients;

~~The~~· ~~PRC's~~the ~~economy~~safety ~~is in a transition from a planned economy to a market oriented economy subject to five-year~~ and ~~annual~~quality ~~plans adopted by the government that set national economic development goals. Policies~~ of ~~the~~similar ~~PRC~~products government can have significant effects on the economic conditions of the PRC. The PRC government has confirmed that economic development will follow the model of a market economy. Under this direction, we believe that the PRC will continue to strengthen its economic and ~~trading~~ingredients ~~relationships~~distributed ~~with~~by ~~foreign~~other ~~countries~~companies; and ~~business development in the PRC will follow market forces. While we believe that this trend will continue, there can be no assurance that this will be the case.~~

A· ~~change~~its insales policies by the PRC government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprisesforce. Although the PRC government has been pursuing economic reform policies for more than two decades, there is no assurance that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting the PRC's political, economic and social life.

15Adverse publicity concerning any actual or purported failure of Confucian to comply with applicable laws and regulations regarding product claims and advertising, good manufacturing practices, or other aspects of Confucian’s business, whether or not resulting in enforcement actions or the imposition of penalties, could have an adverse effect on the goodwill of Confucian and could negatively affect its sales and ability generate revenue.

~~The~~In ~~PRC~~addition, ~~laws~~Confucian’s consumers' perception of the safety and ~~regulations~~quality ~~governing~~of its products and ingredients as well as similar products and ingredients distributed by other companies can be significantly influenced by media attention, publicized scientific research or findings, widespread product liability claims and other publicity concerning Confucian’s ~~current~~products ~~business~~or ~~operations~~ingredients ~~are~~or ~~sometimes~~similar ~~vague~~products and ~~uncertain~~ingredients distributed by other companies. ~~Any~~Adverse ~~changes~~publicity, inwhether ~~such~~or ~~PRC~~not ~~laws~~accurate ~~and~~or ~~regulations~~resulting ~~may~~from consumers' use or misuse of Confucian’s ~~harm~~products, that associates consumption of its products or ingredients or any similar products or ingredients with illness or other adverse effects, questions the benefits of Confucian’s or similar products or claims that any such products are ineffective, inappropriately labeled or have inaccurate instructions as to their use, could negatively impact its ~~business~~reputation or the market demand for Confucian’s products.

The PRC laws and regulations governing Confucian’s current business operations are sometimes vague and uncertain. The PRC’s legal system is a civil law system based on written statutes, in which system decided legal cases have little value as precedents unlike the common law system prevalent in the United States. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to the laws and regulations governing its business, or the enforcement and performance of its arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. The Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We are considered a foreign persons or foreign funded enterprises under PRC laws, and as a result, we are required to comply with PRC laws and regulations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on its businesses. If the relevant authorities find that we are in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:19

·If ~~levying~~Confucian ~~fines;~~fails to develop new products with high profit margins, and its high profit margin products are substituted by competitor's products, our gross and net profit margins will be adversely affected.

·There ~~revoking~~is no assurance that Confucian will be able to sustain its profit margins in the future. The supplement industry is very competitive, and there may be pressure to reduce sale prices of products without a corresponding decrease in the price of raw materials. In addition, the supplement industry in China is highly competitive and new products are constantly being introduced to the market. In order to increase the sales of Confucian’s ~~business~~products and ~~other~~expand ~~licenses;~~its market, it may be forced to reduce prices in the future, leading to a decrease in gross profit margin. The research and development of new products and technologies is costly and time consuming, and there are no assurances that Confucian’s research and development of new products will either be successful or completed within the anticipate timeframe, if ever at all. There is no assurance that Confucian’s competitors' new products, technologies, and processes will not render its existing products obsolete or non-competitive. To the extent that Confucian fails to develop new products with high profit margins and its high profit margin products are substituted by competitors' products, our gross profit margins will be adversely affected.

·Risks ~~requiring~~Related ~~that~~To weDoing ~~restructure~~Business ~~its~~In ~~ownership or operations; and~~The PRC

·Changes ~~requiring~~in ~~that~~the policies of the PRC government could have a significant impact upon the business we ~~discontinue~~may ~~any~~be ~~portion~~able orto ~~all~~conduct ofin ~~our~~the PRC and the profitability of such business.

AConfucian’s ~~slowdown,~~business ~~inflation~~operations ormay be ~~other~~adversely ~~adverse~~affected by the current and future political environment in the PRC. The PRC has operated as a socialist state since ~~developments~~the mid-1900s and is controlled by the Communist Party of China. The Chinese government exerts substantial influence and control over the manner in which we and it must conduct our business activities. The PRC has only permitted provincial and local economic autonomy and private economic activities since 1988. The government of the PRC has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy, particularly the pharmaceutical industry, through regulation and state ownership. Our ability to operate in China may ~~harm~~be ~~Confucian’s~~adversely ~~customers~~affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters. Under current leadership, the ~~demand~~government ~~for~~of ~~Confucian’s~~the ~~services~~PRC has been pursuing economic reform policies that encourage private economic activity and ~~products~~ greater economic decentralization. There is no assurance, however, that the government of the PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.

~~All~~The ~~of Confucian’~~PRC's ~~operations~~economy ~~are conducted~~is in ~~the~~a ~~PRC~~transition ~~and~~from a ~~all~~planned ofeconomy ~~its~~to ~~revenues~~a ~~are~~market ~~generated~~oriented ~~from~~economy ~~sales~~subject into five-year and annual plans adopted by the ~~PRC~~government that set national economic development goals. ~~Although~~Policies of the PRC ~~economy~~government ~~has~~can ~~grown~~have ~~significantly in~~significant ~~recent~~effects ~~years,~~on wethe ~~cannot~~economic ~~assure~~conditions ~~you~~of the PRC. The PRC government has confirmed that ~~this~~economic ~~growth~~development will ~~continue.~~follow Athe ~~slowdown~~model inof ~~overall~~a ~~economic~~market ~~growth,~~economy. anUnder ~~economic~~this ~~downturn~~direction, we abelieve ~~recession~~that orthe ~~other~~PRC ~~adverse~~will continue to strengthen its economic ~~developments~~and trading relationships with foreign countries and business development in the PRC ~~could~~will ~~significantly~~follow ~~reduce~~market ~~the~~forces. ~~demand~~While ~~for its~~we ~~products~~believe ~~and~~that ~~harm~~this trend will continue, there can be no assurance that this will ~~Confucian’s~~be ~~business~~the case.

~~While~~A ~~the~~change ~~PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and~~ in ~~different~~policies ~~geographical~~by ~~areas of~~ the ~~country.~~PRC ~~Rapid~~government ~~economic growth~~ could ~~lead~~adversely toaffect ~~growth~~our ininterests ~~the~~by, ~~money~~among ~~supply~~other ~~and~~factors: ~~rising~~changes ~~inflation.~~in Iflaws, ~~prices~~regulations ~~for~~or ~~Confucian’s~~the ~~products~~interpretation ~~rise~~thereof, atconfiscatory ataxation, ~~rate~~restrictions ~~that~~on iscurrency ~~insufficient~~conversion, toimports ~~compensate~~or ~~for~~sources ~~the rise in the costs~~ of supplies, itor ~~may~~the ~~harm~~expropriation ~~its~~or ~~profitability.~~nationalization Inof ~~order to control~~private ~~inflation~~enterprises. inAlthough the ~~past, the~~ PRC government has ~~imposed~~been ~~controls~~pursuing oneconomic ~~bank~~reform ~~credit,~~policies ~~limits on loans~~ for ~~fixed~~more ~~assets~~than ~~and~~two ~~restrictions on~~decades, ~~state~~there ~~bank~~is ~~lending.~~no ~~Such~~assurance that anthe ~~austere~~government ~~policy~~will ~~can~~continue ~~lead~~ to apursue ~~slowing~~such ofpolicies ~~economic~~or ~~growth.~~that Insuch ~~October~~policies ~~2004,~~may ~~the~~not ~~People's~~be ~~Bank~~significantly ~~of China~~altered, ~~the~~ ~~PRC's~~especially ~~central bank, raised interest rates for~~ in the ~~first~~event ~~time~~of ~~in nearly~~ a ~~decade~~change ~~and indicated~~ in aleadership, ~~statement~~social ~~that~~or ~~the~~political ~~measure was~~disruption, ~~prompted~~or byother ~~inflationary~~circumstances ~~concerns~~affecting in the ~~Chinese~~PRC's ~~economy. Repeated rises in interest rates by the central bank would likely slow economic activity in China which could~~political, ~~in turn, materially increase its costs~~ economic and ~~also~~social ~~reduce demand for its products~~life.

~~Governmental control of currency conversion may affect the value of your investment.~~20

The PRC ~~government~~laws ~~imposes controls on the convertibility of Renminbi into foreign currencies~~ and, inregulations ~~certain cases, the remittance of currency out of the PRC. We receive~~governing ~~substantially~~Confucian’s all of our revenues in Renminbi, which is currently not a freely convertible currency. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or otherwise satisfy foreign currency dominated obligations. Under existing PRC foreign exchange regulations, payments of current ~~account~~business ~~items,~~operations ~~including~~are ~~profit distributions,~~sometimes ~~interest~~vague ~~payments~~ and ~~expenditures~~uncertain. ~~from~~Any ~~the~~changes ~~transaction, can be made~~ in ~~foreign~~such ~~currencies without prior approval from the~~ PRC ~~State~~laws Administration of Foreign Exchange by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and ~~remitted~~regulations ~~out of China~~may toharm its ~~pay capital expenses such as the repayment of bank loans denominated in foreign currencies~~business.

16The PRC laws and regulations governing Confucian’s current business operations are sometimes vague and uncertain. The PRC’s legal system is a civil law system based on written statutes, in which system decided legal cases have little value as precedents unlike the common law system prevalent in the United States. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to the laws and regulations governing its business, or the enforcement and performance of its arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. The Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We are considered a foreign persons or foreign funded enterprises under PRC laws, and as a result, we are required to comply with PRC laws and regulations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on its businesses. If the relevant authorities find that we are in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

~~The~~· ~~PRC~~levying government may also in the future restrict access to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay certain of our expenses as they come due.fines;

~~The~~· ~~fluctuation~~revoking ofConfucian’s ~~the~~business ~~Renminbi~~and ~~may harm~~other ~~your investment.~~licenses;

~~The~~· ~~value~~requiring of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. As we rely entirely on revenues earned in the PRC, any significant revaluation of the Renminbi may materially and adversely affect our cash flows, revenues and financial condition. For example, to the extent that we ~~need~~restructure toits ~~convert~~ownership ~~U.S.~~or ~~dollars we receive from an offering of our securities into Renminbi for Confucian’s~~ operations,; ~~appreciation of the Renminbi against the U.S. dollar would diminish the value of the proceeds of the offering~~ and this could harm Confucian’s business, financial condition and results of operations because it would reduce the proceeds available to us for capital investment in proportion to the appreciation of the Renminbi. In addition, the depreciation of significant RMB denominated assets could result in a charge to our income statement and a reduction in the dollar value of these assets.

On· ~~July~~requiring ~~21,~~that ~~2005,~~we ~~the~~discontinue ~~PRC~~any ~~government~~portion ~~changed its~~or ~~decade-old~~all ~~policy~~ of ~~pegging~~our ~~the value of the Renminbi to the U~~business.S. dollar. Under the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant appreciation of the Renminbi against the U.S. dollar.

~~PRC~~A ~~state~~slowdown, ~~administration~~inflation ofor ~~foreign~~other adverse ~~exchange~~developments ~~("SAFE")~~in ~~regulations regarding offshore financing activities by PRC residents which may increase~~ the ~~administrative burden we face. The failure by our shareholders who are~~ PRC ~~residents~~economy ~~to make any required applications and filings pursuant to such regulations~~ may ~~prevent~~harm usConfucian’s ~~from~~customers ~~being able to distribute profits~~ and ~~could~~the ~~expose~~demand usfor ~~and~~Confucian’s ~~our~~services ~~PRC resident shareholders to liability under PRC law~~and products.

~~SAFE,~~All ~~issued~~of aConfucian’s ~~public~~operations ~~notice ("SAFE~~are ~~#75")~~conducted ~~effective~~in ~~from~~the ~~November~~PRC 1,and ~~2005,~~all ~~which~~of ~~requires~~its ~~registration~~revenues ~~with~~are ~~SAFE~~generated byfrom sales in the PRC. ~~resident~~Although ~~shareholders~~the ofPRC ~~any~~economy ~~foreign~~has grown significantly ~~holding~~in ~~company~~recent ofyears, awe ~~PRC~~cannot ~~entity~~assure you that this growth will continue. ~~Without~~A ~~registration,~~slowdown ~~the~~in ~~PRC~~overall ~~entity~~economic ~~cannot~~growth, ~~remit~~an ~~any~~economic ofdownturn, a ~~its~~recession ~~profits~~or ~~out~~other ofadverse economic developments in the PRC ascould ~~dividends~~significantly reduce the demand for its products and harm orConfucian’s ~~otherwise~~business.

InWhile ~~October~~the ~~2005,~~PRC ~~SAFE~~economy ~~issued~~has aexperienced rapid ~~public notice~~growth, ~~the~~ ~~Notice~~such ongrowth ~~Relevant~~has ~~Issues~~been inuneven ~~the~~among ~~Foreign~~various ~~Exchange~~sectors ~~Control~~of ~~over~~the ~~Financing~~economy and ~~Return~~in ~~Investment~~different ~~Through~~geographical ~~Special~~areas ~~Purpose~~of ~~Companies~~the bycountry. ~~Residents~~Rapid ~~Inside~~economic ~~China,~~growth orcould ~~the~~lead ~~SAFE notice, which requires PRC residents, including both legal persons and natural persons,~~ to ~~register~~growth ~~with~~in the ~~competent~~money ~~local~~supply ~~SAFE~~and ~~branch~~rising ~~before~~inflation. ~~establishing~~If orprices ~~controlling any company outside of China, referred to as an "offshore special purpose company,"~~ for ~~the purpose of overseas equity financing involving onshore assets or equity~~Confucian’s ~~interests~~products ~~held~~rise byat ~~them.~~a Inrate ~~addition, any PRC resident~~ that is ~~the~~insufficient ~~shareholder of an offshore special purpose company is required~~ to ~~amend~~compensate ~~its~~for ~~SAFE registration with~~ the ~~local~~rise ~~SAFE branch with respect to that offshore special purpose company~~ in ~~connection~~the ~~with any~~costs ~~increase or decrease~~ of ~~capital~~supplies, ~~transfer~~it ofmay ~~shares,~~harm ~~merger,~~its profitability. ~~division,~~In ~~equity~~order ~~investment~~to orcontrol ~~creation~~inflation ~~of any security interest over any assets located~~ in ~~China.~~the ~~Moreover~~past, if the ~~offshore~~PRC ~~special~~government ~~purpose~~has ~~company~~imposed ~~was~~controls ~~established~~on ~~and~~bank ~~owned~~credit, ~~the~~limits ~~onshore assets~~on orloans ~~equity~~for ~~interests~~fixed ~~before~~assets ~~the~~and ~~implementation~~restrictions ~~date~~on ofstate ~~the~~bank ~~SAFE~~lending. ~~notice,~~Such aan ~~retroactive~~austere ~~SAFE~~policy ~~registration~~can islead ~~required~~ to ~~have~~a ~~been completed~~slowing ~~before~~of ~~March 31, 2006~~economic growth. IfIn ~~any~~October ~~PRC~~2004, ~~shareholder of any offshore special purpose company fails to make~~ the ~~required~~People's ~~SAFE registration~~Bank ~~and~~of ~~amendment~~China, the PRC's ~~subsidiaries~~central ofbank, ~~that~~raised ~~offshore~~interest ~~special~~rates ~~purpose~~for ~~company~~the ~~may~~first betime ~~prohibited~~in nearly ~~from~~a ~~distributing~~decade ~~their profits~~ and ~~the~~indicated ~~proceeds~~in ~~from~~a ~~any~~statement ~~reduction~~that inthe ~~capital,~~measure ~~share~~was ~~transfer~~prompted orby ~~liquidation~~inflationary toconcerns in the ~~offshore~~Chinese ~~special purpose company~~economy. ~~Moreover,~~Repeated ~~failure~~rises toin ~~comply~~interest ~~with~~rates by the ~~SAFE~~central ~~registration~~bank ~~and~~would ~~amendment~~likely ~~requirements~~slow ~~described~~economic ~~above~~activity ~~could~~in ~~result~~China inwhich ~~liability~~could, ~~under~~in turn, ~~PRC~~materially ~~laws~~increase its ~~for~~costs ~~evasion~~and ofalso ~~applicable~~reduce ~~foreign~~demand ~~exchange~~for ~~restrictions~~its products.

It is unclear whether our other PRC resident shareholders must make disclosure to SAFE. We believe that only PRC resident shareholders who receive ownership of the foreign holding company in exchange for ownership in the PRC operating company are subject to SAFE #75, there can be no assurance that SAFE will not require our other PRC resident shareholders to register and make the applicable disclosure. In addition, SAFE #75 requires that any monies remitted to PRC residents outside of the PRC be returned within 180 days; however, there is no indication of what the penalty will be for failure to comply or if shareholder non-compliance will be considered to be a violation of SAFE #75 by us or otherwise affect us.21

17Governmental control of currency conversion may affect the value of your investment.

InThe ~~the~~PRC ~~event~~government ~~that~~imposes controls on the ~~proper~~convertibility ~~procedures are~~of ~~not~~Renminbi ~~followed~~into ~~under~~foreign ~~SAFE~~currencies ~~#75~~and, ~~we could~~ ~~lose~~in ~~the~~certain ~~ability~~cases, tothe ~~remit~~remittance ~~monies~~of ~~outside~~currency out of the PRC. ~~and~~We ~~would~~receive substantially ~~therefore~~all beof our revenues in Renminbi, which is currently not a freely convertible currency. Shortages in the availability ~~unable~~of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or ~~make~~otherwise ~~other~~satisfy ~~distributions~~foreign currency dominated obligations. ~~Our~~Under existing PRC ~~resident~~foreign ~~shareholders~~exchange ~~could~~regulations, bepayments ~~subject~~of tocurrent ~~fines~~account items, ~~other~~including ~~sanctions~~profit distributions, interest payments and ~~even~~ ~~criminal~~expenditures ~~liabilities~~from ~~under~~the transaction, can be made in foreign currencies without prior approval from the PRC State Administration of Foreign Exchange ~~Administrative~~by ~~Regulations~~complying ~~promulgated~~with ~~January~~certain ~~29,~~procedural ~~1996~~requirements. However, approval from appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as ~~amended~~the repayment of bank loans denominated in foreign currencies.

The PRC's ~~legal~~government ~~and~~may ~~judicial~~also in the future restrict access to foreign currencies for current account transactions. If the foreign exchange control system prevents us from ~~may~~obtaining ~~not~~sufficient ~~adequately~~foreign ~~protect~~currency to satisfy our ~~business~~currency ~~and~~demands, ~~operations~~we ~~and~~may ~~the~~not ~~rights~~be able to pay certain of ~~foreign~~our ~~investors~~expenses as they come due.

The ~~PRC~~fluctuation ~~legal and judicial system may negatively impact foreign investors. In 1982, the National People's Congress amended the Constitution~~ of ~~China to authorize foreign investment and guarantee~~ the ~~"lawful~~Renminbi rights and interests" of foreign investors in the PRC. However, the PRC's system of laws is not yet comprehensive. The legal and judicial systems in the PRC are still rudimentary, and enforcement of existing laws is inconsistent. Many judges in the PRC lack the depth of legal training and experience that would be expected of a judge in a more developed country. Because the PRC judiciary is relatively inexperienced in enforcing the laws that do exist, anticipation of judicial decision-making is more uncertain than would be expected in a more developed country. It may ~~be impossible to obtain swift and equitable enforcement~~ ofharm ~~laws~~your ~~that do exist, or to obtain enforcement of the judgment of one court by a court of another jurisdiction~~investment. The PRC's legal system is based on the civil law regime, that is, it is based on written statutes; a decision by one judge does not set a legal precedent that is required to be followed by judges in other cases. In addition, the interpretation of Chinese laws may be varied to reflect domestic political changes.

The ~~promulgation~~value of ~~new~~the ~~laws~~Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes ~~to existing~~in ~~laws~~the PRC's political and economic conditions. As we rely entirely on revenues earned in the ~~pre-emption~~PRC, ofany ~~local~~significant ~~regulations~~revaluation byof ~~national~~the ~~laws~~Renminbi may materially and adversely affect our ~~foreign~~cash ~~investors~~flows, revenues and financial condition. ~~However~~For example, to the ~~trend of~~extent ~~legislation~~that ~~over~~we ~~the~~need ~~last~~to 20convert ~~years~~U.S. ~~has~~dollars ~~significantly~~we ~~enhanced~~receive ~~the~~from an ~~protection~~offering of ~~foreign~~our ~~investment~~securities ~~and~~into ~~allowed~~Renminbi for ~~more~~Confucian’s ~~control by~~operations, ~~foreign~~appreciation ~~parties~~ of ~~their~~the ~~investments~~Renminbi inagainst ~~Chinese~~the ~~enterprises~~U.S. ~~There~~dollar would ~~can~~diminish bethe novalue ~~assurance~~of ~~that~~the aproceeds ~~change~~of inthe ~~leadership~~offering and this could harm Confucian’s business, ~~social~~financial orcondition and ~~political~~results ~~disruption,~~of oroperations ~~unforeseen~~because ~~circumstances~~it ~~affecting~~would reduce the ~~PRC's~~proceeds ~~political,~~available ~~economic~~to orus ~~social~~for ~~life,~~capital ~~will~~investment ~~not~~in ~~affect~~proportion to the ~~PRC~~appreciation ~~government's~~of ~~ability~~the toRenminbi. ~~continue~~In toaddition, ~~support~~the ~~and~~depreciation ~~pursue~~of ~~these~~significant ~~reforms.~~RMB ~~Such~~denominated assets could result in a ~~shift~~charge ~~could~~to ~~have~~our income statement and a ~~material~~reduction ~~adverse~~in ~~effect~~the ondollar ~~Confucian’s business~~value ~~and~~of ~~prospects~~these assets.

~~The~~On ~~practical~~July ~~effect of the PRC legal system on Confucian’s business operations in the PRC can be viewed from two separate but intertwined considerations. First~~21, ~~as a matter of substantive law~~2005, the ~~Foreign~~PRC ~~Invested Enterprise laws provide significant protection from~~ government ~~interference. In~~changed ~~addition,~~its ~~these~~decade-old ~~laws~~policy ~~guarantee the full enjoyment~~ of ~~the~~pegging benefits of corporate Articles and contracts to Foreign Invested Enterprise participants. These laws, however, do impose standards concerning corporate formation and governance, which are qualitatively different from the ~~general~~value ~~corporation laws~~ of the ~~United~~Renminbi ~~States.~~to ~~Similarly,~~ the ~~PRC accounting laws mandate accounting practices, which are not consistent with~~ U.S. ~~generally accepted accounting principles~~dollar. ~~PRC's~~Under ~~accounting laws require that an annual "statutory audit" be performed in accordance with PRC accounting standards and that~~ the ~~books~~new ofpolicy, ~~account of Foreign Invested Enterprises are maintained in accordance with Chinese accounting laws. Article 14 of~~ the ~~People's~~Renminbi ~~Republic~~is ~~of China Wholly Foreign-Owned Enterprise~~permitted ~~Law requires a wholly foreign-owned enterprise~~ to ~~submit~~fluctuate ~~certain~~within ~~periodic~~a ~~fiscal~~narrow ~~reports~~ and ~~statements~~managed toband ~~designated~~against ~~financial and~~a ~~tax~~basket ~~authorities, at the risk~~ of ~~business~~certain ~~license~~foreign ~~revocation~~currencies. While the ~~enforcement~~international ~~of substantive rights may appear less clear~~reaction ~~than~~to ~~United States procedures,~~ the ~~Foreign~~Renminbi ~~Invested~~revaluation ~~Enterprises~~has ~~and~~generally ~~Wholly~~been ~~Foreign-Owned Enterprises are Chinese registered companies~~positive, ~~which~~ ~~enjoy~~there ~~the~~remains ~~same~~significant ~~status~~international aspressure ~~other Chinese registered companies in business-to-business dispute resolution. Any award rendered by an arbitration tribunal is enforceable in accordance with the United Nations Convention~~ on the ~~Recognition~~PRC ~~and Enforcement of~~government ~~Foreign~~to ~~Arbitral~~adopt ~~Awards~~an ~~(1958).~~even ~~Therefore,~~more asflexible acurrency ~~practical matter~~policy, ~~although~~which nocould ~~assurances~~result ~~can be given, the Chinese legal infrastructure, while different~~ in ~~operation~~a ~~from~~further ~~its~~and ~~United~~more ~~States counterpart, should not present any~~ significant ~~impediment~~appreciation toof the ~~operation~~Renminbi ofagainst ~~Foreign~~the ~~Invested~~U.S. ~~Enterprises~~dollar.

~~Because~~PRC ~~our~~state ~~principal~~administration ~~assets~~of ~~are~~foreign ~~located~~exchange ~~outside~~("SAFE") ofregulations ~~the~~regarding ~~United~~offshore ~~States~~financing ~~and~~activities ~~all~~by ofPRC ~~our~~residents ~~directors~~which ~~and~~may ~~all~~increase ofthe ~~our~~administrative burden ~~officers~~we ~~reside~~face. ~~outside~~The offailure ~~the~~by ~~United~~our ~~States,~~shareholders itwho ~~may be~~are ~~difficult~~PRC ~~for~~residents ~~you~~ to ~~enforce~~make ~~your~~any ~~rights~~required ~~based~~applications onand ~~U.S.~~filings ~~federal~~pursuant ~~securities~~to such ~~laws~~regulations ~~against~~may prevent us ~~and~~from ~~our~~being ~~officers~~able or to ~~enforce~~distribute ~~U.S. court~~profits ~~judgment~~and ~~against~~could expose us orand ~~them~~our inPRC ~~the~~resident shareholders to liability under PRC law.

~~All~~SAFE, ofissued ~~our~~a ~~directors~~public ~~and~~notice ~~all of our officers~~("SAFE ~~reside~~#75") ~~outside~~effective offrom ~~the~~November ~~United~~1, ~~States. In addition~~2005, ~~Confucian’s~~which ~~operating~~requires ~~company~~registration iswith ~~located~~SAFE inby the PRC ~~and~~resident ~~substantially~~shareholders ~~all~~ of ~~its~~any ~~assets are located outside of the United States. It may therefore be difficult for investors in the United States to enforce~~foreign ~~their~~holding ~~legal~~company ~~rights based on the civil liability provisions~~ of ~~the~~a ~~U.S. Federal securities laws against us in the courts of either the U.S. or the~~ PRC ~~and, even if civil judgments are obtained in U~~entity.S. ~~courts,~~Without ~~to enforce such judgments in PRC courts. Further~~registration, it ~~is unclear if extradition treaties now in effect between~~ the ~~United States and the~~ PRC ~~would~~entity ~~permit~~cannot ~~effective~~remit ~~enforcement~~any ~~against us~~of orits ~~our~~profits ~~officers~~out ~~and directors~~ of ~~criminal penalties, under~~ the ~~U.S.~~PRC ~~Federal~~as ~~securities laws~~ dividends or otherwise.

1822

~~The~~In ~~relative~~October ~~lack~~2005, ofSAFE issued a public notice, the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, or the SAFE notice, which requires PRC residents, including both legal persons and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China, referred to as ~~experience~~an "offshore special purpose company," for the purpose of ~~our~~overseas ~~management~~equity ~~team~~financing ~~may~~involving ~~put~~onshore usassets ator equity interests held by them. In addition, any PRC resident that is the shareholder of an offshore special purpose company is required to amend its SAFE registration with the local SAFE branch with respect to that offshore special purpose company in connection with any increase or decrease of capital, transfer of shares, merger, division, equity investment or creation of any security interest over any assets located in China. Moreover, if the offshore special purpose company was established and owned the onshore assets or equity interests before the implementation date of the SAFE notice, a ~~competitive~~retroactive ~~disadvantage~~SAFE registration is required to have been completed before March 31, 2006. If any PRC shareholder of any offshore special purpose company fails to make the required SAFE registration and amendment, the PRC subsidiaries of that offshore special purpose company may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore special purpose company. Moreover, failure to comply with the SAFE registration and amendment requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

~~Our~~It ~~management~~is ~~team~~unclear ~~lacks~~whether ~~public~~our ~~company experience,~~other ~~which~~PRC ~~could~~resident shareholders ~~impair~~must ~~our~~make ~~ability~~disclosure to ~~comply~~SAFE. ~~with~~We ~~legal~~believe ~~and~~that ~~regulatory~~only ~~requirements~~PRC ~~such~~resident asshareholders ~~those~~who ~~imposed~~receive byownership ~~Sarbanes-Oxley~~of the foreign ~~Act~~holding ofcompany ~~2002.~~in ~~The~~exchange ~~individuals~~for ~~who~~ownership ~~now~~in ~~constitute~~the ~~our~~PRC ~~senior~~operating ~~management~~company ~~have~~are ~~never~~subject ~~had~~to ~~responsibility~~SAFE ~~for~~#75, ~~managing~~there acan ~~publicly~~be ~~traded company.~~no ~~Such~~assurance ~~responsibilities~~that SAFE ~~include~~will ~~complying~~not ~~with~~require ~~federal~~our ~~securities~~other ~~laws~~PRC ~~and~~resident ~~making~~shareholders ~~required~~to ~~disclosures~~register onand amake ~~timely~~the ~~basis~~applicable disclosure. ~~Our~~ ~~senior~~In ~~management~~addition, ~~may~~SAFE ~~not~~#75 requires bethat ~~able~~any monies remitted to ~~implement~~PRC ~~programs~~residents ~~and~~outside ~~policies~~of inthe anPRC ~~effective~~be ~~and~~returned ~~timely~~within ~~manner~~180 ~~that~~days; ~~adequately~~however, ~~responds to~~there ~~such~~is ~~increased~~no ~~legal,~~indication of ~~regulatory~~what ~~compliance~~the ~~and~~penalty ~~reporting~~will ~~requirements.~~be ~~Our~~for failure to comply ~~with~~or ~~all~~if ~~applicable~~shareholder ~~requirements could~~non-compliance ~~lead~~will tobe ~~the~~considered ~~imposition~~to ofbe ~~fines~~a ~~and~~violation ~~penalties~~of ~~and~~SAFE #75 ~~distract~~by ~~our~~us ~~management~~or ~~from~~otherwise ~~attending~~affect ~~to the growth of our business~~us.

~~RISKS~~In ~~RELATED~~the TOevent ~~OUR~~that ~~COMMON~~the ~~STOCK~~proper procedures are not followed under SAFE #75, we could lose the ability to remit monies outside of the PRC and would therefore be unable to pay dividends or make other distributions. Our PRC resident shareholders could be subject to fines, other sanctions and even criminal liabilities under the PRC Foreign Exchange Administrative Regulations promulgated January 29, 1996, as amended.

~~Our~~The ~~officers~~PRC's legal and ~~directors~~judicial ~~control~~system usmay ~~through~~not ~~their~~adequately ~~positions~~protect ~~and~~our ~~stock~~business ~~ownership~~ and ~~their~~operations ~~interests~~and ~~may~~the ~~differ~~rights ~~from~~of ~~other~~foreign ~~stockholders~~investors.

~~Our~~The ~~officers~~PRC legal and ~~directors~~judicial ~~beneficially~~system may negatively ~~own~~impact ~~approximately~~foreign ~~41%~~investors. In 1982, the National People's Congress amended the Constitution of ~~our~~China ~~common~~to ~~stock.~~authorize Asforeign ainvestment and ~~result~~guarantee the "lawful rights and interests" of foreign investors in the PRC. However, ~~she~~the PRC's system of laws is not ~~able~~yet tocomprehensive. ~~influence~~The legal and judicial systems in the ~~outcome~~PRC are still rudimentary, and enforcement of ~~stockholder~~existing ~~votes~~laws onis ~~various~~inconsistent. ~~matters,~~Many ~~including~~judges in the ~~election~~PRC lack the depth of ~~directors~~legal training and ~~extraordinary~~experience ~~corporate~~that ~~transactions~~would ~~including~~be ~~business~~expected ~~combinations.~~of ~~Yet~~a ~~Mrs~~judge in a more developed country. ~~Song's~~Because ~~interests~~the ~~may~~PRC ~~differ~~judiciary ~~from~~is ~~those~~relatively inexperienced in enforcing the laws that do exist, anticipation of ~~other~~judicial ~~stockholders~~decision-making is more uncertain than would be expected in a more developed country. ~~Furthermore,~~It ~~ownership~~may be impossible to obtain swift and equitable enforcement of ~~42%~~laws that do exist, or to obtain enforcement of ~~our~~the ~~common~~judgment ~~stock~~of one court by ~~our~~a ~~officers~~court of another jurisdiction. The PRC's legal ~~and~~system ~~directors~~is ~~reduces~~based on the ~~public~~civil ~~float~~law ~~and~~regime, ~~liquidity~~that is, ~~and~~it ~~may~~is ~~affect~~based on written statutes; a decision by one judge does not set a legal precedent that is required to be followed by judges in other cases. In addition, the ~~market~~interpretation ~~price~~of Chinese laws may be varied to reflect domestic political changes.

WeThe ~~are~~promulgation ~~not~~of ~~likely~~new laws, changes to existing ~~pay~~laws ~~cash~~and ~~dividends~~the pre-emption of local regulations by national laws may adversely affect foreign investors. However, the trend of legislation over the last 20 years has significantly enhanced the protection of foreign investment and allowed for more control by foreign parties of their investments in Chinese enterprises. There can be no assurance that a change in leadership, social or political disruption, or unforeseen circumstances affecting the ~~foreseeable~~PRC's ~~future~~political, economic or social life, will not affect the PRC government's ability to continue to support and pursue these reforms. Such a shift could have a material adverse effect on Confucian’s business and prospects.

We intend to retain any future earnings for use in the operation and expansion of Confucian’s business. We do not expect to pay any cash dividends in the foreseeable future but will review this policy as circumstances dictate. Should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries. In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.23

~~Our~~The ~~common~~practical ~~stock~~effect isof ~~illiquid~~the PRC legal system on Confucian’s business operations in the PRC can be viewed from two separate but intertwined considerations. First, as a matter of substantive law, the Foreign Invested Enterprise laws provide significant protection from government interference. In addition, these laws guarantee the full enjoyment of the benefits of corporate Articles and contracts to Foreign Invested Enterprise ~~subject~~participants. These laws, however, do impose standards concerning corporate formation and governance, which are qualitatively different from the general corporation laws of the United States. Similarly, the PRC accounting laws mandate accounting practices, which are not consistent with U.S. generally accepted accounting principles. PRC's accounting laws require that an annual "statutory audit" be performed in accordance with PRC accounting standards and that the books of account of Foreign Invested Enterprises are maintained in accordance with Chinese accounting laws. Article 14 of the People's Republic of China Wholly Foreign-Owned Enterprise Law requires a wholly foreign-owned enterprise to ~~price~~submit ~~volatility~~certain ~~unrelated~~periodic fiscal reports and statements to ~~Confucian’s~~designated ~~operations~~financial and tax authorities, at the risk of business license revocation. While the enforcement of substantive rights may appear less clear than United States procedures, the Foreign Invested Enterprises and Wholly Foreign-Owned Enterprises are Chinese registered companies, which enjoy the same status as other Chinese registered companies in business-to-business dispute resolution. Any award rendered by an arbitration tribunal is enforceable in accordance with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). Therefore, as a practical matter, although no assurances can be given, the Chinese legal infrastructure, while different in operation from its United States counterpart, should not present any significant impediment to the operation of Foreign Invested Enterprises

IfBecause ~~a market for~~ our ~~common~~principal ~~stock~~assets ~~does develop,~~are ~~its~~located ~~market~~outside ~~price~~of ~~could~~the ~~fluctuate~~United ~~substantially~~States ~~due~~and toall ~~a variety~~ of ~~factors,~~our ~~including~~directors ~~market~~and ~~perception~~all of our ~~ability~~officers toreside ~~achieve Confucian’s~~outside ~~planned growth, quarterly operating results~~ of ~~other companies in~~ the ~~same~~United ~~industry~~States, ~~trading~~it ~~volume in our common~~may ~~stock,~~be ~~changes~~difficult infor ~~general~~you ~~conditions~~to inenforce ~~the~~your ~~economy~~rights ~~and~~based ~~the~~on ~~financial markets or other developments affecting Confucian or its competitors~~U. ~~In addition, the stock market itself is subject to extreme price and volume fluctuations~~S. ~~This~~federal ~~volatility has had a significant effect on the market price of~~ securities ~~issued~~laws byagainst ~~many~~us ~~companies~~and ~~for~~our ~~reasons~~officers ~~unrelated~~or to ~~their~~enforce ~~operating performance~~U.S. ~~and~~court ~~could~~judgment ~~have~~against ~~the~~us ~~same~~or ~~effect~~them onin ~~our~~the ~~common stock~~PRC.

~~Investors~~All of our directors and all of our officers reside outside of the United States. In addition, Confucian’s operating company is located in the PRC and substantially all of its assets are located outside of the United States. It may ~~have~~therefore ~~difficulty~~be ~~liquidating~~difficult for investors in the United States to enforce their ~~investment~~legal ~~because~~rights ~~our~~based ~~common~~on ~~stock~~the Iscivil ~~subject~~liability toprovisions of the ~~"Penny~~U.S. ~~Stock"~~Federal ~~rules,~~securities ~~which~~laws ~~require~~against ~~delivery~~us in the courts of aeither the ~~schedule~~U.S. or the PRC and, even if civil judgments are obtained in U.S. courts, to enforce such judgments in PRC courts. Further, ~~explaining~~it is unclear if extradition treaties now in effect between the ~~penny~~United ~~stock~~States ~~market~~and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties, under the ~~associated~~U.S. ~~risks~~Federal ~~before~~securities ~~any~~laws ~~sale~~or otherwise.

~~Our common stock may be subject to regulations prescribed by the SEC relating to "penny stocks."~~ The ~~SEC~~relative ~~has~~lack ~~adopted regulations that generally define a penny stock to be any equity security that has a market price (as defined in such regulations)~~ of ~~less~~public ~~than $5 per share, subject to certain~~company ~~exceptions.~~experience These regulations impose additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions with assets in excess of ~~$5,000,000~~our ~~and~~management ~~individuals with~~team amay ~~net~~put ~~worth~~us inat ~~excess of $1,000,000 or annual income exceeding $200,000 (individually) or $300,000 (jointly with their spouse). For transactions covered by these rules, the broker-dealer must make~~ a ~~special~~competitive ~~suitability determination for the purchase of these securities and have received the purchaser's prior written consent to the transaction~~disadvantage. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

19Our management team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. The individuals who now constitute our senior management have never had responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately responds to such increased legal, regulatory compliance and reporting requirements. Our failure to comply with all applicable requirements could lead to the imposition of fines and penalties and distract our management from attending to the growth of our business.

~~Legal~~RISKS ~~remedies,~~RELATED ~~which~~TO ~~may~~OUR beCOMMON ~~available to the investor, are as follows:~~STOCK.

·Our Ifofficers ~~penny~~and ~~stocks~~directors ~~are~~control us ~~sold~~through intheir ~~violation~~positions ofand ~~the~~stock ~~investor's~~ownership ~~rights~~and ~~listed~~their ~~above,~~interests ~~or other federal or state securities laws, the investor~~ may bediffer ~~able~~from toother ~~cancel his purchase and get his money back~~stockholders.

·Our Ifofficers ~~the~~and ~~stocks~~directors ~~are~~beneficially own ~~sold~~approximately in41% of our common stock. As a ~~fraudulent~~result, ~~manner~~she is able to influence the outcome of stockholder votes on various matters, including the ~~investor~~election of directors and extraordinary corporate transactions including business combinations. Yet Mrs. Song's interests may bediffer ~~able~~from tothose ~~sue~~of other stockholders. Furthermore, ownership of 42% of our common stock by our officers and directors reduces the ~~persons~~public float and ~~firms~~liquidity, ~~that~~and ~~caused~~may affect the ~~fraud~~market ~~for damages~~price.

~~· If the investor has signed an arbitration agreement, however, s/he may have to pursue a claim through arbitration.~~24

IfWe ~~the~~are ~~person~~not ~~purchasing~~likely the securities is someone other than an accredited investor or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to bepay ~~reasonably~~cash ~~expected to be capable of~~dividends ~~evaluating the risk of transactions~~ in ~~such securities. Accordingly,~~ the ~~SEC's~~foreseeable ~~rules may limit the number of potential purchasers of the shares of our common stock and stockholders may have difficulty selling their securities~~future.

AWe ~~large~~intend ~~number~~to retain any future earnings for use in the operation and expansion of Confucian’s ~~shares~~business. ~~will~~We bedo not expect to pay any cash dividends in the foreseeable ~~eligible~~future ~~for~~but will review this policy as circumstances dictate. Should we decide in the future ~~sale~~to do so, as a holding company, our ability to pay dividends and ~~may~~meet ~~depress~~other obligations depends upon the receipt of dividends or other payments from our ~~stock~~operating subsidiaries. ~~price~~In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.

WeOur ~~may~~common bestock ~~required,~~is ~~under~~illiquid ~~terms of future~~and ~~financing~~subject ~~arrangements,~~ to ~~offer~~price avolatility ~~large~~unrelated ~~number of common shares~~ to ~~the~~Confucian’s ~~public, or to register for sale by future private investors a large number of shares sold in private sales to them~~operations.

~~Sales~~If ofa ~~substantial~~market ~~amounts~~for ofour common stock does develop, its ormarket aprice ~~perception~~could ~~that~~fluctuate ~~such~~substantially ~~sales~~due ~~could~~to ~~occur~~a variety of factors, ~~and~~including ~~the~~market ~~existence~~perception of ~~options~~our orability ~~warrants~~ to ~~purchase~~achieve Confucian’s ~~shares~~planned ofgrowth, ~~common~~quarterly ~~stock at~~operating ~~prices~~results ~~that~~of ~~may~~other becompanies ~~below~~in the ~~then-current~~same ~~market~~industry, ~~price~~trading ofvolume in our common stock, ~~could~~changes ~~adversely~~in ~~affect~~general conditions in the ~~market~~economy ~~price~~and ofthe ~~our~~financial ~~common~~markets or other developments affecting Confucian or its competitors. In addition, the stock market itself is subject to extreme price and ~~could~~volume ~~impair~~fluctuations. ~~our~~This ~~ability~~volatility tohas ~~raise~~had a ~~capital~~significant ~~through~~effect on the ~~sale~~market price of ~~our~~securities ~~equity~~issued ~~securities,~~by ~~either~~many ofcompanies ~~which~~for ~~would~~reasons ~~decrease~~unrelated ~~the~~to their operating performance ~~value~~and ofcould ~~any~~have ~~earlier~~the ~~investment~~same ineffect on our common stock.

WeInvestors ~~are~~may ~~authorized~~have difficulty liquidating their investment because our common stock Is subject to ~~issue~~the "~~blank check~~Penny Stock" ~~preferred stock~~rules, which, ifrequire ~~issued~~delivery ~~without~~of ~~stockholders’~~a ~~approval,~~schedule explaining ~~may~~the ~~adversely~~penny ~~affect~~stock ~~the~~market ~~rights~~and ofthe ~~holders of~~associated ~~our~~risks ~~common~~before ~~stock~~any sale.

WeOur ~~are~~common ~~authorized~~stock tomay ~~issue~~be ~~50,000,000 shares~~subject ofto ~~preferred~~regulations prescribed ~~stock,~~by ofthe ~~which~~SEC ~~974,730~~relating ~~have~~to ~~been~~"penny ~~issued~~stocks." asThe ~~Series~~SEC Ahas ~~Preferred~~adopted ~~Stock.~~regulations ~~The~~that ~~Series~~generally Adefine ~~Preferred~~a ~~shares~~penny ~~are~~stock ~~convertible~~to ~~into~~be ~~common~~any ~~shares~~equity onsecurity that has a ~~1:1~~market ~~ratio~~price at(as adefined ~~fixed~~in ~~rate~~such regulations) of less than $35 per share, subject to certain exceptions. ~~Preferred~~These ~~shares~~regulations ~~have~~impose noadditional ~~voting~~sales ~~rights,~~practice ~~have no~~requirements ~~redemption~~on ~~rights~~broker-dealers ~~and~~who ~~earn~~sell nopenny ~~dividends.~~stocks ~~Holders~~to ofpersons other ~~Series~~than Aestablished ~~Convertible~~customers ~~Preferred~~and ~~Stock~~accredited ~~are~~investors ~~not~~(generally ~~permitted~~institutions towith ~~convert their~~assets ~~stock~~in ~~into~~excess ~~common~~of ~~shares~~$5,000,000 ~~until~~and ~~the~~individuals with ~~Company’s~~a ~~market~~net ~~capital~~worth ~~reaches~~in excess of $151,000,000~~. Upon~~ ~~dissolution~~or annual income exceeding $200, ~~liquidation~~000 (individually) or ~~winding~~$300,000 up(jointly ofwith ~~the~~their ~~Company,~~spouse). For ~~whether~~transactions ~~voluntary~~covered orby ~~involuntary~~these rules, the ~~holders~~broker-dealer ofmust ~~the~~make ~~then~~a ~~outstanding~~special ~~shares~~suitability determination for the purchase of these ~~Series~~securities Aand ~~Convertible~~have ~~Preferred~~received ~~Stock~~the ~~shall~~purchaser's beprior ~~entitled~~written consent to ~~receive~~the ~~out~~transaction. ofAdditionally, for any transaction, other than exempt transactions, involving a penny stock, the ~~assets~~rules ofrequire the ~~Company~~delivery, prior to the ~~sum~~transaction, of $0a risk disclosure document mandated by the SEC relating to the penny stock market.~~0001~~ ~~per~~The broker-dealer also must disclose the commissions payable to ~~share~~both (the ~~“Liquidation~~broker-dealer ~~Rate”)~~and ~~before~~the ~~any~~registered ~~payment~~representative, orcurrent ~~distribution~~quotations ~~shall~~for bethe ~~made~~securities onand, ~~any~~if ~~other~~the ~~class~~broker-dealer ofis ~~capital~~the ~~stock~~sole ofmarket-maker, the ~~Company~~broker-dealer ~~ranking~~must ~~junior~~disclose tothis fact and the ~~Series~~broker-dealer's Apresumed ~~Convertible~~control ~~Preferred~~over ~~Stock~~the market. ~~This~~Finally, monthly ~~could~~statements ~~dilute~~must ~~your~~be ~~ownership~~sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

~~The~~Legal ~~Board~~remedies, ofwhich ~~Directors~~may isbe ~~authorized under~~available ~~our Articles of Amendment~~ to ~~provide for~~ the ~~issuance of additional shares of preferred stock by resolution~~investor, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders. Any shares of preferred stock so issued are ~~likely to have priority over the common stock with respect to dividend or liquidation rights. In the event of issuance, the preferred stock could be utilized, under certain circumstances,~~ as a method of discouraging, delaying or preventing a change in control, which could have the effect of discouraging bids for our company and thereby prevent stockholders from receiving the maximum value for their shares. We have no present intention to issue any shares of its preferred stock in order to discourage or delay a change of control. However, there can be no assurance that preferred stock will not be issued at some time in the future.follows:

~~Failure~~· toIf ~~raise~~penny ~~additional~~stocks ~~capital as~~are ~~needed~~sold ~~could~~in ~~adversely~~violation ~~affect~~of the ~~Company~~investor's ~~and~~rights ~~its~~listed ~~ability~~above, or other federal or state securities laws, the investor may be able to ~~grow~~cancel his purchase and get his money back.

~~The~~· ~~Company will need considerable amounts of capital to develop its business. It may raise funds through public or private equity offerings or debt financings.~~ If the ~~Company~~stocks ~~cannot~~are ~~raise~~sold ~~funds~~in ona ~~acceptable~~fraudulent ~~terms when needed~~manner, itthe investor may ~~not~~ be able to ~~grow~~sue ~~or maintain~~ the ~~business.~~persons Furthermore, such lack of funds may inhibit the Company’s ability to respond to competitive pressures or unanticipated capital needs, or may force the Company to reduce operating expenses, which could significantly harm the business and ~~development~~firms ofthat ~~operations. Because~~caused the ~~Company’s~~fraud ~~independent~~for auditors have expressed doubt as to the Company’s ability to continue as a “going concern,” as reported in the consolidated financial statements of the Company, its ability to raise capital may be severely hampereddamages. ~~Similarly, the Company’s ability to borrow any such capital may be more expensive and difficult to obtain until this “going concern” issue is eliminated.~~

20· If the investor has signed an arbitration agreement, however, s/he may have to pursue a claim through arbitration.

~~ITEM 1B. Unresolved Staff Comments~~25

~~None~~If the person purchasing the securities is someone other than an accredited investor or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in such securities. Accordingly, the SEC's rules may limit the number of potential purchasers of the shares of our common stock and stockholders may have difficulty selling their securities.

~~ITEM~~A 2.large ~~Description~~number of ~~Property~~shares will be eligible for future sale and may depress our stock price.

~~YBCC’s~~We ~~corporate~~may ~~headquarters~~be ~~are located~~required, atunder ~~17800~~terms ~~Castleton~~of ~~St.~~future financing ~~Ste 386~~arrangements, ~~City~~to ofoffer ~~Industry,~~a ~~California~~large ~~91748.~~number ~~YBCC rents approximately 983 square feet~~ of ~~office space~~common ~~for~~shares ~~its~~to ~~headquarters.~~the ~~The~~public, ~~lease~~or ~~began~~to onregister ~~September~~for 1,sale ~~2016~~by ~~and~~future ~~expires~~private oninvestors a ~~September~~large ~~30,~~number ~~2018. As~~ of ~~December~~shares ~~31,~~sold ~~2017,~~in ~~total monthly~~private ~~base~~sales ~~rent~~to ~~is $2,923~~them.

~~Confucian~~Sales isof ~~located~~substantial inamounts ~~Food~~of ~~Industrial~~common stock, ~~Park~~or ~~inside~~a perception that such sales could occur, and the ~~economic development~~existence ~~Zone~~of options or warrants to purchase shares of ~~JinXiang~~common ~~County,~~stock at ~~Jining~~prices ~~City~~that inmay be below the ~~province~~then-current market price of ~~Shandong~~our incommon ~~China.~~stock, Itcould ~~has~~adversely ~~three~~affect ~~land~~the ~~use~~market ~~rights~~price ~~with~~of ~~the~~our ~~total~~common ~~costs~~stock ~~approximately~~and ~~$736,632.~~could ~~One~~impair ~~land~~our ~~use~~ability ~~right~~to ~~expires~~raise incapital ~~2063,~~through ~~while~~ the ~~other~~sale ~~two~~of ~~land~~our ~~use~~equity ~~rights~~securities, ~~expire~~either inof ~~2065.~~which Itwould ~~has~~decrease ~~nearly~~the ~~30,000~~value ~~square~~of ~~meters~~any ~~standardized~~earlier ~~plant~~investment in our common stock.

~~ITEM~~We 3.are ~~Legal~~authorized ~~Proceedings~~to issue "blank check" preferred stock, which, if issued without stockholders’ approval, may adversely affect the rights of holders of our common stock.

~~None~~We are authorized to issue 50,000,000 shares of preferred stock, of which 974,730 have been issued as Series A Preferred Stock. The Series A Preferred shares are convertible into common shares on a 1:1 ratio at a fixed rate of $3 per share. Preferred shares have no voting rights, have no redemption rights and earn no dividends. Holders of Series A Convertible Preferred Stock are not permitted to convert their stock into common shares until the Company’s market capital reaches $15,000,000. Upon dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the then outstanding shares of Series A Convertible Preferred Stock shall be entitled to receive out of the assets of the Company the sum of $0.0001 per share (the “Liquidation Rate”) before any payment or distribution shall be made on any other class of capital stock of the Company ranking junior to the Series A Convertible Preferred Stock. This could dilute your ownership.

~~ITEM~~The 4Board of Directors is authorized under our Articles of Amendment to provide for the issuance of additional shares of preferred stock by resolution, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders. ~~Mine~~Any ~~Safety~~shares ~~Disclosure~~of preferred stock so issued are likely to have priority over the common stock with respect to dividend or liquidation rights. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control, which could have the effect of discouraging bids for our company and thereby prevent stockholders from receiving the maximum value for their shares. We have no present intention to issue any shares of its preferred stock in order to discourage or delay a change of control. However, there can be no assurance that preferred stock will not be issued at some time in the future.

~~Not~~Failure ~~applicable~~to raise additional capital as needed could adversely affect the Company and its ability to grow.

~~PART~~The IICompany will need considerable amounts of capital to develop its business. It may raise funds through public or private equity offerings or debt financings. If the Company cannot raise funds on acceptable terms when needed, it may not be able to grow or maintain the business. Furthermore, such lack of funds may inhibit the Company’s ability to respond to competitive pressures or unanticipated capital needs, or may force the Company to reduce operating expenses, which could significantly harm the business and development of operations. Because the Company’s independent auditors have expressed doubt as to the Company’s ability to continue as a “going concern,” as reported in the consolidated financial statements of the Company, its ability to raise capital may be severely hampered. Similarly, the Company’s ability to borrow any such capital may be more expensive and difficult to obtain until this “going concern” issue is eliminated.

~~ITEM 5. Market for Common Equity and Related Shareholder Matters~~26

~~Our~~ITEM ~~common stock is quoted on the Over-the Counter Market, (the “OTC Markets”), under the trading symbol “YBAO”~~1B. AsUnresolved ofStaff ~~March 29, 2018, the last working day prior to the date of this report, the closing price of our securities was $0.16.~~Comments

~~The following table set forth the quarterly high and low bid prices per share for our common stock~~None. The bid prices reflect inter-dealer prices, without retail markup, markdown, or commission and may not represent actual transactions. The low prices are often arbitrary prices put in the system by market makers.

	High		Low
Year ended December 31, 2017
First quarter	$	0.84	$	0.41
Second quarter	$	0.66	$	0.48
Third quarter	$	0.48	$	0.16
Fourth quarter	$	0.20	$	0.10
Year ended December 31, 2016
First quarter	$	0.35	$	0.13
Second quarter	$	0.92	$	0.13
Third quarter	$	0.68	$	0.30
Fourth quarter	$	0.58	$	0.30

ITEM 2.

Description of Property

~~Holders~~YBCC’s corporate headquarters are located at 618 Brea Canyon Rd. Suite A, Walnut, California 91789.

AsConfucian ofis ~~December~~located ~~31,~~in ~~2017,~~Food ~~there~~Industrial ~~were~~Park ~~approximately 840~~inside ~~registered~~the ~~shareholders~~economic development Zone of JinXiang County, Jining City in the ~~Company’s~~province ~~Common~~of ~~Stock~~Shandong in China. It has three land use rights with 9the total costs approximately $743,~~894~~864. One land use right expires in 2063,~~214~~ ~~shares~~while ~~issues~~the ~~and~~other ~~outstanding~~two land use rights expire in 2065. It has nearly 30,000 square meters standardized plant.

21ITEM 3. Legal Proceedings

~~Common Stock~~None.

~~Our~~ITEM ~~Company’s Certificate of Incorporation, as amended, provide for authority to issue 900,000,000 shares of common stock with par value of $0~~4.~~001~~ ~~per~~Mine ~~share.~~Safety Disclosure

AsNot ~~of December 31, 2017, we shall have approximately 9,894,214 shares of our common stock issued and outstanding held by approximately 840 stockholders of record~~applicable.

~~Preferred Stock~~27

WePART ~~currently have 974,730 shares of preferred stock Series A issued and outstanding. A total of 50,000,000 preferred shares with par value of $0.0001 per share are authorized.~~II

~~Series~~ITEM A5. ~~Preferred~~Market ~~Shares~~for Common Equity and Related Shareholder Matters

~~The~~Our ~~Series~~common Astock ~~Preferred~~is ~~shares~~quoted ~~are convertible into common shares~~ on athe ~~1:1~~Over-the Counter ~~ratio~~Market, at(the a“OTC ~~fixed rate of $3 per share. Preferred shares have no voting rights~~Markets”), ~~have~~under ~~no redemption rights and earn no dividends. Holders of Series A Convertible Preferred Stock are not permitted to convert their stock into common shares until~~ the ~~Company’s~~trading ~~market~~symbol ~~capital reaches $15,000,000~~“YBAO”. ~~Upon~~ ~~dissolution,~~As ~~liquidation or winding up~~ of ~~the~~March ~~Company~~29, ~~whether~~ ~~voluntary or involuntary~~2019, the ~~holders~~last ofworking day ~~the~~prior ~~then outstanding shares of Series A Convertible Preferred Stock shall be entitled~~ to ~~receive out of~~ the ~~assets~~date of ~~the~~this ~~Company~~report, the ~~sum~~closing ofprice ~~$0.0001 per share (the “Liquidation Rate”) before any payment or distribution shall be made on any other class~~ of ~~capital~~our ~~stock~~securities ofwas ~~the Company ranking junior to the Series A Convertible Preferred Stock~~$0.24.

~~ASC~~The ~~Topic~~following ~~480,~~table ~~“Distinguishing~~set ~~Liabilities~~forth the quarterly ~~from~~high ~~Equity,”~~and ~~establishes~~low ~~standards~~bid prices per share for ~~how~~our ancommon ~~issuer~~stock. ~~classifies~~The ~~and~~bid ~~measures~~prices ~~certain~~reflect ~~financial~~inter-dealer ~~instruments~~prices, ~~with~~without ~~characteristics of~~retail ~~both~~markup, ~~liabilities~~markdown, or commission and ~~equity~~may not represent actual transactions. The low prices are often arbitrary prices put in the system by market makers.

A mandatorily redeemable financial instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation or termination of the reporting entity. A financial instrument issued in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable—and, therefore becomes a liability—if that event occurs, the condition is resolved, or the event becomes certain to occur.

	High		Low
Year ended December 31, 2018
First quarter	$	0.30	$	0.12
Second quarter	$	0.29	$	0.16
Third quarter	$	0.29	$	0.11
Fourth quarter	$	0.25	$	0.12

Year ended December 31, 2017
First quarter	$	0.84	$	0.41
Second quarter	$	0.66	$	0.48
Third quarter	$	0.48	$	0.16
Fourth quarter	$	0.20	$	0.10

The Company determined that the preferred shares are not mandatorily or conditionally redeemable and are properly classified as permanent equity in the accompanying unaudited condensed consolidated financial statements.Holders

~~Series~~As Bof ~~Preferred~~December ~~Shares~~31, 2018, there were approximately 840 registered shareholders of the Company’s Common Stock with 9,894,214 shares issued and outstanding.

~~Not Applicable~~Common Stock

~~Dividends~~Our Company’s Certificate of Incorporation, as amended, provide for authority to issue 900,000,000 shares of common stock with par value of $0.001 per share.

WeAs ~~have not declared or paid any dividends on our common stock since our inception and do not anticipate paying dividends for the foreseeable future. The payment~~ of ~~dividends is~~December ~~subject to the discretion of our board of directors and depends~~31, ~~among other things~~2018, ~~upon~~we ~~our~~shall ~~earnings, our capital requirements,~~have ~~our~~approximately ~~financial condition~~9,894,214 ~~and~~shares ~~other relevant factors. We intend to reinvest any earnings in the development and expansion~~ of our ~~business.~~ ~~Any cash dividends in the future to~~ common shareholders will be payable when, as and if declared by our board of directors, based upon the board’s assessment of our financial condition and performance, earnings, need for funds, capital requirements, prior claims of preferred stock ~~to the extent~~ issued and outstanding, ~~and~~held ~~other~~by ~~factors,~~approximately ~~including~~840 ~~income~~stockholders ~~tax~~of ~~consequences, restrictions and applicable laws~~record. ~~There can be no assurance, therefore, that any dividends on our common stock will ever be paid.~~

~~Transfer~~Preferred ~~Agent and Registrar~~Stock

~~The~~We ~~Company’s~~currently ~~transfer~~have ~~agent~~974,730 isshares ~~Worldwide~~of preferred ~~Stock~~stock ~~Transfer~~Series ~~LLC~~A ~~located~~issued atand ~~One~~outstanding. ~~University~~A ~~Plaza.~~total ~~Ste~~of ~~505~~50, ~~Hackensack~~000,000 NJpreferred ~~07601~~shares with par value of $0.0001 per share are authorized.

2228

~~Securities~~Series ~~authorized~~A ~~for~~Preferred ~~issuance under equity compensation plans.~~Shares

~~Not~~The ~~Applicable~~Series A Preferred shares are convertible into common shares on a 1:1 ratio at a fixed rate of $3 per share. Preferred shares have no voting rights, have no redemption rights and earn no dividends. Holders of Series A Convertible Preferred Stock are not permitted to convert their stock into common shares until the Company’s market capital reaches $15,000,000. Upon dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the then outstanding shares of Series A Convertible Preferred Stock shall be entitled to receive out of the assets of the Company the sum of $0.0001 per share (the “Liquidation Rate”) before any payment or distribution shall be made on any other class of capital stock of the Company ranking junior to the Series A Convertible Preferred Stock.

~~Recent~~ASC ~~Sales~~Topic 480, “Distinguishing Liabilities from Equity,” establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of ~~Unregistered~~both ~~Securities~~liabilities and equity.

~~Unless~~A ~~otherwise~~mandatorily ~~indicated,~~redeemable ~~all~~financial ~~of the~~instrument ~~following~~shall ~~sales~~be orclassified ~~issuances~~as ofa ~~Company~~liability ~~securities~~unless ~~were~~the ~~conducted~~redemption ~~under~~is ~~the~~required ~~exemption~~to ~~from~~occur ~~registration~~only asupon ~~provided~~the ~~under~~liquidation ~~Section 4(a)(2)~~or termination of the ~~Securities~~reporting entity. A ~~Act~~financial ofinstrument ~~1933.~~issued ~~All~~in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the ~~shares~~issuer ~~issued~~to ~~were~~redeem ~~issued~~the ininstrument ~~transactions~~by ~~not~~transferring ~~involving~~its assets at a ~~public~~specified ~~offering,~~or ~~are~~determinable date (or dates) or upon ~~considered~~an event certain to beoccur. ~~restricted~~A ~~stock~~financial asinstrument ~~defined~~that inembodies ~~Rule~~a ~~144~~conditional ~~promulgated~~obligation ~~under~~to redeem the ~~Securities~~instrument ~~Act~~by oftransferring assets ~~1933~~upon an event not certain to occur becomes mandatorily redeemable—and, ~~stock~~therefore ~~certificates~~becomes ~~issued~~a liability—if that ~~with~~event ~~respect~~occurs, ~~thereto~~the ~~bear~~condition ~~legends~~is toresolved, ~~that~~or ~~effect~~the event becomes certain to occur.

~~ITEM~~The 6.Company ~~Selected~~determined ~~Financial~~that ~~Data~~the preferred shares are not mandatorily or conditionally redeemable and are properly classified as permanent equity in the accompanying consolidated financial statements.

WeSeries ~~are~~B aPreferred ~~smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.~~Shares

~~ITEM~~Not ~~7. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~Applicable

~~SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS~~Dividends

~~This~~We ~~Annual Report~~have not declared or paid any dividends on ~~Form~~our ~~10-K~~common ~~contains~~stock ~~forward-looking~~since ~~statements~~our ~~within~~inception and do not anticipate paying dividends for the ~~meaning~~foreseeable offuture. ~~Section~~The ~~27A~~payment of dividends is subject to the ~~Securities~~discretion ~~Act~~of our board of ~~1933~~directors and ~~Section~~depends, among other things, upon our earnings, our capital requirements, ~~21E~~our offinancial condition, and other relevant factors. We intend to reinvest any earnings in the ~~Securities~~development ~~Exchange~~and ~~Act~~expansion of ~~1934~~our business. In ~~some~~Any ~~cases~~cash dividends in the future to common shareholders will be payable when, ~~forward-looking~~as ~~statements~~and ~~are~~if ~~identified~~declared by ~~terms~~our ~~such~~board asof ~~“may”~~directors, ~~“will”,~~based ~~“should”,~~upon ~~“could”~~the board’s assessment of our financial condition and performance, ~~“would”~~earnings, ~~“expects”~~need for funds, ~~“plans”~~capital requirements, ~~“anticipates”,~~prior ~~“believes”,~~claims ~~“estimates”,~~of ~~“projects”~~preferred stock to the extent issued and outstanding, ~~“predicts”~~and other factors, ~~“potential”~~including income tax consequences, restrictions and ~~similar~~applicable ~~expressions~~laws. ~~intended~~There tocan ~~identify~~be ~~forward-looking~~no ~~statements~~assurance, therefore, that any dividends on our common stock will ever be paid.

~~These~~Transfer ~~forward-looking statements~~Agent ~~are only predictions~~ and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this Report. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this Report to reflect any change in our expectations or any change in events, conditions, or circumstances on which any of our forward-looking statements are based or to conform to actual results. We qualify all of our forward-looking statements by these cautionary statements.Registrar

~~Overview~~The Company’s transfer agent is Pacific Stock Transfer Co. located at 6725 Via Austi Pkwy, Suite 300, Las Vegas, NV 89119.

The Company is a manufacture and research based bio-science company. It has large capacity to manufacture tablets, granule, oral liquid, powders, soft gels and capsules products. The Company distributes its products through its own network and white label products. It also has access to a member-based distribution system operated by an affiliated company.29

~~The~~Securities ~~Company~~authorized ~~possesses~~for ~~manufacturing~~issuance ~~permits~~under ~~for~~equity ~~food~~compensation ~~product, hygienic products, sanitary products, and health products~~plans. ~~The Company's main business includes:~~

·Not ~~research and development of chondroitin and garlic oil;~~Applicable

·Recent ~~trading,~~Sales ~~cold storage, and pretreating~~ of ~~garlic,~~Unregistered ~~fruit, and vegetables products;~~Securities

·Unless ~~trading~~otherwise indicated, all of ~~chemical~~the following ~~products~~sales ~~(excluding~~or ~~hazardous~~issuances ~~chemicals~~of Company securities were conducted under the exemption from registration as provided under Section 4(a);(2) of the Securities Act of 1933. All of the shares issued were issued in transactions not involving a public offering, are considered to be restricted stock as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect.

·ITEM ~~import~~6. ~~and~~Selected ~~export~~Financial ~~of goods and technology (excluding those restricted by government); and,~~Data

·We are a smaller reporting company as defined by Rule 12b-2 of the ~~manufacturing~~Securities ~~and~~Exchange ~~sale~~Act of ~~health~~1934 ~~products~~and ~~including~~are ~~powder,~~not ~~granules,~~required ~~tablets,~~to ~~hard~~provide ~~capsule,~~the ~~and~~information ~~soft~~under ~~capsule~~this ~~products~~item.

~~Plan~~ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

BySPECIAL ~~following~~NOTE ~~the~~REGARDING ~~Company motto of being passionate for health industry, bringing together the world's resources, focusing on consumer demand, creating a win~~FORWARD-~~win~~LOOKING ~~situation,” the Company is eager to develop businesses in the international health and pharmaceutical market.~~STATEMENTS

23This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases, forward-looking statements are identified by terms such as “may”, “will”, “should”, “could”, “would”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “projects”, “predicts”, “potential”, and similar expressions intended to identify forward-looking statements.

~~The~~These ~~Company’s~~forward-looking statements ~~near~~are ~~term~~only ~~goal~~predictions isand ~~to reach~~involve ~~breakeven~~known ~~within~~and aunknown ~~6-month~~risks, ~~period~~uncertainties, ~~time.~~and Inother ~~order~~factors that may cause our actual results, levels of activity, performance, or achievements to ~~reach~~be ~~such~~materially ~~goal~~different from any future results, ~~the~~levels ~~Company~~of isactivity, performance, ~~increasing~~or ~~its~~achievements ~~sales~~expressed ~~and~~or ~~production~~implied ~~volume~~by such forward-looking statements. Also, these forward-looking statements represent ~~through~~our ~~arrangements~~estimates and ~~networking~~assumptions ~~with~~only ~~its~~as ~~existing~~of ~~customers~~the ~~and~~date ~~its~~of ~~affiliated~~this ~~companies~~Report. ~~Additionally~~Except as otherwise required by law, itwe ~~plans~~expressly disclaim any obligation or undertaking to ~~increase~~release publicly any updates or revisions to any forward-looking statement contained in this Report ~~the~~to ~~size~~reflect any change in our expectations or any change in events, conditions, or circumstances on which any of ~~its~~our ~~sales~~forward-looking statements ~~department~~are based or to ~~develop~~conform ~~new~~to ~~customers~~actual results. We qualify all of our forward-looking statements by these cautionary statements.

The Company’s ultimate goal is to make the business profitable and competitive in the international health and pharmaceutical market. To achieve such goal, the Company needs to cooperate with other businesses having capital, market, technology, or products, recruit sufficient workforce and various talents to serve the company, and actively develop new technology and new product through research and development.Overview

~~Results~~The ofCompany ~~Operations~~is a manufacture and research based bio-science company. It has large capacity to manufacture tablets, granule, oral liquid, powders, soft gels and capsules products. The Company distributes its products through its own network and white label products. It also has access to a member-based distribution system operated by an affiliated company.

~~Twelve~~The ~~Months~~Company ~~Ending~~possesses ~~December~~manufacturing 31permits for food product, ~~2017~~hygienic ~~Compared to~~products, ~~December~~sanitary 31products, ~~2016~~and health products. The Company's main business includes:

~~Revenue:~~· research and development of chondroitin and garlic oil;

~~For~~· ~~the years ended December 31~~trading, ~~2017~~cold ~~and 2016~~storage, ~~revenues were $2,103,890~~ and ~~$1,130,743~~pretreating ~~respectively with an increase~~ of ~~$973~~garlic,~~147~~ ~~over~~fruit, ~~the~~and ~~same~~vegetables ~~period in 2016. The increase is mainly due to the increase in the number of customers in 2017 compared to 2016. The increase is also due to the increase in demand from consumers for healthy~~ products.;

~~Cost of Goods Sold:~~30

~~Cost~~· oftrading ~~goods sold for the years ended December 31, 2017 and 2016 were $1,867,994 and $996,925 respectively, for an increase~~ of ~~$871,069~~chemical ~~over~~products ~~the~~(excluding ~~same~~hazardous ~~period in 2016. This increase corresponds with the increase in revenue referenced above.~~chemicals);

~~Gross~~· ~~Profit:~~import and export of goods and technology (excluding those restricted by government); and,

~~Gross~~· ~~profits~~the ~~were~~manufacturing ~~$235,896~~ and ~~$133,818 for~~sale ~~the~~of ~~years~~health ~~ended~~products ~~December~~including 31powder, ~~2017 and 2016~~granules, ~~an increase of $102~~tablets,~~078~~ ~~over~~hard ~~the same period in 2016. The gross profit margin as a percent of sales for the years ending December 31~~capsule, ~~2017~~ and ~~2016~~soft ~~was~~capsule ~~11% and 12% respectively with a slight decrease of 1% due to the increase in depreciation cost from newly added manufacturing related fixed assets in 2017~~products.

~~Operating~~Plan ~~Expenses:~~of Operations

~~Operating~~By ~~expenses~~following ~~for~~ the ~~years~~Company ~~ended December~~motto ~~31,~~of ~~2017~~being passionate ~~and 2016 were $863,240 and $527,300 respectively~~ for anhealth ~~increase of $335~~industry,~~940~~ orbringing ~~64%~~together ~~from~~ the ~~same~~world's ~~period in the prior year. The major expenses for the years ended December 31~~resources, ~~2017~~focusing ~~and~~on ~~2016~~consumer ~~consist of payroll~~demand, ~~professional~~creating ~~fee~~a ~~and~~win-win ~~depreciation.~~situation,” ~~The~~the ~~increase~~Company ofis ~~$405,249~~eager ~~was mainly due~~ to ~~the~~develop ~~increase~~businesses in ~~payroll~~the ofinternational ~~$170,275~~health ~~from increased numbers of newly recruited employees~~ and ~~increase~~pharmaceutical ~~in professional fee of $138,023~~market.

~~Other~~The ~~Income~~Company’s ~~(Expense):~~near term goal is to reach breakeven within a 6-month period time. In order to reach such goal, the Company is increasing its sales and production volume through arrangements and networking with its existing customers and its affiliated companies. Additionally, it plans to increase the size of its sales department to develop new customers.

~~Other~~The ~~income~~Company’s ~~(expense)~~ultimate ~~consists~~goal ofis ~~interest~~to ~~income~~make ~~and~~the ~~expenses~~business ~~and~~profitable ~~other non-operation related income~~ and ~~expenses.~~competitive ~~For~~in the ~~years~~international ~~ended~~health ~~December 31, 2017~~ and ~~2016,~~pharmaceutical ~~the~~market. ~~net other~~To ~~income~~achieve ~~(expenses)~~such ~~were 24~~goal,~~869~~ ~~and~~the Company ~~($26,294),~~needs ~~respectively~~to cooperate with another ~~increase~~businesses ofhaving ~~$51~~capital,~~163.~~ ~~The~~market, ~~increase~~technology, ~~was~~or ~~mainly~~products, ~~due~~recruit tosufficient ~~the~~workforce ~~reduction~~and invarious ~~interest~~talents ~~expenses~~to ofserve ~~$45,219~~the ~~for an early repayment of a short-term loan~~company, ~~offsetting~~and byactively andevelop ~~increase~~new intechnology ~~other~~and ~~income of~~new ~~$5,944~~product ~~for~~through ~~less~~research ~~governmental~~and ~~rewards received in 2017 comparing that in 2016~~development.

~~Liquidity~~Results ~~and~~of ~~Capital Resources~~Operations

~~The~~Twelve ~~Company~~Months ~~suffered~~Ending ~~recurring losses from operations and has an accumulated deficit of $1,179,676 at~~ December 31, ~~2017.~~2018 ~~The Company has a cash balance of $369,607 and negative~~Compared working capital of $3,022,540 as of December 31, 2017. The Company has incurred losses of $602,475 and $419,777 for the years ended December 31, 2017 and 2016, respectively. The Company has not continually generated significant gross margins. Unless our operations generate a significant increase in gross margins and cash flows from operating activities, our continued operations will depend on whether we are able to raise additional funds through various sources, such as equity and debt financing, other collaborative agreements and/or strategic alliances. Our management is actively engaged in seeking additional capital to fund our operations in the short to medium term. Such additional funds may not become available on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term. As of December 31, 2017~~, we had enough cash to last approximately six months.~~

24Revenue:

~~Net~~For ~~cash provided by operating activities for~~ the ~~year~~years ended December 31, 2018 and 2017, ~~amounted~~revenues towere $~~635~~2,248,254 ~~compared~~and to $~~183~~2,~~993~~103,890 ~~provided~~respectively bywith ~~operating~~an ~~activities~~increase ~~for~~of $144,364 over the ~~year~~same ~~ended December~~period ~~31,~~in ~~2016~~2017. The ~~decrease~~increase is ofmainly ~~$183,358 was primarily~~ due to the increase in ~~net~~the ~~loss~~number of ~~$182,698,~~customers ~~offset~~in by2018 compared to 2017. The increase is also due to the increase in ~~net~~demand ~~cash~~from ~~provided~~consumers byfor ~~other~~healthy ~~payable~~and ofbeauty ~~532K~~products.

~~Net~~Cost ~~cash used in investing activities for the year ended December 31, 2017 amounted to $72,000 compared to net cash used in investing activities~~ of ~~$484,504~~Goods ~~in the year ended December 31, 2016, resulting in a decrease of $412,504. The decrease was mainly due to reduction in fixed assets purchases by $397,305 in 2017 comparing that in 2016.~~Sold:

~~Net~~Cost ~~cash~~of ~~provided~~goods bysold ~~financing activities~~ for the ~~year~~years ended December 31, ~~2017~~2018 ~~amounted~~and to2017 were $891,~~625~~704,803 ~~compared~~and ~~to net cash used in financing activities of~~ $~~619~~1,~~773 in the year ended December 31~~867,994 ~~2016~~respectively, ~~resulting~~for in a ~~net~~decrease ~~increase~~ of $~~530~~163,~~148.~~191 ~~The~~over ~~increase~~the insame ~~net~~period ~~cash~~in ~~provided~~2017. This bydecrease ~~financing~~is ~~activities was~~ mainly due to the ~~repayment~~decrease ~~from~~in ~~payable~~cost of production compared to ~~related~~same ~~party~~periods ofin $12017.~~2 million.~~

~~Going~~Gross ~~Concern~~Profit:

~~The~~Gross ~~accompanying~~profits ~~consolidated~~were ~~financial statements~~$543,451 ~~have~~and ~~been~~$235,896 for ~~prepared assuming~~ the ~~Company~~years ~~will~~ended ~~continue~~December as31, a2018 ~~going~~and ~~concern; however~~2017, ~~the~~an ~~above~~increase ~~condition~~of ~~raises~~$307,555 ~~substantial doubt~~over ~~about~~ the ~~Company’s~~same ~~ability~~period toin ~~do so~~2017. The ~~financial~~gross ~~statements~~profit domargin ~~not~~as a ~~include~~percent ~~any~~of ~~adjustments~~sales tofor ~~reflect~~ the ~~possible future~~years ~~effects~~ending onDecember ~~the~~31, ~~recoverability~~2018 and ~~classification~~2017 ofwas ~~assets~~24% orand ~~the~~11% ~~amounts~~respectively ~~and~~an ~~classification~~increase of ~~liabilities~~13% ~~that~~due ~~may~~to ~~result~~the increase ~~should~~in ~~the~~domestic ~~Company~~sales beof ~~unable~~new toproducts, ~~continue~~primarily assales to a ~~going~~related ~~concern~~party, which maintained higher profit margin and to the improvements in production efficiency.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s products, (3) short-term and long-term borrowings from banks, and (4) short-term borrowings from stockholders or other related party(ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.31

~~The~~Operating ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations.Expenses:

~~Critical~~Operating ~~Accounting~~expenses ~~Policies~~for the years ended December 31, 2018 and 2017 were $608,917 and $863,240 respectively for a decrease of $254,323 or 29% from the same period in 2017. The major expenses for the years ended December 31, 2018 and 2017 consist of payroll, professional fee and depreciation. The decrease of $254,323 was mainly due to decrease in payroll of $84,322 and decrease in professional fee of $178,304.

~~The~~Other ~~discussion~~Income and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We continually evaluate our estimates, including those related to bad debts, allowance for obsolete inventory, and the classification of short and long-term inventory, the useful life of property and equipment and intangible assets, recovery of long-lived assets, income taxes, write-down in value of inventory, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our significant judgments and estimates used in the preparation of the financial statements.(Expense):

~~Accounts Receivable~~Other -income ~~The~~(expense) ~~Company~~consists ~~extends~~of interest ~~credit~~income toand ~~its~~expenses ~~customers.~~and ~~Accounts~~other ~~receivable~~non-operation ~~was~~related ~~recorded~~income atand ~~the~~expenses. ~~contract~~For ~~amount~~the ~~after~~years ~~deduction of~~ended ~~trade~~December ~~discounts and~~31, ~~allowances,~~2018 ~~if any~~and 2017, ~~and~~the donet ~~not~~other ~~bear~~income ~~interest.~~(expenses) ~~The~~were ~~allowance for doubtful accounts~~$21,404 ~~when~~and ~~necessary~~$24,869, isrespectively ~~the Company’s~~with ~~best~~a ~~estimate~~decrease of ~~the amount of probable credit losses from accounts receivable~~$3,465. The ~~Company~~decrease ~~determines~~was mainly ~~the~~due ~~allowance based~~to onthe ~~historical~~increase ~~write~~of non-~~off~~operating ~~experience~~related expenses, ~~customer~~offsetting ~~specific~~by ~~facts~~an ~~and~~increase ~~economic~~in ~~conditions~~non-operating related income.

~~Inventories - Inventory,~~Liquidity ~~comprised principally of finished goods, raw material~~ and ~~packaging~~Capital ~~material, are valued at the lower of cost or net realizable value. Cost is determined using first-in, first-out method.~~Resources

25The Company suffered recurring losses from operations and has an accumulated deficit of $1,331,207 at December 31, 2018. The Company has a cash balance of $50,397 and working capital deficit of $2,961,341 as of December 31, 2018. The Company has incurred losses of $44,062 and $602,475 for the years ended December 31, 2018 and 2017, respectively. The Company has not continually generated significant gross margins. Unless our operations generate a significant increase in gross margins and cash flows from operating activities, our continued operations will depend on whether we are able to raise additional funds through various sources, such as equity and debt financing, other collaborative agreements and/or strategic alliances. Our management is actively engaged in seeking additional capital to fund our operations in the short to medium term. Such additional funds may not become available on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term. As of December 31, 2018, we had enough cash to last approximately six months.

~~Property,~~Net ~~Plant~~cash ~~and~~used ~~Equipment –~~in ~~Property~~operating ~~and~~activities for ~~equipment~~the ~~are~~year ~~carried~~ended atDecember ~~cost~~31, ~~and~~2018 ~~are~~amounted ~~depreciated~~to on$141,486, acompared ~~straight-line~~to ~~basis~~$635 ~~(after~~net ~~taking~~cash ~~into~~provided ~~account~~by ~~their respective~~operating ~~estimated~~activities ~~residual~~for ~~value) over~~ the year ~~estimated~~ended ~~useful~~December ~~lives~~31, ~~of the assets~~2017. The ~~cost~~increase of ~~repairs~~net ~~and~~cash ~~maintenance~~used isin ~~expensed as~~operating ~~incurred;~~activities ~~major~~was ~~replacements~~primarily ~~and~~due ~~improvements~~to ~~are capitalized. When assets are retired, or disposed of,~~ the ~~cost~~increase ~~and~~in ~~accumulated~~inventory, ~~depreciation~~decrease ~~are~~in ~~removed from the~~ accounts, payable and ~~any~~increase ~~resulting gains or losses are included~~ in ~~income~~advance into ~~the~~suppliers, ~~year~~offset ofby ~~disposition. We examine~~ the ~~possibility~~decrease ~~of decreases~~ in ~~the~~net ~~value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable~~loss. ~~The estimated useful lives are as follows:~~

Category	Estimated Life		Method
Manufacturing equipment		10	Straight Line
Office equipment		5	Straight Line
Buildings		20	Straight Line

Net cash used in investing activities for the year ended December 31, 2018 amounted to $278,038, compared to net cash used in investing activities of $72,000 in the year ended December 31, 2017, resulting in an increase of net cash used in investing activities of $206,038. The increase was mainly due to increase in construction and fixed assets purchases in 2018 comparing to 2017.

~~Intangible~~Net ~~Assets -~~cash ~~Land~~provided ~~use~~by ~~rights~~financing ~~represent~~activities for the ~~exclusive~~year ~~right~~ended December 31, 2018 amounted to ~~occupy~~$106,775, ~~and~~compared ~~use~~to anet ~~piece~~cash provided in financing activities of ~~land~~$89,625 in the ~~PRC~~year ~~during~~ended ~~the~~December ~~contractual~~31, ~~term~~2017, ofresulting ~~the land~~in ~~use~~a ~~right.~~net ~~Land~~increase ~~use~~of ~~rights~~net ~~are~~cash ~~carried~~provided atby ~~cost~~financing ~~and~~activities ~~charged~~of to$17,150. ~~expense~~The onincrease in anet ~~straight-line~~cash ~~basis~~provided ~~over~~by ~~the~~financing ~~respective~~activities ~~periods of~~was ~~the~~mainly ~~rights~~due ofto 50increase ~~years~~in orloan ~~the~~from ~~remaining~~unrelated ~~period~~party, ofoffset ~~the~~by ~~rights~~repayment ~~upon~~to ~~acquisition~~related party.

~~Revenue~~Going Recognition - Pursuant to the guidance of ASC 605 and ASC 360, we recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured, and no significant obligations remain. The Company has no product returns or sales discounts and allowances because goods delivered and accepted by customers are normally not returnable.Concern

~~Stock-based~~The ~~compensation- Stock~~accompanying ~~based~~consolidated ~~compensation~~financial statements ishave ~~accounted~~been ~~for~~prepared ~~based~~assuming on the ~~requirements~~Company ofwill ~~the~~continue ~~Share-Based~~as ~~Payment~~a ~~topic~~going ofconcern; ~~ASC~~however, ~~718~~the ~~which~~above ~~requires recognition~~condition inraises ~~the~~substantial doubt ~~financial~~about ~~statements of~~ the ~~cost~~Company’s ofability ~~employee~~to ~~and~~do ~~director~~so. ~~services~~The ~~received~~financial instatements ~~exchange~~do ~~for~~not aninclude ~~award~~any ofadjustments ~~equity instruments over the period the employee or director is required~~ to ~~perform~~reflect the ~~services~~possible future ineffects ~~exchange~~on ~~for~~ the ~~award.~~recoverability ~~The~~and ~~Accounting Standards~~classification ~~Codification~~of ~~also~~assets ~~requires~~or ~~measurement of~~ the ~~cost~~amounts ~~of employee~~ and ~~director~~classification ~~services~~of ~~received~~liabilities inthat ~~exchange~~may ~~for~~result should anthe ~~award based~~Company onbe ~~the~~unable ~~grant-date~~to ~~fair~~continue ~~value~~as ofa ~~the~~going ~~award~~concern.

Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.32

~~Off~~In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s products, (3) short-~~Balance~~term ~~Sheet~~and ~~Arrangements~~long-term borrowings from banks, and (4) short-term borrowings from stockholders or other related party(ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

AsThe ability of ~~December~~the ~~31,~~Company ~~2017,~~to wecontinue as ~~did~~a ~~not~~going ~~have any~~concern ~~off-balance~~is ~~sheet~~dependent ~~arrangements~~upon asits ~~defined~~ability to successfully accomplish the plans described in ~~Item~~the ~~303(a)(4)(ii)~~preceding paragraph and eventually to secure other sources of ~~Regulation~~financing ~~S-K~~and attain profitable operations.

~~ITEM~~Critical ~~7A.~~Accounting ~~Quantitative and Qualitative Disclosures about Market Risk~~Policies

WeThe discussion and analysis of the Company’s financial condition and results of operations are abased ~~smaller~~upon ~~reporting~~the ~~company~~Company’s asconsolidated ~~defined~~financial statements, which have bybeen ~~Rule~~prepared ~~12b~~in accordance with accounting principles generally accepted in the United States of America. We continually evaluate our estimates, including those related to bad debts, allowance for obsolete inventory, and the classification of short and long-2term inventory, the useful life of property and equipment and intangible assets, recovery of long-lived assets, income taxes, write-down in value of inventory, and the ~~Securities~~valuation ~~Exchange~~of ~~Act~~equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of ~~1934~~which form the basis for making judgments about the carrying values of assets and liabilities that are not ~~required~~readily apparent from other sources. Any future changes to ~~provide~~these estimates ~~the~~and ~~information~~assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under ~~this~~different ~~item~~assumptions or conditions. We believe the following critical accounting policies affect our significant judgments and estimates used in the preparation of the financial statements.

~~ITEM~~Accounts Receivable 8- The Company extends credit to its customers. ~~Financial~~Accounts ~~Statements~~receivable was recorded at the contract amount after deduction of trade discounts and, allowances, if any, and do not bear interest. The allowance for doubtful accounts, when necessary, is the Company’s best estimate of the amount of probable credit losses from accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

~~The~~Inventories - Inventory, ~~report~~comprised principally of ~~Independent~~finished ~~Registered~~goods, ~~Public Accounting~~raw ~~Firm~~material and ~~consolidated~~packaging ~~financial~~material, ~~statements~~ are ~~set~~valued ~~forth~~at inthe ~~this~~lower ~~report~~of ~~beginning~~cost onor ~~Page~~net realizable Fvalue. Cost is determined using first-1in, first-out method.

~~ITEM~~Property, 9.Plant ~~Changes~~and inEquipment - Property and ~~Disagreements~~equipment ~~with~~are ~~Accountants~~carried at cost and are depreciated on ~~Accounting~~a straight-line basis (after taking into account their respective estimated residual value) over the estimated useful lives of the assets. The cost of repairs and ~~Financial~~maintenance ~~Disclosure~~is expensed as incurred; major replacements and improvements are capitalized. When assets are retired, or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. We examine the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. The estimated useful lives are as follows:

None

Category	Estimated Life	Method
Manufacturing equipment	10	Straight Line
Office equipment	5	Straight Line
Buildings	20	Straight Line

26Intangible Assets - Land use rights represent the exclusive right to occupy and use a piece of land in the PRC during the contractual term of the land use right. Land use rights are carried at cost and charged to expense on a straight-line basis over the respective periods of the rights of 50 years or the remaining period of the rights upon acquisition.

~~ITEM 9A. Controls and Procedures.~~33

Revenue Recognition (- We account for a) contract with a customer when the written contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Substantially all of our revenue is derived by fulfilling customer orders for the purchase of our products under ~~Evaluation~~contracts which contain a single performance obligation, to supply continually defined quantities of ~~disclosure~~product ~~controls~~at fixed prices. We account for shipping and ~~procedures~~handling activities that occur before the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service. We recognize revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is upon delivery to the customer, or its designee at a customer location or other customer-designated delivery point.

AsAmounts ofbilled ~~December 31, 2017, we conducted an evaluation under the supervision~~ and ~~with~~due ~~the~~from ~~participation~~our ofcustomers ~~the~~are ~~Company's Chief Executive Officer and the Chief Financial~~classified ~~Officer,~~as ~~management~~accounts ~~has~~receivables ~~evaluated~~on ~~the~~our ~~effectiveness~~consolidated ofbalance ~~the~~sheets ~~design~~ and ~~operation~~require ofpayment ~~the~~on ~~Company's~~a ~~disclosure~~short-term ~~controls and procedures~~basis. Invoices are ~~The~~generally ~~term~~issued ~~“disclosure~~at ~~controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under~~ the ~~Securities~~point ~~and Exchange~~control ~~Act~~transfers ~~of 1934, as amended (“Exchange Act”), means controls~~ and ~~other~~substantially ~~procedures~~all of aour ~~company~~invoices ~~that~~ are ~~designed to~~due ~~ensure~~within ~~that~~30 ~~information~~days ~~required to be disclosed by the company in the reports it files~~ or ~~submits under the Exchange Act is~~less. ~~recorded~~Periodically, ~~processed,~~we ~~summarized~~require ~~and~~payment ~~reported,~~prior ~~within~~to the ~~time~~point ~~periods specified~~ in ~~the~~time ~~Securities~~we ~~and~~recognize ~~Exchange Commission's rules and forms~~revenue. ~~Disclosure~~Amounts ~~controls~~received ~~and~~from ~~procedures~~customers ~~also~~prior ~~include, without limitation, controls and procedures designed~~ to ~~ensure that~~ ~~information~~revenue ~~required~~recognition toon ~~be disclosed by~~ a ~~company~~contract inare ~~the~~contract ~~reports~~liabilities, ~~that~~are itclassified ~~files~~as orcustomer ~~submits~~deposit ~~under~~on ~~the Exchange Act is accumulated~~our consolidated ~~and~~balance ~~communicated~~sheets ~~to the company's management, including its principal executive~~ and ~~principal~~are ~~financial~~typically ~~officers,~~applied orto ~~persons~~an ~~performing similar~~invoice ~~functions,~~within as30 ~~appropriate,~~days toof ~~allow~~receipt. ~~timely~~There ~~decisions~~were ~~regarding~~around ~~required disclosure~~$0. ~~Based~~14 onmillion ~~that evaluation and because of the material weaknesses~~ in ~~our internal control over financial reporting described below, the Chief Executive Officer and the~~customer ~~Chief~~deposit ~~Financial Officer have concluded that the Company's disclosure controls and procedures were not effective~~ as of December 31, ~~2017~~2018.

~~Identified~~Off-Balance ~~Material~~Sheet ~~Weakness~~Arrangements

~~Management~~As ~~identified~~of ~~the~~December ~~following~~31, ~~control deficiencies~~2018, ~~that~~we ~~constitute~~did ~~material~~not ~~weaknesses~~have any ~~that~~off-balance ~~are~~sheet ~~not~~arrangements ~~fully remediated~~ as ofdefined ~~the~~in ~~filing~~Item ~~date~~303(a)(4)(ii) of ~~this~~Regulation ~~report:~~S-K.

~~Our~~ITEM ~~size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system~~7A. ~~There~~Quantitative ~~is mainly one person involved in processing of transactions. Therefore, it is difficult to effectively segregate accounting duties. We have hired an additional administrative person~~ and ~~retained~~Qualitative anDisclosures ~~outside~~about ~~professional~~Market firm to assist in mitigating the separation of duties issues on an ongoing basis. The use of the outside firm has proven successful in assisting in the separation of duties. However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.Risk

~~Similarly,~~We ~~the~~are ~~Shandong Confucian Biologic Co., Ltd. operation also has~~ a ~~material~~smaller ~~weakness~~reporting ~~due~~company toas ~~lack~~defined by ofRule ~~segregation~~12b-2 of ~~duties.~~the ~~Its~~Securities ~~size~~Exchange ~~has~~Act ~~prevented us from being able to employ sufficient resources to enable us to have an adequate level~~ of ~~supervision~~1934 and ~~segregation~~are ofnot ~~duties~~required ~~within our internal control system. We have retained an outside professional firm~~ to ~~assist~~provide in the ~~separation~~information ofunder ~~duties~~this ~~on an ongoing basis~~item. ~~The use of the outside firm has proven successful in assisting in the separation of duties.~~

~~(b)~~ITEM ~~Management's~~8. ~~Report on Internal Control Over~~ Financial ~~Reporting.~~Statements

~~Our~~The ~~management~~report ~~is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act~~ of ~~1934. Our~~Independent ~~internal~~Registered ~~control over financial reporting is a process designed by, or under the supervision~~Public ~~of,~~Accounting ~~our~~Firm ~~CEO~~ and ~~CFO,~~consolidated ~~or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of~~ financial ~~reporting and the preparation of financial~~ statements for external purposes in accordance with accounting principles generally accepted in the United States of America (GAAP). Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable assurance that transactions are ~~recorded~~set asforth ~~necessary to permit preparation of financial statements~~ in ~~accordance~~this ~~with GAAP~~report ~~and~~beginning that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on ~~the~~Page ~~financial statements~~F-1.

~~Management~~ITEM ~~assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017~~9. In ~~making~~Changes ~~this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission~~ in ~~the~~and ~~2013 Internal Control-Integrated~~Disagreements ~~Framework.~~with ~~Based~~Accountants on ~~its~~Accounting ~~evaluation,~~and ~~management~~Financial ~~has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2017.~~Disclosure

Pursuant to Regulation S-K Item 308(b), this Annual Report on Form 10-K does not include an attestation report of our company’s registered public accounting firm regarding internal control over financial reporting.None

~~Because~~ITEM ~~of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements~~9A. ~~Also,~~Controls projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. A control system, no matter how well designed and operated can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their cost.Procedures

(ca) Evaluation ~~Changes~~of indisclosure ~~Internal~~controls ~~Control~~and ~~over Financial Reporting~~procedures.

~~There~~As ~~have~~of ~~been~~December no31, ~~changes~~2018, inwe ~~our~~conducted ~~internal~~an ~~control~~evaluation under ~~over~~the ~~financial~~supervision ~~reporting~~and inwith the ~~fiscal~~participation ~~year~~of ~~ended~~the ~~December~~Company's ~~31,~~Chief ~~2017~~Executive Officer and the Chief Financial Officer, ~~which~~management ~~were~~has ~~identified~~evaluated inthe ~~connection~~effectiveness ~~with~~of ~~our~~the ~~management’~~design and operation of the Company's disclosure controls and procedures. ~~evaluation~~The ~~required~~term by“disclosure ~~paragraph~~controls ~~(d)~~and ofprocedures,” ~~rules~~as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that ~~have~~are ~~materially~~designed to ~~affected~~ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or ~~are~~submits ~~reasonably~~under the Exchange Act is accumulated ~~likely~~and communicated to ~~materially~~the ~~affect~~company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation and because of the material weaknesses in our internal control over financial reporting described below, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2018.

~~Item~~Identified ~~9B.~~Material ~~Other Information.~~Weakness

~~None~~ Management identified the following control deficiencies that constitute material weaknesses that are not fully remediated as of the filing date of this report:

2734

~~PART~~Our ~~III~~size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. There is mainly one person involved in processing of transactions. Therefore, it is difficult to effectively segregate accounting duties. We have hired an additional administrative person and retained an outside professional firm to assist in mitigating the separation of duties issues on an ongoing basis. The use of the outside firm has proven successful in assisting in the separation of duties. However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.

~~ITEM~~Similarly, ~~10.~~the ~~Directors,~~Shandong ~~Executive~~Confucian ~~Officers~~Biologic Co., ~~Promoters~~Ltd. operation also has a material weakness due to lack of segregation of duties. Its size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and ~~Control~~segregation ~~Persons;~~of ~~Compliance~~duties ~~with~~within ~~Section~~our ~~16(a)~~internal control system. We have retained an outside professional firm to assist in the separation of duties on an ongoing basis. The use of the ~~Exchange~~outside ~~Act~~firm has proven successful in assisting in the separation of duties.

~~The~~(b) ~~Company~~Management's ~~has~~Report aon ~~sole director and a sole executive officer,~~Internal ~~and~~Control ~~the~~Over ~~ages~~Financial ~~and positions with the Company as of December 31, 2017 are as follows:~~Reporting.

Name	Age	Office	Since
Xiuhua Song	47	Director, CEO and Acting CFO	August 2016

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (GAAP). Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

~~Mrs.~~Management ~~Song~~assessed ~~has been~~ the ~~Managing~~effectiveness ~~Director~~ of the ~~Shandong~~Company’s ~~Yibao~~internal ~~Biologics~~control ~~Co.,~~over ~~Ltd.~~financial ~~from~~reporting ~~May 2011 to present. Additionally, Mrs. Song has served~~ as ~~President~~ of ~~YBCC, Inc an Illinois Corporation from November 2012 to~~ December 31, ~~2017~~2018. In ~~Mrs.~~making ~~Song~~this ~~received~~assessment, anmanagement used ~~Associate~~the ~~Degree~~criteria inset ~~Economics~~forth ~~and~~by ~~Management from~~the ~~HuBei~~Committee ~~University~~ of ~~Economics.~~Sponsoring ~~Additionally,~~Organizations ~~Mrs.~~of ~~Song completed~~ the ~~CEO~~Treadway ~~training~~Commission ~~program~~in atthe ~~TsingHua University and received~~2013 Internal ~~her~~Control-Integrated ~~Executive MBA from Peking University~~Framework. Based ~~Mrs.~~on ~~Song~~its isevaluation, anmanagement ~~active~~has ~~member~~concluded ofthat the ~~American~~Company’s ~~Nutrition~~internal control ~~and~~over ~~Health~~financial ~~Association.~~reporting ~~Mrs. Song~~was ~~plans~~not toeffective ~~dedicate~~as ~~a minimum~~ of 40December ~~hours~~31, ~~per week to the Company~~2018.

~~Compensation~~Pursuant to Regulation S-K Item 308(b), this Annual Report on Form 10-K does not include an attestation report of ~~Directors:~~our company’s registered public accounting firm regarding internal control over financial reporting.

~~Mrs~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, ~~Song~~projections ~~receives~~of ~~salary~~any evaluation of ~~$120,000~~effectiveness to ~~per~~future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree ~~year~~of compliance with the policies or procedures may deteriorate. A control system, no matter how well designed and aoperated ~~guaranteed~~can ~~bonus~~provide only ofreasonable, ~~$20~~but not absolute,~~000~~ ~~per~~assurance ~~year~~that ~~starting~~the ~~from~~control ~~December~~system’s 1objectives will be met. The design of a control system must reflect the fact that there are resource constraints, ~~2016~~and the benefits of controls must be considered relative to their cost.

~~Family~~(c) ~~Relationships~~Changes in Internal Control over Financial Reporting

~~None~~There have been no changes in our internal control over financial reporting in the fiscal year ended December 31, 2018, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Board~~Item of9B. ~~Directors, Board~~Other ~~Meetings and Committees~~Information

Our Board is comprised of one (1) member, Xiuhua Song who is a management member of Confucian. All members of the Board serve until their terms expire or until their successors are duly elected and qualified.None

Mrs. Song has been appointed as the Chairman of the Board of Directors. In this capacity, she is responsible for meeting with our Chief Financial Officer to review our financial and operating results, agendas and minutes of board and committee meetings, and presiding at the meetings of the committees of the Board.35

~~Our~~PART Board held no formal meetings during the most recently completed fiscal year. All proceedings of the Board were conducted by resolutions, consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the State of Nevada and our By-laws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.III

~~Board~~ITEM ~~Committees~~10. Directors, Executive Officers, Promoters and Control Persons; ~~Director~~ ~~Independence~~Compliance with Section 16(a) of the Exchange Act

AsThe ofCompany ~~this date our Board~~ has ~~not appointed~~ a ~~nominating~~sole ~~committee,~~director ~~audit~~and ~~committee or compensation committee, or committees performing similar functions nor do we have~~ a ~~written~~sole ~~nominating,~~executive compensation or audit committee charter. Our Board does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our Board. Furtherofficer, ~~we are not a "listed company" under SEC rules~~ and thus we are not required to have a compensation committee or a nominating committee. We are not currently required to have such committees. Accordingly, we do not have an “audit committee financial expert” as such term is defined in the ~~rules~~ages ~~promulgated~~and ~~under~~positions ~~the~~with ~~Securities Act of 1933 and~~ the ~~Securities~~Company ~~and~~as ~~Exchange Act~~ of ~~1934.~~December ~~The~~31, ~~functions~~2018 ~~ordinarily handled by these committees~~ are ~~currently handled by our entire Board. Our Board intends, however, to review our governance structure and institute board committees~~ as ~~necessary and advisable in the future, to facilitate the management of our business.~~follows:

Name	Age	Office	Since
Xiuhua Song	48	Director, CEO and Acting CFO	August 2016

WeMrs. doSong ~~not~~has ~~believe~~been the Managing Director ~~that~~of ~~our~~Shandong ~~incoming~~Yibao ~~director~~Biologics isCo., ~~considered~~Ltd. ~~“independent”~~from ~~under~~May ~~Rule~~2011 ~~4200(a)(15)~~to ofpresent. ~~the~~Additionally, ~~National~~Mrs. ~~Association~~Song has served as President of ~~Securities~~YBCC, Inc an ~~Dealers~~Illinois ~~listing~~Corporation ~~standards~~from November 2012 to December 31, 2018. WeMrs. ~~are~~Song ~~not~~received ~~currently~~an ~~subject~~Associate toDegree ~~any~~in ~~law,~~Economics ~~rule~~and orManagement from ~~regulation,~~HuBei ~~however~~University of Economics. Additionally, ~~requiring~~Mrs. ~~that~~Song ~~all~~completed orthe ~~any~~CEO ~~portion~~training program at TsingHua University and received her Executive MBA from Peking University. Mrs. Song is an active member of ~~our~~the ~~Board~~American ~~include~~Nutrition ~~"independent"~~and ~~directors~~Health Association. Mrs. Song plans to dedicate a minimum of 40 hours per week to the Company.

WeCompensation ~~do not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. Our Board believes that, given the early stages~~ of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. We do not currently have any specific or minimum criteria for the election of nominees to our Board and we do not have any specific process or procedure for evaluating such nominees. Our Board assesses all candidates, whether submitted by management or shareholders, and makes recommendations for election or appointment.Directors:

A shareholder who wishes to communicate with our Board may do so by directing a written request addressed to our Chief Executive Officer at the address appearing on the face page of this Current ReportMrs. ~~YBAO~~Song ~~does~~receives ~~not~~salary ~~have a policy regarding the attendance~~ of ~~board~~$60,000 ~~members~~per atyear ~~the~~starting ~~annual~~from ~~meeting~~January of1, ~~shareholders~~2018.

~~Compensation Committee~~Family ~~Interlocks and Insider Participation~~Relationships

~~No interlocking relationship exists between our Board and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past~~None.

~~Compliance~~Board ~~with Section 16(a)~~ of ~~the~~Directors, ~~Securities~~Board ~~Exchange~~Meetings ~~Act~~and ~~of 1934~~Committees

~~Section~~Our ~~16(a)~~Board ofis ~~the Securities Exchange~~comprised ~~Act~~ of ~~1934~~one ~~requires~~(1) ~~the Company’s directors and executive officers~~member, ~~and~~Xiuhua ~~persons~~Song who ~~own~~is ~~more than 10% of~~ a ~~registered~~management ~~class of~~member ~~the Company’s equity securities to file with the Securities and Exchange Commission initial reports~~ of ~~ownership~~Confucian. ~~and~~All ~~reports of~~members ~~changes in ownership~~ of ~~Common Stock and other equity securities of~~ the ~~Company.~~Board ~~Officers,~~serve ~~directors~~until ~~and~~their ~~greater~~terms ~~than 10% shareholders~~expire ~~are~~or ~~required~~until bytheir ~~SEC~~successors ~~regulations~~are toduly ~~furnish~~elected ~~the~~and ~~Company with copies of all Section 16(a) forms they file~~qualified.

ToMrs. Song has ~~the~~been ~~Company’s~~appointed ~~knowledge,~~as ~~based solely~~the onChairman ~~its review~~ of the ~~copies~~Board of ~~such~~Directors. ~~reports~~In ~~furnished~~this tocapacity, ~~the~~she ~~Company~~is ~~and~~responsible ~~written~~for ~~representations~~meeting ~~that~~with noour ~~other~~Chief ~~reports were~~Financial ~~required~~Officer ~~during~~to ~~the~~review ~~fiscal~~our ~~year~~financial ~~ended~~and ~~December~~operating 31results, ~~2017,~~agendas ~~all~~and ~~Section~~minutes ~~16(a)~~of ~~filing~~board ~~requirements~~and ~~applicable~~committee ~~to its officers~~meetings, ~~directors~~ and ~~greater~~presiding ~~than~~at ~~10%~~the meetings ~~beneficial~~of ~~owners~~the ~~were~~committees ~~complied~~of ~~with~~the Board.

~~Code~~Our Board held no formal meetings during the most recently completed fiscal year. All proceedings of ~~Ethics~~the ~~for~~Board were conducted by resolutions, consented to in writing by all the ~~Chief~~directors ~~Executive~~and filed with the minutes of the proceedings of the directors. Such resolutions consented ~~Officer~~to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the State of Nevada and our By-laws, as valid and effective as if they had been passed at a meeting of the ~~Principal~~directors ~~Financial~~duly called ~~Officer~~and held.

We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.36

~~ITEM~~Board ~~11.~~Committees; Director ~~Executive Compensation~~Independence

~~The~~As ~~following~~of ~~table~~this ~~sets~~date our ~~forth~~Board ~~certain~~has ~~summary~~not ~~information~~appointed ~~regarding~~a nominating committee, audit committee or compensation committee, or committees performing similar functions nor do we have a written nominating, compensation ~~paid~~or byaudit ~~YBCC~~committee ~~for~~charter. ~~services~~Our ~~rendered~~Board ~~during~~does not believe that it is necessary to have such committees because it believes the ~~fiscal~~functions ~~years~~of ~~ended~~such ~~December~~committees 31can be adequately performed by our Board. Further, we ~~2017~~are not a "listed company" under SEC rules and ~~2016,~~thus ~~respectively,~~we are not required to have a compensation committee or a nominating committee. We are not currently required to have such committees. Accordingly, we do not have an “audit committee financial expert” as such term is defined in the rules promulgated under the Securities Act of 1933 and the Securities and Exchange ~~Company’s~~Act ~~Chief~~of ~~Executive~~1934. ~~Officer~~The functions ordinarily handled by these committees are currently handled by our entire Board. Our Board intends, however, to review our governance structure and ~~Chief~~institute ~~Financial~~board ~~Officer~~committees ~~during~~as ~~such~~necessary ~~period~~and advisable in the future, to facilitate the management of our business.

29We do not believe that our incoming director is considered “independent” under Rule 4200(a)(15) of the National Association of Securities Dealers listing standards. We are not currently subject to any law, rule or regulation, however, requiring that all or any portion of our Board include "independent" directors.

~~Summary~~We ~~Compensation~~do ~~Table~~not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. Our Board believes that, given the early stages of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. We do not currently have any specific or minimum criteria for the election of nominees to our Board and we do not have any specific process or procedure for evaluating such nominees. Our Board assesses all candidates, whether submitted by management or shareholders, and makes recommendations for election or appointment.

A shareholder who wishes to communicate with our Board may do so by directing a written request addressed to our Chief Executive ~~Compensation:~~Officer at the address appearing on the face page of this Current Report. YBAO does not have a policy regarding the attendance of board members at the annual meeting of shareholders.

SUMMARY COMPENSATION TABLE
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Xiuhua Song, CEO and CFO	2017	120,000	20,000	0	0	0	0	0	140,000
	2016	10,000	1,667	0	0	0	0	0	11,667

Compensation Committee Interlocks and Insider Participation

~~Effective~~No ~~December 1, 2016, the Company~~interlocking ~~entered~~relationship ~~into~~exists anbetween ~~Employment~~our ~~Agreement~~Board ~~(the~~and ~~Employment Agreement) with Xiuhua Song,~~ the ~~Company’s~~board ~~CEO.~~of ~~Under~~directors ~~the~~or ~~Employment Agreement,~~compensation ~~Ms.~~committee ~~Song will receive a base salary~~ of ~~$120,000~~any ~~per~~other ~~year and a guaranteed bonus of $20~~company,~~000~~ ~~per~~nor ~~year.~~has ~~The~~any ~~term of the~~interlocking ~~contract~~relationship isexisted ~~from~~in ~~December~~the ~~1, 2016 to December 31, 2019~~past.

~~Outstanding~~Compliance ~~Equity~~with ~~Awards~~Section at16(a) ~~Fiscal~~of ~~Year-end~~the Securities Exchange Act of 1934

~~The~~Section ~~following~~16(a) ~~table~~of ~~sets~~the ~~forth~~Securities ~~certain~~Exchange Act ~~summary~~of ~~information~~1934 ~~regarding outstanding~~requires ~~equity~~the ~~awards~~Company’s asdirectors ofand ~~December~~executive 31officers, ~~2017~~and topersons who own more than 10% of a registered class of the Company'’s ~~Chief~~equity ~~Executive~~securities ~~Officer~~to file with the Securities and ~~Chief~~Exchange ~~Financial~~Commission ~~Officer~~initial reports of ownership and ~~most~~reports ~~highly~~of ~~paid~~changes ~~executive~~in ~~officers~~ownership ~~during~~of ~~such~~Common ~~period~~Stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS

STOCK AWARDS

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Xiuhua Song

To the Company’s knowledge, based solely on its review of the copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended December 31, 2018, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with.

~~Options/SAR~~Code ~~Grants~~of inEthics for the ~~Last~~Chief ~~Fiscal~~Executive ~~Year:~~Officer and the Principal Financial Officer

~~There~~We ~~were~~have nonot ~~exercises~~adopted a code of ~~stock~~ethics ~~options,~~that ~~SARs~~applies orto ~~similar~~our ~~instruments~~principal executive officer, ~~and~~principal nofinancial ~~vesting~~officer, ofprincipal ~~stock~~accounting officer, ~~including~~or ~~restricted~~persons ~~stock~~performing similar functions, ~~restricted~~because ~~stock~~of ~~units~~the ~~and~~small ~~similar~~number ~~instruments, during~~of persons involved in the ~~last~~management ~~completed~~of ~~fiscal~~the ~~year~~Company.

~~Employment Agreements~~37

~~Effective December~~ITEM ~~1, 2016, the Company entered into an Employment Agreement (the Employment Agreement) with Xiuhua Song, the Company’s CEO~~11. ~~Under~~ ~~the~~Executive ~~Employment Agreement, Ms. Song will receive a base salary of $120,000 per year and a guaranteed bonus of $20,000 per year. The term of the contract is from December 1, 2016 to December 31, 2019.~~ Compensation

~~Employee~~The ~~Benefits~~following table sets forth certain summary information regarding compensation paid by YBCC for services rendered during the fiscal years ended December 31, 2018 and 2017, respectively, to the Company’s Chief Executive Officer and Chief Financial Officer during such period.

WeSummary ~~currently~~Compensation ~~have no plans that provide for payments or other benefits.~~Table

~~ITEM~~Executive ~~12. Security Ownership of Certain Beneficial Owners and Management~~Compensation:

The following table sets forth certain information known to the Company with respect to the beneficial ownership of the Company’s common stock as of December 31, 2017, by (i) each person who is known by the Company to own beneficially more than 5% of the Company's common stock and (ii) the Company’s directors and executive officers, and (iii) all officers and directors of the Company as a group.

SUMMARY COMPENSATION TABLE
Name and principal position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Xiuhua Song,	2018		60,000		0		0		0		0		0		0		60,000
CEO and CFO	2017		120,000		20,000		0		0		0		0		0		140,000

30Effective January 1, 2018, the Company entered into an Oral Agreement with Xiuhua Song, the Company’s CEO. Under the Employment Agreement, Ms. Song will receive a base salary of $60,000 per year. The term of the contract is from January 1, 2018 to December 31, 2019.

Shares beneficially owned (1)
	Number of shares		Percentage of class (2)
Xiuhua Song		4,020,000		40.63%
Officers and Directors as a group		4,020,000		40.63%
(1 individual)

Options/SAR Grants in the Last Fiscal Year:

~~(1)~~There Aswere no exercises of ~~December~~stock 31options, SARs ~~2017~~or similar instruments, ~~Mrs.~~and ~~Song was~~no ~~the~~vesting ~~sole~~of ~~director~~stock, ~~President~~including restricted stock, ~~Chief~~restricted ~~Financial~~stock ~~Officer~~units and ~~Secretary~~similar ofinstruments, during the ~~Company~~last completed fiscal year.

~~(2)~~Employment ~~Percentage based on 9,894,214 shares of common stock outstanding as of December 31, 2017.~~Agreements

~~ITEM~~Effective December 131, 2016, the Company entered into an Employment Agreement (the Employment Agreement) with Xiuhua Song, the Company’s CEO. Effective ~~Certain~~January ~~Relationships~~1, ~~and~~2018, ~~Related~~Ms. ~~Transaction~~Song will receive a base salary of $60,000 per year. The term of the contract is from January 1, 2018 to December 31, 2019.

~~Xiuhua~~Employee ~~Song~~Benefits

~~During~~We ~~2017,~~currently Mshave ~~Song,~~no ~~the~~plans ~~Company’s~~that provide ~~Chief~~for ~~Executive~~payments ~~Office~~or ~~and~~other ~~acting Chief Financial Officer, was paid compensation of $140,000~~benefits.

~~Related~~ITEM ~~Party Transactions~~12. Security Ownership of ~~Confucian~~Certain Beneficial Owners and Management

~~Set~~The following table sets forth ~~below~~certain ~~are~~information known to the ~~related~~Company ~~party~~with ~~transactions~~respect ~~since~~to ~~December~~the ~~31,~~beneficial ~~2015,~~ownership ~~among~~of ~~Confucian~~the Company’s ~~shareholders,~~common ~~officers~~stock ~~and/or~~as ~~directors,~~of ~~and~~December 31, ~~Confucian.~~2018, Asby a(i) ~~result~~each ofperson ~~the~~who ~~share~~is ~~exchange~~known ~~transaction,~~by wethe ~~have~~Company ~~contractual~~to ~~arrangements~~own ~~with~~beneficially ~~Confucian~~more ~~which~~than ~~give~~5% usof the ~~ability to~~Company's ~~substantially~~common ~~influence~~stock ~~Confucian~~and (ii) the Company’s ~~daily~~directors ~~operations~~ and ~~financial~~executive ~~affairs~~officers, ~~appoint~~and ~~its~~(iii) ~~senior~~all ~~executives~~officers and ~~approve all~~directors ~~matters~~of ~~requiring~~the ~~shareholder~~Company ~~approval~~as a group.

Name of related party Relationship Wenxiu Song Owner of Confucian Hengchun Zhang Owner of Confucian Qinbao Kong Xiuhua Song's spouse Xiuhua Song CEO and Director Shandong Yibao Biologics Co., Ltd. Affiliated company with common shareholders Shandong Yibao Import and Export Trade Co, Ltd Affiliated company with common shareholders

	Number of shares		Percentage of class (2)
Xiuhua Song		4,020,000		40.63%

Officers and Directors as a group		4,020,000		40.63%
(1 individual)

~~Sales~~(1) toAs ~~Shandong~~of ~~Yibao Biologics Co, Ltd. for the twelve months ended~~ December 31, ~~2017 and 2016 were $755~~2018,~~910~~ ~~and $309,691, respectively~~Mrs. ~~The purchases of raw material from Shandong Yibao~~Song ~~Biologics~~was ~~Co,~~the ~~Ltd.~~sole ~~were $268~~director,~~571~~ ~~and $218~~President,~~262~~ ~~for~~Chief ~~the~~Financial ~~years~~Officer ~~of 2017~~ and ~~2016,~~Secretary ~~respectively. The purchases from Shandong Yibao Biologics are mostly consisted~~ of ~~one raw material, and~~ the ~~sales to Shandong Yibao Biologics are all finished goods.~~Company

~~Sales~~(2) toPercentage ~~Shandong~~based ~~Yibao~~on ~~Import and Export Trade Co~~9,894,214 shares ~~Ltd.~~of ~~for~~common ~~the~~stock ~~twelve~~outstanding ~~months~~as ~~ended~~of December 31, ~~2017 and 2016 were $54,019 and $0, respectively~~2018.

InITEM ~~June 2016, Shandong Yibao Biologics Co~~13., ~~Ltd.~~Certain ~~advanced funds~~Relationships toand ~~the~~Related Company $1,064,073 to pay off the short-term loan. Prior to December 2016, loan from Shandong Yibao Biologics Co., Ltd. amounted to $545,545. In December 2016, Shandong Yibao Biologics assigned the loan to Xiuhua Song.Transaction

31Xiuhua Song

~~The~~During ~~Company~~2018, ~~has~~Ms Song, the ~~following~~Company’s ~~payables~~Chief toExecutive ~~related~~Office ~~parties:~~and acting Chief Financial Officer, was paid compensation of $60,000.

	December 31, 2017		December 31, 2016
To Xiuhua Song	$	2,630,912	$	2,293,434
To Hengchun Zhang		270,000		260,169
To Quingbao Kong		–		5,873
Total due to related parties	$	2,900,912	$	2,559,476

~~ITEM~~Related ~~14.~~Party Transactions ~~Principal~~of ~~Accountant~~Confucian ~~Fees and Services~~

~~The~~Set ~~Company~~forth ~~paid~~below are the ~~following~~related ~~fees~~party intransactions ~~each~~since December 31, 2015, among Confucian’s shareholders, officers and/or directors, and Confucian. As a result of the ~~prior~~share ~~two fiscal~~exchange ~~years~~transaction, we have contractual arrangements with Confucian which give us the ability to ~~its~~substantially ~~former~~influence ~~and~~Confucian’s ~~current~~daily ~~independent~~operations ~~certified~~and ~~public~~financial ~~accountants~~affairs, ~~TAAD~~appoint ~~LLP~~its senior executives and ~~KCCW~~approve all ~~Accountancy~~matters ~~Corp:~~requiring shareholder approval.

	For the Year Ended December 31,
	2017		2016
Audit Fees	$	117,738	$	40,000
Audit-Related Fees		106,400		61,500
All Other Fees		–		–
Total Fees	$	224,138	$	101,500

Name of related party		Relationship
Wenxiu Song		Owner of Confucian
Hengchun Zhang		Owner of Confucian
Qinbao Kong		Xiuhua Song's spouse
Xiuhua Song		CEO and Director
Shandong Yibao Biologics Co., Ltd.		Affiliated company with common shareholders
Shandong Yibao Import and Export Trade Co, Ltd		Affiliated company with common shareholders
Jinxiang Confucian Food Testing Co, Ltd.		Affiliated company with common shareholders

~~"Audit~~Sales ~~Fees"~~to ~~consisted~~Shandong ofYibao ~~fees billed~~Biologics ~~for~~Co, ~~services~~Ltd ~~rendered~~ for the ~~audit~~twelve months ofended ~~the~~December ~~Company’s~~31, ~~annual~~2018 ~~consolidated~~and ~~financial~~2017 ~~statements~~were ~~included~~$1,055,516 inand ~~the~~$755,910, ~~Company’s annual~~respectively. ~~reports~~The onpurchases ~~Form~~of ~~10-K~~raw ~~and~~material ~~audit~~from ~~related~~Shandong Yibao ~~fees~~Biologics ~~are~~Co, Ltd were $0 and $268,571 for ~~reviews~~the years of ~~the~~2018 ~~consolidated~~and ~~financial~~2017, ~~statements~~respectively. ~~included~~The inpurchases ~~the~~from ~~Company’s~~Shandong Yibao Biologics ~~quarterly~~are ~~reports~~mostly onconsisted ~~Form~~of ~~10-Q.~~one ~~Tax~~raw ~~fees~~material, ~~are~~and ~~for~~the ~~tax~~sales ~~preparation~~to ~~and~~Shandong ~~compliance~~Yibao ~~services~~Biologics are all finished goods.

32Sales to Shandong Yibao Import and Export Trade Co, Ltd for the twelve months ended December 31, 2018 and 2017 were $5,983 and $54,019, respectively.

~~ITEM~~The ~~15.~~Company ~~Exhibits,~~has ~~List~~the ~~and~~following accounts ~~Reports~~receivable infrom ~~Form~~related ~~8-K~~parties:

a) Exhibits

	December 31, 2018		December 31, 2017
Accounts receivable from Shandong Yibao Biologics Co. Ltd.	$	67,339	$	–
Total	$	67,339	$	–

2.1	Share Exchange Agreement among IPLO, Yibaoccyb and Xiuhua Song dated July 1, 2016 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
3.1	Articles of Incorporation and bylaws of the Company, as amended. Previously filed as an exhibit to the Company's registration statement on Form S-18, file number 33-17548-NY, as amended on August 7, 1990, and incorporated herein by reference.
3.2	Amendment to the Articles of Incorporation dated November 25, 1997. Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.
3.3	Amendment to the Articles of Incorporation dated February 3, 1998. Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.
3.4	Amendment to the Articles of Incorporation dated January 31, 2002 Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.
3.5	Amendment to the Articles of Incorporation dated July 2, 2007.
3.6	Amendment to the Articles of Incorporation dated December 5, 2016. Previously filed as exhibit 3.1 to the Company’s Form 8-K filed on December 22, 2016.
10.1	Stock Purchase Agreement between IPLO and Xiuhua Song dated May 15, 2016. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
10.2	Stock Purchase Agreement among IPLO, Standard Resources Ltd., and H&H Glass Inc. dated July 1, 2016. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
10.3	Consulting Services Agreement between YibaoHK and Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.6 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.4	Equity Pledge Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.7 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.5	Operating Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.8 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.6	Voting Rights and Proxy Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.9 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.7	Option Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.10 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
32.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Label Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

The Company has the following customer deposit from related parties:

* Filed herewith.


	December 31, 2018		December 31, 2017
Customer deposit from Shandong Yibao Import & Export Trading Co. Ltd.		1,085		–
Total	$	1,085	$	–

3340

~~Signatures~~The Company has the following payables to related parties:

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	December 31, 2018		December 31, 2017
To Xiuhua Song	$	2,392,258	$	2,630,912
To Hengchun Zhang		255,502		270,000
To Qingbao Kong		–		–
To Jinxiang Confucian Food Testing Co, Ltd		58,178		–
Total due to related parties	$	2,705,938	$	2,900,912

	YBCC, Inc.
	By:	/s/ Xiuhua Song
		Xiuhua Song Chief Executive Officer
	Dated	April 13, 2018

ITEM 14.

Principal Accountant Fees and Services

InThe ~~accordance~~Company ~~with~~paid the ~~Exchange Act, this report has been signed below by the~~ following ~~persons~~fees onin ~~behalf~~each of the ~~registrant~~prior ~~and~~two fiscal inyears ~~the~~to ~~capacities~~its ~~and~~independent oncertified ~~the~~public ~~dates~~accountants, ~~indicated.~~KCCW Accountancy Corp:

/s/ Xiuhua Song	April 13, 2018
		For the Year Ended December 31,
Xiuhua Song Chief Executive Officer,
		2018		2017
Principal Financial Officer and Director
Audit Fees		$	40,000	$	41,385
Audit-Related Fees			27,000		33,891
All Other Fees			–		–
Total Fees		$	67,000	$	75,276

34"Audit Fees" consisted of fees billed for services rendered for the audit of the Company’s annual consolidated financial statements included in the Company’s annual reports on Form 10-K and audit related fees are for reviews of the consolidated financial statements included in the Company’s quarterly reports on Form 10-Q. Tax fees are for tax preparation and compliance services.

~~YBCC, Inc~~ITEM 15. Exhibits

~~and Subsidiaries~~a) Exhibits

Consolidated Financial Statements

2.1	Share Exchange Agreement among IPLO, Yibaoccyb and Xiuhua Song dated July 1, 2016 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
3.1	Articles of Incorporation and bylaws of the Company, as amended. Previously filed as an exhibit to the Company's registration statement on Form S-18, file number 33-17548-NY, as amended on August 7, 1990, and incorporated herein by reference.
3.2	Amendment to the Articles of Incorporation dated November 25, 1997. Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.
3.3	Amendment to the Articles of Incorporation dated February 3, 1998. Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.
3.4	Amendment to the Articles of Incorporation dated January 31, 2002 Previously filed as an exhibit to the Company’s Form 10-KSB filed for the period ended December 31, 2002 and incorporated herein by reference.

~~for the Years Ended~~41

December 31, 2017 and 2016

3.5	Amendment to the Articles of Incorporation dated July 2, 2007.
3.6	Amendment to the Articles of Incorporation dated December 5, 2016. Previously filed as exhibit 3.1 to the Company’s Form 8-K filed on December 22, 2016.
10.1	Stock Purchase Agreement between IPLO and Xiuhua Song dated May 15, 2016. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
10.2	Stock Purchase Agreement among IPLO, Standard Resources Ltd., and H&H Glass Inc. dated July 1, 2016. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 11, 2016.)
10.3	Consulting Services Agreement between YibaoHK and Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.6 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.4	Equity Pledge Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.7 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.5	Operating Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.8 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.6	Voting Rights and Proxy Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.9 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.7	Option Agreement between YibaoHK, Shandong Confucian Biologics Co. Ltd. and the owners of Shandong Confucian Biologics Co. Ltd. dated August 31, 2016 (Incorporated by reference to Exhibit 99.10 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 6, 2016.)
10.8	Employment Agreement between International Packaging and Logistics Group, Inc. and Xiuhua Song dated December 1, 2016. (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 8, 2016.)
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
32*	Certification of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Label Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

~~C O N T E N T S~~42

Reports of Independent Registered Public Accountants	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Income	F-4
Consolidated Statements of Changes in Equity	F-5 - F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8 – F-19

Signatures

~~F-1~~In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

	YBCC, Inc.

	By:	/s/ Xiuhua Song
		Xiuhua Song Chief Executive Officer

	Dated	April 15, 2019

ToIn accordance with the ~~Board~~Exchange Act, this report has been signed below by the following persons on behalf of ~~Directors~~the registrant and ~~Stockholders~~in ~~of YBCC,~~the ~~Inc.~~capacities and ~~Subsidiaries~~on the dates indicated.

Opinion on the Financial Statements

/s/ Xiuhua Song	April 15, 2019
Xiuhua Song Chief Executive Officer,
Principal Financial Officer and Director

We have audited the accompanying consolidated balance sheets of YBCC, Inc. and Subsidiaries (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, and comprehensive income, changes in equity, and cash flows for each of the years in the two-year period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.43

~~Going concern~~YBCC, Inc.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 of the consolidated financial statements, the Company has sustained continuing operating losses and ~~working capital deficits. The Company’s~~ viability is dependent upon its ability to obtain future financing and the success of its future operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Subsidiaries

~~Basis~~Consolidated Financial ~~for Opinion~~Statements

~~These consolidated financial statements~~for ~~are~~ the ~~responsibility~~Years of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Ended

~~We conducted our audits in accordance with~~December ~~the~~31, ~~standards~~2018 ~~of the PCAOB. Those standards require that we plan~~ and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.2017

~~Our~~C ~~audits~~O ~~included~~N ~~performing~~T ~~procedures to~~E ~~assess~~N ~~the~~T risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.S

/s/ KCCW Accountancy Corp.

Reports of Independent Registered Public Accountants	F-2

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations and Comprehensive Income	F-4

Consolidated Statements of Changes in Equity	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7 – F-19

~~We have served as the Company’s auditor since 2016.~~F-1

~~Los~~REPORT OF INDEPENDENT REGISTERED PUBLIC ~~Angeles,~~ACCOUNTING ~~California~~FIRM

~~March~~To 30the Board of Directors and Stockholders of YBCC, ~~2018~~Inc. and Subsidiaries

~~F-2~~Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of YBCC, ~~INC~~Inc. and Subsidiaries (the “Company”) as of December 31, ~~AND~~2018 ~~SUBSIDIARIES~~and 2017, and the related consolidated statements of operations, and comprehensive loss, stockholders’ equity (deficiency), and cash flows for each of the years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

~~CONSOLIDATED~~Going ~~BALANCE SHEETS~~concern

	December 31, 2017			December 31, 2016
				(restated)
Assets
Current assets
Cash and cash equivalents	$	369,607		$	339,147
Accounts receivable - net		–			149,765
Other receivable		33,251			102,122
Advance to suppliers		20,007			94,799
Prepaid expenses		50,753			40,858
Inventory, net		127,335			149,844
Total current assets		600,953			876,535
Property, plant, and equipment - net		2,538,580			2,518,243
Intangible assets - net		726,043			695,109
Other assets
Deferred cost		–			14,792
Deposits		6,052			11,635
Total other assets		6,052			26,427
Total assets	$	3,871,628		$	4,116,314
Liabilities and Equity
Current liabilities
Accounts payable	$	160,625		$	69,606
Accrued expenses		124,714			71,395
Customer deposits		31,314			22,401
Customer deposits-related party		–			34,378
Taxes payable		92,122			60,963
Other payable		313,806			399,052
Loan Payable-unrelated party		–			87,858
Other payable-related party		2,900,912			2,559,476
Total current liabilities		3,623,493			3,305,129
Total liabilities		3,623,493			3,305,129
Equity
Convertible preferred shares: $0.0001 par value, 50,000,000 shares authorized, 974,370 series A issued and outstanding as of December 31, 2017 and 2016, respectively		98			98
Common stock: $0.001 par value, 900,000,000 shares authorized, 9,894,214 and 6,894,214 shares issued and outstanding of December 31, 2017 and 2016, respectively		9,894			6,894
Additional paid in capital		1,162,328			865,328
Subscription received in advance		–			300,000
Accumulated foreign currency exchange loss		(36,581	)		(56,689	)
Accumulated deficit		(1,179,676	)		(608,739	)
Total YBCC, Inc stockholders' equity		(43,937	)		506,892
Non-controlling interest		292,072			304,293
Total equity		248,135			811,185
Total liabilities and equity	$	3,871,628		$	4,116,314

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 of the consolidated financial statements, the Company has incurred significant negative cash flows from operative activities, and continuing net losses and working capital deficits. The Company’s viability is dependent upon its ability to obtain future financing and the success of its future operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~The~~Basis ~~accompanying~~for ~~notes are integral to these consolidated financial statements.~~Opinion

~~F-3~~These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~YBCC~~We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, ~~INC~~whether due to error or fraud. The Company is not required to have, nor ~~AND~~were ~~SUBSIDIARIES~~we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

~~CONSOLIDATED~~Our ~~STATEMENTS~~audits OFincluded ~~OPERATIONS~~performing ~~AND~~procedures to ~~COMPREHENSIVE~~assess ~~INCOME~~the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~FOR~~/s/ ~~THE~~KCCW ~~YEARS~~Accountancy ~~ENDED DECEMBER 31, 2017 AND 2016~~Corp.

	For The Year Ended December 31,
	2017			2016
Sales revenue	$	2,103,890		$	1,130,743
Cost of goods sold		1,867,994			988,742
Gross profit		235,896			142,001
Operating expenses
Selling expenses		23,366			15,960
General & administrative expenses		839,874			514,937
Total operating expenses		863,240			530,897
Loss from operations		(627,344	)		(388,896	)
Other income (expenses)
Other income		24,869			18,925
Interest income (expense)		–			(49,805	)
Total other income (expenses)		24,869			(30,880	)
Loss before income taxes		(602,475	)		(419,776	)
Provision for income tax		–			–
Net Loss		(602,475	)		(419,776	)
Less: net loss attributable to non-controlling interest		(31,538	)		(134,729	)
Net loss attributable to the Company	$	(570,937	)	$	(285,047	)
Net Loss		(602,475	)		(419,776	)
Other Comprehensive Income
Foreign currency translation gain/(loss) attributable to the Company		20,108			(26,335	)
Comprehensive loss		(550,829	)		(446,111	)
Less: comprehensive loss attributable to non-controlling interest		9,853			(25,767	)
Net comprehensive loss attributable to the Company	$	(560,682	)	$	(420,344	)
Loss per weighted average share of common stock -basic& diluted	$	(0.06	)	$	(0.09	)
Weighted average share outstanding -basic & diluted		9,877,776			5,199,351

We have served as the Company’s auditor since 2016.

~~The~~Los ~~accompanying~~Angeles, ~~notes are integral to these consolidated financial statements.~~California

~~F-4~~April 15, 2019

~~YBCC, INC., AND SUBSIDIARIES~~F-2

~~CONSOLIDATED~~YBCC, ~~STATEMENTS~~INC. OFAND ~~CASH FLOWS~~SUBSIDIARIES

~~FOR THE YEARS ENDED~~CONSOLIDATED ~~DECEMBER~~BALANCE ~~31, 2017 and 2016~~SHEETS

	For The Year Ended December 31,
	December 31, 2018			December 31, 2017
	2017			2016
Assets
Operating activities
Current assets
Net Loss	$	(602,475	)	$	(419,776	)
Cash and cash equivalents	$	50,397		$	369,607
Adjustment to reconcile net loss to net cash provided (used) by operating activities:
Accounts receivable-related party		67,339			–
Depreciation		230,079			197,483
Inventory		305,161			127,335
Amortization		15,139			15,405
Other receivable		36,015			33,251
Legal professional fees paid by issuance of stock		–			35,000
Advance to suppliers		96,703			20,007
Changes in operating assets and liabilities:
Prepaid expenses		26,047			50,753
Accounts receivable		153,891			(153,166	)
Total current assets		581,662			600,953
Other receivable		72,916			(22,556	)
Property, plant, and equipment - net		2,451,217			2,538,580
Advance to suppliers		78,146			(97,709	)
Intangible assets - net		672,178			726,043
Prepaid expenses		(9,199	)		(39,404	)
Deposits		1,330			6,052
Inventory		31,359			(40,686	)
Total assets	$	3,706,387		$	3,871,628
Deposits		5,920			3,562
Liabilities and Equity
Accounts payable		83,145			58,095
Current liabilities
Accrued expense		51,716			39,001
Accounts payable	$	63,568		$	160,625
Customer deposit		7,135			(37,421	)
Accrued expenses		200,197			124,714
Customer deposit-related party		(35,325	)		35,947
Customer deposits		143,556			31,314
Tax payable		26,063			29,041
Customer deposits-related party		1,085			–
Other payable		(107,875	)		424,873
Taxes payable		124,775			92,122
Cash provided by operating activities		635			27,689
Other payable		141,461			313,806
Cash flow used in investing activities:
Other payable-related party		2,705,938			2,900,912
Deferred cost		15,199			156,303
Loan payable		162,423			–
Purchase of property and equipment		(87,199	)		(484,504	)
Total current liabilities		3,543,003			3,623,493
Cash used in investing activities		(72,000	)		(328,201	)
Total liabilities		3,543,003			3,623,493
Cash flow provided (used) by financing activities:
Equity
Subscription received in advance		–			300,000
Convertible preferred shares: $0.0001 par value, 50,000,000 shares authorized, 974,730 series A issued and outstanding as of December 31, 2018 and December 31, 2017, respectively		98			98
Advance from related party		179,903			1,373,990
Common stock: $0.001 par value, 900,000,000 shares authorized, 9,894,214 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively		9,894			9,894
Loan payable -unrelated party		(90,278	)		–
Additional paid in capital		1,162,328			1,162,328
Repayment of Loan		–			(1,054,217	)
Accumulated foreign currency exchange loss		(57,332	)		(36,581	)
Cash provided by financing activities		89,625			619,773
Accumulated deficit		(1,331,207	)		(1,179,676	)
Effects of currency translation on cash		12,200			(1,861	)
Total YBCC, Inc. stockholders' equity		(216,219	)		(43,937	)
Net increase in cash		30,460			317,400
Non-controlling interest		379,603			292,072
Cash at beginning of year		339,147			21,747
Total equity		163,384			248,135
Cash at end of year	$	369,607		$	339,147
Total liabilities and equity	$	3,706,387		$	3,871,628
Supplementary Disclosures of Cash Flow
Cash paid during the year for
Income taxes	$	–		$	–
Interest	$	–		$	45,248
Non-cash investing and financing activities:
Issuance of common stock for subscription received previously	$	300,000		$	–

The accompanying notes are integral to these consolidated financial statements.

F-53

YBCC, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS ~~STATEMENT~~ OF ~~CHANGE~~OPERATIONS INAND ~~EQUITY~~COMPREHENSIVE LOSS

FOR THE ~~YEARS~~YEAR ENDED DECEMBER 31, ~~2017~~ 2018 AND ~~2016~~2017

	Preferred Stock Series A						Preferred Stock Series B				Common Stock
	For The Year Ended December 31,
	Shares			Amount			Shares		Amount		Shares		Amount
	2018			2017
Balance as of December 31, 2015		974,730		$	98			–	$	–		4,504,214	$	4,504
Revenue	$	2,248,254		$	2,103,890
Effect of restructuring entities under common control		–			–			–		–		2,040,000		2,040
Cost of goods sold		1,704,803			1,867,994
Issuance of stock to Legal Counsel for services		–			–			–		–		350,000		350
Gross profit		543,451			235,896
Subscriptions received in advance		–			–			–		–		–		–
Operating expenses
Foreign currency translation loss		–			–			–		–		–		–
Selling expenses		18,590			23,366
Net Loss		–			–			–		–		–		–
General & administrative expenses		590,327			839,874
Balance as of December 31, 2016		974,730		$	98			–	$	–		6,894,214	$	6,894
Total operating expenses		608,917			863,240
Issuance of stock for seven individuals		–			–			–		–		3,000,000		3,000
Income (loss) from operation		(65,466	)		(627,344	)
Foreign currency translation gain		–			–			–		–		–		–
Other income (expense)
Net Loss		–			–			–		–		–		–
Other income (expense)		21,193			24,869
Balance as of December 31, 2017		974,730		$	98			–	$	–		9,894,214	$	9,894
Interest income		211			–
Total other income		21,404			24,869
Income (loss) before income taxes		(44,062	)		(602,475	)
Provision for income tax		–			–
Net income (loss)		(44,062	)		(602,475	)
Less: net income (loss) attributable to non-controlling interest		107,469			(31,538	)
Net income (loss) attributable to YBCC, Inc. stockholders	$	(151,531	)	$	(570,937	)
Net income (loss)		(44,062	)		(602,475	)
Other Comprehensive Income
Foreign currency translation gain (loss)		(40,689	)		20,108
Comprehensive income (loss)		(192,220	)		(550,829	)
Less: comprehensive income (loss) attributable to non-controlling interest		(19,938	)		9,853
Comprehensive income (loss) attributable to YBCC, Inc. stockholders	$	(172,282	)	$	(560,682	)
Net income (loss) per share - basic & diluted	$	(0.02	)	$	(0.06	)
Weighted average shares outstanding - basic & diluted		9,894,214			9,877,776

The accompanying notes are integral to these consolidated financial statements.

F-64

YBCC, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGE IN EQUITY ~~(CONTINUED)~~

FOR THE YEARS ENDED DECEMBER 31, ~~2017~~2018 AND ~~2016~~ 2017

	Additional Paid-In			Subscription Received in			Accumulated Other Comprehensive			Accumulated Earnings			Non-Controlling
	Preferred Stock Series A						Common stock						Additional Paid-In			Subscription received in			Accumulated Other Comprehensive Income			Accumulated Earnings			Non- Controlling
	Capital			Advance			Income (Loss)			(Deficit)			Interest			Total
	Shares			Amount			Shares			Amount			Capital			advance			(Loss)			(Deficit)			Interest			Total
Balance as of December 31, 2015	$	832,718		$	–		$	(30,353	)	$	(323,691	)	$	464,323		$	947,599
Balance as of December 31, 2016		974,730		$	98			6,894,214		$	6,894		$	865,328		$	300,000		$	(56,689	)	$	(608,739	)	$	304,293		$	811,185
Effect of restructuring entities under common control		(2,040	)					–			–			–			–
Issuance of stock for seven individuals								3,000,000			3,000			297,000			(300,000	)											–
Issuance of stock to Legal Counsel for services		34,650			–			–			–			–			35,000
Foreign currency translation gain																				20,108						19,317			39,425
Subscriptions received in advance		–			300,000			–			–			–			300,000
Net income (loss)																							(570,937	)		(31,538	)		(602,476	)
Foreign currency translation loss		–			–			(26,336	)		–			(25,302	)		(51,638	)
Balance as of December 31, 2017		974,730			98			9,894,214			9,894			1,162,328			–			(36,581	)		(1,179,676	)		292,072			248,135
																	–
Foreign currency translation loss																				(20,751	)					(19,938	)		(40,689	)
Net Loss		–			–			–			(285,048	)		(134,728	)		(419,776	)
Net income (loss)																							(151,531	)		107,469			(44,062	)
																	–
Balance as of December 31, 2018		974,730		$	98			9,894,214		$	9,894		$	1,162,328		$	–		$	(57,332	)	$	(1,331,207	)	$	379,603		$	163,384
Balance as of December 31, 2016	$	865,328		$	300,000		$	(56,689	)	$	(608,739	)	$	304,293		$	811,185
Issuance of stock for seven individuals		297,000			(300,000	)		–			–			–			–
Foreign currency translation gain		–			–			20,108			–			19,317			39,425
Net Loss		–			–			–			(570,937	)		(31,538	)		(602,476	)
Balance as of December 31, 2017	$	1,162,328		$	–		$	(36,581	)	$	(1,179,676	)	$	292,072		$	248,135

~~F-7~~The accompanying notes are integral to these consolidated financial statements.

~~YBCC, INC., AND SUBSIDIARIES~~F-5

~~NOTES~~YBCC, ~~FOR~~INC., ~~THE~~AND ~~CONSOLIDATED FINANCIAL STATEMENTS~~SUBSIDIARIES

~~FOR~~CONSOLIDATED ~~THE~~STATEMENTS ~~YEARS ENDED DECEMBER 31, 2017 AND~~OF ~~2016~~CASH FLOWS

~~NOTE~~FOR 1THE -YEAR ~~ORGANIZATIONS~~ENDED ~~AND~~DECEMBER ~~SUMMARY~~31, 2018 OFAND ~~SIGNIFICANT ACCOUNTING POLICIES~~2017

Organization and Operations – YBCC, Inc., (The “Company” or “YBAO”), formerly known as International Packaging and Logistic Group, Inc., a Nevada corporation, was originally incorporated on June 2, 1986, in the state of Delaware. On April 17, 2008, the Company redomiciled form the State of Delaware to the State of Nevada.

	For The Year Ended December 31,
	2018			2017
Cash flows from operating activities
Net loss	$	(44,062	)	$	(602,475	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		227,316			230,079
Amortization		15,477			15,139

Changes in operating assets and liabilities:
Accounts receivable		–			153,891
Accounts receivable - related party		(70,054	)		–
Other receivable		(7,738	)		72,916
Advance to suppliers		(80,907	)		78,146
Prepaid expenses		24,337			(9,199	)
Inventory		(192,111	)		31,359
Deposits		4,625			5,920
Accounts payable		(91,998	)		83,145
Accrued expense		76,631			51,716
Customer deposit		118,517			7,135
Customer deposit - related party		1,129			(35,325	)
Tax payable		39,116			26,063
Other payable		(161,764	)		(107,875	)
Cash (used in) provided by operating activities		(141,486	)		635

Cash flows from investing activities:
Deferred cost		–			15,199
Purchase of property and equipment		(134,127	)		(87,199	)
Construction in progress		(143,911	)		–
Cash used in investing activities		(278,038	)		(72,000	)

Cash flows from financing activities:
Advance from (repayment to) related party		(62,198	)		179,903
Proceeds from (repayment of) short term borrowing		168,973			(90,278	)
Net cash provided by financing activities		106,775			89,625

Effects of currency translation on cash and cash equivalents		(6,461	)		12,200

Net increase (decrease) in cash and cash equivalents		(319,210	)		30,460
Cash and cash equivalents at beginning of period		369,607			339,147
Cash and cash equivalents at end of period	$	50,397		$	369,607

Supplementary Disclosures of Cash Flow
Cash paid during the year for
Income taxes	$	–		$	–
Interest	$	–		$	–

Non-cash investing and financing activities:
Issuance of common stock for subscription received previously	$	–		$	300,000

OnThe ~~May~~accompanying ~~15,~~notes ~~2016,~~are ~~the~~integral ~~Company, and Xiuhua Song (the “Purchaser”) entered into a Stock Purchase Agreement (the “Purchase Agreement”), pursuant~~ to ~~which~~ ~~IPLO (the “Seller”) would sell to the Purchaser, and the Purchaser will purchase from the Seller, an aggregate~~these ofconsolidated ~~3,915,000~~financial ~~newly issued shares of IPLO Common Stock (the “Shares”), which Shares represented 87% of the issued and outstanding shares of Common Stock~~statements. ~~On July 1, 2016, this transaction was completed.~~

On July 1, 2016, Standard Resources Ltd. (“Standard”) previously IPLO’s Majority Stockholder, and IPLO entered into a share purchase agreement (“H&H Vend Out”) whereby Standard would cancel 3,915,000 shares of IPLO common stock held by it in exchange for all of the outstanding shares of H&H Glass. The H&H Glass Vend Out was completed on August 31, 2016.F-6

~~On July 1~~YBCC, 2016, the Company executed a Share Exchange Agreement (“Exchange Agreement”) by and among Yibaoccyb Limited, a British Virgin Islands limited liability company (“Yibaoccyb”), and the stockholders of 51% of Yibaoccyb’s common stock (the “Yibaoccyb Shareholders”), on the one hand, and the Company, on the other handINC. ~~Yibaoccyb owns 100% of YibaoConfucian Co.~~, ~~Ltd. (“YibaoHK”),~~AND a Hong Kong company. YibaoHK will own 100% of Shenzhen Confucian Biologics Co. Ltd. (yet to be formed, “Yibao”), which will be a wholly foreign-owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”). On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Shandong Confucian Biologics Co., Ltd. (“Confucian”) which is a limited liability company headquartered in, and organized under the laws of, the PRC. The contractual arrangements are discussed below.SUBSIDIARIES

~~The Exchange Agreement was completed on~~NOTES ~~August~~FOR ~~31,~~THE ~~2016~~CONSOLIDATED ~~concurrent~~FINANCIAL with the H&H Vend Out. The Company issued 2,040,000 shares of the Registrant’s common stock (the “IPLO Shares”) to the Yibaoccyb Shareholders in exchange for 51% of the common stock of Yibaoccyb (the “Exchange Agreement”).STATEMENTS

OnFOR ~~December~~THE ~~22,~~YEARS ~~2016,~~ENDED ~~the~~DECEMBER ~~Company amended its Certificate of Incorporation (the “Amendment”). As a result of the Amendment~~31, ~~the Company’s corporate name~~2018 ~~was~~AND ~~changed from International Packaging and Logistics Group, Inc. to YBCC, Inc.~~2017

~~Yibaoccyb~~NOTE ~~Limited~~1 is- aORGANIZATIONS ~~limited~~AND ~~liability~~SUMMARY ~~company~~OF ~~incorporated~~SIGNIFICANT ~~under~~ACCOUNTING ~~the laws of the British Virgin Islands on May 30, 2016. Other than all the issued and outstanding shares of Yibao Confucian Co. Ltd., Yibaoccyb has no other assets or operations.~~POLICIES

~~YibaoHK~~Organization isand aOperations – ~~limited~~YBCC, ~~liability~~Inc., ~~company incorporated~~(The ~~under~~“Company” ~~the~~or ~~laws~~“YBAO”), offormerly ~~the~~known ~~Hong~~as ~~Kong~~International onPackaging ~~June~~and ~~15,~~Logistic ~~2016~~Group, Inc., ~~which~~a Nevada corporation, was ~~formed~~originally byincorporated ~~Yibaoccyb~~on June 2, a1986, ~~British~~in ~~Virgin~~the ~~Island~~state of Delaware. ~~YibaoHK~~On April 17, 2008, the Company ~~entered~~redomiciled aform ~~series~~the State of ~~contractual~~Delaware ~~arrangements~~to ~~with~~ the ~~Confucian~~State ~~Co.,~~of ~~Ltd~~Nevada.

~~Confucian~~On ~~was~~May ~~founded~~15, on2016, ~~October~~the 31Company, ~~2012.~~and Xiuhua ~~Confucian~~Song is(the in“Purchaser”) ~~Food~~entered ~~Industrial~~into ~~Park~~a ~~inside~~Stock Purchase Agreement (the ~~economic~~“Purchase ~~development~~Agreement”), ~~Zone~~pursuant ofto which ~~JinXiang~~IPLO ~~County~~(the “Seller”) would sell to the Purchaser, ~~Jining~~and ~~City~~the inPurchaser will purchase from the ~~province~~Seller, an aggregate of ~~Shandong~~3,915,000 newly issued shares of IPLO Common Stock (the “Shares”), which Shares represented 87% of the issued and inoutstanding ~~China~~shares of Common Stock. On July 1, 2016, this transaction was completed.

~~Confucian~~On ~~possesses~~July ~~manufacturing permits for food product~~1, ~~hygienic products~~2016, ~~sanitary~~Standard ~~products,~~Resources ~~and health products~~Ltd. (“Standard”) ~~The~~previously ~~Company'~~IPLO’s ~~main~~Majority ~~business~~Stockholder, ~~includes~~and ~~research~~IPLO ~~and development~~entered ofinto ~~chondroitin~~a ~~and~~share ~~garlic~~purchase ~~oil;~~agreement ~~trading,~~(“H&H Vend ~~cold~~Out”) ~~storage,~~whereby ~~and~~Standard ~~pretreating~~would ofcancel ~~garlic~~3, ~~fruit~~915,000 ~~and~~shares ~~vegetables~~of ~~products;~~IPLO ~~trading of~~common ~~chemical~~stock ~~products~~held ~~(excluding~~by ~~hazardous~~it ~~chemicals);~~in ~~import~~exchange ~~and~~for ~~export~~all of ~~goods~~the ~~and technology (excluding those restricted by~~outstanding ~~China~~shares ~~government);~~of ~~and,~~H&H ~~the~~Glass. ~~manufacturing~~The ~~and~~H&H ~~sale~~Glass ofVend ~~health~~Out ~~products~~was ~~including~~completed ~~powder,~~on ~~granules,~~August ~~tablets~~31, ~~hard capsule, soft capsule products~~2016.

FOn July 1, 2016, the Company executed a Share Exchange Agreement (“Exchange Agreement”) by and among Yibaoccyb Limited, a British Virgin Islands limited liability company (“Yibaoccyb”), and the stockholders of 51% of Yibaoccyb’s common stock (the “Yibaoccyb Shareholders”), on the one hand, and the Company, on the other hand. Yibaoccyb owns 100% of YibaoConfucian Co., Ltd. (“YibaoHK”), a Hong Kong company. YibaoHK will own 100% of Shenzhen Confucian Biologics Co. Ltd. (yet to be formed, “Yibao”), which will be a wholly foreign-8owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”). On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Shandong Confucian Biologics Co., Ltd. (“Confucian”) which is a limited liability company headquartered in, and organized under the laws of, the PRC. The contractual arrangements are discussed below.

~~Details~~The ofExchange Agreement was completed on August 31, 2016 concurrent with the H&H Vend Out. The Company issued 2,040,000 shares of the Registrant’s ~~structure~~common stock as(the “IPLO Shares”) to the Yibaoccyb Shareholders in exchange for 51% of ~~December~~the ~~31,~~common ~~2017,~~stock isof asYibaoccyb ~~follow:~~(the “Exchange Agreement”).

~~Reverse Merger~~On ~~Accounting~~December –22, ~~Since YBCC and Yibaoccyb were entities under Mrs. Song’s common control prior to the share exchange~~2016, the ~~transaction~~Company ~~was accounted for as a restructuring transaction in accordance with generally accepted accounting~~amended ~~principles~~its inCertificate ~~the~~of ~~United~~Incorporation ~~States~~ (~~"GAAP"~~the “Amendment”). ~~YBCC~~As ~~has~~a ~~recast~~result ~~prior~~of ~~period~~the ~~consolidated~~Amendment, ~~financial statements to reflect~~ the ~~conveyance~~ ~~of Yibaoccyb~~Company’s ~~common~~corporate ~~shares~~name was aschanged iffrom ~~the~~International ~~restructuring~~Packaging ~~transaction~~and ~~had~~Logistics ~~occurred~~Group, asInc. ofto ~~the~~YBCC, ~~earliest date of the consolidated financial statements~~Inc.

~~Basis~~Yibaoccyb ofLimited ~~Accounting~~is ~~and~~a ~~Presentation~~limited liability -company ~~The~~incorporated ~~accompanying~~under ~~consolidated~~the ~~financial~~laws ~~statements~~of ~~have~~the ~~been~~British ~~prepared~~Virgin inIslands ~~accordance~~on ~~with~~May ~~accounting~~30, ~~principles~~2016. ~~generally~~Other ~~accepted in~~than all the ~~United~~issued ~~States~~and outstanding shares of ~~America~~Yibao Confucian Co. Ltd., Yibaoccyb has no other assets or operations.

~~Principles~~YibaoHK ofis ~~Consolidation -~~a ~~The~~limited ~~accompanying~~liability ~~consolidated~~company incorporated ~~financial~~under ~~statements~~the ~~are~~laws ~~prepared~~of ~~in accordance with generally accepted accounting principles in~~ the ~~United~~Hong ~~States~~Kong ofon ~~America.~~June ~~Confucian’s~~15, ~~functional~~2016, ~~currency~~which iswas ~~Chinese~~formed ~~Yuan~~by ~~(CNY)~~Yibaoccyb, ~~however,~~a ~~the~~British ~~accompanying~~Virgin ~~consolidated~~Island. YibaoHK ~~financial~~entered ~~statements~~a ~~have~~series ~~been~~of ~~re-measured~~contractual ~~and~~arrangements ~~presented~~with inthe ~~United~~Confucian ~~States~~Co., ~~Dollars ($)~~Ltd.

~~The~~Confucian ~~consolidated~~was ~~financial~~founded ~~statements~~on ~~include the~~October ~~accounts~~31, of2012. Confucian ~~YBCC~~is ~~and~~in ~~its~~Food ~~subsidiaries~~Industrial ~~(collectively~~Park inside the ~~“Company”).~~economic ~~The~~development ~~Company’s~~Zone ~~subsidiaries include 51%~~ of ~~Yibaoccyb,~~JinXiang ~~YibaoHK and Confucian~~County, ofJining ~~which~~City ~~49% of Yibaoccyb’s consolidated operating results was shown~~ in ~~non-controlling interest on~~ the ~~consolidated~~province ~~balance~~of ~~sheets~~Shandong in China.

~~Intercompany accounts and transactions have been eliminated upon consolidation.~~F-7

~~Use~~Confucian ofpossesses ~~Estimates~~manufacturing -permits ~~The~~for ~~preparation~~food ofproduct, ~~unaudited~~hygienic ~~condensed~~products, ~~financial~~sanitary ~~statements~~products, ~~in conformity with accounting principles generally accepted in the United States of America requires management to make estimate~~ and ~~assumptions~~health ~~that~~products. ~~affect~~The ~~certain~~Company's ~~reported~~main ~~amounts~~business ofincludes ~~assets~~research and ~~liabilities~~development ~~and disclosure~~ of ~~contingent~~chondroitin ~~assets~~ and ~~liabilities~~garlic atoil; ~~the~~trading, ~~date~~cold ofstorage, ~~the financial statements~~ and ~~the~~pretreating ~~reported amounts~~ of ~~revenues~~garlic, and expenses during the reporting periods. Actual results could differ from those estimates. The most significant estimates reflected in the consolidated financial statements include allowance for doubtful accountsfruit, ~~allowance~~and ~~for~~vegetables ~~inventory,~~products; ~~depreciation,~~trading ~~useful lives~~ of ~~property~~chemical ~~and~~products ~~equipment,~~(excluding ~~deferred~~hazardous ~~income~~chemicals); ~~taxes,~~import ~~useful~~and ~~life~~export of ~~intangible~~goods ~~assets,~~ and ~~contingencies.~~technology ~~Estimates~~(excluding ~~and assumptions~~those ~~are~~restricted ~~periodically~~by China ~~reviewed~~government); and, the ~~effects~~manufacturing ofand ~~revisions~~sale ~~are~~of ~~reflected~~health inproducts ~~the~~including ~~consolidated~~powder, ~~financial~~granules, ~~statements~~tablets, inhard ~~the period~~capsule, ~~they~~soft ~~are determined to be necessary~~capsule products.

~~F-9~~Details of the Company’s structure as of December 31, 2018, is as follow:

~~Cash~~Reverse Merger Accounting - Since YBCC and ~~Cash~~Yibaoccyb ~~Equivalents –~~were ~~For~~entities ~~purpose~~under ofMrs. ~~the~~Song’s ~~statements~~common ofcontrol ~~cash~~prior ~~flows~~to the share exchange, the ~~Company~~transaction ~~considers~~was ~~all~~accounted ~~highly~~for ~~liquid~~as ~~debt~~a ~~instruments~~restructuring ~~purchased~~transaction in accordance with agenerally accepted accounting ~~maturity~~principles ofin 90the ~~days~~United orStates ~~less~~("GAAP"). YBCC has recast prior period consolidated financial statements to bereflect ~~cash~~the conveyance ~~equivalents~~of Yibaoccyb’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements.

~~Accounts~~Basis ~~Receivable - The Company extends credit to its customers. Accounts receivable was recorded at the contract amount after deduction~~ of ~~trade discounts~~Accounting and, ~~allowances,~~Presentation - ifThe ~~any,~~accompanying ~~and~~consolidated dofinancial ~~not~~statements ~~bear~~have ~~interest.~~been ~~The~~prepared ~~allowance~~in ~~for~~accordance ~~doubtful~~with ~~accounts,~~accounting ~~when~~principles ~~necessary,~~generally isaccepted in the ~~Company’s best~~United ~~estimate~~States of ~~the amount of probable credit losses from accounts receivable~~America. ~~The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.~~

AsPrinciples of ~~December~~Consolidation - ~~31,~~The ~~2017~~accompanying ~~and~~consolidated ~~2016,~~financial ~~accounts receivable~~statements ~~was~~are $0prepared ~~and~~in ~~$149,765,~~accordance ~~respectively.~~with ~~The~~generally ~~Company~~accepted ~~believes~~accounting ~~that~~principles ~~its~~in the ~~accounts~~United ~~receivables~~States ~~are~~of ~~fully~~America. ~~collectable~~Confucian’s ~~and~~functional ~~determined~~currency is Chinese Yuan (CNY), however, the accompanying consolidated ~~that~~financial anstatements ~~allowance~~have ~~for~~been ~~doubtful~~re-measured ~~accounts~~and ~~was~~presented ~~not~~in ~~necessary~~United States Dollars ($).

~~Account~~The ~~balances~~consolidated ~~are~~financial ~~charged~~statements ~~off against~~include the ~~allowance~~accounts ~~after~~of ~~all~~YBCC ~~means~~and ofits ~~collection~~subsidiaries ~~have~~(collectively ~~been~~the ~~exhausted~~“Company”). The Company’s subsidiaries include 51% of Yibaoccyb, YibaoHK and ~~the~~Confucian, ~~potential~~of ~~for~~which ~~recovery~~49% isof ~~considered~~Yibaoccyb’s ~~remote.~~consolidated ~~The~~operating ~~Company does~~results ~~not~~was ~~have~~shown ~~any~~in ~~off~~non-~~balance-sheet~~controlling interest ~~credit~~on ~~exposure~~the ~~related~~consolidated tobalance ~~its customers~~sheets.

~~Inventories -~~Intercompany ~~Inventory,~~accounts ~~comprised principally of finished goods, raw material~~ and ~~packaging material, are valued at the lower~~transactions ofhave ~~cost~~been oreliminated ~~net~~upon ~~realizable value~~consolidation. ~~Cost is determined using first-in, first-out method.~~

	December 31, 2017		December 31, 2016
Finished goods	$	7,106	$	7,098
Work in progress		47,292		106,934
Raw materials		46,902		20,457
Packaging material		26,035		15,088
Supplies		–		267
Total	$	127,335	$	149,844

F-8

Use of Estimates - The ~~Company~~preparation ~~periodically~~of ~~estimates~~financial anstatements ~~inventory~~in conformity with accounting principles generally accepted in the ~~allowance~~United ~~for~~States ~~estimated~~of ~~unmarketable~~America ~~inventories.~~requires ~~Inventory~~management ~~amounts~~to ~~are~~make estimate and assumptions that affect certain reported ~~net~~amounts of ~~such~~assets ~~allowances,~~and liabilities ifand ~~any~~disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. ~~There~~Actual ~~were~~results nocould differ from those estimates. The most significant estimates ~~allowances~~reflected in the consolidated financial statements include allowance for doubtful accounts, allowance for inventory, asdepreciation, useful lives of ~~December~~property 31and equipment, ~~2017~~deferred income taxes, useful life of intangible assets, and ~~2016~~contingencies. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

~~Property,~~Cash ~~Plant~~ and ~~Equipment~~ –Cash ~~Property,~~Equivalents ~~plant,~~- ~~and~~For ~~equipment~~purpose ~~are stated at cost less accumulated depreciation. The costs~~ of ~~a constructed asset are accumulated in~~ the ~~account~~statements ~~Construction-in-Progress~~of ~~until~~cash ~~the~~flows, ~~asset is placed into service. When~~ the ~~asset~~Company isconsiders ~~completed~~all ~~and~~highly ~~placed~~liquid ~~into service,~~debt ~~the~~instruments ~~account~~purchased ~~Construction-in-Progress~~with ~~will~~a bematurity ~~credited for the accumulated costs~~ of ~~the~~90 ~~asset~~days ~~and~~or ~~will~~less ~~be debited~~ to ~~the~~be ~~appropriate Property,~~cash ~~Plant and Equipment account~~equivalents. ~~Depreciation begins after the asset has been placed into service.~~

~~Expenditures~~Accounts ~~for~~Receivable - ~~maintenance~~The ~~and~~Company ~~repairs are~~extends ~~charged~~credit to ~~operations;~~its ~~major~~customers. ~~expenditures~~Accounts ~~for~~receivable ~~renewals~~was ~~and~~recorded ~~betterments~~at ~~are~~the ~~capitalized.~~contract ~~Assets~~amount ~~that~~after ~~are~~deduction ~~still~~of ~~kept in service~~trade ~~after~~discounts ~~reaching~~and, ~~the~~allowances, ~~end~~if ofany, ~~their~~and ~~estimated~~do ~~useful~~not ~~lives~~bear ~~are~~interest. ~~depreciated~~The ~~over~~allowance ~~the~~for ~~estimated~~doubtful ~~useful~~accounts, ~~life~~when ofnecessary, ~~their~~is ~~residual~~the ~~value.~~Company’s ~~Gain~~best orestimate ~~loss~~of onthe ~~disposal~~amount of ~~property,~~probable ~~plant,~~credit ~~and~~losses ~~equipment~~from isaccounts ~~recognized~~receivable. asThe ~~non~~Company determines the allowance based on historical write-~~operating~~off ~~income~~experience, orcustomer ~~expenses~~specific facts and economic conditions.

~~Depreciation~~As isof ~~computed~~December by31, ~~applying~~2018 ~~the~~and 2017, accounts ~~following~~receivable ~~methods~~was $67,339 and ~~estimated~~$0, ~~lives:~~respectively. The Company believes that its accounts receivables are fully collectable and determined that an allowance for doubtful accounts was not necessary.

Category	Estimated Life		Method
Manufacturing equipment		10	Straight Line
Office equipment		5	Straight Line
Buildings		20	Straight Line

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

~~Intangible Assets~~Inventories - ~~Land~~Inventory, ~~use~~comprised ~~rights~~principally ~~represent~~of ~~the~~finished ~~exclusive~~goods, ~~right~~work ~~to occupy and use a piece of land~~ in ~~the~~progress, ~~PRC~~raw ~~during~~material ~~the~~and ~~contractual~~packaging ~~term~~material, ~~of the land use right. Land use rights~~ are ~~carried~~valued at ~~cost and charged to expense on a straight-line basis over the respective periods~~ of the ~~rights~~lower of 50cost ~~years~~ or ~~the~~net ~~remaining~~realizable ~~period~~value. ofCost ~~the~~is ~~rights~~determined ~~upon~~using ~~acquisition~~first-in, first-out method.

F-10

	December 31, 2018		December 31, 2017
Finished goods	$	135,996	$	7,106
Work in progress		45,012		47,292
Raw materials		87,193		46,902
Packaging material		36,960		26,035
Total	$	305,161	$	127,335

~~Non-Controlling Interest –~~ The Company ~~accounted~~periodically ~~for~~estimates ~~its~~an ~~non-controlling~~inventory allowance ~~interest~~for ofestimated ~~49%~~unmarketable ininventories. ~~Yibaoccyb~~Inventory asamounts aare ~~separate~~reported ~~component~~net of ~~equity.~~such ~~In addition~~allowances, ~~net~~ ~~loss,~~if ~~and~~any. ~~components~~There ofwere ~~other~~no allowances ~~comprehensive~~for ~~income~~inventory ~~are~~as ~~attributed~~of toDecember ~~both~~31, ~~the~~2018 ~~Company~~ and ~~non-controlling interest~~2017.

~~Revenue~~Property, Plant and ~~Recognition~~Equipment - ~~The~~Property, ~~Company~~plant, ~~recognizes~~and ~~product~~equipment ~~revenue~~are instated ~~accordance~~at ~~with~~cost ~~ASC~~less ~~605~~accumulated depreciation. ~~ASC~~The ~~605~~costs ~~requires~~of ~~that four basic criteria~~a ~~must~~constructed beasset ~~met~~are ~~before~~accumulated ~~revenue~~in ~~can~~the beaccount ~~recognized:~~Construction-in-Progress ~~(i)~~until ~~persuasive~~the ~~evidence~~asset ofis anplaced ~~arrangement~~into ~~exists,~~service. ~~(ii)~~When ~~delivery has occurred, (iii)~~ the asset ~~price paid by the customer~~ is ~~fixed~~completed ~~or determinable~~ and ~~(iv)~~placed ~~collection~~into ofservice, the ~~resulting~~ account ~~receivable~~Construction-in-Progress iswill ~~reasonably~~be ~~assured. The~~credited ~~Company recognizes revenue~~ for ~~product~~the ~~sales~~accumulated ~~upon transfer~~ costs of ~~title to~~ the ~~customer.~~asset ~~Customer purchase orders~~ and~~/or~~ ~~contracts are~~will ~~generally~~be ~~used~~debited to ~~determine~~ the ~~existence~~appropriate ofProperty, anPlant ~~arrangement. Shipping documents~~ and ~~terms~~Equipment ~~and the completion of any customer acceptance requirements, when applicable, are used to verify product delivery~~account. ~~The~~Depreciation ~~Company~~begins ~~assesses~~after ~~whether a price is fixed or determinable based upon~~ the ~~payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.~~ ~~The~~asset ~~Company~~ has nobeen ~~product~~placed ~~returns~~into ~~or sales discounts and allowances because goods delivered and accepted by customers are normally not returnable~~service.

~~Cost of goods sold~~F- ~~Cost of goods sold includes cost of inventory sold during the period, net of discounts and inventory allowances, freight and shipping costs, warranty and rework costs, and sales tax.~~9

~~Impairment of~~Expenditures ~~Long-Lived~~for ~~Assets~~maintenance ~~– The Company applies FASB ASC 360, “Property, Plant~~ and ~~Equipment,” which addresses~~repairs ~~the~~are ~~financial~~charged ~~accounting~~to ~~and~~operations; ~~reporting~~major expenditures for ~~the~~renewals ~~recognition~~ and ~~measurement~~betterments ofare ~~impairment losses for long-lived assets~~capitalized. InAssets ~~accordance with~~that ~~ASC 360, long-lived assets~~ are ~~reviewed~~still ~~for~~kept ~~impairment whenever events or changes~~ in ~~circumstances~~service after ~~indicate~~reaching ~~that~~ the ~~carrying amount~~end of antheir ~~asset~~estimated ~~may~~useful ~~not~~lives beare ~~recoverable.~~depreciated ~~The~~over ~~Company~~the ~~will~~estimated ~~recognize~~useful ~~the~~life ~~impairment~~ of ~~long-lived~~their ~~assets~~residual invalue. Gain ~~the~~or ~~event~~loss ~~the~~on ~~net book~~disposal ~~value~~ of ~~such~~property, ~~assets~~plant, ~~exceeds~~and ~~the~~equipment ~~future~~is ~~undiscounted~~recognized ~~cash~~as ~~flows attributable to those assets. There are no impairment of our long~~non-~~lived~~operating ~~assets~~income ~~for~~or ~~the year ended 2017 and 2016~~expenses.

~~Income~~Depreciation ~~Taxes~~is ~~– The~~computed ~~Company~~by ~~adopts~~applying ~~FASB ASC Topic 740, "Income Taxes,” which requires~~ the ~~recognition of deferred tax assets and liabilities~~ ~~for~~following ~~the~~methods expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and ~~liabilities~~estimated and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.lives:

In accordance with ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB ASC Topic 740”, which requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. As of December 31, 2017 and 2016, management considered that the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

Category	Estimated Life	Method
Manufacturing equipment	10	Straight Line
Office equipment	5	Straight Line
Buildings	20	Straight Line

~~The~~Intangible ~~application of tax laws and regulations~~Assets is- ~~subject~~Land touse ~~legal~~rights ~~and~~represent ~~factual~~the ~~interpretation,~~exclusive ~~judgment~~right ~~and~~to ~~uncertainty.~~occupy ~~Tax laws~~ and ~~regulations~~use ~~themselves~~a ~~are~~piece ~~subject to change because~~ of ~~changes~~land in ~~fiscal~~the ~~policy,~~PRC ~~changes~~during ~~in legislation,~~ the ~~evolution~~contractual term of ~~regulations~~the land ~~and~~use ~~court rulings~~right. ~~Therefore,~~Land ~~the~~use ~~actual liability~~rights ~~may~~are becarried ~~materially~~at ~~different~~cost ~~from~~and ~~our~~charged ~~estimates,~~to ~~which~~expense ~~could~~on ~~result~~a instraight-line ~~the~~basis ~~need~~over tothe ~~record~~respective ~~additional~~periods of ~~tax~~the ~~liabilities~~rights ~~or potentially~~of ~~reverse~~50 ~~previously~~years ~~recorded~~or ~~tax~~the ~~liabilities~~remaining orperiod ~~deferred~~of ~~tax~~the ~~asset~~rights ~~valuation~~upon ~~allowance~~acquisition.

Non-Controlling Interest - The Company ~~has~~accounted ~~made~~for aits ~~comprehensive~~non-controlling ~~review~~ interest of ~~its~~49% ~~portfolio~~in Yibaoccyb as a separate component of ~~tax~~equity. ~~positions~~In inaddition, net ~~accordance~~loss, ~~with~~and ~~recognition~~components ~~standards~~of ~~established~~other bycomprehensive ~~ASC~~income ~~740-10~~are ~~and~~attributed ~~has~~to ~~not~~both ~~recognized~~the ~~any material~~Company ~~uncertain~~and ~~tax~~non-controlling ~~positions~~interest.

InRevenue ~~addition~~Recognition - We account for a contract with a customer when the written contract is committed, ~~companies~~the inrights of the ~~PRC~~parties, including payment terms, are ~~required~~identified, the contract has commercial substance and consideration is probable of collection. Substantially all of our revenue is derived by fulfilling customer orders for the purchase of our products under contracts which contain a single performance obligation, to ~~pay~~supply continually defined quantities of product at fixed prices. We account for shipping and handling activities that occur before the customer has obtained control of a good as a fulfillment cost rather than as an ~~Enterprise~~additional ~~Income~~promised ~~Tax~~service. We recognize revenue at ~~25%~~the point in time that control of the ordered product(s) is transferred to the customer, which is upon delivery to the customer, or its designee at a customer location or other customer-designated delivery point.

FAmounts billed and due from our customers are classified as accounts receivables on our consolidated balance sheets and require payment on a short-11term basis. Invoices are generally issued at the point control transfers and substantially all of our invoices are due within 30 days or less. Periodically, we require payment prior to the point in time we recognize revenue. Amounts received from customers prior to revenue recognition on a contract are contract liabilities, are classified as customer deposit on our consolidated balance sheets and are typically applied to an invoice within 30 days of receipt. There were around $0.14 million in customer deposit as of December 31, 2018.

~~Foreign Currency Translation~~Cost -of ~~The~~goods ~~Company's~~sold ~~functional~~- ~~currency~~Cost isof ~~the~~goods ~~Chinese~~sold ~~Renminbi~~includes ~~(RMB).~~cost ~~The~~of ~~reporting~~inventory ~~currency~~sold isduring ~~that of~~ the ~~US Dollar. Assets~~period, ~~liabilities and~~net ~~owners’ contribution are translated at the exchange rates as~~ of ~~the~~discounts ~~balance sheet date. Income~~ and ~~expenditures are translated~~ atinventory ~~the~~allowances, ~~average~~freight ~~exchange~~and ~~rate~~shipping ofcosts, ~~the~~warranty ~~year. The RMB is not freely convertible into foreign currency~~ and ~~all~~rework ~~foreign currency exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been~~costs, ~~or could~~and ~~be,~~sales ~~converted into US dollar at the rates used in translation~~tax.

Impairment of Long-Lived Assets - The ~~exchange~~Company ~~rates~~applies ~~used~~FASB toASC ~~translate~~360, ~~amounts~~“Property, Plant and Equipment,” which inaddresses ~~RMB~~the ~~into~~financial ~~USD~~accounting and reporting for the ~~purposes~~recognition and measurement of ~~preparing~~impairment losses for long-lived assets. In accordance with ASC 360, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the ~~financial~~carrying ~~statements~~amount ~~were~~of asan ~~follows:~~asset may not be recoverable. The Company will recognize the impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to those assets. There are no impairment of our long-lived assets for the year ended 2018 and 2017.

December 31, 2017
Balance sheet		RMB 6.51 to US $1.00
Statement of operation and other comprehensive income		RMB 6.76 to US $1.00
December 31, 2016
Balance sheet		RMB 6.94 to US $1.00
Statement of operation and other comprehensive income		RMB 6.64 to US $1.00

Income Taxes - The Company adopts FASB ASC Topic 740, "Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Fair Value of Financial Instruments – FASB ASC 820, “Fair Value Measurement” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:F-10

~~Level 1~~In ~~Inputs~~accordance with ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes — ~~Unadjusted~~An ~~quoted~~Interpretation of FASB ASC Topic 740”, which requires income tax positions to ~~market~~meet ~~prices~~a ~~for~~more-likely-than-not ~~identical~~recognition ~~assets~~threshold ~~and~~to ~~liabilities~~be recognized in anthe ~~active~~financial ~~market~~statements. Tax positions that previously failed to meet the ~~Company~~more-likely-than-not ~~has~~threshold should be recognized in the ~~ability~~first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. As of December 31, 2018 and 2017, management considered that the Company had no uncertain tax positions, and will continue to ~~access~~evaluate for uncertain positions in the future.

~~Level 2~~The ~~Inputs—~~application ~~Inputs~~of ~~other~~tax ~~than~~laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change because of changes in fiscal policy, changes in legislation, the ~~quoted~~evolution ~~prices~~of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in ~~active~~the ~~markets~~need ~~that~~to ~~are~~record ~~observable~~additional ~~either~~tax ~~directly~~liabilities or potentially ~~indirectly~~reverse previously recorded tax liabilities or deferred tax asset valuation allowance.

~~Level 3~~The ~~Inputs—~~Company ~~Inputs~~has ~~based~~made a comprehensive review onof ~~valuation~~its ~~techniques~~portfolio ~~that~~of ~~are~~tax ~~both~~positions ~~unobservable~~in accordance with recognition standards established by ASC 740-10 and ~~significant~~has tonot ~~the~~recognized ~~overall~~any material ~~fair~~uncertain ~~value~~tax ~~measurements~~positions.

~~ASC~~In ~~820 requires the use of observable market data~~addition, ~~when~~companies ~~available,~~ in ~~making fair value measurements. When inputs used to measure, fair value fall within different levels of~~ the ~~hierarchy,~~PRC ~~the~~are ~~level within which the fair value measurement is categorized is based on the lowest level input that is significant~~required to ~~the~~pay ~~fair~~an ~~value~~Enterprise ~~measurement.~~Income ~~Valuation~~Tax ~~techniques~~at ~~used need to maximize the use of observable inputs and minimize the use of unobservable inputs~~25%.

Foreign Currency Translation - The Company's ~~did~~functional ~~not~~currency ~~identify~~is ~~any~~the ~~assets or~~Chinese ~~liabilities~~Renminbi (RMB). The reporting currency is that ~~are~~of ~~required~~the toUS beDollar. ~~presented~~Assets, atliabilities and ~~fair~~owners’ ~~value~~contribution onare atranslated ~~recurring~~at ~~basis.~~the ~~Carrying~~exchange ~~values~~rates as of ~~non-derivative~~the ~~financial instruments,~~balance ~~including~~sheet ~~cash~~date. Income and ~~cash~~expenditures ~~equivalents,~~are ~~accounts~~translated at ~~receivable,~~the ~~inventories,~~average ~~prepaid~~exchange ~~expenses,~~rate ~~advances~~of ~~from~~the ~~customers, accounts~~year. ~~payable,~~The ~~taxes~~RMB ~~payable,~~is ~~accrued~~not ~~liabilities~~freely ~~and~~convertible ~~other~~into ~~payables,~~foreign currency and ~~loan~~all ~~from~~foreign ~~bank,~~currency ~~approximated~~exchange transactions ~~their~~must ~~fair~~take ~~values~~place ~~due to~~through ~~the~~authorized ~~short~~institutions. ~~maturity~~No ofrepresentation ~~these~~is ~~financial~~made ~~instruments.~~that ~~There~~the ~~were~~RMB noamounts ~~changes~~could inhave ~~methods~~been, or could ~~assumptions~~be, ~~during~~converted into US dollar at the ~~periods~~rates ~~presented~~used in translation.

~~Net~~The ~~Earnings(loss)~~exchange ~~Per~~rates ~~Share –~~used ~~Earnings/(loss)~~to ~~per~~translate ~~common share is computed on the weighted average number of common shares outstanding during each year.~~amounts ~~Basic~~in ~~earnings~~RMB ~~per~~into ~~share~~USD isfor ~~computed as net loss applicable to common stockholders divided by~~ the ~~weighted~~purposes ~~average number~~ of ~~common shares~~preparing ~~outstanding for~~ the ~~period.~~financial ~~Diluted~~statements earnings per share reflects the potential dilution that could occur from common shares issuable through convertible preferred shares, stock options, warrants and other convertible securities when the effect would be dilutive. In this case, the Preferred Shares would not be dilutive since the conversion price is $3.00 and the quoted price is significantly lower than the conversion price. Therefore, there were noas ~~dilutive securities for the years ending December 31, 2017 and 2016, respectively.~~follows:

Reclassifications – Certain classifications have been made to the prior year consolidated financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.

December 31, 2018
Balance sheet	RMB 6.88 to US $1.00
Statement of operation and other comprehensive income	RMB 6.61 to US $1.00
December 31, 2017
Balance sheet	RMB 6.51 to US $1.00
Statement of operation and other comprehensive income	RMB 6.76 to US $1.00

FFair Value of Financial Instruments -12 FASB ASC 820, “Fair Value Measurement” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

~~Recent~~Level 1 ~~Accounting~~Inputs - ~~Pronouncements~~Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

InLevel 2 ~~March~~Inputs ~~2016, the FASB issued ASU No. 2016~~-~~09,~~ ~~Compensation~~Inputs –other ~~Stock~~than ~~Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which modifies certain aspects of~~ the ~~accounting for share-based payment transactions,~~quoted ~~including~~prices ~~income taxes, classification of awards, and classification~~ in ~~the~~active ~~statement~~markets ofthat ~~cash flows. The Company will adopt ASU 2016-09 in its first quarter of 2018. Currently, excess tax benefits or deficiencies from the Company's equity awards~~ are ~~recorded as~~observable ~~additional~~either ~~paid-in~~directly ~~capital in its Consolidated Balance Sheets. Upon adoption, the Company will record any excess tax benefits~~ or ~~deficiencies from its equity awards in its Consolidated Statements of Operations in the reporting periods in which vesting occurs~~indirectly. As a result, subsequent to adoption the Company's income tax expense and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards. The Company is still in progress of evaluating future impact of adopting this standard.

InLevel 3 ~~May~~Inputs ~~2014, the FASB issued ASU No. 2014~~-~~09,~~ ~~Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards~~Inputs ~~for revenue recognition. ASU 2014-09 is~~ based on ~~principles~~valuation techniques that ~~govern~~are ~~the~~both ~~recognition~~unobservable ofand ~~revenue~~significant ~~at an amount an entity expects~~ to bethe ~~entitled~~overall ~~when~~fair ~~products~~value ~~are transferred to customers~~measurements.

~~Subsequently, the FASB has issued the following standards related to ASU 2014~~F-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”); and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20”).11

~~The~~ASC ~~new~~820 ~~revenue~~requires ~~standards~~the ~~may~~use beof ~~applied~~observable ~~retrospectively~~market data, when available, in making fair value measurements. When inputs used to ~~each~~measure, ~~prior~~fair ~~period~~value ~~presented~~fall orwithin ~~retrospectively~~different ~~with~~levels of the ~~cumulative~~hierarchy, ~~effect~~the ~~recognized~~level aswithin ofwhich the ~~date~~fair ofvalue ~~adoption. The~~measurement ~~new~~is ~~revenue~~categorized ~~standards~~is ~~are~~based ~~not~~on ~~expected~~the tolowest ~~have~~level ainput ~~material~~that ~~impact~~is onsignificant to the ~~amount~~fair ~~and~~value ~~timing~~measurement. Valuation techniques used need to maximize the use of ~~revenue~~observable ~~recognized~~inputs inand minimize the ~~Company’s~~use of ~~consolidated~~unobservable ~~financial statements~~inputs.

InThe ~~October 2016,~~Company ~~the~~did ~~FASB~~not ~~issued~~identify ~~ASU~~any ~~2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are~~assets ~~under~~or ~~Common~~liabilities ~~Control”. These amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity~~ that ~~is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that~~ are ~~under~~required ~~common~~to ~~control~~be ~~with~~presented ~~the reporting~~at ~~entity.~~fair Ifvalue aon ~~reporting entity satisfies the first characteristic of~~ a ~~primary~~recurring ~~beneficiary~~basis. ~~(such~~Carrying ~~that~~values ~~it is the single decision maker~~ of anon-derivative ~~variable interest entity)~~financial instruments, ~~the~~including ~~amendments~~cash ~~require~~and ~~that~~cash ~~reporting entity~~equivalents, inaccounts ~~determining whether it satisfies the second characteristic of a primary beneficiary~~receivable, ~~to include all of its direct variable interests in a variable interest entity and~~inventories, onprepaid ~~a proportionate basis~~expenses, ~~its~~advances ~~indirect~~from ~~variable interests in a variable interest entity held through~~customers, ~~related~~accounts ~~parties~~payable, ~~including~~taxes ~~related~~payable, ~~parties~~accrued ~~that~~liabilities ~~are~~and ~~under~~other ~~common control with the reporting entity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15~~payables, ~~2016,~~and ~~including~~loan ~~interim~~from ~~periods within those fiscal years. Early adoption is permitted~~bank, ~~including~~approximated ~~adoption~~their infair anvalues ~~interim period. If an entity adopts the~~due ~~pending content that links~~ to ~~this~~the ~~paragraph~~short inmaturity ~~an interim period, any adjustments should be reflected as~~ of ~~the~~these ~~beginning~~financial ~~of the fiscal year that includes that interim period~~instruments. ~~The~~There ~~Company~~were isno ~~currently~~changes in ~~the~~methods ~~process~~or ofassumptions ~~evaluating~~during the ~~impact~~periods ~~of the adoption on its consolidated financial statements~~presented.

InNet ~~November~~Earnings(loss) ~~2016, the~~Per ~~FASB issued ASU 2016~~Share -~~18,~~ ~~“Statement of Cash Flows~~ Earnings/(~~Topic 230~~loss): ~~Restricted~~per ~~Cash”. These~~common ~~amendments require~~share ~~that~~is acomputed ~~statement~~on ~~of cash flows explain~~ the ~~change~~weighted ~~during~~average ~~the~~number ~~period in the total~~ of ~~cash,~~common ~~cash~~shares ~~equivalents,~~outstanding ~~and~~during ~~amounts generally~~each ~~described as restricted cash or restricted cash equivalents~~year. Basic Asearnings aper ~~result,~~share ~~amounts~~is ~~generally~~computed ~~described~~ as ~~restricted~~net ~~cash and~~loss ~~restricted~~applicable ~~cash~~to ~~equivalents~~common ~~should~~stockholders bedivided ~~included~~by ~~with~~the ~~cash~~weighted ~~and~~average ~~cash~~number ~~equivalents when reconciling the beginning-~~of~~-period~~ ~~and~~common ~~end-of-period~~shares ~~total~~outstanding ~~amounts~~for ~~shown on~~ the ~~statement~~period. ofDiluted ~~cash~~earnings ~~flows.~~per ~~The~~share ~~amendments~~reflects dothe ~~not~~potential ~~provide~~dilution athat ~~definition~~could ofoccur ~~restricted~~from ~~cash~~common shares orissuable ~~restricted~~through ~~cash~~convertible ~~equivalents.~~preferred ~~The~~shares, ~~amendments~~stock inoptions, ~~this~~warrants ~~ASU~~and ~~are~~other ~~effective~~convertible ~~for~~securities ~~public~~when ~~business~~the ~~entities~~effect ~~for~~would ~~fiscal years beginning~~be ~~after~~dilutive. ~~December~~In ~~15,~~this ~~2017~~case, ~~and~~the ~~interim~~Preferred ~~periods~~Shares ~~within~~would ~~those~~not ~~fiscal~~be ~~years.~~dilutive ~~Early~~since ~~adoption~~the conversion price is ~~permitted~~$3.00 ~~The~~and ~~amendments~~the ~~should~~quoted beprice ~~applied~~is ~~using~~significantly alower ~~retrospective~~than ~~transition~~the ~~method~~conversion toprice. ~~each~~Therefore, ~~period~~there ~~presented.~~were ~~The~~no ~~Company~~dilutive issecurities ~~currently~~for in the ~~process~~years ofending ~~evaluating~~December ~~the~~31, ~~impact~~2018 ofand ~~the~~2017, ~~adoption on its consolidated financial statements~~respectively.

FReclassifications -13 Certain classifications have been made to the prior year consolidated financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.

InRecent ~~July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I)~~ Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.Pronouncements

In ~~September 2017~~April 2016, the ~~The~~ FASB issued ASU ~~2017~~2016-~~13- Revenue Recognition (Topic 605)~~10, “Revenue from Contracts with Customers (Topic 606)~~, Leases (Topic 840), and Leases (Topic 842)~~: ~~This~~Identifying ~~Accounting~~Performance ~~Standards~~Obligations ~~Update adds SEC paragraphs pursuant to the SEC Staff~~and ~~Announcement at the July 20, 2017 Emerging Issues Task Force (EITF) meeting~~Licensing”. The ~~July~~amendments ~~announcement~~add ~~addresses~~further ~~Transition~~guidance ~~Related to~~on ~~Accounting~~identifying ~~Standards~~performance ~~Updates~~obligations ~~No. 2014-09, Revenue from Contracts with Customers (Topic 606),~~ and ~~No. 2016-02, Leases (Topic 842). This Update~~ also ~~supersedes SEC paragraphs pursuant~~ to improve the ~~rescission of SEC Staff Announcement, “Accounting for Management~~operability ~~Fees~~and ~~Based~~understandability onof ~~a Formula,” effective upon~~ the ~~initial~~licensing ~~adoption~~implementation ofguidance. ~~Topic~~The ~~606,~~amendments ~~Revenue~~do ~~from~~not ~~Contracts~~change ~~with~~the ~~Customers,~~core ~~and~~principle ~~SEC Staff Announcement, “Lessor Consideration~~ of ~~Third-Party Value Guarantees,” effective upon~~ the ~~initial adoption of~~guidance in Topic ~~842, Leases~~606. The ~~amendments~~effective indate ~~this~~and ~~Update~~transition ~~also~~requirements ~~rescind~~for ~~three~~the ~~SEC~~amendments ~~Observer~~are ~~Comments~~the ~~effective~~same ~~upon~~as the ~~initial~~effective ~~adoption of~~date ~~Topic~~and ~~842.~~transition requirements ~~One~~in ~~SEC Staff Observer comment is being moved to~~ Topic ~~842~~606. The Company ishas ~~currently~~adopted inthis ~~the~~ASU ~~process~~and ofits ~~evaluating the~~adoption ~~impact~~did ofnot ~~the~~have ~~adoption~~a material effect on its consolidated financial statements.

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”. The ~~Company~~amendments, ~~has~~among other things: (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; ~~considered~~(2) ~~all~~permit ~~new~~an ~~accounting~~entity ~~pronouncements~~to exclude amounts collected from customers for all sales (and ~~has~~other ~~concluded~~similar) ~~that~~taxes ~~there~~from ~~are~~the notransaction ~~new~~price; (3) ~~pronouncements~~specify that ~~may~~the ~~have~~measurement date for noncash consideration is contract inception; (4) provide a ~~material~~practical expedient that permits ~~impact~~an onentity ~~results~~to reflect the aggregate effect of ~~operations~~all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, ~~financial~~determining ~~condition~~the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations; (5) clarify that a completed contract for purposes of transition is a contract for which all (or ~~cash~~substantially ~~flows~~all) of the revenue was recognized under legacy GAAP before the date of initial application, and ~~based~~(6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption. The effective date of these amendments is at the same date that Topic 606 is effective. The Company has adopted this ASU and its adoption did not have a material effect on ~~current~~its ~~information~~consolidated financial statements.

~~NOte~~In October 22016, the FASB issued ASU 2016-17, “Consolidation ~~going~~(Topic ~~concern~~810): Interests Held through Related Parties That Are under Common Control”. These amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company has adopted this ASU and its adoption did not have a material effect on its consolidated financial statements.

The Company sustained operating losses of $602,475 and $419,777 during the years ended December 31, 2017 and 2016, respectively. The Company has accumulated deficit of $1,179,678 and $608,739 as of December 31, 2017 and 2016, respectively. Working capital deficits amounted to $3,022,540 and $2,428,594 as of December 31, 2017 and 2016, respectively. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.F-12

~~The~~In ~~accompanying~~November ~~consolidated financial~~2016, ~~statements~~the ~~have~~FASB ~~been~~issued ~~prepared~~ASU ~~assuming~~2016-18, ~~the~~“Statement of ~~Company~~Cash ~~will~~Flows ~~continue~~(Topic as230): Restricted Cash”. These amendments require that a ~~going~~statement ~~concern;~~of ~~however,~~cash flows explain the ~~above~~change ~~condition~~during ~~raises~~the ~~substantial doubt~~period ~~about~~in the ~~Company’s~~total ~~ability~~of tocash, docash soequivalents, and amounts generally described as restricted cash or restricted cash equivalents. ~~The~~As ~~financial~~a ~~statements~~result, doamounts ~~not~~generally ~~include~~described ~~any~~as restricted ~~adjustments~~cash toand ~~reflect~~restricted cash equivalents should be included with cash and cash equivalents when reconciling the ~~possible~~beginning-of-period ~~future~~and ~~effects~~end-of-period total amounts shown on the ~~recoverability~~statement ~~and~~of ~~classification~~cash flows. The amendments do not provide a definition of ~~assets~~restricted cash or ~~the~~restricted ~~amounts~~cash ~~and~~equivalents. ~~classification~~The ofamendments ~~liabilities~~in ~~that~~this ~~may~~ASU ~~result~~are effective for public business entities for fiscal years beginning ~~should~~after ~~the~~December 15, 2017, and interim periods within those fiscal years. The Company behas ~~unable~~adopted tothis ~~continue~~ASU asand its adoption did not have a ~~going~~material ~~concern~~effect on its consolidated financial statements.

~~Management’s~~In ~~Plan~~July to2017, the ~~Continue~~FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives asand Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a ~~Going~~Scope ~~Concern~~Exception. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

In ~~order~~February to2018, the ~~continue~~FASB asissued aASU ~~going~~No. ~~concern, the~~2018-02 ~~Company~~Income ~~will~~Statement—Reporting ~~need,~~Comprehensive ~~among~~Income ~~other~~(Topic ~~things,~~220)—Reclassification ~~additional~~of Certain ~~capital~~Tax ~~resources~~Effects from Accumulated Other Comprehensive Income. ~~Management’s~~The ~~plans~~amendments toin ~~obtain~~this ~~such~~Update ~~resources~~allow ~~for~~a reclassification from ~~the~~accumulated ~~Company~~other ~~include~~comprehensive ~~(1)~~income ~~obtaining~~to ~~capital~~retained earnings for stranded tax effects resulting from the ~~sale~~Tax Cuts and Jobs Act of 2017. ~~its~~The ~~equity~~amendments ~~securities,~~in ~~(2)~~this ~~sales~~Update ofaffect any entity that is required to apply the ~~Company’s~~provisions ~~products~~of Topic 220, ~~(3) short~~Income Statement-~~term~~Reporting Comprehensive Income, and ~~long-term~~has ~~borrowings~~items ~~from~~of ~~banks,~~other ~~and~~comprehensive ~~(4)~~income ~~short-term~~for ~~borrowings~~which ~~from~~the ~~stockholders~~related ortax ~~other~~effects ~~related~~are ~~party(ies)~~presented ~~when~~in other comprehensive ~~needed.~~income ~~However,~~as ~~management~~required ~~cannot~~by ~~provide~~GAAP. ~~any~~The ~~assurance~~Company ~~that~~is ~~the~~currently ~~Company~~in ~~will~~the beprocess ~~successful~~of inevaluating ~~accomplishing~~the ~~any~~impact of the adoption on its ~~plans~~consolidated financial statements.

The ~~ability of the~~ Company ~~to continue~~has asconsidered aall ~~going~~new ~~concern~~accounting ispronouncements ~~dependent~~and ~~upon~~has ~~its~~concluded ~~ability~~that tothere ~~successfully~~are ~~accomplish~~no ~~the~~new ~~plans~~pronouncements ~~described~~that inmay ~~the~~have ~~preceding~~a ~~paragraph~~material ~~and~~impact ~~eventually~~on toresults ~~secure~~of ~~other~~operations, ~~sources~~financial ofcondition, ~~financing~~or ~~and~~cash ~~attain~~flows, ~~profitable~~based ~~operations~~on current information.

FNOte 2 -14 going concern

~~NOTE~~The Company sustained operating losses of $44,062 and $602,475 during the years ended December 31, 2018 and 2017, respectively. The Company has accumulated deficit of $1,331,207 and $1,179,676 as of December 31, 2018 and 2017, respectively. Working capital deficits amounted to $2,961,341 and $3-,022,540 as ~~RESTATEMENT~~of OFDecember ~~PREVIOUSLY~~31, ~~ISSUED~~2018 ~~FINANCIAL~~and ~~STATEMENTS~~2017, respectively. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.

AsThe accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and ~~For~~classification ~~The~~of ~~Year~~liabilities ~~Ended~~that ~~December~~may ~~31,~~result should ~~2016~~the Company be unable to continue as a going concern.

During the year ended December 31, 2017, the Company reviewed its tax payables related to land use tax and real property tax and determined that the value of the tax payables were understated. According to China tax law, Land use tax are calculated on the actual land square footage and real property tax are calculated based on property value which were both understated in year ended 2016. This understated payable result an understated net operating loss in amount of $21,744 for the year ended December 31, 2016.F-13

~~Beside the understatement of tax payable, the Company also reclassified certain accounts on the balance sheet. For the effects of the adjustments on the Company~~Management’s ~~previously~~ ~~issued~~Plan ~~consolidated~~to ~~financial statements~~ Continue as ofa ~~and~~Going ~~for the year ended December 31, 2016 are summarized as follow:~~Concern

	Consolidated Balance Sheets As of December 31, 2016
	Previously			Impact of
	Reported			Restatement			Restated
Assets
Current assets
Advance to suppliers	$	–		$	94,799		$	94,799
Prepaid expenses		158,869			(118,011	)		40,858
Total current assets	$	899,747		$	(23,212	)	$	876,535
Other assets
Deferred cost		–			14,792			14,792
Deposits		3,215			8,420			11,635
Total other assets		3,215			23,212			26,427
Total assets	$	4,116,314		$	–		$	4,116,314
Liabilities and Equity
Current liabilities
Taxes payable	$	40,168		$	20,795		$	60,963
Other payable		486,910			(87,858	)		399,052
Loan Payable-unrelated party		–			87,858			87,858
Total current liabilities		3,284,334			20,795			3,305,129
Total liabilities		3,284,334			20,795			3,305,129
Equity
Accumulated foreign currency exchange loss		(57,173	)		484			(56,689	)
Accumulated deficit		(597,650	)		(11,089	)		(608,739	)
Total YBCC, Inc stockholders' equity		517,497			(10,605	)		506,892
Non-controlling interest		314,483			(10,190	)		304,293
Total equity		831,980			(20,795	)		811,185
Total liabilities and equity	$	4,116,314		$	–		$	4,116,314

~~F-15~~The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations.

	Consolidated Statements of Income and Comprehensive Income For The Year Ended December 31, 2016
	Previously
	Reported			Difference			Restated
Operating expenses
General & administrative expenses	$	493,191		$	21,746		$	514,937
Total operating expenses		509,151			21,746			530,897
Loss from operation		(367,150	)		(21,746	)		(388,896	)
Loss before income taxes		(398,030	)		(21,746	)		(419,776	)
Net Loss		(398,030	)					(419,776	)
Less: net loss attributable to non-controlling interest		(124,073	)		(10,656	)		(134,729	)
Net loss attributable to the Company	$	(273,957	)	$	10,656		$	(285,047	)
Net Loss		(398,030	)		(21,746	)		(419,776	)
Other Comprehensive Income
Foreign currency translation gain/(loss) attributable to the Company		(52,587	)		26,252			(26,335	)
Comprehensive loss		(450,617	)		(4,506	)		(446,111	)
Less: comprehensive loss attributable to non-controlling interest		(25,767	)		–			(25,767	)
Net comprehensive loss attributable to the Company	$	(424,850	)	$	(4,506	)	$	(420,344	)
Loss per weighted average share of common stock - basic& diluted	$	(0.17	)	$	0.08		$	(0.09	)
Weighted average share outstanding - basic & diluted		2,700,174			5,199,351			5,199,351

NOte 3 - concentration of credit risk

	Consolidated Statements of Equity
	As of and For the Year Ended
	December 31, 2016
	Previously			Impact of
	Reported			Restatement			Restated
Accumulated Other Comprehensive Income:
Foreign currency translation	$	(26,820	)	$	484		$	(26,336	)
Balance at December 31, 2016	$	(57,173	)	$	484		$	(56,689	)
Retained earnings:
Net loss for the year ended December 31, 2016	$	(273,957	)	$	(11,091	)	$	(285,048	)
Balance at December 31, 2016	$	(597,650	)	$	(11,089	)	$	(608,739	)

We maintain our cash balance in several banks in China and United States. The consolidated cash balances as of December 31, 2018, and 2017 were $50,397 and $369,607 respectively. The cash balances in China as of December 31, 2018 and 2017 are $41,831 and $307,361 respectively. The accounts in China were not insured which we believe were exposed to credit risks on cash. Our U.S. bank accounts are maintained at Wells Fargo and American First National Bank, as of December 31, 2018, and the balance of $8,566 is within federal insured limit of $250,000.

FNOTe 4 -16 other receivable

	Consolidated Statements of Cash Flows For The Year Ended December 31, 2016
	Previously			Impact of Restatement/
	Reported			Reclassification			Restated
Cash flow from operating activities
Net Loss	$	(398,030	)	$	(21,744	)	$	(419,774	)
Advance to suppliers		–			(97,709	)		(97,709	)
Prepaid expenses		25,968			(65,370	)		(39,402	)
Deposits		(3,215	)		6,776			3,561
Accounts payable		97,096			(39,001	)		58,095
Accrued expense		–			39,001			39,001
Tax payable		7,296			21,744			29,040
Other payable		424,872			–			424,872
Cash provided by operating activities		183,992			(156,303	)		27,689
Cash flow from investing activities:
Deferred cost		–			156,303			156,303
Cash used in investing activities	$	(484,504	)	$	156,303		$	(328,201	)

Total other receivable consists of balance of VAT receivable of $36,015 and $33,251 as of December 31, 2018 and 2017, respectively.

~~NOte~~NOTe 45 - ~~concentration~~prepaid ~~of credit risk~~expenses

WePrepaid ~~maintain~~expenses ~~our cash balance in several banks in China and United States. The consolidated cash balances as of December 31, 2017, and 2016~~ were ~~$369,607~~comprised ~~and $339,147 respectively. The cash balances in China as~~ of December 31, 2017 and 2016 are $307,361 and $29,156 respectively. The accounts in China were not insured which we believe were exposed to credit risks on cash. Our U.S. bank account is maintained at Wells Fargo, as of December 31, 2017, and the ~~balance of $62,246 is within federal insured limit of $250,000.~~ following:

NOTE 5 - OTHER RECEIVABLE

	December 31, 2018		December 31, 2017
Utilities	$	1,454	$	1,537
Professional fee		24,593		44,974
Other		–		4,242
Total	$	26,047	$	50,753

~~Total other receivable consists of balance~~Note of6 ~~VAT~~- ~~receivable of $33~~property,~~251~~ ~~and~~plant ~~$102,122 as of December 31, 2017~~ and ~~2016, respectively.~~equipment

~~NOTE~~Property, 6plant and equipment -as ~~PREPAID~~of ~~EXPENSES~~December 31, 2018 and 2017 are summarized as following:

Prepaid expenses were comprised of the following:

	December 31, 2018			December 31, 2017
Buildings	$	1,756,860		$	1,858,989
Leasehold improvement		14,254			–
Vehicles		11,272			11,912
Manufacturing equipment		1,186,877			1,133,045
Office equipment		89,191			93,961
Construction in process		140,637			–
Property, plant, and equipment - total		3,199,091			3,097,907
Less: accumulated depreciation		(747,874	)		(559,327	)
Fixed assets, net	$	2,451,217		$	2,538,580

	December 31, 2017		December 31, 2016
Utilities	$	1,537	$	–
Professional fee		44,974		–
Other		4,242		40,858
Total	$	50,753	$	40,858

For the years ended December 31, 2018 and 2017, depreciation expense was $227,316 and $230,079, respectively.

F-1714

~~Note~~note 7 - ~~property,~~intangible ~~plant~~assets ~~and equipment~~-net

~~Property,~~All ~~plant~~land in the PRC is owned by the government and cannot be sold to any individual or entity. Instead, the government grants landholders a "land use right" after a ~~equipment~~purchase asprice for such "land use right" is paid to the government. The "land use right" allows the holder to use the land for 50 years and enjoys all the incidents of ownership of the land. As of December 31, 2018, and December 31, 2017, the land use rights net of accumulated amortization was $672,178 and ~~2016~~$726,043, ~~are~~respectively. ~~summarized~~The asuse ~~following:~~term was 50 years.

	December 31, 2017			December 31, 2016
Buildings	$	1,858,989		$	1,739,780
Vehicles		11,912			11,162
Manufacturing equipment		1,133,045			982,511
Office equipment		93,961			85,061
Property, plant, and equipment - total		3,097,907			2,818,514
Less: accumulated depreciation		(559,327	)		(300,271	)
Fixed assets, net	$	2,538,580		$	2,518,243

The summary of land use rights as of December 31, 2018 and 2017 are summarized as following:

For the years ended December 31, 2017 and 2016, depreciation expense was $230,079 and $197,484, respectively.

The land use right term	December 31, 2018			December 31, 2017
May, 2013 - Apr, 2063	$	523,619		$	553,332
Dec, 2015 - Sep, 2065		196,349			207,491
Dec, 2015 - Sep, 2065		23,896			25,252
Intangible assets- total		743,864			786,075
Less: accumulated amortization		(71,686	)		(60,032	)
Intangible assets, net	$	672,178		$	726,043

~~note~~For the year ended December 31, 2018 and 2017, amortization ~~8 -~~expense ~~intangible~~was ~~assets~~$15,477 ~~-net~~and $15,139, respectively.

~~All~~NOTE ~~land~~8 in- ~~the~~COMMITMENTS ~~PRC~~AND is owned by the government and cannot be sold to any individual or entity. Instead, the government grants landholders a "land use right" after a purchase price for such "land use right" is paid to the government. The "land use right" allows the holder to use the land for 50 years and enjoys all the incidents of ownership of the land. As of December 31, 2017, and December 31, 2016, the land use rights net of accumulated amortization was $726,043 and $695,109, respectively. The use term was 50 years.CONTINGENCIES

The ~~summary~~Company ofdoes ~~land~~not ~~use~~have ~~rights~~known ~~as of December~~future ~~31, 2017 and 2016 are summarized as following:~~commitments.

The land use right term	December 31, 2017			December 31, 2016
May, 2013 - Apr, 2063	$	553,332		$	518,528
Dec, 2015 - Sep, 2065		207,491			194,440
Dec, 2015 - Sep, 2065		25,252			23,664
Intangible assets- total		786,075			736,632
Less: accumulated amortization		(60,032	)		(41,523	)
Intangible assets, net	$	726,043		$	695,109

NOTE 9 - INCOME TAX

~~For~~At ~~the year ended~~ December 31, 2018 and 2017, ~~and~~based ~~2016~~on the weight of available evidence, ~~amortization expense~~management determined that it was ~~$15,139~~unlikely that the Company's deferred tax assets would be realized and ~~$15,405,~~have ~~respectively~~provided for a full valuation allowance associated with the net deferred tax assets.

~~NOTE~~The ~~9 -~~Company ~~COMMITMENTS~~periodically analyzes ~~AND~~its ~~CONTINGENCIES~~tax positions taken and expected to be taken and has determined that since inception there has been no need to record a liability for uncertain tax positions. The Company classifies income tax penalties and interest, if any, as part of selling, general and administrative expenses in the accompanying statements of operations. There was no accrued interest or penalties as of December 31, 2018 or 2017.

The Company ~~entered a lease for new office~~is ~~space~~neither inunder ~~City~~examination ofby ~~Industry,~~any ~~California.~~taxing ~~The lease period started October 1~~authority, ~~2016~~nor ~~and~~has ~~expired~~it onbeen ~~September~~notified 1,of ~~2018.~~any Onimpending ~~October 1, 2016, the Company started this lease at $2,802 per month from October 1, 2016 to September 1, 2017~~examination. ~~From September 2, 2017 to August 31, 2018, the monthly lease will be $3,063, resulting in the following future commitments:~~

	Amount
2018 calendar year	$	24,504
Total	$	24,504

Under the Law of People’s Republic of China on Enterprise Income Tax (“EIT Law”), which was effective from January 1, 2008, domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. The potential benefit of the Company’s net operating losses has not been recognized in these financial statements because it is more likely-than-not the Company will not utilize the net operating losses carried forward as it does not expect to generate sufficient taxable income in future or the amount involved is not significant.

F-1815

NOTE 10 - INCOME TAX

	For the Years Ended
	December 31,
	2018			2017
Current
USA	$	–		$	–
China		39,953			–

Deferred
USA
Deferred tax assets for NOL carryforwards		55,311			113,003
Valuation allowance		(55,311	)		(113,003	)
Net changes in deferred income tax under non-current portion		–			–

China
NOL carryforwards		(39,953	)		8,207
Valuation allowance		–			(8,207	)
Net changes in deferred income tax under non-current portion		(39,953	)		–

Total provision for income tax	$	–		$	–

AtThe ~~December~~tax ~~31,~~effects ~~2017 and 2016, based on the weight~~ of ~~available~~temporary ~~evidence,~~differences ~~management determined~~ that itgave ~~was~~rise ~~unlikely~~to ~~that~~significant ~~the~~portions ~~Company's~~of deferred tax assets ~~would~~at beDecember ~~realized~~31, 2018 and ~~have~~2017 ~~provided~~are ~~for~~as ~~a full valuation allowance associated with the net deferred tax assets.~~follows:

The Company periodically analyzes its tax positions taken and expected to be taken and has determined that since inception there has been no need to record a liability for uncertain tax positions. The Company classifies income tax penalties and interest, if any, as part of selling, general and administrative expenses in the accompanying statements of operations. There was no accrued interest or penalties as of December 31, 2017 or 2016.

	December 31, 2018			December 31, 2017
Deferred Tax Assets:
Net operating loss carry forwards		208,236			170,449
Valuation allowance		(208,236	)		(170,449	)
Net deferred tax assets		–			–

~~The~~A ~~Company is~~reconciliation ~~neither~~between ~~under~~the ~~examination~~income bytax ~~any~~computed ~~taxing~~at ~~authority,~~the ~~nor~~U.S. ~~has~~statutory itrate ~~been~~and ~~notified~~the ofCompany’s ~~any~~provision ~~impending~~for ~~examination.~~income tax in the PRC is as follows:

Under the Law of People’s Republic of China on Enterprise Income Tax (“EIT Law”), which was effective from January 1, 2008, domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. As of December 31, 2017, the Company have net operating losses carry forward of $634,692 that begin expiring in 2018. The potential benefit of the company’s net operating losses has not been recognized in these financial statements because it is more likely-than-not the Company will not utilize the net operating losses carried forward as it does not expect to generate sufficient taxable income in future or the amount involved is not significant.

	December 31, 2018			December 31, 2017
Tax expense at statutory rate-US		21%			34%
Foreign income not recognized in the US		(21%	)		(34%	)
PRC enterprise income tax rate		25%			25%
Loss not subject to income tax		(25%	)		(25%	)
Effective income tax rates		–			–

	For the Years Ended
	December 31,
	2017			2016
Current
USA	$	–		$	–
China		–			–
Deferred
USA
Deferred tax assets for NOL carryforwards		113,003			49,239
Valuation allowance		(113,003	)		(49,239	)
Net changes in deferred income tax under non-current portion		–			–
China
NOL carryforwards		8,207			115,980
Valuation allowance		(8,207	)		(115,980	)
Net changes in deferred income tax under non-current portion		–			–
Total provision for income tax	$	–		$	–

F-16

~~The~~On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA) was enacted, significantly altering U.S. corporate income tax ~~effects~~law. ofThe ~~temporary~~SEC ~~differences~~issued Staff ~~that~~Accounting ~~gave~~Bulletin ~~rise~~118, which allows companies to ~~significant~~record ~~portions~~reasonable estimates of enactment impacts where all of the underlying analysis and calculations are not yet complete. The provisional estimates must be finalized within a one-year measurement period. The Company reduced its net domestic deferred tax ~~assets~~asset atbalance ~~December~~by 31$55,311 ~~2017~~due ~~and~~to ~~2016~~the reduction in corporate tax rate from 34% to 21%. These adjustments are asfully ~~follows:~~offset by a change in the Company’s U.S. valuation allowance. The U.S. holding had operating loss carryforwards for federal income tax purposes of $681,591 approximately, which will expire in 2037. The statute of limitations for the 2016 tax year expires in 2020.

	December 31, 2017			December 31, 2016
Deferred Tax Assets:
Net operating loss carry forwards	$	170,449		$	165,219
Valuation allowance		(170,449	)		(165,219	)
Net deferred tax assets	$	–		$	–

note 10 - equity

~~F-19~~Common stock:

AOn ~~reconciliation between~~July 1, 2016, the ~~income~~Company ~~tax~~issued ~~computed~~3,915,000 atshares ~~the~~of Ucommon stock to Ms.S. ~~statutory~~Song ~~rate~~in ~~and~~connection with the ~~Company’s~~change ~~provision~~of ~~for~~control. ~~income~~Subsequently, ~~tax~~on inAugust 31, 2016, the ~~PRC~~Company iscancelled as3,915,000 ~~follows:~~shares of outstanding shares.

	December 31, 2017			December 31, 2016
Tax expense at statutory rate-US		34%			34%
Foreign income not recognized in the US		(34	)%		(34)%
PRC enterprise income tax rate		25%			25%
Loss not subject to income tax		(25	)%		(25)%
Effective income tax rates		–			–

On August 31, 2016, the Company issued 2,040,000 shares to Yibaoccyb Shareholders in exchange for 51% of the common stock of Yibaoccyb to complete the share exchange and restructuring of entities under common control.

On December 22, ~~2017~~2016, the ~~Tax~~Company ~~Cuts and Jobs Act (the Tax Act) was enacted, significantly altering U.S. corporate income tax law. The SEC~~ issued ~~Staff~~ ~~Accounting Bulletin 118~~350,000 ~~which~~shares ~~allows~~for ~~companies~~consulting toservices ~~record~~valued ~~reasonable~~at estimates of enactment impacts where all of the underlying analysis and calculations are not yet complete. The provisional estimates must be finalized within a one-year measurement period. The Company reduced its net domestic deferred tax asset balance by $6935,~~954~~000, ~~due~~or ~~to the reduction in corporate tax rate from 34% to 21%~~$0.10 ~~These~~per ~~adjustments~~share ~~are~~per ~~fully offset by a change in the Company’s U~~agreement.~~S. valuation allowance.~~

~~note~~On December 23, 112016, the Company received cash payment of $300,000 in advance for issuance of 3,000,000 shares of common stock, or $0.10 per share on January 3, 2017 to seven investors, none of which is a related-party ~~equity~~to the Company.

~~Common~~Series ~~stock~~A Preferred Shares:

OnThe ~~July~~Series A Preferred shares are convertible into common shares on a 1,:1 ~~2016~~ratio at a fixed rate of $3 per share. Preferred shares have no voting rights, have no redemption rights and earn no dividends. Holders of Series A Convertible Preferred Stock are not permitted to convert their stock into common shares until the Company’s ~~issued~~market 3capital reaches $15,~~915~~000,000. Upon dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the then outstanding shares of ~~common~~Series ~~stock~~A Convertible Preferred Stock shall be entitled to ~~Ms.~~receive ~~Song~~out inof ~~connection~~the ~~with~~assets of the ~~change~~Company the sum of ~~control~~$0.0001 ~~Subsequently,~~per onshare ~~August~~(the “Liquidation Rate”) ~~31,~~before ~~2016,~~any payment or distribution shall be made on any other class of capital stock of the Company ~~cancelled~~ranking ~~3,915,000~~junior ~~shares~~to ofthe ~~outstanding~~Series A ~~shares~~Convertible Preferred Stock.

OnASC ~~August~~Topic 31480, ~~2016,~~“Distinguishing ~~the~~Liabilities ~~Company~~from ~~issued 2~~Equity,~~040,000~~” ~~shares~~establishes tostandards ~~Yibaoccyb Shareholders in exchange~~ for ~~51%~~how ofan ~~the~~issuer ~~common~~classifies ~~stock~~and ofmeasures ~~Yibaoccyb~~certain ~~to complete~~financial ~~the~~instruments ~~share~~with ~~exchange~~characteristics ~~and restructuring~~ of ~~entities~~both ~~under~~liabilities ~~common~~and ~~control~~equity.

OnA ~~December~~mandatorily redeemable ~~22,~~financial instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation ~~2016,~~or termination of the ~~Company~~reporting entity. A financial instrument issued ~~350,000~~in the form of shares ~~for~~is ~~consulting~~mandatorily ~~services~~redeemable ~~valued~~if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at ~~$35~~a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable—and,~~000~~ therefore becomes a liability—if that event occurs, the condition is resolved, or ~~$0.10~~the ~~per~~event ~~share~~becomes ~~per~~certain ~~agreement~~to occur.

OnThe ~~December~~Company ~~23,~~determined ~~2016,~~that the ~~Company~~preferred ~~received cash payment of $300,000 in advance for issuance of 3,000,000~~ shares ofare ~~common~~not ~~stock,~~mandatorily or ~~$0.10~~conditionally ~~per~~redeemable ~~share on~~and ~~January~~are 3,properly ~~2017~~classified toas ~~seven~~permanent ~~investors,~~equity ~~none~~in ofthe accompanying ~~which~~consolidated isfinancial ~~a related-party to the Company~~statements.

~~Series A Preferred Shares:~~F-17

~~The~~ Series AB Preferred shares are convertible into common shares on a 1:1 ratio at a fixed rate of $3 per share. Preferred shares have no voting rights, have no redemption rights and earn no dividends. Holders of Series A Convertible Preferred Stock are not permitted to convert their stock into common shares until the Company’s market capital reaches $15,000,000. Upon dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the then outstanding shares of Series A Convertible Preferred Stock shall be entitled to receive out of the assets of the Company the sum of $0.0001 per share (the “Liquidation Rate”) before any payment or distribution shall be made on any other class of capital stock of the Company ranking junior to the Series A Convertible Preferred Stock.Shares

~~ASC~~During ~~Topic~~the ~~480,~~year ~~“Distinguishing~~ended ~~Liabilities~~December ~~from~~31, ~~Equity~~2015,” ~~establishes~~the ~~standards~~Company ~~for~~received ~~how~~the an400,000 ~~issuer~~shares ~~classifies~~of ~~and~~Series ~~measures~~B ~~certain~~Preferred ~~financial~~Shares being returned to the Company. As ~~instruments~~a ~~with~~result, ~~characteristics~~there were no shares of ~~both~~Series ~~liabilities~~B Preferred Shares issued and ~~equity~~outstanding as of December 31, 2018 and 2017.

ANOTE ~~mandatorily redeemable~~11 ~~financial~~- ~~instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation~~NON-CONTROLLING or termination of the reporting entity. A financial instrument issued in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable—and, therefore becomes a liability—if that event occurs, the condition is resolved, or the event becomes certain to occur.INTEREST

~~The~~On ~~Company~~July ~~determined~~1, 2016, ~~that~~the Company executed the ~~preferred~~Exchange ~~shares~~Agreement ~~are~~with ~~not~~Yibaoccyb ~~mandatorily~~and orthe ~~conditionally~~Yibaoccyb ~~redeemable~~Shareholders. From and ~~are~~after ~~properly~~the ~~classified~~Closing asDate, ~~permanent~~Yibaoccyb become ~~equity~~a in51% owned subsidiary of the Company. Yibaoccyb owns 100% of YibaoHK, a Hong Kong company. YibaoHK will own 100% of Shenzhen ~~accompanying~~Confucian ~~unaudited~~Biologics ~~condensed~~Co. ~~consolidated~~Ltd. ~~financial~~(yet ~~statements~~to be formed, “Yibao WFOE”), which will be wholly foreign-owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”). On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Confucian and currently is 100% owner of Confucian.

FNon-20controlling interest consisted of the following:

Series B Preferred Shares

	December 31,			December 31,
	2018			2017
Beginning balance	$	292,072		$	304,291
Net income (loss) attributed to non-controlling interest		107,469			(31,538	)
Foreign currency translation loss (gain) attributable to non-controlling interest		(19,938	)		19,319
Ending balance	$	379,603		$	292,072

~~During the year~~note ~~ended~~12 ~~December~~- ~~31,~~related ~~2015,~~party the Company received the 400,000 shares of Series B Preferred Shares being returned to the Company. As a result, there were no shares of Series B Preferred Shares issued and outstanding as of December 31, 2017 and 2016.transactions

~~NOTE~~The 12Company -has received ~~NON-CONTROLLING~~sales income from Shandong Yibao Biologics Co, Ltd for the twelve months ended December 31, 2018 and 2017 were $1,055,516 ~~INTEREST~~and $755,910, respectively. The purchases of raw material from Shandong Yibao Biologics Co, Ltd were $0 and $268,571 for the years of 2018 and 2017, respectively. The purchases from Shandong Yibao Biologics are mostly consisted of one raw material, and the sales to Shandong Yibao Biologics are all finished goods.

OnThe ~~July~~company ~~1, 2016,~~has ~~the~~received ~~Company~~sales ~~executed~~income ~~the~~from ~~Exchange~~Shandong ~~Agreement~~Yibao ~~with~~Import ~~Yibaoccyb~~ and ~~the~~Export ~~Yibaoccyb~~Trade ~~Shareholders. From and after the Closing Date~~Co, ~~Yibaoccyb become~~Ltd afor ~~51% owned subsidiary of~~ the ~~Company.~~twelve ~~Yibaoccyb~~months ~~owns~~ended ~~100%~~December ~~of YibaoHK~~31, a2018 ~~Hong~~and ~~Kong company. YibaoHK will own 100% of Shenzhen~~2017 ~~Confucian~~were ~~Biologics Co. Ltd. (yet to be formed~~$5,983 ~~“Yibao~~and ~~WFOE”)~~$54, ~~which will be wholly foreign-owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”)~~019. ~~On August 31, 2016, YibaoHK entered into a series of contractual arrangements with Confucian and currently is 100% owner of Confucian.~~

~~Non-controlling~~The ~~interest~~Company ~~consisted of the~~has the following payables to related parties:

	December 31,			December 31,
	December 31, 2018			December 31, 2017
	2017			2016
To Xiuhua Song	$	2,392,258		$	2,630,912
Beginning balance	$	304,291		$	464,323
To Hengchun Zhang		255,502			270,000
Net loss attributed to non-controlling interest		(31,538	)		(134,729	)
To Quingbao Kong		–			–
Foreign currency translation loss attributable to non-controlling interest		19,319			(25,303	)
To Jinxiang Confucian Food Testing Co, Ltd		58,178			–
Ending balance	$	292,072		$	304,291
Total due to related parties	$	2,705,938		$	2,900,912

~~note 13~~ F- ~~related party transactions~~18

~~The Company has~~NOTE ~~received~~13 ~~sales~~- ~~income~~MAJOR ~~from~~SUPPLIERS ~~Shandong~~AND Yibao Biologics Co, Ltd for the twelve months ended December 31, 2017 and 2016 were $755,910 and $309,691, respectively. The purchases of raw material from Shandong Yibao Biologics Co, Ltd were $268,571 and $218,262 for the years of 2017 and 2016, respectively. The purchases from Shandong Yibao Biologics are mostly consisted of one raw material, and the sales to Shandong Yibao Biologics are all finished goods.CUSTOMERS

The ~~company~~Company ~~has~~had ~~received~~one ~~sales~~major ~~income~~vendor ~~from~~to ~~Shandong~~purchases ~~Yibao~~its ~~Import~~inventory and ~~Export~~packaging ~~Trade~~supplies Cofrom, ~~Ltd~~which accounted for 14% of the ~~twelve~~total ~~months~~purchases in year ended December 31, ~~2017 and 2016 were $54,019 and $0~~2018.

InThe ~~June~~Company ~~2016,~~had ~~Shandong~~three ~~Yibao~~major ~~Biologics~~customers ~~Co.,~~for ~~Ltd.~~the ~~advanced~~year ~~funds~~ended ofDecember $131,~~064,073~~ to2018: ~~the~~Shandong ~~Company~~Yibao toBiologics ~~pay~~Co, ~~off~~Ltd ~~the~~accounted ~~short-term~~for ~~loan.~~40% ~~Prior~~of torevenue, ~~December~~Anhui ~~2016,~~Xiancheng ~~loan~~Import ~~from~~and ~~Shandong~~Export ~~Yibao~~Company ~~Biologics~~accounted ~~Co.~~for 29% of revenue, ~~Ltd~~and ~~amounted~~Ping toXiang ~~$545,545.~~Import Inand ~~December~~Export ~~2016,~~Company ~~Shandong~~accounted ~~Yibao~~for ~~Biologics~~15% ~~assigned~~of revenue for the ~~loan~~ toyear ~~Xiuhua~~ended ~~Song~~December 31, 2018.

The Company ~~has~~purchased majority of its inventory and packaging supplies from four suppliers which accounted for 57.59% of the ~~following~~total ~~payables~~purchases toin ~~related~~year ended ~~parties:~~December 31, 2017.

	December 31, 2017		December 31, 2016
To Xiuhua Song	$	2,630,912	$	2,293,434
To Hengchun Zhang		270,000		260,169
To Quingbao Kong		–		5,873
Total due to related parties	$	2,900,912	$	2,559,476

The Company had three major customers for the year ended December 31, 2017: Shandong Yibao Biologics Co, Ltd accounted for 31.08% of revenue, Nanjing Hejian Trading Co, Ltd. accounted for 15.56% of revenue, and Ping Xiang Import and Export Company accounted for 13.63% of revenue for the year ended December 31, 2017.

FNOTE 14 -21 SUBSEQUENT EVENTS

~~NOTE~~Management has 14evaluated -subsequent ~~MAJOR~~events ~~SUPPLIERS~~through ~~AND~~April ~~CUSTOMERS~~15, 2019, the date which the consolidated financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2018 have been incorporated into these consolidated financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

~~The Company purchases majority of its inventory and packaging supplies from four suppliers which accounted for 57.59% of the total purchases in year ended December 31, 2017.~~F-19

The Company had three major customers for the year ended December 31, 2017: Shandong Yibao Biologics Co, Ltd accounted for 31.08% of revenue, Nanjing Hejian Trading Co, Ltd accounted for 15.56% of revenue, and Ping Xiang Import and Export Company accounted for 13.63% of revenue for the year ended December 31, 2017.

The Company purchases majority of its inventory and packaging supplies from four suppliers which accounted for 56.87% of the total purchases in year ended December 31, 2016.

The Company had two major customers for the year ended December 31, 2016: Ping Xiang Import and Export Company accounted for 46.07% of revenue and Shandong Yibao Biologics for 27.76% of revenue for the year ended December 31, 2016.

NOTE 15 - SUBSEQUENT EVENTS

Management has evaluated subsequent events through March 30, 2018, the date which the consolidated financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2017 have been incorporated into these consolidated financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

F-22

Filing Compare · YBCC, Inc.