Edgar Filing: RENHUANG PHARMACEUTICALS INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended January 31, 2009

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: O-24512

RENHUANG PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Nevada	88-1273503
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

No. 281, Taiping Road, Taiping District,

Harbin, Heilongjiang Province, 150050, P. R. China

(Address of principal executive offices)

Registrant's telephone number, including area code 86-451-5762-0378

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 x

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 o No o

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

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨	Smaller Reporting Company x

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

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of March 10, 2008, there were 35,096,680 shares of common stock, par value $0.001, issued and outstanding.

Renhuang Pharmaceuticals, Inc.

TABLE OF CONTENTS

PART I

ITEM 1	FINANCIAL STATEMENTS	4

ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26

ITEM 4	CONTROLS AND PROCEDURES	26

PART II
ITEM 1	LEGAL PROCEEDINGS	28

ITEM 1A	RISK FACTORS	28

ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29

ITEM 3	DEFAULTS UPON SENIOR SECURITIES	29

ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	29

ITEM 5	OTHER INFORMATION	29

ITEM 6	EXHIBITS	29

PART I - FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning possible or assumed future results of operations of the Company set forth under the heading “Management's Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. The Company's future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1 Financial Statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

	January 31, 2009		October 31, 2008
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	10,876,693	$	9,747,693
Accounts receivable, net		25,645,306		20,844,478
Inventories		2,525,065		2,625,385
Prepayments and other receivables, net		295,756		167,338
Due from related party		343,573
TOTAL CURRENT ASSETS		39,686,393		33,384,894

PROPERTY, PLANT AND EQUIPMENT, NET		2,540,993		2,620,949

TOTAL ASSETS	$	42,227,386	$	36,005,843

The accompanying notes are an integral part of the consolidated financial statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

	January 31, 2009		October 31, 2008
	(Unaudited)
CURRENT LIABILITIES
Accounts payable	$	280,097	$	193,934
Other payables		1,700,909		1,607,489
Due to related party		—		159,664

TOTAL LIABILITIES		1,981,006		1,961,087

COMMITMENTS

STOCKHOLDERS' EQUITY
Preferred stock - Authorized preferred shares 1,000,000, issued and outstanding number of shares: nil and at par value of nil
Common Stock - Authorized common shares 100,000,000, issued and outstanding number of shares 35,096,680 at par value of $0.001		35,097		35,097
Additional paid-in capital		6,595,400		6,595,400
Reserves		2,867,674		2,867,674
Retained earnings		27,511,998		21,245,271
Accumulated other comprehensive income		3,236,211		3,301,314
TOTAL STOCKHOLDERS' EQUITY		40,246,380		34,044,756

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	42,227,386	$	36,005,843

The accompanying notes are an integral part of the consolidated financial statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended January 31,
	2009			2008
SALES	$	13,769,997		$	10,458,856

COST OF SALES		(6,480,493	)		(4,797,732	)

GROSS PROFIT		7,289,504			5,661,124

SELLING AND DISTRIBUTION EXPENSES		(5,406	)		(69,344	)

ADVERTISING EXPENSE		(292,684	)		(681,431	)

GENERAL AND ADMINISTRATIVE EXPENSES		(618,374	)		(775,070	)

RESEARCH AND DEVELOPMENT		(111,778	)		(341,894	)

(PROVISION FOR DOUBTFUL ACCOUNTS)/RECOVERY		—			41,432

DEPRECIATION		(3,659	)		(3,126	)

INCOME FROM OPERATIONS		6,257,603			3,831,691

OTHER INCOME		9,128			13,973

INCOME BEFORE INCOME TAXES		6,266,731			3,845,664

INCOME TAXES		—			—

NET INCOME	$	6,266,731		$	3,845,664

OTHER COMPREHENSIVE INCOME

FOREIGN CURRENCY TRANSLATION ADJUSTMENT		(65,103	)		967,392

COMPREHENSIVE INCOME	$	6,201,628		$	4,813,056

BASIC AND DILUTED EARNINGS PER SHARE	$	0.18		$	0.11

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING –BASIC – AND DILUTED		35,096,680			35,096,680

The accompanying notes are an integral part of the consolidated financial statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended January 31,
	2009			2008
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,266,731		$	3,845,664
Adjustments to reconcile net income to net cash from operating activities :
Depreciation		88,464			80,240
Provision for doubtful account		—			(41,432	)
Changes in operating assets and liabilities:
Accounts receivable		(4,896,584	)		(4,434,966	)
Inventories		95,701			(911,844	)
Prepayments and other receivables		(128,805	)		(203,934	)
Accounts payable and accruals, net		86,569			173,496
Other payables		96,355			52,393
Due to related parties		(448,118	)		(8,992	)
NET CASH - OPERATING ACTIVITIES		1,160,313			(1,449,375	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(13,133	)		(71,514	)
NET CASH - INVESTING ACTIVITIES		(13,133	)		(71,514	)

CASH FLOWS FROM FINANCING ACTIVITIES:		—			—

The accompanying notes are an integral part of the consolidated financial statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

	Three Months Ended January 31,
	2009			2008
	(Unaudited)			(Unaudited)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	1,147,180		$	(1,520,889	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(18,181	)		386,588

Cash and cash equivalents, beginning of period		9,747,694			10,153,603

Cash and cash equivalents, end of period	$	10,876,693		$	9,019,302

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	—		$	—

Income taxes paid	$	—		$	—

The accompanying notes are an integral part of the consolidated financial statements

RENHUANG PHARMACEUTICALS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. REORGANIZATION TRANSACTIONS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Renhuang Pharmaceuticals, Inc., (“Renhuang”) or the (“Company”) was incorporated in the State of Nevada on August 18, 1988 and shares of the Company's Common Stock are trading on the pink sheet under the symbol RHGP. The Company owns 100% of Harbin Renhuang Pharmaceutical Company Limited (the “BVI”), a holding company. Substantially all of the Company’s operations are conducted through BVI’s wholly-owned subsidiary Harbin Renhuang Pharmaceuticals Co., Ltd (“Renhuang China” or the “Subsidiary”) which was incorporated in Harbin City in the People’s Republic of China (the “PRC” or “China”) in 1996. The subsidiary is principally engaged in production and sales of nutraceutical and bio-pharmaceutical products including tablets, drinks and health food; the Subsidiary’s sales network covers various provinces, cities, and counties throughout China.

Unless otherwise provided in this current report, all references in this current report to “we”, “us”, “our company”, “our”, or the “Company” refers to Renhuang Pharmaceuticals, Inc. on a consolidated basis, including Renhuang China and the BVI.

2. BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company are stated in United States dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America and include the financial statements of the Company and its majority-owned subsidiaries. All significant intercompany transactions and balances are eliminated on consolidation.

The accompanying unaudited consolidated financial statements as of January 31, 2009 and for the three months ended January 31, 2009 and 2008 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X applicable to smaller reporting companies. In the opinion of management, these unaudited consolidated interim financial statements include all adjustments considered necessary to make the financial statements not misleading. The results of operations for the three months ended January 31, 2009 are not necessarily indicative of the results for the full fiscal year ending October 31, 2009. The unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended October 31, 2008 as reported in Form 10-K.

3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

A. CASH AND CASH EQUIVALENTS

The Company considers cash and cash equivalents to include cash on hand and demand deposits with banks with an original maturity of three months or less.

B. ACCOUNTS RECEIVABLE, NET

Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. The Company issues invoices at month-end for the deliveries made during that monthly period. . An account is considered past due after 180 days from the invoice date as at January 31,2009 and October 31, 2008. The Company extended its standard credit terms to 180 days during 2008 in order to increase its market share. The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility and are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The allowance on the doubtful accounts was $442,122 as at January 31, 2009 ($442,912 at October 31, 2008). The Company does not accept returns or offer any post-sales marketing supporting to customers.

C. INVENTORIES

Inventories are stated at the lower of cost or net realizable value. Production cost is allocated at FIFO and overhead cost is calculated on the weighted average basis. The cost includes all costs to acquire, transport and process inventories to their present location and condition. The Company evaluates the net realizable value of its inventories on a periodic basis and records a provision for loss, if necessary, to reduce inventories to their net realizable value. There were $64,033 and $64,147 inventory reserve provisions recorded at January 31, 2009 and October 31, 2008, respectively.

D. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at cost. The cost of repairs and maintenance 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 as components of income in the year of disposition.

The Company records depreciation of its property, plant and equipment on a straight-line basis over the estimated useful lives of the assets based on their costs. The useful lives for property, plant and equipment are estimated as follows:

Machinary and equipment		10 years
Office equipment		5 to 10 years
Motor vehicles		5 to 10 years

E. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of certain financial instruments, including cash, accounts receivable, other receivables, accounts payable, and other payables approximate their fair values as of January 31, 2009 because of the relative short-term maturity of these instruments.

3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

F. INCOME TAXES

The Company accounts for income tax under the provisions of Statements of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Deferred income taxes are provided using the liability method. Under the liability method, deferred income taxes are recognized for all significant temporary differences between the tax and financial statement bases of assets and liabilities. In addition, the Company is required to record all deferred tax assets, including future tax benefits of capital losses carried forward, and to record a “valuation allowance” for any deferred tax assets where it is more likely than not that the asset will not be realized.

In accordance with the relevant income tax laws applicable to wholly foreign owned enterprises operating in PRC, the profits of the Company are fully exempt from income tax for two years (“tax holiday”), commencing from the first profit making year of operations, followed by a 50% exemption for the immediate next three years (“tax preferential period”), after which the profits of the Company will be taxable at the full rate, currently 25% (See Note 12). On January 22, 2009, the local government extended the tax holiday for the Company to the end of 2009.

G. RELATED PARTIES

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities (See Note 15).

H. IMPAIRMENT OF LONG-TERM ASSETS

The Company reviews long-lived assets for potential impairment based on a review of projected undiscounted cash flows associated with these assets. Long-lived assets are included in impairment evaluations when events and circumstances exist that indicate the carrying amount of these assets may not be recoverable. Measurement of impairment losses for long-lived assets that the Company expects to hold and use is based on the estimated fair value of the assets. Therefore, future changes in the Company’s strategy and other changes in its operations could impact the projected future operating results that are inherent in estimates of fair value, resulting in impairments in the future. Additionally, other changes in the estimates and assumptions, including the discount rate and expected long-term growth rate, which drive the valuation techniques employed to estimate the fair value of long-lived assets could change and, therefore, impact the assessments of impairment in the future. As of January 31, 2009, management expects its long-lived assets to be fully recoverable.

I. FOREIGN CURRENCY TRANSLATION

The Company maintains its books and accounting records in its functional currency, the Renminbi, (which is the PRC's currency).

In translating the financial statements of the Company from its functional currency into United States dollars (“USD”), its reporting currency, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the transaction, if any, are included in accumulated other comprehensive income in stockholders’ equity.

Foreign currency transaction gains and losses, if any, are included in the determination of net income for the period.

The Renmimbi (“RMB”) is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or can be, converted into USD at the rates used in translation. The exchange rate between the RMB and the USD on January 31, 2009 and the average rate from October 31, 2008 to January 31, 2009 are:

Exchange rate	Oct 31,2008	Jan 31, 2009
Balance Sheets- period end RMB : USD exchange rate	6.8258:1	6.8380:1
Operating Statement: Period average RMB : USD exchange rate	7.0467:1	6.8333:1

J. USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates primarily related to the realizable value of accounts receivable, inventories, and the useful lives of plant and equipment. Actual results when ultimately realized could differ from those estimates.

K. REVENUE RECOGNITION

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed and determinable, and collectability is reasonably assured; this policy is in accordance with the provisions of Staff Accounting Bulletin No. 104. Renhuang generally recognizes product sales when the product is shipped.

The Company provides rebates to its sales agents (who act as wholesalers) as an incentive plan. The rebate rate is set on a product-by-product basis. When revenue is recognized, the rebate is accounted for as an offset to revenues in accordance with EITF Issue No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. On average, the rebate rate was 19% and 17% of gross revenue in the three months ended January 31, 2009 and 2008, respectively.

L. CERTAIN RISKS AND CONCENTRATIONS

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of trade accounts receivable. The Company performs ongoing credit evaluations with respect to the financial condition of its creditors, but does not require collateral. In order to determine the value of the Company's accounts receivable, the Company records a provision for doubtful accounts to cover probable credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable.

The Company is subject to the consideration and risks of operating in the PRC. These include risks associated with the political and economic environment, foreign currency exchange and the legal system in the PRC.

M. RESEARCH AND DEVELOPMENT

Research and development (“R&D”) costs are expensed as incurred. Engineers and technical staff are involved in the production of our products as well as on-going research, with no segregation of the portion of their salaries relating to research and development from the portion of their salaries relating to production. The total salaries are included in cost of sales. R&D for the three months ended January 31, 2009 and 2008 are $111,778 and $341,894, respectively.

N. ADVERTISING

Advertising costs consist primarily of promoting the Company and the Company’s products through television and print advertisements in trade publications. Advertising costs are expensed as incurred. They are separately disclosed in the consolidated statements of income and comprehensive income.

O. STOCK-BASED COMPENSATION

The Company measures and records the cost of employee services received in exchange for stock-based compensation at the grant date fair value of the award. This method is in accordance with SFAS No. 123 (revised 2004), “Share-Based Payment”.

P. CLASSIFICATION OF OPERATING COSTS AND EXPENSES

The Company records its operating costs and expenses using the following general classifications:

Cost of Goods Sold

Cost of goods sold consists primarily of raw materials, direct labor and manufacturing overhead. Manufacturing overhead includes an allocation of purchasing and receiving costs, inspection fees, warehousing utilities, supplies, factory and equipment repairs and maintenance, safety equipment and supplies, packing materials, loading fees, and depreciation.

Selling Expenses

Selling expenses consist primarily of travel and entertainment, maintenance, payroll (including taxes and benefits) for sales staff, telephone, utilities, insurance, sales commissions and export fees.

General and Administrative Expenses

General and administrative expenses consist primarily of general office expenses, travel and entertainment, transportation, administrative payroll, payroll taxes and benefits, maintenance, telephone, utilities, printing, professional fees, continuing education, licenses and fees.

Q. EARNINGS PER SHARE

The Company reports earnings per share in accordance with SFAS No. 128, “Earnings per Share.” Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares available. Diluted earnings per share is computed using the treasury stock method whereby the denominator is increased by the net dilution on the exercise of the warrants and other common stock equivalents if the additional common shares are dilutive. There were nil and 25,000 potentially dilutive securities outstanding during the three month periods ended January 31, 2009 and 2008, respectively.

R. COMPREHENSIVE INCOME

The Company has adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general-purpose financial statements. SFAS No. 130 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. In the three months ended January 31, 2009, the only component of other comprehensive income is foreign translation loss of $65,103 (gain $967,392 in the three months ended January 31, 2008), which is included within the accumulated other comprehensive income in the balance sheet.

S. RECENT PRONOUNCEMENTS

The Company adopted SFAS No. 157 effective January 1, 2008, except for the nonfinancial assets and liabilities that are subject to a one-year deferral allowed by FASB Staff Position (FSP) SFAS 157-2 (“ FSP SFAS 157-2”). FSP SFAS 157-2 delays the effective date of SFAS No.157 until fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of SFAS No.157 did not have a material effect on our financial statements. The Company does not expect the adoption of SFAS No.157 will have a material effect on our financial statements beginning in year 2009 as it relates to the items subject to the one-year deferral allowed by FSP SFAS 157-2.

In February 2007, the FASB issued Statement No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No.159). This statement permits companies to choose to measure many financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159, effective January 1, 2008, did not have a material impact on the Company’s financial statements.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in an acquiree at the acquisition date, measured at their fair values as of that date. Transaction costs and restructuring costs are accounted for separately from the business combination. This Statement also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values. SFAS 141(R) is effective for the Company’s fiscal year beginning January 1, 2009 on a prospective basis.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires entities to report noncontrolling (minority) interests of consolidated subsidiaries as a component of shareholders’ equity on the balance sheet; include all earnings of a consolidated subsidiary in consolidated results of operations; and treat all transactions between an entity and the noncontrolling interest as equity transactions between the parties. SFAS 160 is effective for the Company’s fiscal year beginning January 1, 2009, and adoption is prospective only; however, the presentation and disclosure requirements must be applied retrospectively. The Company does not consolidate any partially owned subsidiaries and therefore does not expect the application of this standard to have a material impact on its consolidated financial position, cash flows or results of operations.

In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of SFAS 133” ("SFAS 161"). This Statement will require enhanced disclosures about derivative instruments and hedging activities to enable investors to better understand their effects on an entity's financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not expect the adoption of SFAS 161 to have a material impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (FAS No.162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles". The implementation of this standard will not have a material impact on the Company's financial position and results of operations.

4. CASH AND CASH EQUIVALENTS

Cash and cash equivalents as of January 31, 2009 and October 31, 2008 consist of the following:

	January 31, 2009		October 31, 2008

Cash on hand	$	7,708	$	20,880
Cash in banks		10,868,985		9,726,813
	$	10,876,693	$	9,747,693

The Company maintains a bank account in the PRC which is not protected by FDIC insurance or other insurance. As of January 31, 2009, the Company had $10,868,985 in uninsured deposits with Chinese banks. Historically, the Company has not experienced any losses in such accounts.

5. ACCOUNTS RECEIVABLE, NET

The Company's accounts receivable as of January 31, 2009 and October 31, 2008 are summarized as follows:

	January 31, 2009			October 31, 2008
Accounts receivable	$	26,087,428		$	21,287,390
Less: Allowance for doubtful accounts		(442,122	)		(442,912	)
Accounts receivable, net	$	25,645,306		$	20,844,478

As of January 31, 2009, there are three customers who accounted for $3,017,006, $2,826,329 and $2,546,415 of accounts receivable, which are approximately 12%, 11% and 10% of the total balance, respectively.

These same three major customers also have sales amounts over 10% of the total sales for the three months ended January 31, 2009 and 2008 as follows:

	2009				2008
Customer A:	$	1,454,267	11	%	$	1,220,295	12	%
Customer B	$	1,325,374	10	%	$	1,208,579	12	%
Customer C:	$	1,384,263	10	%		–	–

6. PREPAYMENT AND OTHER RECEIVABLES, NET

Prepayments and other receivables as of January 31, 2009 and October 31, 2008 consist of the following:

	January 31, 2009				October 31, 2008

Prepayment and other receivables		$	654,996			$	527,220
Less: allowance for doubtful accounts			(359,240	)			(359,882	)
		$	295,756			$	167,338

As of January 31, 2009, the balance in prepayment and other receivables mainly includes advances to employees and prepayment for purchase materials of $128,206 and $148,187, respectively. As of October 31, 2008, the Company had advances to employees of approximately $114,000.

7. INVENTORIES

The Company's inventories as of January 31, 2009 and October 31, 2008 are summarized as follows:

	January 31, 2009			October 31, 2008

Raw materials	$	1,710,222		$	1,533,472
Finished goods		284,527			249,103
Work in progress		594,349			906,957
Less: Valuation allowance		(64,033	)		(64,147	)
	$	2,525,065		$	2,625,385

8. PROPERTY, PLANT AND EQUIPMENT, NET

	January 31, 2009			October 31, 2008
Cost:-
Machinery and equipment	$	3,357,254		$	3,350,762
Office equipment and furnishings		50,951			53,015
Motor vehicles		52,920			50,388
		3,461,125			3,454,165

Less: Accumulated depreciation		(920,132	)		(833,216	)

Net book value	$	2,540,993		$	2,620,949

For the three months ended January 31, 2009, depreciation expenses relating to property, plant and equipments were $88,464, consisting of $84,805 recorded as cost of sales and $3,659 in general and administrative expenses. These expenses were $80,240 for the three months ended January 31, 2008, consisting of $77,114 recorded as cost of sales and $3,126 in general and administrative expenses.

On March 3, 2007, the Company entered into an agreement to purchase certain assets and/or the rights to use those assets from ZhangFa ShiYe Qingyang (“QingYang”) for approximately $467,000. The Company paid a deposit of approximately $302,000 to QingYang and agreed to assume a bank loan of approximately $165,000 to secure the rights. The assumed loan amount is included in other liabilities as of January 31, 2009 and October 31, 2008. The assets acquired, which are comprised of property, equipment and inventory (the Collateral”), are pledged against the bank loan. Although QingYang transferred operational control of the Collateral to the Company, the Company was unable to obtain consent from the bank and local governmental authorities to transfer legal title of the Collateral to Renhuang; as a result, the Collateral is not recorded as an asset of Renhuang though the deposit was initially recorded in the amount of $467,000.

After paying the deposit, the Company began negotiating with the bank and local authorities to settle all outstanding issues and secure full ownership of the assets. The Company was unable to finalize those negotiations prior to October 31, 2007 and Management decided to record an impairment reserve against the entire deposit amount at that date as the Company did not have legal title to the Collateral and was unable to determine when or if it would gain title. That $467,000 impairment was recorded as a component of general and administrative expenses during the fiscal year ended October 31, 2007. Though the QingYang facility (which constitutes the majority of the Collateral) has not operated subsequent to the agreement it remains under the control of Renhuang. Management anticipates obtaining title to the Collateral during 2009 upon the conclusion of negotiations with the bank and local government authorities.

9. ACCOUNTS PAYABLE

Accounts payable of $280,097 and $193,934 as of January 31, 2009 and October 31, 2008, respectively, consists of balances payable to supplies.

The suppliers from whom the purchased amount is over 10% of the total purchase for the three months ended January 31, 2009 and 2008 are listed as:

	2009				2008
Supplier A:	$	1,254,870	25	%	$	1,082,404	22	%
Supplier B:	$	598,879	12	%	$	543,633	11	%

10. OTHER PAYABLES

The balance as of January 31, 2009, mainly includes taxes payable of $675,822 and social insurance payable of $745,122.

As of October 31, 2008, the balance includes taxes payable of $693,607 and social insurance payable of $645,110.

11. RESERVES

The reserve funds as of January 31, 2009 and October 31, 2008 comprise the following:

	January 31, 2009		October 31, 2008
Statutory surplus reserve fund	$	2,585,297	$	2,585,297
Public welfare fund	282,377		282,377
	$	2,867,674	$	2,867,674

Pursuant to the relevant laws and regulations of the PRC, the Company is required to annually transfer 10% of its after tax profit as reported on financial statements prepared under the accounting principles of the PRC to a statutory surplus reserve fund until the balance reaches 50% of the registered share capital. This reserve can be used to make up any losses incurred or to increase the share capital. Except for reducing losses incurred, any other application may not result in this reserve balance falling below 25% of the registered capital.

Prior to January 1, 2007, the Company was required each year to transfer 5% of its after tax profit as reported on financial statements prepared under the accounting principles of the PRC to the public welfare funds. This reserve was restricted to capital expenditure for employees’ collective welfare facilities that are owned by the Company. The public welfare funds are not available for distribution to the stockholders (except in liquidation). Once capital expenditures for staff welfare facilities have been made, an equivalent amount must be transferred from the public welfare funds to the discretionary common reserve funds. Due to a change in PRC law, appropriation of profit to the public welfare funds is no longer required.

The Company reserves the statutory surplus at year end. As of January 31, 2009, the estimated statutory surplus for the three months then ended was approximately $626,673.

12. INCOME TAXES

The Company is subject to state and local income taxes within the PRC at the applicable tax rate as reported in their PRC statutory financial statements in accordance with the relevant income tax laws.

For the year of 2008 and 2009, the Company was granted a tax holiday and is entitled to full exemption from corporation income taxes through December 2009.

Had the Company not been granted the tax holiday or been an eligible wholly foreign owned company, the income tax provision at the general PRC income rate of 25% starting from January 1, 2008 and 33% previously would have been approximately $1.6 million and $1.2 million for the three months ended January 31, 2009 and 2008, respectively.

13. COMMON STOCK

During the three months ended January 31, 2009, no common stock was issued.

14. RELATED PARTY TRANSACTIONS

The Company rents property from Harbin Renhuang Pharmaceutical Stock Co. Ltd. (“Old Renhuang”), a Company owned by the Company’s major shareholder. The lease term is from May 1, 2008 to May 1, 2009, with a monthly rental payment of approximately $51,200. The Company has due from related party of approximately $696,000 including the construction fees paid on behalf of Old Renhuang of approximately $248,000 and trade receivable of approximately $448,000. As of January 31, 2009, the Company also has due to relate party of approximately $408,000, which was the professional fee paid by Old Renhuang in 2007 for the reverse merger. The Company offset the due from and due to related party, therefore, the net balance was due from related party of approximately $288,000 at January 31, 2009.

As of January 31, 2009, the net sales to Heilongjiang Renhuang Pharmaceutical Limited, an Old Renhuang owned subsidiary, was approximately $375,000.

15. COMMITMENTS AND CONTINGENCIES

A. CAPITAL AND LEASE COMMITMENTS

The Company entered into a lease for office space from May 1, 2007 to April 30, 2010, with average monthly rental payment $10,481. The Company also rents factory space from a related party (See Note 14) with a monthly payment of approximately $51,200.

The minimum future payments for the rental leases as followings:

	January 31, 2009
	Office space		Factory
2010	$	125,768	$	153,554
2011		31,442		–
Thereafter		–		–
Total	$	157,210	$	153,554

B. LEGAL PROCEEDINGS

The Company is not currently involved in any litigation. There are no actions, suits, proceedings, inquiries or investigations before or by any court, public board, government agency, self-regulatory organization or body pending to the knowledge of the executive officers of the Company.

16. EMPLOYEE WELFARE PLAN

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for all permanent employees. Pursuant to regulations promulgated by the local authority in the PRC, the retirement pension insurance, unemployment insurance, health insurance, injury insurance and pregnancy insurance are established for employees during the term of their employment. For the three months ended January 31, 2009, the level of contribution to these funds was set at 22% of the average employee salary determined by the Social Welfare Bureau. The Company included the payable amount of $101,232 as of January 31, 2009 in other payables.

17. VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

The Company faces a number of risks and challenges since its operations are in the PRC. The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

18. SUBSEQUENT EVENT

On May 15, 2009, an agreement was reached between Renhuang and Allied Merit International Investments, Inc. and Griffin Ventures Ltd. (the “Investors”). The Investors will provide Renhuang with $1.5 million by July 31, 2009, in exchange for an aggregate of 2,142,856 shares of the Company’s Common Stock and 1,071,428 Warrants with an exercise price of $0.875. The Company issued the 2,142,856 shares on May 20, 2009 and received the $1.5 million on August 7, 2009.

The Company extended the lease with Old Renhuang on May 1, 2009. No modification was made on the minimum payment table in Note 16 regarding the renewed lease.

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The following discussion of the financial condition and results of the operation of Renhuang Pharmaceuticals, Inc. include forward-looking statements involving risk and uncertainties and should be read in conjunction with the financial statements and notes included in this Quarterly Report on Form 10-Q. Actual results may differ from the forward-looking statements due to a variety of factors.

Results of operations

For the three months ended January 31, 2009 as compared to January 31, 2008

Revenues, Expenses and Net Income

	For the Three Months Ended January 31,
	2009			2008

Revenue	$	13,769,997		$	10,458,856
Cost of Sales		(6,480,493	)		(4,797,732	)
Selling and Distribution Expenses		(5,406	)		(69,344	)
Advertising Expenses		(292,684	)		(681,431	)
General and Administrative Expenses		(618,374	)		(775,070	)
Research and Development		(111,778	)		(341,894
Provision for Doubtful Account		—			41,432
Depreciation and Amortization		(3,659	)		(3,126	)
Other Income (expense)		9,128			13,973
Net Income	$	6,266,731		$	3,845,664

Revenues

Our revenues for the three months ended January 31, 2009 were $13,769,997, which was $3,311,141, or 32%, higher than $10,458,856 for the three months ended January 31, 2008. The increase was primarily due to our marketing expansion. During the three months ended January 31, 2009, we increased production of our higher profit margin products in line with our overall strategy and decreased production of our lower profit margin products. Our revenues for the three months ended January 31, 2009 consisted primarily of sales of the following products: Acanthopanax (Siberian Ginseng) products, Shark Power Health Care products, and other Chinese traditional medical products.

Cost of Sales

Our cost of sales for the three months ended January 31, 2009 was $6,480,493, which was $1,682,761, or 35%, higher than $4,797,732 for the quarter ended January 31, 2008. The increase in our cost of sales was primarily due to the increase of revenue. The costs for the three months ended January 31, 2009 consisted primarily of raw material, labor and production costs.

Selling and Distribution Expenses

Our selling and distribution expenses are those expenses related to the sales of our products and the costs in distributing those products. For the three months ended January 31, 2009, the expenses were $5,406, which was $63,938 or 92% lower than $69,344 for the same period in 2008. This decrease was due to the reduction of traveling expenses of approximately $43,000 with more efficient cost management. The sales rebates of $3,165,828 and $2,576,838 for the three months ended January 31, 2009 and 2008, respectively, were directly deducted from revenue.

Advertising Expenses

For the three months ended January 31, 2009, we had advertising expenses of $292,684. These advertising expenses were primarily related to the advertising of Siberian Ginseng products. The advertising expenses were $681,431 for the same period in 2008. This decrease was due to a less aggressive advertising strategy.

General and Administrative Expenses

Our general and administrative expenses were $618,374 for the three months ended January 31, 2009, which were primarily composed of $137,110 for payroll, $220,757 for rental expenses, $95,635 for professional fees, $16,041 for entertainment expenses, and $11,625 for travelling expenses. The expenses were lower than the $775,070 for the three months ended January 31, 2008, which were primarily composed of $49,161 for traveling expenses, $140,729 for payroll, and $30,479 for office expenses.

Research and Development

For the three months ended January 31, 2009, we spent $111,778 on research and development as compared to $341,894 for the same period in 2008. In the period ended January 31, 2008, we engaged in more Siberian Ginseng related R&D projects than for the period ended January 31, 2009.

Depreciation

We had depreciation expenses of $3,659 for the three months ended January 31, 2009, which were related to property, plant and equipment. The expenses were $3,126 for the same period in 2008. The expenses were comparable for the two periods.

Liquidity and Capital Resources

Our cash, current assets, total assets, current liabilities, and total liabilities as of January 31, 2009 are as follows:

	January 31, 2009

Cash and Cash Equivalents	$	10,876,693
Total Current Assets	$	39,686,393
Total Assets	$	42,227,386
Total Current Liabilities	$	1,981,006
Total Liabilities	$	1,981,006
Working Capital	$	37,705,387

Sources and Uses of Cash

Operations

Net cash generated from operating activities was $1,160,313 for the three months ended January 31, 2009, compared to net cash used for operating activities of $1,449,375 for the three months ended January 31, 2008. Our net cash generated from operating activities for the current quarter was primarily $4,896,584 in net accounts receivables, $128,805 in prepayment and other receivables, $96,355 in other payables, $95,701 in inventories and $86,569 in total accounts payable and accruals. Cash generated from operating activities declined as the Company extended credit terms for some of our key accounts in order to obtain larger market share.

Investments

Net cash used in investing activities was $13,133 for the quarter ended January 31, 2009. Our cash used in investing activities was related to the acquisition of property, plant and equipment.

Financing

There were no financing activities during the quarter ended January 31, 2009.

Debt Instruments, Guarantees, and Related Covenants

The Company does not have any long term debt or significant short term debt, and has not entered into any guarantee arrangements or other related covenants.

Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. As such, in accordance with the use of accounting principles generally accepted in the United States of America, our actual realized results may differ from management’s initial estimates as reported.. Our significant accounting policies include:

Property, plant and equipments are carried at cost. The cost of repairs and maintenance 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 as components of income in the year of disposition. The Company records depreciation of its property, plant and equipment on a straight-line basis over the estimated useful lives of the assets based on their costs.

The Company provides rebates to its sales agents (who act as wholesalers) as an incentive plan. The rebate rate is set on a product-by-product basis. When revenue is recognized, the rebate is accounted for as an offset to revenues in accordance with EITF Issue No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products).

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations

	Payments due by period
Obligations	Total		1 Year	2 Years		3Years	4Years
Operating Lease Obligations – Total		310,764	279,322		31,442	-0-		-0-
Operating Lease Obligations - Related Party		153,554	153,554		-0-	-0-		-0-
Operating Lease Obligations - Third Party		157,210	125,768		31,442	-0-		-0-

As noted above, we do lease office space from Old Renhuang, but we rent the space pursuant to a one year lease and therefore, in accordance with GAAP, we have not capitalized this expense.

ITEM 3

Quantitative and Qualitative Disclosures About Market Risk

Not required.

ITEM 4

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of January 31, 2009, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Principal Accounting Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Principal Accounting Officer have concluded that as of January 31, 2009, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

Evaluation of Internal Control over Financial Reporting

As required by Exchange Act Rules 13a-15(f) and 15d-15(f), our management has carried out an evaluation, under the supervision of our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our internal control over financial reporting as of January 31, 2009.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company,

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of management and the board of directors of the Company, and

Provide reasonable assurance regarding prevention (or timely detection) of unauthorized acquisition, use, or disposition of the Company's assets, which could have a material effect on Company consolidated financial statements.

Because of certain inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5) or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following material weakness that has caused management to conclude that, as of January 31, 2009, our internal control over financial reporting was not effective:

We were unable to meet our requirements to timely file our Annual Report on Form 10-K or our Quarterly Report on Form 10-Q for the three months ended January 31, 2009. Management evaluated the impact of our inability to timely file periodic reports with the Securities and Exchange Commission on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted in the inability to timely make these filings represented a material weakness.

We were unable to properly review the U.S. GAAP adjustment procedures, disclosure reporting processes, and consolidated financial statements preparation processes.

We were unable to effectively provide oversight of internal control over financial reporting because there was a lack of a proper reporting channel between the internal audit function and an audit committee.

Remediation of Material Weaknesses

Management recognizes the importance of these material weaknesses and is committed to remediation and may institute a comprehensive remediation plan. The plan will include, but will not be limited to, hiring finance management, resources and personnel with knowledge and experience in U.S. GAAP, and where necessary, the plan will utilize the services of external consulting professionals in the area of accounting advisory services. Furthermore, the plan will re-organize the internal audit function and establish communication channels between the internal audit function and an audit committee.

Management intends to allocate resources to insure that reports are filed on a timely basis in the future.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1

Legal Proceedings

We are not a party to, or threatened by, any litigation or proceedings.

ITEM 1A

Risk Factors

Not required for smaller reporting company.

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

There have been no events that are required to be reported under this Item.

ITEM 3

Defaults Upon Senior Securities

There have been no events that are required to be reported under this Item.

ITEM 4

Submission of Matters to a Vote of Security Holders

There have been no events that are required to be reported under this Item.

ITEM 5

Other Information

There have been no events that are required to be reported under this Item.

ITEM 6

Exhibits

(a)

Exhibits

3.1 (1)		Restated Articles of Incorporation, as filed with the Nevada Secretary of State on April 21, 2003.

3.2 (5)		Amendment to Articles of Incorporation, as filed with the Nevada Secretary of State on July 28, 2006.

3.3 (1)		Second Restated Bylaws

10.1 (2)		Common Stock Purchase Agreement dated September 19, 2005.

10.2 (2)		Securities Purchase Agreement dated September 16, 2005.

10.3 (3)		Reorganization, Stock and Asset Purchase Agreement dated September 30, 2005.

10.4 (3)		Stock Purchase Agreement dated September 30, 2005.

10.5 (4)		Securities Purchase Agreement dated September 16, 2005.

10.6 (5)		Loan Agreement with Heilongjiang Yuejintiande Building and Installation Project Co.,Ltd

10.7 (6)		Acquisition Agreement between Harbin Renhuang Pharmaceutical Co., Ltd. and Zhongfa Industrial Group Yerui Pharmaceutical Co., Ltd., dated February 28, 2007

21.1 (5)		Subsidiaries of the Registrant

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1		Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)		Incorporated by reference to our Current Report on Form 8-K dated April 21, 2003, filed with the Commission on April 22, 2003.
(2)		Incorporated by reference from our Current Report on Form 8-K filed with the Commission on September 23, 2005.
(3)		Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 3, 2005.
(4)		Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 14, 2005.
(5)		Incorporated by reference from our First Amended Transition Report on Form 10-K/A filed with the Commission on February 22, 2007.
(6)		Incorporated by reference from our Quarterly Report on Form 10-Q for the period ended January 31, 2007, filed with the Commission on March 19, 2007.

SIGNATURES

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

	Renhuang Pharmaceuticals, Inc.

Dated: January 7, 2010		/s/ Li Shaoming
	By:	Li Shaoming
		President and
		Chief Executive Officer

Dated: January 7, 2010		/s/ Zuoliang Wang
	By:	Zuoliang Wang
		Interim Chief Financial Officer