The following discussion contains forward-looking statements. Forward looking statements are identified by words and phrases such as "anticipate", "intend", "expect" and words and phrases of similar import. We caution investors that forward-looking statements are only predictions based on our current expectations about future events and are not guarantees of future performance. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements due to risks, uncertainties and assumptions that are difficult to predict, including those set forth in Item 1A above. We encourage you to read those risk factors carefully along with the other information provided in this Report and in our other filings with the SEC before deciding to invest in our stock or to maintain or change your investment. We undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law.

You should read this MD&A in conjunction with the Consolidated Financial Statements and Related Notes in Item 1.

In August 2006, the Company incorporated a new subsidiary, Shanghai LiKang International Trade Co., Ltd. ("LiKang International"). Since its inception, LiKang International has primarily served as an agent for third parties who desire to export goods from China, including computers, computer components, small medical equipment and instruments, meters, scales electromechanical devices. In October 2006, LiKang International expanded its business to include light weight construction materials, textile crafts, furniture, and chemical raw materials.

OVERVIEW

Since 1988 we have developed, manufactured and distributed disinfectant health care products primarily to the medical industry in China. In the last few years, China has witnessed a variety of public health crises, such as the outbreak of SARS, which demonstrated the need for increased health standards in China. In response, beginning in 2002 the Chinese government has undertaken various initiatives to improve public health and living standards, including continuing efforts to educate the public about the need for proper sanitation procedures and the establishment of production standards for the disinfectant industry in China. As a result of this heightened license and permit system, all disinfectant manufacturers must comply with "qualified disinfection product manufacturing enterprise requirements" established by the Ministry of Public Health. The requirements include standards for hardware, such as facilities and machinery, and software, including the technology to monitor the facilities, as well as the heightened knowledge and capability of the production staff regarding quality control procedures. Following the adoption of the industry standards in 2002, we have been granted 31 hygiene licenses by the Ministry of Public Health.

We believe that the government standards adopted in July 2002 have increased the barriers to entry for competitors in the disinfectant industry in China. The implementation of these improved production standards and license requirements has effectively decreased the competitive landscape as it pertains to small to medium size manufacturers, since the new standards are especially difficult for companies with limited product offerings and inferior technical content. In addition, prior to the adoption of industry standards, disinfectant products were generally marketed and sold based on price as opposed to quality. We believe that as a result of the adoption of industry standards, the marketplace is evolving with a more stringent focus on product quality, which we believe will enable us to increase our base of commercial customers thereby increasing our revenues.

Historically, our focus has been on the commercial distribution of our products. Our customers include hospitals, medical suppliers and distribution companies throughout China. We have made efforts to expand our distribution reach to the retail market. We have repackaged certain of our commercial disinfectant products for sale to the consumer market and have commenced upon expanding our customer base to include hotels, schools, supermarkets, and pharmacies. By virtue of the Chinese government's continuing focus on educating the Chinese population about the benefits of proper sanitation procedures, we believe that another key to increasing our revenues is the continued expansion of the retail distribution of our products.

The disinfectant industry in China is an emerging industry that is populated with small, regional companies. We estimate that there are in excess of 1,000 manufacturers and distributors of disinfectant products in China; however, most domestic competitors offer a limited line of products and there are only a few domestic companies with a nationwide presence. We believe that our national marketing and sales presence throughout all 22 provinces, as well as four autonomous regions, and four municipalities in China, gives us a competitive advantage over many other disinfectant companies in China, and will enable us to leverage the brand awareness for our products with commercial customers to the retail marketplace.

Our present manufacturing facilities and production capacities are sufficient for the foreseeable future, and we believe that we otherwise have the assets and capital available to us necessary to enable us to increase our revenues in future periods as the market for disinfectant products in China continues to increase. During the remaining nine months of 2008, we will continue to focus our efforts on the retail market for our products, as well as expanding our traditional base of commercial customers. In addition, we may also consider the possible acquisition of independent sales networks, which could be used to increase our product distribution capacity and align our company with small, regional companies in the industry.

RESULTS OF OPERATIONS

The table below sets forth the results of operations for the three months ended
March 31, 2008 as compared to the same period ended March 31, 2007 accompanied
by the change amount and percentage of changes.

                                       For the three months        Change       Variance
                                          ended March 31,          2008 vs
                                        2008          2007          2007            %

Sales - unaffiliated                 $ 4,604,117   $ 2,295,950   $ 2,308,167           101 %
Sales - related parties                  128,821       549,882      (421,061 )         (77 )%
Total net revenues                     4,732,938     2,845,832     1,887,106            66 %
Cost of revenues                       3,502,958     1,853,120     1,649,838            89 %
Gross Profit                           1,229,980       992,712       237,268            24 %

Operating Expenses:
Selling expenses                         328,428       266,785        61,643            23 %
General and administrative
expenses                                 477,812       250,172       227,640            91 %
Total Operating Expenses                 806,240       516,957       289,283            56 %

Income From Operations                   423,740       475,755       (52,015 )         (11 )%

Other Income (Expenses):
Other income                                 152       120,514      (120,362 )        (100 )%
Interest income                            1,577         1,093           484            44 %
Interest expense - related party          (4,822 )      (4,297 )        (525 )          12 %
Interest expense                         (15,696 )     (11,917 )      (3,779 )          32 %
Net Other Income (Expense)               (18,789 )    (105,393 )     124,182           118 %

Income before income taxes and
Minority interest                        404,951       581,148      (176,197 )         (30 )%
Income taxes                             (46,109 )     (43,415 )      (2,694 )           6 %
Minority interest                        (30,535 )     (41,162 )      10,627           (26 )%
Net income                           $   328,307   $   496,571   $  (168,264 )         (34 )%

Other Key Indicators:                    Three months ended
                                              March 31,
(Percent of Net Revenues)                2008           2007      Change

Cost Of Revenues                              74 %           65 %       9 %
Selling Expenses                               7 %            9 %      (2 )%
General and Administrative Expenses           10 %            9 %      (1 )%
Income From Operations                         9 %           17 %      (8 )%

NET REVENUES

Net revenues for the three months ended March 31, 2008 were $4,732,938 as compared to net revenues of $2,845,832 for the three months ended March 31, 2007, an increase of $1,887,106 or approximately 66%. Included in our net revenues for the first three months of 2008 are revenues of $2,251,506 attributable to LiKang Disinfectant and revenues of $2,481,432 attributable to LiKang International. Of our total net revenues for the three months ended March 31, 2008, $128,821 or approximately 3% were attributable to related parties as compared to net revenues of $549,882, or approximately 19%, of our total net revenues for the comparable period in fiscal 2007.

Revenues associated with LiKang Disinfectant increased $555,623, or approximately 33%, during the three months of fiscal 2008 compared to the same period of fiscal 2007. We believe this increase in demand was due to an increase in our sales staff and customer recognition of our high-quality, competitively priced disinfectant products.

LiKang Disinfectant's revenues associated with third parties increased $976,684, or approximately 85%, while revenues associated with related parties decreased $421,061, or approximately 77%. LiKang Disinfectant generated revenues to third parties of $2,122,685 for the three months in fiscal 2008 as compared to $1,146,001 for the same period of fiscal 2007; LiKang International generated revenues from third parties of $2,481,432 for the first three months in fiscal 2008 as compared to $1,149,949 for the comparable period in fiscal 2007.

Of the $128,821 of revenues derived from related parties during the three months ended March 31, 2008, $114,210, or approximately 89%, was from ZhongYou compared to $549,882 for the same period of fiscal 2007, decrease of $421,061, or approximately 327%, from the same period in fiscal 2007.

While the revenue associated with third parties increased $2,308,167, or approximately 101% for the three months ended March 31, 2008 from the comparable period in fiscal 2007, which included an increase of $1,331,483 attributed to LiKang international and an increase of $976,684 attributed to LiKang Disinfectant.

COST OF REVENUES

Cost of revenues includes raw materials and manufacturing costs, which includes labor, rent and an allocated portion of overhead expenses such as utilities directly related to product production. For the three months ended March 31, 2008, cost of revenues amounted to $3,502,958 or approximately 74% of net revenues as compared to cost of revenues of $1,853,120 or approximately 65% of net revenues for the same period in fiscal 2007. The increase of the percentage is mainly due to the high percentage from the LiKang International.

For the three months ended March 31, 2008, cost of revenues for LiKang Disinfectant was $1,127,798, or approximately 50% of net revenues generated from LiKang Disinfectant, as compared to $917,004 or approximately 54% of net revenues for the three months ended March 31, 2007. Historically, LiKang Disinfectant's cost of sales is comprised of approximately 65% for raw material costs and approximately 35% for manufacturing costs. The increase in cost of revenues for the three months ended March 31, 2008 as compared to the period ended March 31, 2007 is attributable, partially, to price increases of raw materials during the three months ended March 31, 2008. We also experienced an increase in overhead costs, including utilities and rent during the three months ended March 31, 2008 as compared to the three months ended March 31, 2007. We absorbed the majority of these increased costs in order to increase our market share in the disinfectant industry. We purchase raw materials from several primary suppliers and we have purchase contracts with these suppliers in an effort to ensure a steady supply of raw materials. We also purchase raw materials and finished product from Meirui, a related party.

For the three months ended March 31, 2008, cost of sales related to LiKang International was $2,375,160, or approximately 95% of revenues. The business of LiKang International mainly includes export of medical equipment, mechanical equipment and chemical products. Since 2007, the Chinese government canceled its tax reimbursement policy for many products that had been in place in 2006. In addition, the foreign currency exchange rate between USD and RMB has declined overall since 2007, dropping approximately 4% from 7.31 on January 1, 2008 to 7.02 on March 31, 2008.

GROSS PROFIT

Gross profit for the three months ended March 31, 2008 was $1,229,980, or approximately 26% of net revenues, as compared to $992,712, or approximately 35% of revenues, for the three months ended March 31, 2007.

OPERATING EXPENSES

Total operating expenses for the three months ended March 31, 2008 were $806,240, an increase of $289,283, or approximately 56%, from total operating expenses for the three months ended March 31, 2007 of $516,957. This increase included the following.

Selling Expenses

For the three months ended March 31, 2008, selling expenses were $328,428 as compared to $266,785 for the same period in 2007, an increase of $61,643, or approximate 23%.

Primarily items included in selling expenses during the first quarter of fiscal 2008, were expenses of $291,724 attributable to LiKang Disinfectant, an increase of $95,433, or approximately 49% from $196,291 for the first quarter of fiscal 2007, and expenses of $36,704 attributable to LiKang International, a decrease of $42,790, or approximately 54%, from $79,494 for the first quarter of fiscal 2007.

For the three months ended March 31, 2008, the increase in selling expenses from LiKang Disinfectant is primarily attributable to increases in meals and entertainment of $32,177, salaries, wages and staff benefits directly related to the sales efforts of $15,195, repair & maintenance expenses of $28,996, travel expense of $26,441 and conference expense of $14,755 which were offset by decreases in office expenses which includes telephone expense of $14,912 directly tied to sales efforts and shipping and freight of $1,247.

General and Administrative Expenses

For the three months ended March 31, 2008, general and administrative expenses were $477,812 as compared to $250,172 for the same period in 2007, an increase of $227,640, or approximate 91%.

Primarily items included in general and administrative during the first quarter of fiscal 2008 were expenses of $395,776 attributable to LiKang Disinfectant, and increase of $208,835, or approximately 112%, from $186,941 for the first quarter of fiscal 2007, and expenses of $21,446 attributable to LiKang International, an increase of $9,505, or approximately 79%, from $11,941 for the first quarter of 2007.

We incurred non-cash consulting fees during the three months ended March 31, 2008 of $20,168 as compared to $78,208 for the three months ended March 31, 2007, a decrease of $58,040 or approximately 74%. Non-cash consulting fees represents the amortization of fees to consultants under agreements entered into during the three month period ended March 31, 2008, which we pay in shares of our common stock.

OTHER INCOME (EXPENSE)

For the three months ended March 31, 2008 total other expenses amounted to $18,789 as compared to other income $105,393 for the three months ended March 31, 2007. This other income is primarily the result of a decrease of $120,362, or approximately 100% in other income, an increase of $484, or approximately 44% in interest income and an increase of $3,779, or approximately 32% in interest expense. We also recorded interest expense of $4,822. This interest expense reflects interest due to Ecolab with the loan of $400,000.

MINORITY INTEREST

For the three months ended March 31, 2008, we reported a minority interest expense of $30,535 as compared to $41,162 for the three months ended March 31, 2007. The minority interest expense is attributable to LiKang Disinfectant's minority shareholder, and had the effect of reducing our net income. However, on March 25, 2008, our wholly-owned subsidiary Linkwell Tech complete the Disinfectant Stock Purchase Agreement and acquired the remaining 10% equity interest of LiKang Disinfectant from Shanhai. Now the Company owns 100% equity interest in LiKang Disinfectant.

LIQUIDITY AND CAPITAL RESOURCES

As shown in the accompanying financial statements, our working capital increased $191,625 or approximately 3% from $5,563,984 on December 31, 2007 to $5,755,609 on March 31 2008. With the expansion of our businesses, we anticipate a strong demand on our capital resource in the near future. In addition to our working capital on hand, we intend to obtain required capital through a combination of bank loans and the sale of our equity securities. Although there are no commitments or agreements on the part of anyone at this time to provide us with additional bank financing or purchase of securities, we are optimistic to obtain additional capital resources to fund our business expansions.

We currently have no material commitments for capital expenditures. At March 31, 2008, we had approximately $1,133,102 in short term loans which will mature before December 31, 2008. Other than our working capital and loans, we presently have no other alternative capital resources available to us. We plan to build additional product lines and upgrade our manufacturing facilities, in order to expand our production capacity and improve the quality of our products. Based on our preliminary estimates, upgrades and expansion will require additional capital of approximate $1 million.

We need to raise additional capital resources to meet the demands described above. We may raise additional capital through the sale of equity securities. There can be no assurances that any additional debt or equity financing will be available to us on acceptable terms, if at all. The inability to obtain debt or equity financing could have a material adverse effect on our operating results, and as a result we could be required to cease or significantly reduce our operations, seek a merger partner or sell additional securities on terms that may be disadvantageous to shareholders.

NET CASH FROM OPERATING ACTIVITES

Net cash used in operating activities for the three months ended March 31, 2008 was $100,734 as compared to net cash used in operating activities of $373,799 for the same period ended March 31, 2007, a decrease of $273,065 or approximately 73%. For the three months ended March 31, 2008, we used cash to fund a net decrease in accounts receivable of $464,944, including a decrease of $290,183 in accounts receivables from related parties, an increase of $203,664 in inventories, an increase in advance from customers of $529,526 and a decrease of $226,656 in other receivables. These increases were offset by our net income, a decrease of $125,042 in prepaid expenses and other current assets and an increase of $534,331 in accounts payable, accrued expenses and other payables and increase of $27,328 in taxes payable.

NET CASH FROM INVESTING ACTIVITIES

Net cash used in investing activities for the three months ended March 31, 2008 was $560,948 as compared to net cash used in investing activities of $649,300 for the same period in 2007, a decrease of $88,352 or approximately 14%. This change is attributable to an increase of $117,008 due from related parties, an increase of $395,800 in cash paid in acquisition and an increase of $48,140 in purchases of property, plant and equipment.

NET CASH FROM FINANCING ACTIVITIES:

Net cash provided by financing activities was $530,491 for the three months ended March 31, 2008, as compared to net cash provided by financing activities of $124,311 for the three months ended March 31, 2007, an increase of $406,180 or approximately 327%. The increased cash flow from financing activities is chiefly resulted from an increase of proceeds from loans payable of $404,822 and an increase of repayment of loans from related parties of $125,669.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.

We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments: allowance for doubtful accounts; income taxes; stock-based compensation; asset impairment.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

We maintain an allowance for doubtful accounts to reduce amounts to their estimated realizable value. A considerable amount of judgment is required when we assess the realization of accounts receivables, including assessing the probability of collection and the current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts could be required. We initially record a provision for doubtful accounts based on our historical experience, and then adjust this provision at the end of each reporting period based on a detailed assessment of our accounts receivable and allowance for doubtful accounts. In estimating the provision for doubtful accounts, we consider: (i) the aging of the accounts receivable; (ii) trends within and ratios involving the age of the accounts receivable; (iii) the customer mix in each of the aging categories and the nature of the receivable; (iv) our historical provision for doubtful accounts;
(v) the credit worthiness of the customer; and (vi) the economic conditions of the customer's industry as well as general economic conditions, among other factors.

INCOME TAXES

We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. SFAS 109 prescribes the use of the liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we establish a valuation allowance. To the extent we establish a valuation allowance, or increase or decrease this allowance in a period, we increase or decrease our income tax provision in our statement of operations. If any of our estimates of our prior period taxable income or loss prove to be incorrect, material differences could impact the amount and timing of income tax benefits or payments for any period. In addition, as a result of the significant change in the Company's ownership, the Company's future use of its existing net operating losses may be limited.

The Company operates in several countries. As a result, we are subject to numerous domestic and foreign tax jurisdictions and tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions are taxed on various bases: income before taxes, deemed profits and withholding taxes based on revenue. The calculation of our tax liabilities involves consideration of uncertainties in the application and interpretation of complex tax regulations in a multitude of jurisdictions across our global operations.

We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. The tax liabilities are reflected net of realized tax loss carry forwards. We adjust these reserves upon specific events; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when the contingency has been resolved and the liabilities are no longer necessary.

Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact upon the amount of income taxes that we provide during any given year.

STOCK- BASED COMPENSATION

We account for share-based payments in accordance with SFAS No. 123(R), Share-Based Payment. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating expected volatility. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted.

ASSET IMPAIRMENT

We periodically evaluate the carrying value of other long-lived assets, including, but not limited to, property and equipment and intangible assets, when events and circumstances warrant such a review. The carrying value of along-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Significant estimates are utilized to calculate expected future cash flows utilized in impairment analyses. We also utilize judgment to determine other factors within fair value analyses, including the applicable discount rate

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements that have or are reasonably likely . . .