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<SEC-DOCUMENT>0001127855-04-000059.txt : 20040204
<SEC-HEADER>0001127855-04-000059.hdr.sgml : 20040204
<ACCEPTANCE-DATETIME>20040204154242
ACCESSION NUMBER:		0001127855-04-000059
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20040131
FILED AS OF DATE:		20040204

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SINOVAC BIOTECH LTD
		CENTRAL INDEX KEY:			0001084201
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			B9
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29031
		FILM NUMBER:		04566775

	BUSINESS ADDRESS:	
		STREET 1:		SUITE #10-EPICUREAN, WOODS CENTRE
		STREET 2:		P.O. BOX W-645
		CITY:			ST. JOHN'S
		STATE:			B9
		ZIP:			00000
		BUSINESS PHONE:		(268) 562-3452

	MAIL ADDRESS:	
		STREET 1:		SUITE #10-EPICUREAN, WOODS CENTRE
		STREET 2:		P.O. BOX W-645
		CITY:			ST. JOHN'S
		STATE:			B9

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NET FORCE SYSTEMS INC
		DATE OF NAME CHANGE:	19991110
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>sinovac6k013104.txt
<DESCRIPTION>SINOVAC BIOTECH LTD. 6K, JANUARY 2004
<TEXT>






                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 6-K

       REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January, 2004.

Commission File Number: 0-29031

                              SINOVAC BIOTECH LTD.
                       (Name of Registrant in its charter)

                               ANTIGUA and BARBUDA
         (State or other jurisdiction of incorporation or organization)

                        Suite #10-Epicurean, Woods Centre
                                 P.O. Box W-645
                        St. John's, Antigua, West Indies
                 (Address of principal executive offices and zip
                                      code)

                               Tel: (268) 562-3452
                               Fax: (268) 562-3453
                      (Issuer's telephone and fax numbers)

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F

          Form 20-F  X          Form 40-F
                   -----                 -----

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

          Yes                   No  X
             -----                -----

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
                                   ------


<PAGE>






INDEX
- -----

Item
- ----

1.   Acquisition of Business
2.   Other Material Events
3.   Share Purchase Agreement - Exhibit 10.1
4.   Financial Statements of Business Acquired - Exhibit 99.1
5.   Pro Forma Financial Statements - Exhibit 99.2
6.   Press Release dated January 30, 2004 - Exhibit 99.3
7.   Press Release dated February 3, 2004 - Exhibit 99.4
8.   Document from the Ministry of Science & Technology of the People's Republic
     of China - Exhibit 99.5
9.   Test Reports of National Institute for the Control of Pharmaceutical &
     Biological Products - Exhibit 99.6
10.  Certificate issued from the Food & Drug Administration of the PRC - Exhibit
     99.7


Item 1.  Acquisition of Business
- --------------------------------

On January 26, 2004, Sinovac Biotech Ltd. (the "Company") entered into a formal
share purchase agreement (the "Share Purchase Agreement") to acquire 100% of the
issued and outstanding shares of Tangshan Yian Biological Engineering Co., Ltd.
("Tangshan Yian"), a corporation organized under the laws of the People's
Republic of China, through the issuance of 3,500,000 shares of common stock of
the Company plus US$2,200,000 in cash, which will be payable by the Company
within 12 months from the date of entering into the Share Purchase Agreement, to
Mr. He Ping Wang, the sole shareholder of Tangshan Yian and also a director of
the Company. Mr. He Ping Wang now holds approximately 11.45% of the Company's
outstanding shares of common stock. The Company's Board of Directors approved
the entering into the letter of intent to acquire all of the issued and
outstanding shares of Tangshan Yian on October 30, 2003. In addition, the
Company's Board of Directors approved the entering into the Share Purchase
Agreement to acquire all of the issued and outstanding shares of Tangshan Yian
on January 26, 2004. As of January 30, 2004, all of the terms and conditions of
the Share Purchase Agreement have been satisfied and the acquisition of Tangshan
Yian by Sinovac is now completed.

About Tangshan Yian Biological Engineering Co., Ltd.
- ----------------------------------------------------

Tangshan Yian operates in the city of Tangshan, People's Republic of China.
Since its inception in 1993, it has operated as an R & D and manufacturing
company specializing in the development and manufacturing of various vaccines
including flu, vaccines for Hepatitis A and Hepatitis A&B, and a potential
vaccine for SARS. Tangshan Yian supplies these vaccines to the Company's
subsidiary, Sinovac Biotech Co., Ltd. The operations of Tangshan Yian are
expected to supply large-scale quantities of new and updated vaccines for the
domestic Chinese and international markets.

Tangshan Yian is located in the New Hi-tech Development Zone of Tangshan City,
connected by superhighways to Beijing, 150 kilometers to the east. Tangshan
Yian's plant was built in accordance with the Pharmaceutical Industrial
Standards and Regulations of China, which are based on international standards.
The plant itself is 4300 square meters, which includes a Biological Safety
Laboratory, Cell Culturing Workshop, Pilot Trial Production Workshop, Reagents
Manufacture Workshop, and Research Lab for R&D of the Split Flu Vaccine.
Moreover, within the plant, there is reserved space of about 1500 square meters,
which will be used as a vaccine manufacture workshop. The plant is situated on
20,000 square meters of land, and has reserved an additional 10,0000 square
meters in anticipation of future expansion. The land is already facilitated with
full amenities.

Tangshan Yian provides the Company with a low-cost R & D and manufacturing base.
The cost of Tangshan Yian's land is about 20% of its equivalent in Beijing while
salaries are about 50% of those paid to equivalent personnel in Beijing.
Furthermore, the acquisition of Tangshan Yian contributes talented management
and scientists who will add significant value to the Company's progress in



                                        2
<PAGE>






vaccine development and manufacture. These favorable attributes are even further
compounded with the addition of Tanshan Yian's state-of-the-art facilities and
expanded manufacturing capabilities. These advantages could prove invaluable for
enhancing the Company's competitive position in its progression towards
large-scale flu and potentially SARS vaccine manufacture.

The Company's Beijing operation has workshops for large-scale production of
inactivated Hepatitis A vaccine and Hepatitis A & B combination vaccine.
However, according to GMP regulations (government regulated standards called
Good Manufacturing Practices), these workshops cannot be used for any other new
vaccine development. Therefore, the research and pilot production activities for
the flu vaccine and potential SARS vaccine actually take place inside Tangshan
Yian.

The Company's potential SARS vaccine has been approved for clinical trials by
the Chinese FDA (SFDA). Tangshan Yian has produced 20,000 doses of this vaccine
to date and has the ability and capacity to produce more of the SARS vaccine for
use in these clinical trials. Tangshan Yian will thus be able to efficiently
produce further required quantities of the vaccine in timely manner. Of
particular note is Tangshan Yian's production-scaled Biological Safety Level 3
laboratory, which includes a negative pressure facility. These highly
specialized, so-called P3 labs, are necessary for research on highly infectious
and contagious viruses and production of their associated vaccines. There are
only a few of these state-of-the-art labs in China.

The Company has conducted clinical trials on its flu vaccine. In order to
receive further approvals from the SFDA (Chinese Food and Drug Administration),
a flu vaccine production line must be built and the resulting manufactured final
product must meet SFDA standards. To achieve this production capability, the
Company is building a large-scale flu vaccine production line at Tangshan Yian.

A copy of the Share Purchase Agreement is attached hereto as Exhibit 10.1.


Item 2.  Other Material Events and Regulation FD Disclosure
- -----------------------------------------------------------

This current report contains forward-looking statements regarding future events
and future performance of the Company, including statements with respect to
consummation of a proposed transaction and commercialization of products, all of
which involve risks and uncertainties that could materially affect actual
results. Such statements are based on Management's current expectations and
actual results could differ materially. Investors should refer to documents that
the Company files from time to time with the Securities and Exchange Commission
for a description of certain factors that could cause the actual results to vary
from current expectations and the forward-looking statements contained in the
report. Such filing includes, without limitation, the Company's Form 20-F and
Form 6-K reports.


Item 3.  Share Purchase Agreement - Exhibit 10.1
- ------------------------------------------------


Item 4.  Financial Statements of Business Acquired - 99.1
- ---------------------------------------------------------


Item 5.  Pro Forma Financial Statements - 99.2
- ----------------------------------------------


Item 6.  Press Release dated January 30, 2004 - 99.3
- ----------------------------------------------------


Item 7.  Press Release dated February 3, 2004 - Exhibit 99.4
- ------------------------------------------------------------


Item 8.  Document from the Ministry of Science & Technology of the People's
- ---------------------------------------------------------------------------
Republic of China - Exhibit 99.5
- --------------------------------


                                        3
<PAGE>






Item 9.  Test Reports of National Institute for the Control of Pharmaceutical &
- -------------------------------------------------------------------------------
Biological Products - Exhibit 99.6
- ----------------------------------


Item 10.  Certificate issued from the Food & Drug Administration of the PRC -
- -----------------------------------------------------------------------------
Exhibit 99.7
- ------------



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                               SINOVAC BIOTECH LTD.

Date:  February 3, 2004                        By:   /s/ Lily Wang
                                                  ----------------------------
                                                     Lily Wang, CFO and a
                                                     Director




































                                        4



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>sinovacsharepuragree.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, SHARE PURCHASE AGREEMENT
<TEXT>

EXHIBIT 10.1
- ------------




                            SHARE PURCAHSE AGREEMENT
                            ------------------------


          THIS  SHARE  PURCAHSE  AGREEMENT  is  dated  and  made  for  reference
          --------------------------------
effective as fully executed on this 26th day of January, 2004.


BETWEEN:
- -------


          SINOVAC BIOTECH LTD., a corporation organized under the laws
          --------------------
          of Country of Antigua  and having an address  for notice and
          delivery located at Suite #10-Epicurean,  Woods Centre, P.O.
          Box W-645, St. John's, Antigua, West Indies

          (the "Purchaser");
                                                               OF THE FIRST PART
                                                               -----------------

AND:
- ---

          TANGSHAN  YIAN   BIOLOGICAL   ENGINEERING,   CO.,   LTD.,  a
          --------------------------------------------------------
          corporation   organized  under  the  laws  of  the  People's
          Republic  of China and  having an  address  for  notice  and
          delivery  located  at 120 Huoju Rd.,  High Tech.  Developing
          Zone Tangshan, Hbei Provence, 063000 P.R. China

          (the "Company");
                                                              OF THE SECOND PART
                                                              ------------------

AND:
- ---

          THE  UNDERSIGNED  SHAREHOLDER  OF TANGSHAN  YIAN  BIOLOGICAL
          ------------------------------------------------------------
          ENGINEERING  CO.,  LTD.,  having an  address  for notice and
          -----------------------
          delivery located at c/o 120 Huoju Rd., High Tech. Developing
          Zone Tangshan, Hbei Provence, 063000 P.R. China

          (such  shareholder  being  hereinafter  referred  to as  the
          "Vendor");
                                                               OF THE THIRD PART
                                                               -----------------

          (the Vendor, the Company and the Purchaser being hereinafter
          singularly  also  referred to as a "Party" and  collectively
          referred to as the "Parties" as the context so requires).
<PAGE>


                                   2



          WHEREAS:
          -------


A.        The  Company  is a body  corporate  subsisting  under  and  registered
pursuant to the laws of the People's Republic of China;


B.        The  Company  is  in  the   business  of  research   and   development
specializing in the development and manufacturing of various vaccines  including
flu  vaccines  and  vaccines  for  Hepatitis  A  (collectively,  the  "Company's
Business");


C.        The Vendor is the legal and beneficial  owner of all of the issued and
outstanding shares in the capital of the Company (each a "Purchased Share"); the
particulars of the registered and beneficial  ownership of such Purchased Shares
being set forth in  Schedule  "A" which is  attached  hereto  and which  forms a
material part hereof; and


D.        The  Parties  hereto  have  agreed to enter into this  Share  Purchase
Agreement  (the  "Agreement")  which  formalizes,  amends and  replaces,  in its
entirety,  the Letter of Intent, dated October 30, 2003 (the "Letter of Intent")
as  contemplated  and required by the terms of such Letter of Intent,  and which
clarifies  their  respective  duties  and  obligations  in  connection  with the
purchase  by the  Purchaser  from  the  Vendor  of all of the  Purchased  Shares
together with the further development of the Company's Business as a consequence
thereof;


          NOW THEREFORE THIS AGREEMENT  WITNESSETH that in  consideration of the
          ----------------------------------------
mutual promises,  covenants and agreements herein contained,  THE PARTIES HERETO
                                                              ------------------
COVENANT AND AGREE WITH EACH OTHER as follows:
- ----------------------------------


                                    Article 1
                                    ---------
                                   DEFINITIONS
                                   -----------


1.1       Definitions.  For the purposes of this Agreement,  except as otherwise
          -----------
expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:

     (a)  "Agreement"  means this "Share  Purchase  Agreement"  as entered  into
          among the Vendor, the Company and the Purchaser herein,  together with
          any amendments thereto and any Schedules as attached thereto;

     (b)  "Board of Directors"  means,  as applicable,  the respective  Board of
          Directors of each of the Parties hereto as duly  constituted from time
          to time;



<PAGE>


                                        3



     (c)  "business day" means any day during which Canadian Chartered Banks are
          open  for  business  in the City of  Vancouver,  Province  of  British
          Columbia;

     (d)  "Business  Documentation"  means any and all records and other factual
          data and information  relating to the Company's Business interests and
          assets and including,  without limitation,  all plans,  agreements and
          records  which  are in the  possession  or  control  of  Vendor or the
          Company in that respect;

     (e)  "Closing" has the meaning ascribed to it in Article "6.1" hereinbelow;

     (f)  "Closing  Date"  has  the  meaning  ascribed  to it in  Article  "6.1"
          hereinbelow;

     (g)  "Commercial Arbitration Act" means the Arbitration Act of the Province
          of British Columbia,  R.S.B.C.  1996, as amended from time to time, as
          set forth in Article "11" hereinbelow;

     (h)  "Commissions"   means  the  United  States   Securities  and  Exchange
          Commission;

     (i)  "Common  Shares"  means the  3,500,000  shares of common  stock of the
          Purchaser  to be issued  and  delivered  to the  Vendor as part of the
          Purchase Price of the Purchased Shares;

     (j)  "Company"  means  Tangshan Yian  Biological  Engineering  Co., Ltd., a
          corporation  organized  under  the laws of the  People's  Republic  of
          China, or any successor company,  however formed,  whether as a result
          of merger, amalgamation or other action;

     (k)  "Company's Assets" means all assets, contracts,  equipment,  goodwill,
          inventory and Intellectual Property of the Company;

     (l)  "Company's  Business"  has the meaning  ascribed to it in recital "B."
          hereinabove;

     (m)  "Company's  Financial  Statements"  has the meaning  ascribed to it in
          Article "3.3(s)" hereinbelow;

     (n)  "Defaulting  Party"  and  "Non-Defaulting  Party"  have  the  meanings
          ascribed to them in Article "12" hereinbelow;

     (o)  "Encumbrances" means mortgages,  liens,  charges,  security interests,
          encumbrances and third party claims of any nature;

     (p)  "Exchange" means the NASD Over-the-Counter Bulletin Board;

     (q)  "Execution  Date" means the actual date of the  complete  execution of
          this Agreement and any amendment  thereto by all Parties hereto as set
          forth on the front page hereof;




<PAGE>


                                        4



     (r)  "Indemnified  Party"  and  "Indemnified  Parties"  have  the  meanings
          ascribed to them in Article "7.1" hereinbelow;

     (s)  "Intellectual  Property" means, with respect to the Company, all right
          and interest to all patents,  patents pending,  inventions,  know-how,
          any  operating  or  identifying  name or  registered  or  unregistered
          trademarks and tradenames,  all computer  programs,  licensed end-user
          software,   source  codes,  products  and  applications  (and  related
          documentation and materials) and other works of authorship  (including
          notes, reports, other documents and materials,  magnetic,  electronic,
          sound or video  recordings  and any other work in which  copyright  or
          similar  right  may  subsist)  and  all   copyrights   (registered  or
          unregistered)    therein,    industrial    designs    (registered   or
          unregistered),    franchises,   licenses,   authorities,   restrictive
          covenants or other  industrial  or  intellectual  property  used in or
          pertaining to the Company;

     (t)  "Parties"  or "Party"  means,  respectively,  the Vendor,  the Company
          and/or the Purchaser  hereto,  as the case may be, together with their
          respective   successors  and  permitted  assigns  as  the  context  so
          requires;

     (u)  "person" or "persons" means an individual,  corporation,  partnership,
          party,  trust,  fund,  association  and any other  organized  group of
          persons and the personal or other legal  representative of a person to
          whom the context can apply according to law;

     (v)  "Purchased  Shares"  has the meaning  ascribed  to it in recital  "C."
          hereinabove;   the   particulars  of  the  registered  and  beneficial
          ownership of such Purchased Securities being set forth in Schedule "A"
          which is attached hereto;

     (w)  "Purchase  Price" has the  meaning  ascribed  to it in  Article  "2.2"
          hereinbelow;

     (x)  "Purchaser" means Sinovac Biotech Ltd., a corporation  organized under
          the laws of the Country of Antigua, or any successor company,  however
          formed, whether as a result of merger, amalgamation or other action;

     (y)  "Purchaser's  Initial Due Diligence" has the meaning ascribed to it in
          Article "5.1(b)" hereinbelow;

     (z)  "Purchaser's  Ratification"  has the meaning ascribed to it in Article
          "5.1(a)" hereinbelow;

     (aa) "Takeover" means that  transaction or series of transactions  pursuant
          to which the Purchaser will acquire all of the Purchased Shares of the
          Company from the Vendor in exchange for the issuance  from treasury by
          the  Purchaser of the Common Shares and  US$2,200,000  payable with 12
          months of entering into this Share Purchase  Agreement and all matters
          necessarily ancillary thereto;




<PAGE>


                                        5



     (ab) "Time of Closing"  means 2:00 o'clock,  p.m.  (Vancouver  Time) on the
          Closing Date;

     (ac) "Transfer Agent" means Pacific Stock Transfer Company; and

     (ad) "Vendor"  means the sole  shareholder  of the Company who has executed
          this Agreement as a Party hereto.


1.2       Schedules.  For the  purposes of this  Agreement,  except as otherwise
          ---------
expressly provided or unless the context otherwise requires, the following shall
represent  the Schedules  which are attached to this  Agreement and which form a
material part hereof:

                 Schedule                          Description
                 --------                          -----------

             Schedule "A":             Purchased Shares and Vendor; and
             Schedule "B"              Promissory Note issued by the
                                       Purchaser.


1.3       Interpretation.   For  the  purposes  of  this  Agreement,  except  as
          --------------
otherwise expressly provided or unless the context otherwise requires,:

     (a)  the words  "herein",  "hereof"  and  "hereunder"  and  other  words of
          similar  import  refer  to this  Agreement  as a whole  and not to any
          particular Article, section or other subdivision of this Agreement;

     (b)  any  reference to an entity shall  include and shall be deemed to be a
          reference to any entity that is a permitted  successor to such entity;
          and

     (c)  words in the  singular  include the plural and words in the  masculine
          gender include the feminine and neuter genders, and vice versa.


                                    Article 2
                                    ---------
              PURCHASE AND SALE OF THE ALL OF THE PURCHASED SHARES
              ----------------------------------------------------


2.1       Purchase  and Sale.  Subject  to the terms and  conditions  hereof and
          ------------------
based upon the representations and warranties  contained in Articles "3" and "4"
hereinbelow  and prior  satisfaction  of the conditions  precedent which are set
forth in Article "5" hereinbelow,  the Vendor hereby agrees to assign,  sell and
transfer at the Closing Date (as  hereinafter  determined) all of his respective
rights, entitlement and interest in and to the Purchased Shares to the Purchaser
and the Purchaser hereby agrees to purchase all of the Purchased Shares from the
Vendor on the terms and subject to the conditions contained in this Agreement.




<PAGE>


                                        6



2.2       Purchase  Price.  The total purchase price (the "Purchase  Price") for
          ---------------
all of the  Purchased  Shares  will  be  satisfied  by way of the  issuance  and
delivery by the  Purchaser  to the Vendor,  in  accordance  with  section  "2.3"
hereinbelow,  of an aggregate of 3,500,000  common  shares in the capital of the
Purchaser  (each a "Common  Share"),  at a deemed  issuance price of US$0.76 per
Common Share and a promissory  note issued by the Purchaser to the Vendor in the
amount of  US$2,200,000,  which amount shall be due and payable within 12 months
of the  effective  date of this  Agreement,  and  which is  attached  hereto  as
Schedule "C".


2.3       Resale  Restrictions.  The Vendor hereby  acknowledges and agrees that
          --------------------
the Purchaser  makes no  representations  as to any resale or other  restriction
affecting  the Common  Shares  and that it is  presently  contemplated  that the
Common Shares will be issued by the Purchaser to the Vendor in reliance upon the
registration and prospectus exemptions contained in the United States Securities
Act of 1933, as amended (the  "Securities  Act") or  "Regulation  S" promulgated
under the Securities  Act which will impose a trading  restriction in the United
States on the Common  Shares for a period of at least 12 months from the Closing
Date (as hereinafter  determined).  In addition, the obligation of the Purchaser
to issue the Common Shares pursuant to section "2.2" hereinabove will be subject
to the Purchaser being satisfied that an exemption from applicable  registration
and  prospectus  requirements  is  available  under the  Securities  Act and all
applicable  securities laws, in respect of the Vendor and related Common Shares,
and the Purchaser shall be relieved of any obligation whatsoever to purchase any
Purchased  Shares of the  Vendor  and to issue  Common  Shares in respect of the
Vendor where the Purchaser  reasonably  determines that a suitable  exemption is
not available to it.


                                    Article 3
                                    ---------
                    REPRESENTATIONS, WARRANTIES AND COVENANTS
                    -----------------------------------------
                          BY THE COMPANY AND THE VENDOR
                          -----------------------------


3.1       General  Representations,  Warranties and Covenants by the Company and
          ----------------------------------------------------------------------
Xianping  Wang.  In order to induce the  Purchaser to enter into and  consummate
- --------------
this Agreement, the Company and Xianping Wang, jointly and severally, represents
to,  warrants  to and  covenants  with the  Purchaser,  with the intent that the
Purchaser  will rely thereon in entering  into this  Agreement and in concluding
the  transactions  contemplated  herein,  that,  to the  best of the  knowledge,
information  and belief of each of Xianping  Wang and the Company,  after having
made due inquiry:

     (a)  if a  corporation,  it  is  duly  organized  under  the  laws  of  its
          respective  jurisdiction of incorporation  and is validly existing and
          in good standing with respect to all statutory filings required by the
          applicable corporate laws;

     (b)  it is  qualified  to do  business in those  jurisdictions  where it is
          necessary to fulfill its  obligations  under this Agreement and it has
          the full  power and  authority  to enter into this  Agreement  and any
          agreement or instrument referred to or contemplated by this Agreement;

     (c)  it has the requisite power,  authority and capacity to own and use all
          of its  respective  business  assets  and to carry  on its  respective




<PAGE>


                                        7



          business as presently  conducted  by it and to fulfill its  respective
          obligations under this Agreement;

     (d)  the  execution  and  delivery  of this  Agreement  and the  agreements
          contemplated hereby have been duly authorized by all necessary action,
          corporate or otherwise, on its respective part;

     (e)  there are no other consents,  approvals or conditions precedent to the
          performance of this Agreement which have not been obtained;

     (f)  this Agreement constitutes a legal, valid and binding obligation of it
          enforceable  against  it in  accordance  with  its  terms,  except  as
          enforcement  may be limited by laws of general  application  affecting
          the rights of creditors;

     (g)  no  proceedings  are pending  for, and it is unaware of, any basis for
          the  institution  of  any   proceedings   leading  to  its  respective
          dissolution  or  winding  up, or the  placing of it in  bankruptcy  or
          subject to any other laws governing the affairs of insolvent companies
          or persons;

     (h)  the making of this  Agreement and the  completion of the  transactions
          contemplated  hereby and the  performance of and  compliance  with the
          terms hereof does not and will not:

          (i)       if a corporation,  conflict with or result in a breach of or
                    violate any of the terms,  conditions  or  provisions of its
                    respective constating documents;

          (ii)      conflict with or result in a breach of or violate any of the
                    terms, conditions or provisions of any law, judgment, order,
                    injunction,  decree,  regulation  or  ruling of any Court or
                    governmental authority,  domestic or foreign, to which it is
                    subject,  or  constitute  or result  in a default  under any
                    agreement, contract or commitment to which it is a party;

          (iii)     give to any party the right of termination,  cancellation or
                    acceleration  in or with respect to any agreement,  contract
                    or commitment to which it is a party;

          (iv)      give to any  government or  governmental  authority,  or any
                    municipality  or  any  subdivision  thereof,  including  any
                    governmental  department,   commission,   bureau,  board  or
                    administration    agency,    any   right   of   termination,
                    cancellation  or suspension of, or constitute a breach of or
                    result in a default under, any permit,  license,  control or
                    authority  issued to it which is  necessary  or desirable in
                    connection with the conduct and operations of its respective
                    business  and the  ownership  or leasing  of its  respective
                    business assets; or

          (v)       constitute  a default  by it, or any event  which,  with the
                    giving of notice or lapse of time or both,  might constitute




<PAGE>


                                        8



                    an  event  of  default,   under  any  agreement,   contract,
                    indenture or other  instrument  relating to any indebtedness
                    of  it  which  would  give  any  party  to  that  agreement,
                    contract,   indenture  or  other  instrument  the  right  to
                    accelerate  the  maturity  for  the  payment  of any  amount
                    payable under that agreement,  contract,  indenture or other
                    instrument; and

     (i)  neither  this  Agreement  nor  any  other  document,   certificate  or
          statement  furnished  to the  Purchaser  by or on behalf of any of the
          Vendor or the Company in connection with the transactions contemplated
          hereby  knowingly or  negligently  contains  any untrue or  incomplete
          statement of material fact or omits to state a material fact necessary
          in order to make the  statements  therein not  misleading  which would
          likely  affect  the  decision  of the  Purchaser  to enter  into  this
          Agreement.


3.2       Representations, Warranties and Covenants by the Vendor respecting the
          ----------------------------------------------------------------------
Purchased  Shares and the Common  Shares.  In order to induce the  Purchaser  to
- ----------------------------------------
enter into and  consummate  this  Agreement,  the Vendor hereby  represents  to,
warrants to and covenants with the Purchaser, with the intent that the Purchaser
will also rely thereon in entering into this  Agreement  and in  concluding  the
transactions   contemplated   herein,  that,  to  the  best  of  the  knowledge,
information and belief of the Vendor, after having made due inquiry:

     (a)  save and except as set forth in Schedule "A" which is attached hereto,
          the  Vendor  has good and  marketable  title to and is the  legal  and
          beneficial  owner of all of the  Purchased  Shares,  and the Purchased
          Shares  are fully  paid and  non-assessable  and are free and clear of
          liens,  charges,  encumbrances,  pledges,  mortgages,  hypothecations,
          security interests and adverse claims of any and all nature whatsoever
          and including,  without  limitation,  options,  pre-emptive rights and
          other  rights  of  acquisition  in  favour  of  any  person,   whether
          conditional or absolute;

     (b)  the  Vendor  has the  power and  capacity  to own and  dispose  of the
          Purchased  Shares,  and the  Purchased  Shares are not  subject to any
          voting or similar arrangement;

     (c)  there are no actions, suits, proceedings or investigations (whether or
          not  purportedly  against or on behalf of the Vendor or the  Company),
          pending or  threatened,  which may  affect,  without  limitation,  the
          rights of the Vendor to transfer  any of the  Purchased  Shares to the
          Purchaser  at law or in equity,  or before or by any  federal,  state,
          provincial,  municipal or other governmental  department,  commission,
          board, bureau,  agency or instrumentality,  domestic or foreign,  and,
          without limiting the generality of the foregoing,  there are no claims
          or potential claims under any relevant family relations legislation or
          other  equivalent  legislation  affecting  the  Purchased  Shares.  In
          addition,  the Vendor is not now aware of any existing ground on which
          any  such  action,  suit or  proceeding  might be  commenced  with any
          reasonable likelihood of success;





<PAGE>


                                        9



     (d)  no other person,  firm or  corporation  has any  agreement,  option or
          right  capable of becoming an agreement for the purchase of any of the
          Purchased Shares;

     (e)  the Vendor  acknowledges  that the Common  Shares will be issued under
          certain   exemptions  from  the  registration  and  prospectus  filing
          requirements  otherwise applicable under the Securities Act, and that,
          as a result,  the  Vendor  may be  restricted  from  using most of the
          remedies that would  otherwise be available to the Vendor,  the Vendor
          will not receive  information  that would  otherwise be required to be
          provided  to the Vendor and the  Purchaser  is relieved  from  certain
          obligations  that would  otherwise  apply to the Purchaser,  in either
          case, under applicable securities legislation;

     (f)  the Vendor has not received,  nor has the Vendor requested or does the
          Vendor  require  to  receive,  any  offering  memorandum  or a similar
          document describing the business and affairs of the Purchaser in order
          to  assist  the  Vendor  in  entering  into  this   Agreement  and  in
          consummating the transactions contemplated herein;

     (g)  the Vendor  acknowledges  and agrees  that the Common  Shares have not
          been and will not be qualified or registered under the securities laws
          of the  United  States or any other  jurisdiction  and,  as such,  the
          Vendor may be  restricted  from  selling or  transferring  such Common
          Shares under applicable law;

     (h)  the Vendor is  resident  in the  jurisdiction  as set forth  under the
          Vendor's  address in Schedule "A" which is attached  hereto,  and that
          all  negotiations  and other acts in  furtherance of the execution and
          delivery  of this  Agreement  by the  Vendor  in  connection  with the
          transactions  contemplated herein have taken place and will take place
          solely in such jurisdiction or in the "Country of Antigua; and

     (i)  the  Purchased   Shares  have  been  issued  in  accordance  with  all
          applicable securities and corporate legislation and policies.


3.3       Representations,  Warranties  and  Covenants  by the  Company  and the
          ----------------------------------------------------------------------
Vendor  respecting  the Company.  In order to induce the Purchaser to enter into
- -------------------------------
and  consummate  this  Agreement,  each of the  Vendor and the  Company  hereby,
jointly and severally,  also  represents to,  warrants to and covenants with the
Purchaser, with the intent that the Purchaser will also rely thereon in entering
into this  Agreement and in concluding  the  transactions  contemplated  herein,
that, to the best of the knowledge, information and belief of each of the Vendor
and the Company, after having made due inquiry:

     Corporate Status of the Company
     -------------------------------

     (a)  the Company is a company  with  limited  liability  duly and  properly
          organized  and  validly  subsisting  under  the  laws of the  People's
          Republic of China being the only jurisdiction  where it is required to




<PAGE>


                                       10



          be registered  for the purpose of enabling it to carry on its business
          and own its property as presently carried on and owned;

     (b)  the Company has good and sufficient power,  authority and right to own
          or lease its property, to enter into this Agreement and to perform its
          obligations hereunder;

     Authorization
     -------------

     (c)  this Agreement has been duly authorized, executed and delivered by the
          Vendor and the Company and is a legal, valid and binding obligation of
          the Vendor and the Company,  enforceable against the Vendor and/or the
          Company,  as the case may be, by the Purchaser in accordance  with its
          terms, except as enforcement may be limited by bankruptcy,  insolvency
          and other laws affecting the rights of creditors  generally and except
          that  equitable  remedies may be granted only in the  discretion  of a
          court of competent jurisdiction;

     No Other Agreements to Purchase
     -------------------------------

     (d)  no person other than the Purchaser  has any written or oral  agreement
          or option or any right or privilege  (whether by law,  pre-emptive  or
          contractual)  capable  of  becoming  an  agreement,  or option for the
          purchase  or  acquisition  from  the  Vendor  of any of the  Purchased
          Shares;

     Options
     -------

     (e)  no person  has any  agreement  or  option  or any  right or  privilege
          (whether by law,  pre-emptive or  contractual)  capable of becoming an
          agreement,  including convertible securities,  warrants or convertible
          obligations of any nature, for the purchase,  subscription,  allotment
          or issuance of any unissued shares or other securities of the Company;

     Title to Shares
     ---------------

     (f)  the Purchased  Shares are  beneficially  owned by the Vendor with good
          and  marketable  title  thereto  free  of  all  Encumbrances  and  are
          registered  in the books of the Company in the name of the Vendor and,
          without limitation  thereto,  none of the Purchased Shares are subject
          to  any  voting  trust,   unanimous  shareholders   agreement,   other
          shareholders agreements, pooling agreements or voting agreements;

     (g)  upon  completion of the  transactions  contemplated by this Agreement,
          all of the  Purchased  Shares  will be owned by the  Purchaser  as the
          beneficial  owner of record,  with good and  marketable  title thereto
          (except  for  such  Encumbrances  as  may  have  been  granted  by the
          Purchaser);



<PAGE>


                                       11



     Title to Personal Property and Other Property
     ---------------------------------------------

     (h)  the  property  and assets of the  Company  are,  and  between the date
          hereof and the  Closing  Date (as  hereinafter  determined),  will be,
          owned  beneficially  by the Company with a good and  marketable  title
          thereto,  free  and  clear  of all  Encumbrances  save  as  previously
          disclosed to the Purchaser;

     Intellectual Property
     ---------------------

     (i)  the Company has  provided the  Purchaser  with a complete and accurate
          list  of all  trade  marks,  trade  names,  business  names,  patents,
          inventions,   know-how,   copyrights,   service  marks,  brand  names,
          industrial  designs and all other industrial or intellectual  property
          owned or used by the Company in carrying on the Company's Business and
          all  applications  therefor  and  all  goodwill  connected  therewith,
          including,   without   limitation,   all  licenses,   registered  user
          agreements  and all like  rights  used by or granted to the Company in
          connection  with the  Company's  Business and all right to register or
          otherwise   apply  for  the   protection   on  any  of  the  foregoing
          (collectively, the "Intellectual Property");

     (j)  the  Intellectual  Property  comprises  all trade marks,  trade names,
          business names, patents,  inventions,  know-how,  copyrights,  service
          marks,  brand marks,  industrial  designs and all other  industrial or
          intellectual property necessary to conduct the Company's Business;

     (k)  the Company is the beneficial owner of the Intellectual Property, free
          and clear of all  Encumbrances,  and is not a party to or bound by any
          contract  or other  obligation  whatsoever  that limits or impairs its
          ability  to  sell,  transfer,  assign  or  convey,  or that  otherwise
          affects, the Intellectual Property;

     (l)  no person has been  granted any interest in or right to use all or any
          portion of the Intellectual Property;

     (m)  neither  the  Vendor  nor the  Company  are  aware  of a claim  of any
          infringement  or breach of any  industrial  or  intellectual  property
          rights of any other person by the Company,  nor have the Vendor or the
          Company received any notice that the conduct of the Company's Business
          infringes or breaches any industrial or  intellectual  property rights
          of any other person, and neither the Vendor nor the Company, after due
          inquiry, have any knowledge of any infringement or violation of any of
          their  rights  or the  rights  of  the  Company  in  the  Intellectual
          Property;

     (n)  the  conduct of the  Company's  Business  does not  infringe  upon the
          patents, trade marks, licenses, trade names, business names, copyright
          or other  industrial  or  intellectual  property  rights,  domestic or
          foreign, of any other person;





<PAGE>


                                       12



     (o)  neither  the  Vendor nor the  Company  are aware of any state of facts
          that  casts  doubt on the  validity  or  enforceability  of any of the
          Intellectual Property;

     (p)  the Company has provided to the  Purchaser a true and complete copy of
          all  Contracts and  amendments  thereto that comprise or relate to the
          Intellectual Property;

     Financial Statements
     --------------------

     (q)  the Company's Audited  Financial  Statements dated June 30, 2003, have
          been  prepared  in  accordance  with  generally  accepted   accounting
          principles  applied  on a basis  consistent  with prior  periods,  are
          correct  and  complete  and  present  fairly the  assets,  liabilities
          (whether  accrued,  absolute,  contingent or otherwise)  and financial
          condition  of the  Company as at the  respective  dates of and for the
          respective periods covered by the Company's Financial Statements;

     (r)  for any period up to the Time of Closing the Company will not have any
          debts  or  liabilities   whatsoever  (whether  accrued,   absolute  or
          contingent  or  otherwise),  including  any  liabilities  for federal,
          provincial, sales, excise, income, corporate or any other taxes of the
          Company except for;

          (i)       the debts and  liabilities  disclosed  on,  provided  for or
                    included  in the  balance  sheet  forming a part of the most
                    recent of the Company's Financial Statements;

          (ii)      debts or  liabilities  disclosed  in this  Agreement  or any
                    Schedule hereto; and

          (iii)     liabilities  incurred by the Company in the ordinary  course
                    of the  Company's  Business  subsequent  to the  date of the
                    balance  sheet  referred  to  in  the  Company's   Financial
                    Statements;

     Books and Records
     -----------------

     (s)  the books and records of the Company  fairly and correctly set out and
          disclose,  in all material  respects,  in  accordance  with  generally
          accepted accounting  principles,  consistently  applied, the financial
          condition of the Company as of the date of this Master  Agreement  and
          all  material   financial   transactions  of  the  Company  have  been
          accurately recorded in such books and records;

     Corporate Records
     -----------------

     (t)  the Corporate records and minute books of the Company contain complete
          and accurate minutes, (duly signed by the chairman and/or secretary of
          the  appropriate  meeting)  of  all  meetings  of  the  directors  and
          shareholders of the Company since its date of incorporation;





<PAGE>


                                       13



     (u)  the share certificate records,  the securities register,  the register
          of  disclosures  , the  register of  directors  and  officers  for the
          Company are  contained in the  corporate  minute book and are complete
          and accurate in all respects;

     Directors and Officers
     ----------------------

     (v)  the present directors and officers of the Company are as follows:

          Name                                  Position
          ----                                  --------

          Xianping Wang                         President and Director

     Accuracy of Warranties
     ----------------------

     (w)  neither this Agreement nor any document,  schedule, list, certificate,
          declaration under oath or written statement now or hereafter furnished
          by the Vendor or the Company to the Purchaser in  connection  with the
          transactions  contemplated by this Agreement  contains or will contain
          any untrue statement or  representation of a material fact on the part
          of the Vendor or the  Company,  or omits or will omit on behalf of the
          Vendor or the Company to state a material  fact  necessary to make any
          such  statement  or  representation  therein or herein  contained  not
          misleading; and

     Full Disclosure
     ---------------

     (x)  the  Vendor  has  no   information   or  knowledge  of  any  fact  not
          communicated  to the  Purchaser  and relating to the Company or to the
          Company's  Business or to the Purchased  Shares which, if known to the
          Purchaser,  might  reasonably be expected to deter the Purchaser  from
          entering  into this  Agreement  or from  completing  the  transactions
          contemplated by this Agreement.


3.4       Survival of the  Representations,  Warranties and Covenants by each of
          ----------------------------------------------------------------------
the Vendor and the Company.  To the extent they have not been fully performed at
- --------------------------
or prior to the Time of Closing,  each and every  representation and warranty of
the  Vendor  or the  Company  contained  in this  Agreement  and any  agreement,
instrument, certificate or other document executed or delivered pursuant to this
Agreement shall:

     (a)  be true and correct on and as of the Closing  Date with the same force
          and effect as though made or given on the Closing Date;

     (b)  remain in full force and  effect  notwithstanding  any  investigations
          conducted by or on behalf of the Purchaser; and

     (c)  survive  the  completion  of the  transactions  contemplated  by  this
          Agreement  until the second  anniversary of the Closing Date and shall
          continue  in full force and effect  for the  benefit of the  Purchaser
          during that period, except that:




<PAGE>


                                       14



          (i)       the representations and warranties set out in section 3.2(a)
                    to and including  3.2(i) above shall survive and continue in
                    full force and effect without limitation of time; and

          (ii)      a claim  for any  breach of any of the  representations  and
                    warranties  contained in this Agreement or in any agreement,
                    instrument,   certificate  or  other  document  executed  or
                    delivered  pursuant  hereto  involving  fraud or  fraudulent
                    misrepresentation  may be made  at any  time  following  the
                    Closing Date, subject only to applicable  limitation periods
                    imposed by law.

     (d)  to the extent  they have not been fully  performed  at or prior to the
          Time of Closing,  each and every  covenant of the Vendor  contained in
          this  Agreement and any  agreement,  instrument,  certificate or other
          document  executed  or  delivered  pursuant  to this  Agreement  shall
          survive  the  completion  of the  transactions  contemplated  by  this
          Agreement and, notwithstanding such completion, shall continue in full
          force and effect for the benefit of the Purchaser.


                                    Article 4
                                    ---------
           WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER
           ----------------------------------------------------------


4.1       Warranties,  Representations and Covenants by the Purchaser.  In order
          -----------------------------------------------------------
to  induce  the  Vendor  and the  Company  to  enter  into and  consummate  this
Agreement,  the Purchaser  hereby warrants to,  represents to and covenants with
each of the Vendor and the Company,  with the intent that each of the Vendor and
the Company will rely thereon in entering into this  Agreement and in concluding
the  transactions  contemplated  herein,  that,  to the  best of the  knowledge,
information and belief of the Purchaser, after having made due inquiry:

     Corporate Status of the Purchaser
     ---------------------------------

     (a)  the  Purchaser is a company with limited  liability  duly and properly
          incorporated,  organized and validly  subsisting under the laws of the
          Country of Antigua being the only jurisdiction where it is required to
          be registered  for the purpose of enabling it to carry on its business
          and own its property as presently carried on and owned;

     (b)  the Purchaser has good and  sufficient  power,  authority and right to
          own or lease its property, to enter into this Agreement and to perform
          its obligations hereunder;

     Authorization
     -------------

     (c)  this Agreement has been duly authorized, executed and delivered by the
          Purchaser  and  is a  legal,  valid  and  binding  obligation  of  the
          Purchaser,  enforceable against the Purchaser,  as the case may be, by
          the Vendor and/or the Company in accordance with its terms,  except as




<PAGE>


                                       15



          enforcement  may be limited by  bankruptcy,  insolvency and other laws
          affecting the rights of creditors  generally and except that equitable
          remedies may be granted only in the discretion of a court of competent
          jurisdiction;

     Share Capital
     -------------

     (d)  the authorized capital of the Purchaser consists of 100,000,000 shares
          of common  stock of which  27,091,033  shares  of common  stock of the
          Purchaser have been duly issued and are  outstanding as fully paid and
          non-assessable,  and 50,000,000  shares of preferred stock of which no
          shares of preferred stock are issued and outstanding;

     (e)  all of the issued and  outstanding  shares of the Purchaser are listed
          and posted for trading on the Exchange;

     (f)  the  Purchaser  will allot and issue the Common  Shares on the Closing
          Date in accordance with sections "2.2" and "2.3"  hereinabove as fully
          paid and  non-assessable  in the  capital of the  Purchaser,  free and
          clear of all actual or threatened liens, charges,  security interests,
          options,  encumbrances,  voting  agreements,  voting trusts,  demands,
          limitations and restrictions of any nature whatsoever, other than hold
          periods or other  restrictions  imposed  under  applicable  securities
          legislation or by securities regulatory authorities;

     Options
     -------

     (g)  no person  has any  agreement  or  option  or any  right or  privilege
          (whether by law,  pre-emptive or  contractual)  capable of becoming an
          agreement,  including convertible securities,  warrants or convertible
          obligations of any nature, for the purchase,  subscription,  allotment
          or  issuance  of  any  unissued  shares  or  other  securities  of the
          Purchaser  except for 3,000,000  stock options  exercisable at US$1.31
          per share which have been granted to  directors,  officers,  employees
          and consultants of the Purchaser;

     Directors and Officers
     ----------------------

     (h)  the present directors and officers of the Purchaser are as follows:

          Name                                  Position
          ----                                  --------

          Wei Dong Yin                          Director, President and CEO;
          Lily Wang                             Director and CFO;
          He Ping Wang                          Director
          Kim Kiat Ong                          Director

     Full Disclosure
     ---------------

     (i)  the  Purchaser  has  no  information  or  knowledge  of any  fact  not
          communicated  to the  Vendor  and  the  Company  and  relating  to the
          Purchaser  or to  the  Purchaser's  business  or  to  its  issued  and
          outstanding  securities  which,  if known  to the  Vendor  and/or  the




<PAGE>


                                       16



          Company,  might  reasonably be expected to deter the Vendor and/or the
          Company  from  entering  into this  Agreement or from  completing  the
          transactions contemplated by this Agreement.


4.2       Survival  of the  Representations,  Warranties  and  Covenants  by the
          ----------------------------------------------------------------------
Purchaser.  To the extent they have not been fully  performed at or prior to the
- ---------
Time of Closing,  each representation and warranty of the Purchaser contained in
this Agreement or in any document, instrument,  certificate or undertaking given
pursuant hereto shall:

     (a)  be true and correct on and as of the Closing  Date with the same force
          and effect as though made or given on the Closing Date;

     (b)  remain in full  force an  effect  notwithstanding  any  investigations
          conducted by or on behalf of the Purchaser, and

     (c)  survive  the  completion  of the  transactions  contemplated  by  this
          Agreement  until the second  anniversary of the Closing Date and shall
          continue  in full force and  effect for the  benefit of the Vendor and
          the Company during that period,  except that a claim for any breach of
          any of the representations and warranties  contained in this Agreement
          or  in  any  agreement,  instrument,  certificate  or  other  document
          executed or delivered  pursuant  hereto  involving fraud or fraudulent
          misrepresentation  may be made at any time following the Closing Date,
          subject only to applicable limitation periods imposed by law.

     (d)  To the extent  they have not been fully  performed  at or prior to the
          Time of Closing, each and every covenant of the Purchaser contained in
          this  Agreement and any  agreement,  instrument,  certificate or other
          document  executed  or  delivered  pursuant  to this  Agreement  shall
          survive  the  completion  of the  transactions  contemplated  by  this
          Agreement and, notwithstanding such completion, shall continue in full
          force and effect for the benefit of the Vendor and the Company.


                                    Article 5
                                    ---------
                         CONDITIONS PRECEDENT TO CLOSING
                         -------------------------------


5.1       Parties'  Conditions  Precedent  prior to the Closing Date. All of the
          ----------------------------------------------------------
rights,  duties  and  obligations  of  each of the  Parties  hereto  under  this
Agreement  are subject to the following  conditions  precedent for the exclusive
benefit of each of the Parties to be fulfilled  in all  material  aspects in the
reasonable  opinion of each of the Parties or to be waived by each or any of the
Parties,  as the case may be,  as soon as  possible  after the  Execution  Date;
however, unless specifically indicated as otherwise,  not later than the Time of
Closing:

     (a)  the  specific  ratification  of  the  terms  and  conditions  of  this
          Agreement  by the Board of  Directors  of the  Purchaser  within  five
          business days of the due and complete  execution of this  Agreement by
          each of the Parties hereto (the "Purchaser's Ratification");




<PAGE>


                                       17



     (b)  the  completion  by the  Purchaser  of an initial  due  diligence  and
          operations review of the Company's Business and operations within five
          (5) calendar  days of the prior  satisfaction  by the Purchaser of the
          Purchaser's Ratification (the "Purchaser's Initial Due Diligence");


5.2       Parties' Waiver of Conditions Precedent.  The conditions precedent set
          ---------------------------------------
forth in section "5.1"  hereinabove are for the exclusive benefit of each of the
Parties  hereto and may be waived by each of the Parties in writing and in whole
or in part at or prior to the Time of Closing.


5.3       The Vendor's and the Company's Conditions Precedent.  The purchase and
          ---------------------------------------------------
sale  of the  Purchased  Securities  is  subject  to  the  following  terms  and
conditions  for the  exclusive  benefit  of the Vendor  and the  Company,  to be
fulfilled or performed at or prior to the Time of Closing:

     (a)  the  representations and warranties of the Purchaser contained in this
          Agreement  shall be true and correct in all  material  respects at the
          Time  of  Closing,   with  the  same  force  and  effect  as  if  such
          representations and warranties were made at and as of such time;

     (b)  all of the terms,  covenants and  conditions  of this  Agreement to be
          complied  with or performed by the  Purchaser at or before the Time of
          Closing  shall have been  complied  with or  performed in all material
          respects;

     (c)  there  shall  have  been  obtained,   from  all  appropriate  federal,
          provincial,  municipal or other governmental or administrative bodies,
          such   licenses,   permits,   consents,    approvals,    certificates,
          registrations and authorizations as are required by law, if any, to be
          obtained by the  Purchaser  to permit the change of  ownership  of the
          Purchased  Shares  contemplated  hereby,  in each  case  in  form  and
          substance   satisfactory  to  the  Vendor  and  the  Company,   acting
          reasonably;

     (d)  no legal or  regulatory  action  or  proceeding  shall be  pending  or
          threatened by any person to enjoin,  restrict or prohibit the purchase
          and sale of the Purchased Shares contemplated hereby;

          If any of the  conditions  contained  in this section 5.3 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendor and the Company,  acting  reasonably,  the Vendor  and/or the Company
may, by notice to the Purchaser, terminate this Agreement and the obligations of
the Vendor,  the Company and the Purchaser under this Agreement,  other than the
obligations  contained in Article 8 hereinbelow,  shall be terminated,  provided
that the Vendor and the Company  may also bring an action  pursuant to Article 7
against  the  Purchaser  for damages  suffered by the Vendor  and/or the Company
where the  non-performance  or non-fulfillment of the relevant condition is as a
result of a breach of covenant, representation or warranty by the Purchaser. Any
such  condition  may be waived in whole or in part by the Vendor and the Company
in writing  without  prejudice to any claims it may have for breach of covenant,
representation or warranty.




<PAGE>


                                       18



5.4       Purchaser's  Conditions  Precedent prior to the Closing Date. The sale
          ------------------------------------------------------------
and  purchase  of the  Purchased  Shares is subject to the  following  terms and
conditions  for the  exclusive  benefit of the  Purchaser,  to be  fulfilled  or
performed at or prior to the Time of Closing:

     (a)  the  representations  and  warranties  of the Vendor  and the  Company
          contained in this  Agreement  shall be true and correct at the Time of
          Closing, with the same force and effect as if such representations and
          warranties were made at and as of such time;

     (b)  all of the terms,  covenants and  conditions  of this  Agreement to be
          complied  with or performed by the Vendor and the Company at or before
          the Time of Closing shall have been complied with or performed;

     (c)  there  shall  have  been  obtained,   from  all  appropriate  federal,
          provincial,  municipal or other governmental or administrative bodies,
          such   licenses,   permits,   consents,    approvals,    certificates,
          registrations and  authorizations  as are required to be obtained,  if
          any, by the Vendor and the  Company to permit the change of  ownership
          of the Purchased Shares contemplated hereby;

     (d)  there shall have been no  material  adverse  changes in the  condition
          (financial or otherwise), assets, liabilities,  operations,  earnings,
          the  Company's  Business or prospects of the Company since the date of
          the Company's Financial Statements;

     (e)  no legal or  regulatory  action  or  proceeding  shall be  pending  or
          threatened by any person to enjoin,  restrict or prohibit the purchase
          and sale of the Purchased Shares contemplated hereby;

     (f)  no  material  damage  by fire or  other  hazard  to the  whole  or any
          material  part of the  property  or assets of the  Company  shall have
          occurred from the date hereof to the Time of Closing;

          If any of the  conditions  contained  in this section 5.4 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendor and
the Company,  terminate  this Agreement and the  obligations of the Vendor,  the
Company and the Purchaser under this  Agreement,  other than the obligations set
forth in Article 8, shall be  terminated,  provided  that the Purchaser may also
bring an action  pursuant to Article 7 against the Vendor and/or the Company for
damages suffered by the Purchaser where the  non-performance  or non-fulfillment
of the relevant condition is as a result of a breach of covenant, representation
or warranty by the Vendor or the Company.  Any such  condition  may be waived in
whole or in part by the  Purchaser  without  prejudice to any claims it may have
for breach of covenant, representation or warranty.




<PAGE>


                                       19



                                    Article 6
                                    ---------
                          CLOSING AND EVENTS OF CLOSING
                          -----------------------------


6.1       Closing and Closing  Date.  The closing (the  "Closing") of the within
          -------------------------
purchase and delivery of the Purchased  Shares, as contemplated in the manner as
set forth in Article  "2"  hereinabove,  together  with all of the  transactions
contemplated  by this  Agreement  shall occur on January 29, 2004 (the  "Closing
Date"),  or on such earlier or later Closing Date as may be agreed to in advance
and in writing by each of the Parties hereto,  and will be closed at the offices
of solicitors for the  Purchaser,  Devlin  Jensen,  Barristers  and  Solicitors,
located at Suite 2550 - 555 W. Hastings St.,  Vancouver,  B.C., V6B 4N5, at 2:00
p.m. (Vancouver time) on the Closing Date.


6.2       Latest  Closing  Date. If the Closing Date has not occurred by January
          ---------------------
31, 2004,  subject to an  extension as may be mutually  agreed to by the Parties
for a maximum of 14 days per extension,  then the Purchaser and the Vendor shall
each have the option to terminate  this  Agreement by delivery of written notice
to the other Party. Upon delivery of such notice,  this Agreement shall cease to
be of any force and effect  except for  Article  "8"  hereinbelow,  which  shall
remain  in  full  force  and  effect  notwithstanding  the  termination  of this
Agreement.


6.3       Documents  to be  delivered by the Company and the Vendor prior to the
          ----------------------------------------------------------------------
Closing Date.  Not later than five calendar days prior to the Closing Date,  and
- ------------
in  addition  to the  documentation  which is  required  by the  agreements  and
conditions precedent which are set forth hereinabove, the Company and the Vendor
shall also execute and deliver or cause to be delivered to  Purchaser's  counsel
all such other  documents,  resolutions and instruments as may be necessary,  in
the opinion of counsel for the Purchaser,  acting reasonably, to complete all of
the  transactions   contemplated  by  this  Agreement  and  including,   without
limitation,  the  necessary  transfer  of  all of the  Purchased  Shares  to the
Purchaser  free  and  clear  of  all  liens,  security  interests,  charges  and
encumbrances,  and in  particular  including,  but not  being  limited  to,  the
following materials:

     (a)  all  documentation  as may be necessary  and as may be required by the
          solicitors for the Purchaser, acting reasonably, to ensure that all of
          the  Purchased  Shares  have  been   transferred,   assigned  and  are
          registerable in the name of and for the benefit of the Purchaser under
          all applicable corporate and securities laws;

     (b)  certificates  representing the Purchased Shares registered in the name
          of the Vendor,  duly  endorsed  for transfer to the  Purchaser  and/or
          irrevocable  stock powers  transferring  the  Purchased  Shares to the
          Purchaser;

     (c)  certificates  representing the Purchased Shares registered in the name
          of the Purchaser;

     (d)  a  certified  copy of the  resolutions  of the  directors  (and of the
          Vendor/shareholder,  if  necessary)  of the  Company  authorizing  the
          transfer by the Vendor to the Purchaser of the Purchased Shares;




<PAGE>


                                       20



     (e)  a copy of all  corporate  records  and books of account of the Company
          and including,  without  limiting the  generality of the foregoing,  a
          copy of all minute books,  share  register  books,  share  certificate
          books and annual reports of the Company;

     (f)  all remaining Business Documentation; and

     (g)  all such other documents and instruments as the Purchaser's solicitors
          may reasonably require.


6.4       Documents to be delivered by the Purchaser  prior to the Closing Date.
          ---------------------------------------------------------------------
Not later than the Closing Date, and in addition to the  documentation  which is
required  by the  agreements  and  conditions  precedent  which  are  set  forth
hereinabove,  the  Purchaser  shall  also  execute  and  deliver  or cause to be
delivered to the Company's and the Vendor's  counsel,  all such other documents,
resolutions and instruments that may be necessary, in the opinion of counsel for
the  Company  and  the  Vendor,  acting  reasonably,  to  complete  all  of  the
transactions  contemplated by this Agreement and including,  without limitation,
the necessary  acceptance of the transfer of all of the Purchased  Shares to the
Purchaser  free  and  clear  of all  liens,  charges  and  encumbrances,  and in
particular including, but not being limited to, the following materials:

     (a)  a copy of the resolutions of the directors of the Purchaser  providing
          for the approval of all of the transactions contemplated hereby;

     (b)  an executed  treasury  order of the  Purchaser  providing  for the due
          issuance of all of the Purchase  Price Common  Shares to the order and
          direction of the Vendor in  accordance  with  section  "2.2" and "2.3"
          hereinabove; and

     (c)  all such other  documents  and  instruments  as the  Company's and the
          Vendors' respective solicitors may reasonably require.


                                    Article 7
                                    ---------
                      INDEMNIFICATION AND LEGAL PROCEEDINGS
                      -------------------------------------


7.1       Indemnification.  The  Parties  hereto  agree  to  indemnify  and save
          ---------------
harmless  the other  Parties  hereto  and  including,  where  applicable,  their
respective  affiliates,  directors,  officers,  employees  and agents (each such
party being an  "Indemnified  Party")  harmless from and against and agree to be
liable for any and all losses, claims,  actions,  suits,  proceedings,  damages,
liabilities or expenses of whatever nature or kind,  including any investigation
expenses  incurred by any Indemnified  Party, to which an Indemnified  Party may
become subject by reason of the terms and conditions of this Agreement.


7.2       No  Indemnification.  This  indemnity  will not apply in respect of an
          -------------------
Indemnified  Party in the  event  and to the  extent  that a court of  competent




<PAGE>


                                       21



jurisdiction in a final judgment shall determine that the Indemnified  Party was
grossly negligent or guilty of willful misconduct.


7.3       Claim of Indemnification.  The Parties hereto agree to waive any right
          ------------------------
they might have of first requiring the  Indemnified  Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.


7.4       Notice of Claim.  In case any action is brought against an Indemnified
          ---------------
Party in respect of which  indemnity  may be sought  against  any of the Parties
hereto, the Indemnified Party will give the relevant Party hereto prompt written
notice of any such action of which the Indemnified  Party has knowledge and such
Party will  undertake  the  investigation  and defense  thereof on behalf of the
Indemnified Party,  including the prompt consulting of counsel acceptable to the
Indemnified  Party  affected  and the  payment of all  expenses.  Failure by the
Indemnified  Party to so notify  shall  not  relieve  any  Party  hereto of such
Party's obligation of  indemnification  hereunder unless (and only to the extent
that) such failure  results in a forfeiture  by any Party hereto of  substantive
rights or defenses.


7.5       Settlement.  No admission of liability and no settlement of any action
          ----------
shall be made without the consent of each of the Parties  hereto and the consent
of the Indemnified Party affected, such consent not to be unreasonably withheld.


7.6       Legal Proceedings. Notwithstanding that the relevant Party hereto will
          -----------------
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate  counsel in any such action and participate in
the defense  thereof,  but the fees and  expenses of such counsel will be at the
expense of the Indemnified Party unless:

     (a)  such counsel has been authorized by the relevant Party hereto;

     (b)  the  relevant  Party  hereto has not assumed the defense of the action
          within a  reasonable  period  of time  after  receiving  notice of the
          action;

     (c)  the named parties to any such action include that any Party hereto and
          the  Indemnified  Party shall have been  advised by counsel that there
          may be a  conflict  of  interest  between  any  Party  hereto  and the
          Indemnified Party; or

     (d)  there are one or more  legal  defenses  available  to the  Indemnified
          Party which are  different  from or in addition to those  available to
          any Party hereto.


7.7       Contribution. If for any reason other than the gross negligence or bad
          ------------
faith of the  Indemnified  Party  being  the  primary  cause of the loss  claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified  Party or  insufficient  to hold them harmless,  the relevant




<PAGE>


                                       22



Party hereto shall  contribute to the amount paid or payable by the  Indemnified
Party as a result of any and all such losses,  claim,  damages or liabilities in
such  proportion  as is  appropriate  to reflect not only the relative  benefits
received by any Party  hereto on the one hand and the  Indemnified  Party on the
other,  but  also  the  relative  fault  of  the  Parties  and  other  equitable
considerations  which  may  be  relevant.  Notwithstanding  the  foregoing,  the
relevant  Party  hereto  shall in any event  contribute  to the  amount  paid or
payable  by the  Indemnified  Party,  as a result  of the loss,  claim,  damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the
Indemnified  Party),  any  excess  of such  amount  over the  amount of the fees
actually received by the Indemnified Party hereunder.


                                    Article 8
                                    ---------
                                 NON-DISCLOSURE
                                 --------------


8.1       Public  Announcements  and Disclosure to Regulatory  Authorities.  All
          ----------------------------------------------------------------
information  relating to the Agreement and the transaction  contemplated therein
shall be treated as confidential  and no public  disclosure shall be made by any
Party   without  the  prior   approval   of  the  Company  and  the   Purchaser.
Notwithstanding the provisions of this Article, the Parties hereto agree to make
such public  announcements and disclosure to the Regulatory  Authorities of this
Agreement promptly upon its execution all in accordance with the requirements of
applicable securities legislation and regulations.


                                    Article 9
                                    ---------
                            ASSIGNMENT AND AMENDMENT
                            ------------------------


9.1       Assignment.  Save and except as provided  herein,  no Party hereto may
          ----------
sell,  assign,  pledge or mortgage or otherwise  encumber all or any part of its
respective interest herein without the prior written consent of all of the other
Parties hereto.


9.2       Amendment.  This  Agreement  and any  provision  thereof  may  only be
          ---------
amended  in  writing  and  only by duly  authorized  signatories  of each of the
respective Parties hereto.


                                   Article 10
                                   ----------
                                  FORCE MAJEURE
                                  -------------


10.1      Events.  If any Party  hereto is at any time  prevented  or delayed in
          ------
complying with any provisions of this Agreement by reason of strikes, walk-outs,
labour  shortages,  power  shortages,  fires,  wars,  acts of God,  earthquakes,
storms,   floods,   explosions,   accidents,   protests  or   demonstrations  by
environmental  lobbyists  or native  rights  groups,  delays in  transportation,
breakdown  of  machinery,  inability to obtain  necessary  materials in the open
market, unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that  Party,  then the time  limited  for the  performance  by that Party of its




<PAGE>


                                       23



respective  obligations hereunder shall be extended by a period of time equal in
length to the period of each such prevention or delay.


10.2      Notice. A Party shall,  within seven calendar days, give notice to the
          ------
other Parties of each event of force majeure under section  "10.1"  hereinabove,
and upon  cessation of such event shall furnish the other Parties with notice of
that  event  together  with  particulars  of the  number  of days by  which  the
obligations  of that Party  hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.


                                   Article 11
                                   ----------
                                   ARBITRATION
                                   -----------


11.1      Matters for  Arbitration.  The  Parties  agree that all  questions  or
          ------------------------
matters  in  dispute  with  respect  to this  Agreement  shall be  submitted  to
arbitration pursuant to the terms hereof.


11.2      Notice. It shall be a condition precedent to the right of any Party to
          ------
submit any matter to  arbitration  pursuant  to the  provisions  hereof that any
Party  intending  to refer any matter to  arbitration  shall have given not less
than 10 calendar  days' prior  written  notice of its  intention to do so to the
other  Party  together  with  particulars  of  the  matter  in  dispute.  On the
expiration  of such 10 calendar  days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "11.3" hereinbelow.


11.3      Appointments.   The  Party  desiring  arbitration  shall  appoint  one
          ------------
arbitrator, and shall notify the other Party of such appointment,  and the other
Party shall,  within two calendar days after  receiving such notice,  appoint an
arbitrator,  and the two arbitrators so named,  before proceeding to act, shall,
within 10 calendar days of the  appointment  of the last  appointed  arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairman of the  arbitration  herein  provided  for. If the other Party shall
fail to appoint an arbitrator  within 10 calendar days after receiving notice of
the appointment of the first arbitrator, and if the two arbitrators appointed by
the Parties shall be unable to agree on the  appointment  of the  chairman,  the
chairman shall be appointed  under the provisions of the Commercial  Arbitration
Act (British Columbia) (the "Arbitration Act"). Except as specifically otherwise
provided in this section, the arbitration herein provided for shall be conducted
in accordance with such Arbitration Act. The chairman, or in the case where only
one arbitrator is appointed,  the single arbitrator,  shall fix a time and place
in  Vancouver,  British  Columbia,  for the purpose of hearing the  evidence and
representations  of the Parties,  and he shall preside over the  arbitration and
determine all questions of procedure not provided for under such Arbitration Act
or this section. After hearing any evidence and representations that the Parties
may submit, the single arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing,  and  deliver one copy  thereof to
each of the Parties.  The expense of the arbitration  shall be paid as specified
in the award.





<PAGE>


                                       24



11.4      Award.  The  Parties  agree  that  the  award  of a  majority  of  the
          -----
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.


                                   Article 12
                                   ----------
                             DEFAULT AND TERMINATION
                             -----------------------


12.1      Default.  The  Parties  hereto  agree  that if any Party  hereto is in
          -------
default with respect to any of the provisions of this  Agreement  (herein called
the  "Defaulting   Party"),   the   non-defaulting   Party  (herein  called  the
"Non-Defaulting  Party") shall give notice to the Defaulting  Party  designating
such default,  and within 10 calendar days after its receipt of such notice, the
Defaulting Party shall either:

     (a)  cure such default,  or commence  proceedings  to cure such default and
          prosecute the same to completion without undue delay; or

     (b)  give the Non-Defaulting  Party notice that it denies that such default
          has occurred and that it is submitting  the question to arbitration as
          herein provided.


12.2      Arbitration.  If arbitration is sought, a Party shall not be deemed in
          -----------
default  until the matter  shall  have been  determined  finally by  appropriate
arbitration under the provisions of Article "11" hereinabove.


12.3      Curing the Default. If:
          ------------------

     (a)  the default is not so cured or the Defaulting  Party does not commence
          or diligently proceed to cure the default; or

     (b)  arbitration is not so sought; or

     (c)  the  Defaulting  Party is found in  arbitration  proceedings  to be in
          default,  and fails to cure it within  five  calendar  days  after the
          rendering of the arbitration award,

the Non-Defaulting Party may, by written notice given to the Defaulting Party at
any time while the default  continues,  terminate the interest of the Defaulting
Party in and to this Agreement.


12.4      Termination.  In addition to the  foregoing it is hereby  acknowledged
          -----------
and agreed by the Parties  hereto that this  Agreement will be terminated in the
event that:





<PAGE>


                                       25



     (a)  the Purchaser's Ratification is not received within five business days
          of the due and  complete  execution  of this  Agreement by each of the
          Parties hereto;

     (b)  the Purchaser fails to complete a successful and  Purchaser's  Initial
          Due Diligence review of the Company's  business and operations  within
          five (5) calendar days of the prior  satisfaction  by the Purchaser of
          the Purchaser's Ratification;

     (c)  the conditions  specified in section "5.1"  hereinabove  have not been
          satisfied at or prior to the Time of Closing;

     (d)  either of the Parties  hereto has not either  satisfied or waived each
          of their  respective  conditions  precedent at or prior to the Time of
          Closing in accordance with the provisions of Article "5" hereinabove;

     (e)  either of the  Parties  hereto  has  failed to deliver or caused to be
          delivered any of their respective  documents  required to be delivered
          by Articles "5" and "6" hereinabove at or prior to the Time of Closing
          in accordance with the provisions of Articles "5" and "6"; or

     (f)  by Closing has not  occurred on or before  January 31,  2004,  or such
          later date, all in accordance with section "6.2" hereinabove; or

     (g)  by agreement in writing by each of the Parties hereto;

and in such event this  Agreement  will be terminated and be of no further force
and effect other than the obligations under Article "8" hereinabove.


                                   Article 13
                                   ----------
                                     NOTICE
                                     ------


13.1      Notice.  Each  notice,  demand  or  other  communication  required  or
          ------
permitted to be given under this Agreement shall be in writing and shall be sent
by prepaid  registered  mail  deposited in a post office  addressed to the Party
entitled to receive the same,  or  delivered  to such Party,  at the address for
such Party specified above. The date of receipt of such notice,  demand or other
communication  shall be the date of delivery thereof if delivered,  or, if given
by registered  mail as aforesaid,  shall be deemed  conclusively to be the third
calendar  day after the same shall  have been so  mailed,  except in the case of
interruption  of postal  services for any reason  whatsoever,  in which case the
date of  receipt  shall  be the  date on  which  the  notice,  demand  or  other
communication is actually received by the addressee.


13.2      Change of Address.  Either Party may at any time and from time to time
          -----------------
notify the other  Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.





<PAGE>


                                       26



                                   Article 14
                                   ----------
                               GENERAL PROVISIONS
                               ------------------


14.1      Entire Agreement.  This Agreement  constitutes the entire agreement to
          ----------------
date  between  the  Parties  hereto and  supersedes  every  previous  agreement,
communication,   expectation,  negotiation,   representation  or  understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties  with respect to the subject  matter of this  Agreement  and  including,
without limitation,  the agreement as between the Purchaser,  the Vendor and the
Company.


14.2      Enurement.  This  Agreement  will enure to the  benefit of and will be
          ---------
binding  upon  the  Parties   hereto,   their   respective   heirs,   executors,
administrators and assigns.


14.3      Schedules.  The Schedules to this Agreement are hereby incorporated by
          ---------
reference into this Agreement in its entirety.


14.4      Time of the Essence. Time will be of the essence of this Agreement.
          -------------------


14.5      Representation  and Costs.  It is hereby  acknowledged  by each of the
          -------------------------
Parties hereto that, as between the Parties  hereto,  Devlin Jensen,  Barristers
and Solicitors,  acts solely for the Purchaser,  and that each of the Vendor and
the  Company  have been  advised by Devlin  Jensen to obtain  independent  legal
advice with respect to their respective reviews and execution of this Agreement.
In addition,  it is hereby further acknowledged and agreed by the Parties hereto
that each Party to this  Agreement  will bear and pay its own  costs,  legal and
otherwise, in connection with its respective  preparation,  review and execution
of  this  Agreement,  and,  in  particular,  that  the  costs  involved  in  the
preparation  of this  Agreement,  and  all  documentation  necessarily  involved
thereto, by Devlin Jensen shall be at the cost of the Purchaser.


14.6      Applicable  Law.  The situs of this  Agreement is  Vancouver,  British
          ---------------
Columbia and for all purposes this Agreement will be governed exclusively by and
construed and enforced in accordance with the laws and Courts  prevailing in the
Province of British Columbia.


14.7      Further Assurances.  The Parties hereto hereby, jointly and severally,
          ------------------
covenant and agree to forthwith,  upon request, execute and deliver, or cause to
be executed and delivered,  such further and other deeds, documents,  assurances
and  instructions  as may be required by the Parties hereto or their  respective
counsel in order to carry out the true nature and intent of this Agreement.


14.8      Severability and Construction.  Each Article, section, paragraph, term
          -----------------------------
and provision of this Agreement,  and any portion  thereof,  shall be considered




<PAGE>


                                       27



severable,  and if, for any reason,  any portion of this Agreement is determined
to be invalid,  contrary to or in conflict with any applicable present or future
law,  rule or  regulation  in a final  unappealable  ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to any of the Parties
hereto is a party,  that ruling shall not impair the  operation  of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible  (all of which shall remain  binding on the Parties and continue to
be given full force and  agreement as of the date upon which the ruling  becomes
final).


14.9      Captions. The captions,  section numbers, Article numbers and Schedule
          --------
numbers  appearing in this  Agreement are inserted for  convenience of reference
only and shall in no way define, limit, construe or describe the scope or intent
of this Agreement nor in any way affect this Agreement.


14.10     Currency. Unless otherwise stipulated, all references to money amounts
          --------
herein shall be in lawful money of the United States.


14.11     Counterparts. This Agreement may be signed by the Parties hereto in as
          ------------
many counterparts as may be necessary,  and via facsimile if necessary,  each of
which so signed being deemed to be an original  and such  counterparts  together
constituting  one and the  same  instrument  and,  notwithstanding  the  date of
execution, being deemed to bear the effective Execution Date as set forth on the
front page of this Agreement.


14.12     No  Partnership  or Agency.  The  Parties  hereto  have not  created a
          --------------------------
partnership  and  nothing  contained  in  this  Agreement  shall  in any  manner
whatsoever  constitute any Party the partner,  agent or legal  representative of
any other  Party,  nor create any  fiduciary  relationship  between them for any
purpose  whatsoever.  No Party shall have any authority to act for, or to assume
any  obligations or  responsibility  on behalf of, any other party except as may
be,  from  time to time,  agreed  upon in  writing  between  the  Parties  or as
otherwise expressly provided.


14.13     Consents  and  Waivers.  No consent or waiver  expressed or implied by
          ----------------------
either  Party  hereto in respect of any breach or default by any other  Party in
the performance by such other of its obligations hereunder shall:

     (a)  be valid  unless it is in writing and stated to be a consent or waiver
          pursuant to this section;

     (b)  be  relied  upon as a consent  to or  waiver  of any  other  breach or
          default of the same or any other obligation;

     (c)  constitute a general waiver under this Agreement; or

     (d)  eliminate or modify the need for a specific consent or waiver pursuant
          to this section in any other or subsequent instance.



<PAGE>


                                       28



          IN WITNESS  WHEREOF each of the Parties  hereto has hereunto  executed
          -------------------
this  Agreement as of the Execution  Date as set forth on the front page of this
Agreement.


SIGNED and DELIVERED by             )
HE PING WANG, a Vendor              )
- ------------                        )
herein, in the presence of:         )
                                    )
                                    )
Witness Signature                   )           /s/ He Ping Wang
                                    )    -------------------------------
                                    )         HE PING WANG
                                    )         ------------
Witness Address                     )
                                    )
                                    )
Witness Name and Occupation         )


TANGSHAN YIAN BIOLOGICAL            )
- ------------------------            )
ENGINEERING CO., LTD., the Company  )
- ---------------------               )
herein,                             )
                                    )
                                    )
Per:     /s/ Xianping Wang          )
- ------------------------------------)
Authorized Signatory                )


SINOVAC BIOTECH LTD., the           )
- --------------------                )
Purchaser herein,                   )
                                    )
                                    )
Per:     /s/ Wei Dong Yin           )
- ------------------------------------)
Authorized Signatory                )



<PAGE>


                                       29



                                   Schedule A
                                   ----------



          This is Schedule "A" to that certain Share  Purchase  Agreement  among
Sinovac  Biotech Ltd.,  Tangshan Yian Biological  Engineering  Co., Ltd. and the
Vendor shareholder of Tangshan Yian Biological Engineering Co., Ltd.


                        Purchased Securities and Vendors
                        --------------------------------


     Authorized Capital:                unlimited common shares
     ------------------


     Issued Capital:                    9,335,435 common shares
     --------------


    Vendor:
    ------

               He Ping Wang:            9,335,435 common shares.
               ------------
               C/o 120 Huoju Rd.
               High Tech. Developing Zone
               Tangshan, Hbei Provence
               063000 P.R. China




<PAGE>


                                       30



                                   Schedule B
                                   ----------



          This is Schedule "B" to that certain Share  Purchase  Agreement  among
Sinovac  Biotech Ltd.,  Tangshan Yian Biological  Engineering  Co., Ltd. and the
Vendor shareholder of Tangshan Yian Biological Engineering Co., Ltd.


   Promissory Note Issued by Sinovac Biotech Ltd. to Tangshan Yian Biological
   --------------------------------------------------------------------------
                              Engineering Co., Ltd.
                              ---------------------


                     Refer to the materials attached hereto.
                     --------------------------------------


                                   ----------



<PAGE>


                                       31



                                 PROMISSORY NOTE
                                 ---------------


Principal:      US$2,200,000                 Made and Dated at:  Vancouver, B.C.

Interest:       0% per annum

Issuance Date:  January 26, 2004             Maturity Date:  January 26, 2005

Borrower:       Sinovac Biotech Ltd.

Lender:         He Ping Wang


FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the Borrower
- --------------------------
hereby  promises  to  pay to the  Lender  (also  called  the  "holder"),  or the
authorized  and  registered  subsequent  holder  of this  promissory  note  (the
"Note"),  the  principal  sum of $2,200,000 in lawful money of the United States
(hereinafter referred to as the "Principal Amount"), with no interest.

          The Principal  Amount,  as specified  above, is due and payable by the
Borrower  on the  Maturity  Date.  The  Borrower  may  prepay  any amount of the
Principal Amount at any time prior to the Maturity Date without penalty and this
Note shall be discharged in respect to the amount paid.

          If the Borrower  fails to make payment of the Principal  Amount on the
Maturity Date, the balance of the Principal  Amount under this  Promissory  Note
will become immediately due and payable.

          To secure  payment of the  Principal  Amount  hereunder,  the Borrower
hereby  irrevocably  appoints and authorizes any representative of the holder to
appear  before a court of competent  jurisdiction  and enter  judgment,  without
process,  in favour of the  holder  for any  unpaid  Principal  Amount,  and the
Borrower  waives and  releases all errors  which may  intervene  and consents to
immediate execution upon such judgment.

          The Borrower hereby waives demand,  presentment for payment, notice of
non-payment, and protest.

          If any  provision  of this  Note is held to be  invalid,  illegal,  or
unenforceable,  then such shall not affect or impair the validity,  legality, or
enforceability of the remaining provisions.

          WITNESS  the  hand  and  seal of the  Borrower  as of the  26th day of
January, 2004.

SINOVAC BIOTECH LTD.
- --------------------


per:     /s/ Wei Dong Yin
- ------------------------------------
         Authorized Signatory




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>sinovacfinancials.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, ACQUIRED BUSINESS FINANCIALS
<TEXT>


EXHIBIT 99.1
- ------------














                        TANGSHAN YIAN BIOLOGICAL
                        ------------------------
                        ENGINEERING CO., LTD.
                        ---------------------
                        (A company incorporated in China)


                        Financial Statements
                        (Expressed in U.S. Dollars)


                        June 30, 2003, December 31, 2002 and 2001







                        Index
                        -----

                        Report of Independent Accountants

                        Balance Sheets

                        Statements of Stockholders' Equity (Deficiency)

                        Statement of Operations

                        Statements of Cash Flows

                        Notes to Financial Statements












                                       F-1
<PAGE>



MOORE STEPHENS ELLIS FOSTER LTD.
- --------------------------------
CHARTERED ACCOUNTANTS
- ---------------------

1650 West 1st Avenue
Vancouver, BC Canada V6J 1G1
Telephone:  (604) 734-1112 Facsimile: (604) 714-5916
Website:  www.ellisfoster.com

- --------------------------------------------------------------------------------


REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------


To the Board of Directors and Stockholders of
- ---------------------------------------------

TANGSHAN YIAN BIOLOGICAL ENGINEERING CO., LTD.
- ----------------------------------------------

We have audited the balance sheets of Tangshan Yian Biological  Engineering Co.,
                                      ------------------------------------------
Ltd.  ("the  Company") as at June 30, 2003,  December 31, 2002 and 2001, and the
- ----
related  statements of stockholders'  equity  (deficiency),  operations and cash
flows for the six months ended June 30, 2003,  the years ended December 31, 2002
and 2001.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

Except as  explained in the  following  paragraph,  we  conducted  our audits in
accordance with auditing  standards  generally  accepted in the United States of
America.  Those  standards  require  that we plan and perform an audit to obtain
reasonable  assurance  whether  the  financial  statements  are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

Because we were not  appointed as auditors of the Company  until after  December
31, 2002, we were not able to observe the counting of physical inventories as at
January 1, 2001 and December 31, 2001, nor satisfy  ourselves  concerning  those
inventories  quantities by  alternative  means.  We were,  therefore,  unable to
determine whether  adjustments to inventories as at January 1, 2001 and December
31,  2001  might  be  necessary.  Since  beginning  inventories  enter  into the
determination  of the results of  operations  and cash flows,  we were unable to
determine whether  adjustments to cost of sales, net income (loss) for the year,
beginning  accumulated deficit and cash provided from operations for each of the
years in the two-year period ended December 31, 2002 might be necessary.

In our opinion,  except for the effect of  adjustments,  if any,  which we might
have determined to be necessary had we been able to examine beginning  inventory
quantities as described in the preceding  paragraph,  these financial statements
present fairly, in all material respects,  the financial position of the Company
as at December 31,  2001,  the result of its  operations  and its cash flows for
each of the years in the two-year  period ended December 31, 2002, in accordance
with generally accepted  accounting  principles in the United States of America.
Further,  in our opinion,  these financial  statements  present  fairly,  in all
material respects, the financial position of the Company as at June 30, 2003 and
December 31, 2002 and the results of its  operations  and its cash flows for the
six months ended June 30, 2003 in conformity with generally accepted  accounting
principles in the United States of America.



Vancouver, Canada                          "MOORE   STEPHENS  ELLIS FOSTER LTD."
August 13, 2003, except as to Note 13                      Chartered Accountants
which is as of September 24, 2003


- --------------------------------------------------------------------------------
M S  An independently owned and operated member of Moore Stephens North America,
Inc. Members in principal cities throughout North America.  Moore Stephens North
America, Inc. is a member of Moore Stephens  International  Limited,  members in
principal cities throughout the world.

                                       F-2
<PAGE>



<TABLE>
<CAPTION>
TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Balance Sheets
(Expressed in U.S. Dollars)
=======================================================================================================================

                                                                        June 30         December 31         December 31
                                                                           2003                2002                2001
- -----------------------------------------------------------------------------------------------------------------------

ASSETS

<S>                                                            <C>                 <C>                 <C>
Current assets
  Cash and cash equivalents                                    $        17,263     $        35,238     $       142,827

  Trade receivables, net of allowance of doubtful accounts              11,594              30,531              61,135
   of $26,109 in 2003, $19,949 in 2002 and $13,657 in 2001

  Other receivables, including related party receivables                17,191              14,770               8,614
    of $6,321 in 2003, $5,439 in 2002 and $3,675 in 2001

  Inventories                                                           81,475              68,848              83,604

  Deferred income taxes                                                      -              47,930                   -
- -----------------------------------------------------------------------------------------------------------------------

Total current assets                                                   127,523             197,317             296,180

Deferred income taxes                                                        -                   -              47,930

Property, plant and equipment                                        1,894,958           1,950,772           2,051,294

Investment in Sinovac Biotech Co., Ltd.                                532,139             523,932             722,950
- -----------------------------------------------------------------------------------------------------------------------

Total assets                                                   $     2,554,620     $     2,672,021     $     3,118,354
=======================================================================================================================


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
  Loans payable                                                $     1,119,324     $     1,115,097     $       869,565
  Accounts payable and accrued liabilities                             705,990           1,454,493             815,427
  Due to related parties                                               677,487           1,225,913           1,437,645
- -----------------------------------------------------------------------------------------------------------------------

Total current liabilities                                            2,502,801           3,795,503           3,122,637
- -----------------------------------------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY (DEFICIENCY)

Paid-in capital                                                      1,130,198             132,850             132,850

Contributed surplus                                                     85,176              79,098              66,912

Accumulated deficit                                                 (1,163,555)         (1,335,430)           (204,045)
- -----------------------------------------------------------------------------------------------------------------------

Total stockholders' equity (deficiency)                                 51,819          (1,123,482)             (4,283)
- -----------------------------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity                     $     2,554,620     $     2,672,021     $     3,118,354
=======================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.




                                       F-3
<PAGE>



<TABLE>
<CAPTION>
TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Statements of Stockholders' Equity (Deficiency)
(Expressed in U.S. Dollars)
================================================================================================================
                                                                                                           Total
                                                                                                    stockholders
                                               Paid-in       Contributed             Deficit              equity
                                               capital           surplus         accumulated        (deficiency)
- ----------------------------------------------------------------------------------------------------------------

<S>                                     <C>               <C>               <C>                 <C>
Balance, December 31, 2000              $     132,850     $      57,144     $      (418,890)    $      (228,896)

Imputed interest                                    -             9,768                   -               9,768

Comprehensive income (loss)
- - Net income for the year                           -                 -             214,845             214,845
- ----------------------------------------------------------------------------------------------------------------

Balance, December 31, 2001                    132,850            66,912            (204,045)             (4,283)
================================================================================================================

Imputed interest                                    -            12,186                   -              12,186

Comprehensive income (loss)
- - Net (loss) for the year                           -                 -          (1,131,385)         (1,131,385)
- ----------------------------------------------------------------------------------------------------------------

Balance, December 31, 2002                    132,850            79,098          (1,335,430)         (1,123,482)
================================================================================================================

Imputed interest                                    -             6,078                   -               6,078

Debt exchange for shares (Note 10f)           997,348                 -                   -             997,348

Comprehensive income (loss)
- - Net income for the period                         -                 -             171,875             171,875
- ----------------------------------------------------------------------------------------------------------------

Balance, June 30, 2003                  $   1,130,198     $      85,176          (1,163,555)    $        51,819
================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.




















                                       F-4
<PAGE>



<TABLE>
<CAPTION>
TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Statements of Operations
(Expressed in U.S. Dollars)
======================================================================================================
                                                      Six months
                                                           ended          Year ended        Year ended
                                                         June 30         December 31       December 31
                                                            2003                2002              2001
- ------------------------------------------------------------------------------------------------------

<S>                                               <C>               <C>                 <C>
Sales                                             $      21,903     $       471,473     $     101,107

Cost of sales                                            31,798             288,014            33,456
- ------------------------------------------------------------------------------------------------------

Gross profit (loss)                                      (9,895)            183,459            67,651
- ------------------------------------------------------------------------------------------------------

Selling, general and administrative expenses             53,451             727,150           103,912

Research and development expenses                           365             910,417           329,642

Interest and financing expenses                          21,955              43,231            21,086

Depreciation of property, plant and equipment            10,812              21,770             9,356

Equity in net loss of Sinovac                            24,134             118,812            18,578
- ------------------------------------------------------------------------------------------------------

                                                        110,717           1,821,380           482,574
- ------------------------------------------------------------------------------------------------------

Operating (loss)                                       (120,612)         (1,637,921)         (414,923)

Gain on disposal of drug licenses                       240,618             502,078           741,528

Dilution gain                                            98,698                   -                 -

Other income                                              1,101               4,458             3,210
- ------------------------------------------------------------------------------------------------------

Income (loss) before income taxes                       219,805          (1,131,385)          329,815

Deferred Income taxes                                    47,930                   -           114,970
- ------------------------------------------------------------------------------------------------------

Net income (loss) for the period                  $     171,875     $    (1,131,385)    $     214,845
======================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.















                                       F-5
<PAGE>



<TABLE>
<CAPTION>
TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Statements of Cash Flows
(Expressed in U.S. Dollars)
==============================================================================================================
                                                              Six months
                                                                   ended          Year ended        Year ended
                                                                 June 30         December 31       December 31
                                                                    2003                2002              2001
- --------------------------------------------------------------------------------------------------------------

<S>                                                       <C>               <C>                 <C>
Cash flows from (used in)
  operating activities
  Net income (loss) for the period                        $     171,875     $    (1,131,385)    $     214,845
  Adjustments for items not involving cash:
  - depreciation of property, plant and equipment                38,063             110,817            26,873
  - provision for doubtful account                                6,160               6,292            21,890
  - imputed interest                                              6,078              12,186             9,768
  - non-cash compensations                                            -             582,285                 -
  - loss on disposal of property, plant and equipment               210                 481                 -
  - gain on disposal of drug licenses                          (240,618)           (502,078)         (741,528)
  - dilution gain                                               (98,698)                  -                 -
  - equity in net loss of Sinovac                                24,134             118,812            18,578
  - deferred income taxes                                        47,930                   -           114,970
- --------------------------------------------------------------------------------------------------------------

                                                                (44,866)           (802,590)         (334,604)
  Change in non-cash working capital items:
  - accounts receivable and others                               11,238              19,920           724,158
  - inventories                                                 (12,627)             14,756            45,821
  - accounts payable and accrued liabilities                      5,107             639,066           499,582
- --------------------------------------------------------------------------------------------------------------

Net cash from (used in) operating activities                    (41,148)           (128,848)          934,957
- --------------------------------------------------------------------------------------------------------------

Cash flows from (used in)
  financing activities
  Loans proceeds                                                  4,227             245,532           869,565
  Advances from (repayment to) related parties                   18,946            (213,496)         (518,316)
- --------------------------------------------------------------------------------------------------------------

Net cash from financing activities                               23,173              32,036           351,249
- --------------------------------------------------------------------------------------------------------------

Cash flows used in investing activities
  Acquisition of property, plant and equipment                        -             (10,777)       (1,310,247)
- --------------------------------------------------------------------------------------------------------------

Decrease in cash and cash equivalents                           (17,975)           (107,589)          (24,041)

Cash and cash equivalents,
 beginning of period                                             35,238             142,827           166,868
- --------------------------------------------------------------------------------------------------------------

Cash and cash equivalents,
 end of period                                            $      17,263     $        35,238     $     142,827
==============================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.









                                       F-6
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


1.   Nature of Business
- -----------------------

     The Company was  incorporated  under the laws of China on February 9, 1993.
     Its business is in the research and  development,  production  and sales of
     pharmaceutical products in China.


2.   Currency of Presentation
- -----------------------------

     These financial statements have been prepared in Renminbi ("RMB"), which is
     the currency of the Company's functional and reporting currency. US dollars
     equivalent  figures presented in these financial  statements are determined
     by  translating  the amounts at the exchange rate of US$1 = RMB8.28 for the
     convenience of the readers.


3.   Significant Accounting Policies
- ------------------------------------

     (a)  Principles of Accounting

          These  financial  statements  have been  prepared in  accordance  with
          accounting  principles  generally  accepted  in the  United  States of
          America.

     (b)  Accounting Estimates

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles 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 revenues
          and expenses during the reporting period.  Actual results could differ
          from those estimates.

     (c)  Cash and Cash Equivalents

          Cash equivalents usually consist of highly liquid investments that are
          readily  convertible  to cash with  maturities of three months or less
          when purchased.  As at June 30, 2003, December 31, 2002 and 2001, cash
          and cash equivalents consist of cash only.

     (d)  Inventories

          Inventories  are  stated  at the  lower of cost or  market  with  cost
          generally  determined on a first-in,  first-out  basis.  Cost includes
          direct material, direct labour and manufacturing overheads.






                                       F-7
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


3.   Significant Accounting Policies (continued)
- ------------------------------------

     (e)  Property, Plant and Equipment

          Property,   plant  and  equipment  are  recorded  at  cost,  including
          capitalized interest and internal  engineering costs.  Depreciation of
          property,   plant  and  equipment  generally  is  computed  using  the
          straight-line method based on the estimated useful lives of the assets
          as follows:

            Land-use rights                               28 years
            Plant and building                            30 years
            Machinery and equipment                       8 - 10 years
            Motor vehicles                                5 years
            Office equipment and furniture                5 years

          Property,  plant and  equipment are reviewed for  impairment  whenever
          events or changes in  circumstances  indicate that the carrying amount
          of an asset (asset group) may not be  recoverable.  An impairment loss
          would be recognized  when the carrying  amount of an asset exceeds the
          estimated  undiscounted  future cash flows expected to result from the
          use of the  asset  and its  eventual  disposition.  The  amount of the
          impairment  loss to be  recorded  is  calculated  by the excess of the
          asset's  carrying  value over its fair value.  Fair value is generally
          determined using a discounted cash flow analysis.

          The Company has adopted  Statement of Financial  Accounting  Standards
          ("SFAS") No. 144. This statement  retains the requirements of SFAS No.
          121  "Accounting  for the  Impairment  of  Long-Lived  Assets  and for
          Long-Lived  Assets to be Disposed  Of " to  recognize  impairments  on
          Property,  Plant and Equipment,  but removes  goodwill from its scope.
          The  adoption  of SFAS No. 144 does not have  impact on the  Company's
          financial statements.

     (f)  Income Taxes

          The Company has adopted  Statement of Financial  Accounting  Standards
          ("SFAS") No. 109,  "Accounting  for Income Taxes",  which requires the
          Company  to  recognize  deferred  tax  liabilities  and assets for the
          expected  future tax  consequences of events that have been recognized
          in the  Company's  financial  statements  or  tax  returns  using  the
          liability  method.  Under this method,  deferred tax  liabilities  and
          assets are determined based on the temporary  differences  between the
          financial  statements  and tax bases of assets and  liabilities  using
          enacted tax rates in effect in the years in which the  differences are
          expected to reverse.

     (g)  Revenue Recognition

          Sales revenue is recognized upon the delivery of goods to customers.




                                       F-8
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


3.   Significant Accounting Policies (continued)
- ------------------------------------

     (h)  Advertising Expenses

          Advertising  costs are  expensed as incurred  and  included in selling
          expenses.  There were no advertising costs incurred for the six months
          ended June 30, 2003, years ended December 31, 2002 and 2001.

     (i)  Research and Development

          Research and development  costs are charged to operations as incurred.
          Research and  development  costs are listed as a separate line item on
          the Company's statements of operations.

     (j)  Foreign Currency Transactions

          The Company's functional currency is Renminbi.  The Company translates
          foreign  currency  transactions  into its  functional  currency in the
          following manner:

          At the transaction date, each asset, liability, revenue and expense is
          translated  into the  functional  currency by the use of the  exchange
          rate in effect at that  date.  At the  period  end,  foreign  currency
          monetary assets,  and liabilities are re-evaluated into the functional
          currency by using the  exchange  rate in effect at the  balance  sheet
          date. The resulting  foreign exchange gains and losses are included in
          operations.

     (k)  Stock-based Compensation

          The Company  adopted the  disclosure-only  provisions  of Statement of
          Financial  Accounting  Standards No. 123 (SFAS 123),  "Accounting  for
          Stock-based Compensation".  SFAS 123 encourages, but does not require,
          companies to adopt a fair value based method for  determining  expense
          related  to  stock-based   compensation.   The  Company  accounts  for
          stock-based  compensation  issued to employees and directors using the
          intrinsic value method as prescribed under Accounting Principles Board
          Opinion (APB) No. 25,  "Accounting  for Stock Issued to Employees" and
          related  Interpretations.  The  Company  does not have  stock  options
          outstanding  as at June 30, 2003 and the years ended December 31, 2002
          and 2001.

     (l)  Comprehensive Income

          The  Company  has  adopted  SFAS  No.  130,  "Reporting  Comprehensive
          Income",  which  establishes  standards  for  reporting and display of
          comprehensive  income,  its components and accumulated  balances.  The
          Company  is   disclosing   this   information   on  its  Statement  of
          Stockholders'  Equity.  Comprehensive  income  comprises equity except
          those  resulting  from  investments  by owners  and  distributions  to
          owners.




                                       F-9
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


3.   Significant Accounting Policies (continued)
- ------------------------------------

     (m)  Earnings Per Share

          Earnings per share number is not presented as the Company is a private
          corporation.

     (n)  Financial Instruments and Concentration of Credit Risks

          Fair value of financial  instruments  are made at a specific  point in
          time,  based on  relevant  information  about  financial  markets  and
          specific financial  instruments.  As these estimates are subjective in
          nature,  involving uncertainties and matters of significant judgement,
          they cannot be determined with  precision.  Changes in assumptions can
          significantly affect estimated fair values.

          The carrying value of cash and cash equivalents, trade receivables and
          other  receivables,   loans  payable,  accounts  payable  and  accrued
          liabilities  approximate  their fair value  because of the  short-term
          nature of these instruments.

          The Company is operating in China,  which may give rise to significant
          foreign currency risks from  fluctuations and the degree of volatility
          of foreign  exchange rates between US dollars and the Chinese currency
          RMB.  Financial  instruments that  potentially  subject the Company to
          concentration  of credit risks consist  principally  of cash and trade
          receivables,  the  balances of which are stated on the balance  sheet.
          The  Company  places  its  cash  in  high  credit  quality   financial
          institutions. The Company's customers are primarily pharmaceutical and
          biotechnology  companies.  Ongoing  credit  evaluations  of customers'
          financial  condition are performed and the Company maintains provision
          for potential credit losses if necessary. The Company does not require
          collateral or other security to support financial  instruments subject
          to credit risks.  The Company is not subject to  significant  interest
          risks.

     (o)  Accounting for Derivative Instruments and Hedging Activities

          The  Company  has  adopted  the  Statement  of  Financial   Accounting
          Standards No. 133 (SFAS 133),  Accounting for  Derivative  Instruments
          and Hedging  Activities,  which  requires  companies to recognize  all
          derivatives  contracts as either assets or  liabilities in the balance
          sheet and to measure  them at fair value.  If certain  conditions  are
          met, a  derivative  may be  specifically  designated  as a hedge,  the
          objective of which is to match the timing of gain or loss  recognition
          on the hedging  derivative  with the recognition of (i) the changes in
          the fair value of the hedged asset or liability that are  attributable
          to the  hedged  risk  or  (ii)  the  earnings  effect  of  the  hedged
          forecasted  transaction.  For a derivative not designated as a hedging
          instrument,  the gain or loss is recognized in income in the period of
          change.

          The Company has not entered into derivative  contracts either to hedge
          existing  risks or for  speculative  purposes.  The  Company  does not
          anticipate  that the adoption of the statement will have a significant
          impact on its financial statements.


                                      F-10
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


3.   Significant Accounting Policies (continued)
- ------------------------------------

     (p)  New Accounting Pronouncements

          In December  2002,  the  Financial  Accounting  Standard  Board issued
          Statement  of  Financial  Accounting  Standard  No.  148  (SFAS  148),
          Accounting for  Stock-based  Compensation - Transition and Disclosure.
          SFAS 148 amends SFAS 123, Accounting for Stock-based Compensation,  to
          provide  alternative  methods for  voluntary  transition to SFAS 123's
          fair value method of accounting for stock-based employee compensation.
          SFAS  148 also  requires  disclosure  of the  effects  of an  entity's
          accounting policy with respect to stock-based employee compensation on
          reported net income (loss) and earnings (loss) per share in annual and
          interim financial  statements.  SFAS 148 is effective for fiscal years
          beginning  after  December 15, 2002. The adoption of SFAS 148 does not
          have an impact on the Company's financial statements.

          In November 2002, the Financial  Accounting Standard Board issued FASB
          Interpretation No. 45 (FIN 45), Guarantor's  Accounting and Disclosure
          Requirements  for  Guarantees,   Including   Indirect   Guarantees  of
          indebtedness of Others - An  Interpretation  of FASB Statements of No.
          5, 57 and 107 and  rescission  of FASB  Interpretation  No.  34.  This
          interpretation clarifies the requirements for a guarantor's accounting
          for and disclosures of certain guarantees issued and outstanding.  FIN
          45 also  clarifies the  requirements  related to the  recognition of a
          liability  by a guarantor at the  inception of a guarantee.  FIN 45 is
          effective for  guarantees  entered into or modified after December 31,
          2002.  The  adoption of FIN 45 does not have  impact on the  Company's
          financial statements.

          In January 2003, the Financial  Accounting  Standard Board issued FASB
          Interpretation  No. 46 (FIN 46),  Consolidation  of Variable  Interest
          Entities - An Interpretation of Accounting Research Bulletin (ARB) No.
          51.  This  interpretation  addressed  the  requirements  for  business
          enterprises  to  consolidate   related  entities  in  which  they  are
          determined to be the primary economic beneficiary as a result of their
          variable economic interest.  The interpretation is intended to provide
          guidance in judging  multiple  economic  interests in an entity and in
          determining  the  primary  beneficiary.  The  interpretation  outlines
          disclosure  requirements  for VIEs in  existence  prior to January 31,
          2003,  outlines  consolidation  requirements  for VIEs  created  after
          January  31,  2003.  The  company has  reviewed  its major  commercial
          relationship and its overall  economic  interests with other companies
          consisting of related parties, manufacture vendors, loan creditors and
          other  suppliers  to  determine  the extent of its  variable  economic
          interest  in  these  parties.   The  review  has  not  resulted  in  a
          determination  that the  Company  would be  judged  to be the  primary
          economic  beneficiary  in any  material  relationships,  or  that  any
          material  entities would be judged to be Variable Interest Entities of
          the Company.




                                      F-11
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


3.   Significant Accounting Policies (continued)
- ------------------------------------

     (p)  New Accounting Pronouncements (continued)

          In May 2003, the FASB issued SFAS No. 149,  Amendment of Statement 133
          on  Derivative  Instruments  and  Hedging  Activities.  SFAS  No.  149
          addresses  certain  accounting  issues related to hedging activity and
          derivative  instruments  embedded in other contracts.  In general, the
          amendments  require  contracts with comparable  characteristics  to be
          accounted for similarly.  In addition,  SFAS No. 149 provides guidance
          as to when a financing component of a derivative must be given special
          reporting  treatment in the  statement of cash flows.  SFAS No. 149 is
          effective for contracts  entered into or modified after June 30, 2003.
          The adoption of SFAS No. 149 does not have an impact on the  Company's
          financial statements.

          In May 2003, the Financial  Accounting Standards Board (FASB) approved
          SFAS No.  150,  Accounting  for  Certain  Financial  Instruments  with
          Characteristics   of  Both  Liabilities  and  Equity.   SFAS  No.  150
          establishes  standards  for  how to  classify  and  measure  financial
          instruments with  characteristics  of both liabilities and equity.  It
          requires  financial  instruments  that  fall  within  its  scope to be
          classified  as  liabilities.  SFAS No. 150 is effective  for financial
          instruments  entered  into or  modified  after May 31,  2003 and,  for
          pre-existing  financial  instruments,  as of July 1, 2003. The Company
          does not have any financial  instruments  that fall under the guidance
          of SFAS No. 150 and,  therefore,  the adoption does not have an effect
          on the Company's financial statements.


4.   Inventories
- ----------------

                                 June 30     December 31    December 31
                                    2003            2002           2001
     -------------------------------------------------------------------

     Raw materials             $  14,275       $  14,048      $  26,868
     Finished goods               67,200          54,800         56,736
     -------------------------------------------------------------------

                               $  81,475       $  68,848      $  83,604
     ===================================================================













                                      F-12
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


5.   Property, Plant and Equipment
- ----------------------------------

<TABLE>
<CAPTION>
                                                                    June 30, 2003
                                                    ----------------------------------------------
                                                             Cost      Accumulated       Net book
                                                                      Amortization          Value
     ---------------------------------------------------------------------------------------------

<S>                                                   <C>               <C>          <C>
     Land-use rights                                  $   226,577       $   17,533   $    209,044
     Plant and building                                 1,380,103           62,849      1,317,254
     Machinery and equipment                              497,373          146,235        351,138
     Motor vehicles                                        48,175           43,309          4,866
     Office equipment and furniture                        35,964           23,308         12,656
     ---------------------------------------------------------------------------------------------

                                                      $ 2,188,192       $  293,234   $  1,894,958
     =============================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                                  December 31, 2002
                                                    ----------------------------------------------
                                                             Cost      Accumulated       Net book
                                                                      Amortization          Value
     ---------------------------------------------------------------------------------------------

<S>                                                   <C>               <C>          <C>
     Land-use rights                                  $   226,577       $   13,487   $    213,090
     Plant and building                                 1,380,103           41,899      1,338,204
     Machinery and equipment                              497,373          118,659        378,714
     Motor vehicles                                        48,175           43,268          4,907
     Office equipment and furniture                        38,422           22,565         15,857
     ---------------------------------------------------------------------------------------------
                                                      $ 2,190,650       $  239,878   $  1,950,772
     =============================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                                  December 31, 2001
                                                    ----------------------------------------------
                                                             Cost      Accumulated       Net book
                                                                      Amortization          Value
     ---------------------------------------------------------------------------------------------

<S>                                                   <C>               <C>          <C>
     Land-use rights                                  $   226,577       $    5,395   $    221,182
     Plant and building, construction in progress       1,380,103                -      1,380,103
     Machinery and equipment                              491,202           63,840        427,362
     Motor vehicles                                        48,175           43,185          4,990
     Office equipment and furniture                        37,018           19,361         17,657
     ---------------------------------------------------------------------------------------------
                                                      $ 2,183,075       $  131,781   $  2,051,294
     =============================================================================================
</TABLE>

     Depreciation  for the six months ended June 30, 2003,  years ended December
     31, 2002 and 2001 are $55,568, $110,817 and $26,873 respectively.







                                      F-13
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


6.   Investment in Sinovac Biotech Co., Ltd. ("Sinovac")
- --------------------------------------------------------

     In April 2001,  the Company  acquired a 24% interest in Sinovac,  a company
     incorporated  in China and operating in the business of  manufacturing  and
     marketing pharmaceutical products. Consideration for the purchase consisted
     of the  contribution  of  its  inactive  Hepatitis  A  drug  license.  This
     transaction was recorded as an investment and a gain on disposition of drug
     license in the amount of $741,528.

     In April 2002,  the Company  transferred  2.68% interest of Sinovac to Sino
     Pharmaceutics  Co., Ltd.  ("Sino Pharma") as a service  compensation.  This
     transaction  was recorded as a compensation  expense of $105,535 and a gain
     on the disposition of investment of $25,328.

     During the six-month period ended June 30, 2003, the Company's  interest of
     Sinovac was diluted to 15.72% due to further  share  issuances  by Sinovac.
     Asae result of this event, the Company recorded a dilution gain of $98,698.


7.   Accounts Payable and Accrued Liabilities
- ---------------------------------------------

<TABLE>
<CAPTION>
                                                     June 30     December 31     December 31
                                                        2003            2002            2001
     ----------------------------------------------------------------------------------------

<S>                                              <C>            <C>             <C>
     Trade payables                              $   579,401    $    587,923    $    653,267
     Payroll and employee benefits                   110,245          97,494          71,413
     Bonuses                                               -         753,610          88,517
     Sundry                                           16,344          15,466           2,230
     ----------------------------------------------------------------------------------------

                                                 $   705 990    $  1,454,493    $    815,427
     ========================================================================================
</TABLE>


8.   Loans Payable
- ------------------

<TABLE>
<CAPTION>
                                                     June 30     December 31     December 31
                                                        2003            2002            2001
     ----------------------------------------------------------------------------------------

<S>                                              <C>            <C>             <C>
     Loan payable to China High Technology
     Co., Ltd.: RMB 9,000,000 (2002 - RMB
     9,000,000, 2001 - RMB 7,200,000), no
     stated interest rate and due on demand      $ 1,086,957    $  1,086,957    $    869,565

     Employees loan: RMB 268,000 (2002 -
     RMB 233,000, 2001 - Nil) bearing interest
     at 12% per annum and due on demand               32,367          28,140               -
     ----------------------------------------------------------------------------------------

                                                 $ 1,119,324    $  1,115,097    $    869,565
     ========================================================================================
</TABLE>




                                      F-14
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


9.   Income Taxes
- -----------------

     The Company is subject to income  taxes in China on its  taxable  income as
     reported in its  statutory  accounts at a tax rate in  accordance  with the
     relevant income tax laws applicable to sino-foreign investment enterprises.
     Pursuant to the same income tax laws, the Company is exempt from income tax
     for two years starting from its first  profit-making year followed by a 15%
     corporation income tax rate for the next three years.

     The tax effect of  temporary  differences  that give rise to the  Company's
     deferred tax assets (liabilities) are as follows:

                                         June 30    December 31    December 31
                                            2003           2002           2001
     ---------------------------------------------------------------------------

     Tax losses carried forward     $    416,500   $    456,500   $     83,200
     Less: valuation allowance          (416,500)      (408,070)       (35,270)
     ---------------------------------------------------------------------------

     Total deferred tax assets      $          -   $     47,930   $     47,930
     ===========================================================================

     The Company  evaluates its valuation  allowance  requirements  on an annual
     basis based on projected future operations.  When circumstances  change and
     this causes a change in management's  judgement about the  realizability of
     deferred tax assets, the impact of the change on the valuation allowance is
     generally reflected in current income.

     A  reconciliation  of the statutory  income tax to the Company's  effective
     income tax rate for the six  months  ended  June 30,  2003 and years  ended
     December 31, 2002 and 2001 are as follows:

                                          June 30    December 31    December 31
                                             2003           2002           2001
     ---------------------------------------------------------------------------

     Federal statutory income tax rate        33%            33%            33%
     Loss on equity accounted investment       4%             -              2%
     Non-taxable gain                        (15%)            -              -
     Benefit of loss carry forward             -            (33%)            -
     ---------------------------------------------------------------------------

     Effective income tax rate                22%             -             35%
     ===========================================================================











                                      F-15
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


10.  Related Party Transactions
- -------------------------------

     Related party transactions that have not been disclosed  elsewhere in these
     financial statements are as follows:

     (a)  Amounts  due to  related  parties  are  unsecured  and  consist of the
          following:

<TABLE>
<CAPTION>
                                                       June 30    December 31    December 31
                                                          2003           2002           2001
          -----------------------------------------------------------------------------------

<S>                                                 <C>           <C>            <C>
          o    Advances from Sinovac, bearing
               interest at 5% per annum,
               unsecured, with no stated terms
               of repayment                         $  677,487    $   982,175    $ 1,193,918

          o    Advances from Sino Pharma, the
               majority shareholder, non-interest
               bearing                                       -        243,738        243,727
          -----------------------------------------------------------------------------------

                                                    $  677,487    $ 1,225,913    $ 1,437,645
          ===================================================================================
</TABLE>

     (b)  The Company  entered  into the  following  transactions  with  related
          parties:

<TABLE>
<CAPTION>
                                                 Six months          Year          Year
                                                      Ended         Ended         Ended
                                                    June 30   December 31   December 31
                                                       2003          2002          2001
          ------------------------------------------------------------------------------

<S>                                             <C>           <C>           <C>
          Sales to Sinovac                      $         -   $   403,698   $         -

          Rental income from Tangshan Yikang
          Biomedical Co., Ltd., a shareholder   $     1,063   $     2,127   $     2,127

          Interest expenses:
          - Sino Pharma                         $     6,078   $    12,186   $     9,768
          - Other shareholders of Sinovac       $    18,189   $    35,223   $    43,208
          ------------------------------------------------------------------------------
</TABLE>

     (c)  During the fiscal year 2002, the Company  transferred  its Recombinant
          Inactive  Hepatitis A&B drug license to Beijing Keding Investment Co.,
          Ltd.  ("Beijing  Keding"),  a corporation  controlled by the president
          (who is also a director) and two senior  officers of the Company.  The
          Company  recorded  compensation  expenses and a gain on disposition of
          drug license of  $476,750,  being the  estimated  fair market value of
          drug license.

     (d)  During  the six months  ended  June 30,  2003,  the  Company  sold its
          Influenza  Virus  HA  Vaccine  drug  license  to  Sinovac  for cash of
          $353,904,  its estimated fair market value.  The Company  recognized a
          gain of $240,618 as a result of this transaction.




                                      F-16
<PAGE>



TANGSHAN YIAN BIOLOGICAL
- ------------------------
ENGINEERING CO., LTD.
- ---------------------

Notes to Financial Statements
June 30, 2003, December 31, 2002 and 2001
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------


10.  Related Party Transactions (continued)
- -------------------------------

     (e)  Pursuant to an  operating  lease  agreement,  the Company has leased a
          laboratory to Sinovac for an annual lease of $176,400 (RMB 1,460,400).
          The lease will commence on July 1, 2003 and has a term of five years.

     (f)  On June 30, 2003, the Company issued shares for settlement of the debt
          owed to a  shareholder  and  certain  officers  and  employees  of the
          Company totalling $997,348.


11.  Segmented Information
- --------------------------

     The Company  operates  exclusively  in the biotech  sector.  The  Company's
     business is considered as operating in one segment based upon the Company's
     organizational  structure,  the way in which the  operation  is managed and
     evaluated,  the availability of separate  financial results and materiality
     considerations.  All the Company's  assets are located in China and all the
     revenues are generated in China.


12.  Non-Cash Transactions
- --------------------------

     (a)  In 2001, the Company contributed  Inactive Hepatitis A drug license to
          Sinovac in exchange for ownership interest in Sinovac (see Note 6).

     (b)  In 2002, the Company transferred the ownership interest of Recombinant
          Hepatitis A&B drug license to Beijing Keding (see Note 10c).

     (c)  In 2003, the Company  issued shares for debt  settlement in the amount
          of $997,348 (see Note 10f)


13.  Subsequent Event
- ---------------------

     On September 24, 2003, the Company  disposed of all its interest in Sinovac
     to an  individual  related  to a  director  of  the  Company  for  cash  of
     approximately  $1.8  Million.  The  proceeds  are due  one  year  from  the
     completion date.













                                      F-17


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>sinovacproforma.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, PRO FORMA FINANCIALS
<TEXT>


EXHIBIT 99.2
- ------------














SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

(Unaudited - Prepared by Management)

Pro-forma Consolidated Financial Statements

June 30, 2003







Index
- -----

Pro-forma Consolidated Balance Sheet

Pro-Forma Consolidated Statement of Stockholders' Equity

Pro-Forma Consolidated Statement of Operations

Notes to Pro-forma Consolidated Financial Statements


















                                       F-1
<PAGE>



<TABLE>
<CAPTION>
SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Pro-forma Consolidated Balance Sheet
June 30, 2003
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
==================================================================================================================================
                                                               Sinovac       Tangshan Yian
                                                          Biotech Ltd.          Biological
                                                         June 30, 2003    Engineering Co.,           Pro-forma
                                                           (Pro-forma)       Ltd., June 30         adjustments          Pro-forma
                                                              (Note 1)                2003            (Note 3)        consolidated
- ----------------------------------------------------------------------------------------------------------------------------------

ASSETS

<S>                                                   <C>                      <C>            <C>                 <C>
Current assets
  Cash and cash equivalents                                  730,250      $       17,263 (a)  $      760,000      $    1,507,513
  Accounts receivable, net                                 1,020,096              28,785                   -           1,048,881
  Inventories                                              1,552,210              81,475                   -           1,633,685
  Prepaid expenses and deposits                               12,990                   -                   -              12,990
- ----------------------------------------------------------------------------------------------------------------------------------

Total current assets                                       3,315,546             127,523             760,000           4,203,069
- ----------------------------------------------------------------------------------------------------------------------------------

Property, plant and equipment                              7,706,783           1,894,958                               9,601,741
Due from a related party                                     677,487                   - (b)       1,800,000           1,800,000
                                                                                         (e)        (677,487)
Promissory note - secured, bearing interest at 8%                  -                   - (a)       1,793,996           1,793,996
Licenses, permits and other intangible asset               2,578,345                   -                   -           2,578,345
Investment in Sinovac Biotech Co., Ltd.                            -             532,139 (b)        (532,139)                  -
- ----------------------------------------------------------------------------------------------------------------------------------

Total assets                                          $   14,278,161           2,554,620      $    3,144,370      $   19,977,151
==================================================================================================================================

LIABILITIES

Current liabilities                                                -
  Loans payable                                              872,282           1,119,324 (c)  $   (1,119,324)     $      872,282
  Accounts payable and accrued liabilities                 1,760,714             705,990 (d)       2,200,000           4,666,704
  Due to related parties                                   1,246,344             677,487 (e)        (677,487)          1,246,344
  Deferred research grants                                   121,850                   -                   -             121,850
- ----------------------------------------------------------------------------------------------------------------------------------

Total current liabilities                                  4,001,190           2,502,801             403,189           6,907,180
- ----------------------------------------------------------------------------------------------------------------------------------

Unamortized finance charge on proceeds
  receivable on disposal of investment                             -                   - (b)         133,000             133,000

MINORITY INTEREST                                          5,035,667                   -                   -           5,035,667

STOCKHOLDERS' EQUITY

Preferred stock                                                    -                   -                   -                   -
  Authorized: 50,000,000 shares at par value of
    $0.001 each
  Issued and outstanding: nil
Common stock                                                  27,091           1,130,198 (a)       2,553,996              30,591
  Authorized: 100,000,000 shares at par value of
    $0.001 each                                                                          (c)       1,119,324
  Issued and outstanding: 30,591,033                                                     (d)      (4,800,018)

Additional paid-in capital                                 5,621,362              85,176 (d)       2,571,324           8,277,862
                                                                                                           -
Accumulated deficit                                         (407,149)         (1,163,555)(b)       1,134,861            (407,149)
                                                                                         (d)          28,694
- ----------------------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                 5,241,304              51,819           2,608,181           7,901,304
- ----------------------------------------------------------------------------------------------------------------------------------

                                                          14,278,161           2,554,620      $    3,144,370      $   19,977,151
==================================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       F-2
<PAGE>



<TABLE>
<CAPTION>
SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Pro-forma Consolidated Statement of Stockholders' Equity
For the six months ended June 30, 2003
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
======================================================================================================================
                                                                                                                Total
                                                     Common stock             Additional                        Stock-
                                              ---------------------------        paid-in    Accumulated       holders'
                                                    Shares         Amount        capital        deficit         equity
- ----------------------------------------------------------------------------------------------------------------------


<S>                                            <C>           <C>            <C>            <C>            <C>
Recapitalization as a result of acquisition
  of China Sinovac by Sinovac (Pro-forma)      27,091,033    $    27,091    $ 5,621,362    $  (341,505)   $ 5,306,948

Issuance of common stock to effect
  the acquisition of Tangshan Yian              3,500,000          3,500      2,656,500              -      2,660,000

Comprehensive income (loss)
- - Net (loss) for the period                             -              -              -        (65,644)       (65,644)
- ----------------------------------------------------------------------------------------------------------------------

Balance, June 30, 2003                         30,591,033    $    30,591    $ 8,277,862    $  (407,149)   $ 7,901,304
======================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.
















                                       F-3
<PAGE>



<TABLE>
<CAPTION>
SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Pro-Forma Consolidated Statement of Operations
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
==============================================================================================================================
                                                           Sinovac       Tangshan Yian
                                                      Biotech Ltd.          Biological           Pro-forma
                                                        (Proforma)         Engineering         adjustments           Pro-forma
                                                          (Note 1)           Co., Ltd.            (Note 3)        Consolidated
- ------------------------------------------------------------------------------------------------------------------------------

                                                        Six months          Six months
                                                             Ended               Ended
                                                           June 30             June 30
                                                              2003                2003
- ------------------------------------------------------------------------------------------------------------------------------

<S>                                               <C>                         <C>         <C>                 <C>
Sales                                             $    1,090,856              21,903 (d)  $      (21,903)     $    1,090,856

Cost of sales                                            357,386              31,798 (d)         (31,798)            357,386
- ------------------------------------------------------------------------------------------------------------------------------

Gross profit (loss)                                      733,470              (9,895)              9,895             733,470
- ------------------------------------------------------------------------------------------------------------------------------

Selling, general and administrative expenses             615,615              53,451 (d)         (53,451)            615,615

Research and development expenses                         18,099                 365 (d)            (365)             18,099

Interest and financing expenses                          118,690              21,955 (d)         (21,955)            118,690

Depreciation of property, plant and equipment
  and amortization of licenses and permits               132,994              10,812 (d)         (10,812)            132,994

Equity in net loss of Sinovac                                  -              24,134 (d)         (24,134)                  -
- ------------------------------------------------------------------------------------------------------------------------------

                                                         885,398             110,717            (110,717)            885,398
- ------------------------------------------------------------------------------------------------------------------------------

Operating (loss)                                       (151,928)            (120,612)            120,612            (151,928)

Gain on disposal of drug license                               -             240,618 (d)        (240,618)                  -

Dilution gain                                                  -              98,698 (d)         (98,698)                  -

Gain on disposal of investment                                 -                   - (b)       1,134,861                   -
                                                                                     (d)      (1,134,861)
Interest income                                           23,214               1,101 (d)          (1,101)             23,214
- ------------------------------------------------------------------------------------------------------------------------------

Income (loss) for the period before income
  taxes and minority interest                          (128,714)             219,805            (219,805)           (128,714)

Deferred income tax (expense)                                  -            (47,930) (d)          47,930                   -

Minority interest                                         63,070                   -                   -              63,070
- ------------------------------------------------------------------------------------------------------------------------------

Net income (loss) for the period                  $      (65,644)            171,875      $     (171,875)     $      (65,644)
==============================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.




                                       F-4
<PAGE>



SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Notes to Pro-forma Consolidated Financial Statements
June 30, 2003
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
================================================================================


1.   Basis of Presentation
- --------------------------

     These pro-forma consolidated financial statements have been prepared solely
     for submission to the U.S. Securities and Exchange Commission in connection
     with the  acquisition  of Tangshan Yian  Biological  Engineering  Co., Ltd.
     ("Tangshan  Yian"),  a company  incorporated  in China and  engaged  in the
     research and development,  production and sales of pharmaceutical  products
     in China,  by Sinovac  Biotech Ltd.  ("Sinovac").  A major  shareholder and
     director  of  Sinovac  is also a director  and a  minority  shareholder  of
     Tangshan Yian.

     These  pro-forma  consolidated  financial  statements  are not  necessarily
     indicative  of the actual  results  which would have been  attained had the
     combination  been in effect on the date  indicated or which may be attained
     in the future.

     These  pro-forma  consolidated  financial  statements have been prepared by
     management  from  information  derived  from  the  pro-forma   consolidated
     financial  statements of Sinovac as at June 30, 2003 (after the  completion
     of its acquisition of Sinovac Biotech Co., Ltd.) and the audited  financial
     statements of Tangshan Yian as at June 30, 2003.


2.   Proposed Acquisition and Pro-forma Assumptions
- ---------------------------------------------------

     (a)  Letter Of Intent

          Pursuant to a letter of intent dated  October 20,  2003,  Sinovac will
          acquire 100%  interest in Tangshan  Yian by issuing  3,500,000  common
          stocks and paying $2.2 Million in cash, with a total  approximate fair
          value of $4.8  Million,  within  twelve  (12)  months from the date of
          entering into a formal agreement. The acquisition is recorded by using
          the purchase method of accounting.

     (b)  Disposal Of Long-term Investment

          On September 24, 2003,  Tangshan Yian disposed all of its 16% interest
          in Sinovac Biotech Co, Ltd. ("China Sinovac"),  a 51% owned subsidiary
          of Sinovac,  to an individual related to a common director of Tangshan
          Yian  and  China  Sinovac  for  cash of  approximately  $1.8  Million.
          Thangshan  Yian also agreed  that the  proceeds do not have to be paid
          until one year after the completion of this transaction.

          The  disposition  is assumed to have taken effect on June 30, 2003 for
          the purpose of preparing these pro-forma financial statements.








                                       F-5
<PAGE>



SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Notes to Pro-forma Consolidated Financial Statements
June 30, 2003
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
================================================================================


2.   Proposed Acquisition and Pro-forma Assumptions (continued)
- ---------------------------------------------------

     (c)  Additional Capital Financing

          Tangshan  Yian agreed to raise an  approximately  $2.6 Million  equity
          ($760,000 cash and $1,793,996 promissory note) from an unrelated party
          immediately  before  the  afore-mentioned   proposed   acquisition  by
          Sinovac.  The promissory note is secured,  bearing  interest at 8% per
          annum and has a one year term. The additional equity financing and the
          conversion of debt for equity as described in Note 2(d) will cause the
          change of control in Tangshan Yian.

          The  approximate  $2.6 Million equity capital  financing is assumed to
          have taken effect on June 30, 2003 for the purpose of preparing  these
          pro-forma financial statements.

     (d)  Debt Exchange for Shares

          Creditors of Tangshan  Yian have agreed to convert  $1,119,324 of debt
          into  equity  in  Tangshan   Yian   before  the   completion   of  the
          afore-mentioned proposed acquisition by Sinovac.

          The  proposed  debt for the equity is assumed to have taken  effect on
          June 30, 2003 for the purpose of preparing these  pro-forma  financial
          statements.

     (e)  The net assets acquired by Sinovac are summarized as follows:

          Cash and cash equivalents                          $        777,263
          Accounts receivable and others                               28,785
          Promissory note - secured and 8% interest rate            1,793,996
          Due from a related party                                  1,800,000
          Inventories                                                  81,475
          Property, Plant and equipment                             1,894,958
          Accounts payable and accrued liabilities                 (1,383,477)
          Unamortized finance charge                                 (133,000)
          ---------------------------------------------------------------------

                                                             $      4,860,000
          =====================================================================














                                       F-6
<PAGE>



SINOVAC BIOTECH LTD.
- --------------------
(formerly Net-Force Systems Inc.)

Notes to Pro-forma Consolidated Financial Statements
June 30, 2003
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
================================================================================


3.   Pro-forma Adjustments
- --------------------------

     (a)  To record the proposed  approximate  additional  $2.6  Million  equity
          financing by Tangshan Yian.

     (b)  To record the  disposal  of  investment  in China  Sinovac by Tangshan
          Yian.

     (c)  To record the  conversion of $1,119,324 of debt for equity by Tangshan
          Yian.

     (d)  To record the acquisition of Tangshan Yian by Sinovac.

     (e)  To eliminate inter-company receivable and payable.


































                                       F-7


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>6
<FILENAME>sinovacpressrel013004.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, PRESS RELEASE 01.30.04
<TEXT>


EXHIBIT 99.3
- ------------



                              SINOVAC BIOTECH LTD.
                    ANNOUNCES COMPLETION OF THE ACQUISITON OF
                 TANGSHAN YIAN BIOLOGICAL ENGINEERING CO., LTD.


BEIJING,  January 30, 2004 - Sinovac  Biotech  Ltd.  ("Sinovac")  (NASD  OTC-BB:
SNVBF) is pleased to announce  that on January 26,  2004,  Sinovac  executed the
formal  share  purchase  agreement  (the  "Share  Purchase  Agreement")  between
Sinovac,  Tangshan Yian Biological  Engineering Co., Ltd.  ("Tangshan  Yian"), a
company  organized under the laws of the People's  Republic of China, and Mr. He
Ping Wang, the sole shareholder of Tangshan Yian and also a director of Sinovac.
The Share  Purchase  Agreement  provides  that  Sinovac will acquire 100% of the
issued and outstanding shares of Tangshan Yian in exchange for issuing 3,500,000
shares of common  stock of  Sinovac  plus  US$2,200,000  in cash,  which will be
payable by Sinovac  within 12 months  from the date of  entering  into the Share
Purchase  Agreement,  to Mr. He Ping Wang.  As of January 30,  2004,  all of the
terms and conditions of the Share Purchase Agreement have been satisfied and the
acquisition of Tangshan Yian by Sinovac is now completed.


Tangshan Yian operates in the city of Tangshan, People's Republic of China, as a
research  and   development   company   specializing   in  the  development  and
manufacturing  of various  vaccines  including flu, and vaccines for Hepatitis A
and  Hepatitis   A&B.   Tangshan  Yian  supplies  these  vaccines  to  Sinovac's
subsidiary, Sinovac Biotech Co., Ltd. The research and development operations of
Tangshan  Yian are expected to supply  increased  quantities  of new and updated
vaccines to the domestic Chinese and international markets.


For further  information  please refer to the Company's  filings with the SEC on
EDGAR or refer to Sinovac's website at http://www.sinovac.com/.


Contact: Graham Taylor at (888) 888 8312 or (604) 684-5990.


MANAGEMENT OF SINOVAC WHO TAKE FULL RESPONSIBILITY FOR ITS CONTENTS HAS PREPARED
THIS NEWS  RELEASE.  THIS NEWS  RELEASE MAY INCLUDE  FORWARD-LOOKING  STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES  SECURITIES  ACT OF 1933,
AS AMENDED,  AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF
1934, AS AMENDED,  WITH RESPECT TO ACHIEVING  CORPORATE  OBJECTIVES,  DEVELOPING
ADDITIONAL  PROJECT  INTERESTS,  SINOVAC'S  ANALYSIS  OF  OPPORTUNITIES  IN  THE
ACQUISITION  AND  DEVELOPMENT  OF VARIOUS  PROJECT  INTERESTS  AND CERTAIN OTHER
MATTERS.  THESE  STATEMENTS  ARE MADE UNDER THE "SAFE HARBOR"  PROVISIONS OF THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE RISKS
AND  UNCERTAINTIES  WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER  MATERIALLY  FROM
THOSE IN THE  FORWARD-LOOKING  STATEMENTS  CONTAINED  HEREIN.  THIS NEWS RELEASE
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE  SECURITIES IN ANY  JURISDICTION  IN WHICH SUCH
OFFER,  SOLICITATION  OR  SALE  WOULD  BE  UNLAWFUL  PRIOR  TO  REGISTRATION  OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>7
<FILENAME>sinovacpressrel020304.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, PRESS RELEASE 02.03.04
<TEXT>


EXHIBIT 99.4
- ------------



                              SINOVAC BIOTECH LTD.
             UPDATES FURTHER ON THE COMPLETION OF THE ACQUISITON OF
                 TANGSHAN YIAN BIOLOGICAL ENGINEERING CO., LTD.



BEIJING,  February 3, 2004 - Sinovac  Biotech  Ltd.  ("Sinovac")  (NASD  OTC-BB:
SNVBF;   Frankfurt:   SVQ)  wishes  to  further  update  the  January  30,  2004
announcement  of the  completion  of its  acquisition  of 100% of the issued and
outstanding shares of Tangshan Yian Biological  Engineering Co., Ltd. ("Tangshan
Yian" or "the Company").


Tangshan  Yian  operates in the city of  Tangshan,  People's  Republic of China.
Since  its  inception  in  1993,  the  Company  has  operated  as  an R & D  and
manufacturing  company  specializing  in the development  and  manufacturing  of
various vaccines  including flu, vaccines for Hepatitis A and Hepatitis A&B, and
a potential vaccine for SARS. Tangshan Yian supplies these vaccines to Sinovac's
subsidiary,  Sinovac  Biotech Co.,  Ltd.  The  operations  of Tangshan  Yian are
expected to supply  large-scale  quantities of new and updated  vaccines for the
domestic Chinese and international markets.


Tangshan Yian is located in the New Hi-tech  Development  Zone of Tangshan City,
connected by superhighways to Beijing, 150 kilometers to the east. The Company's
plant was built in accordance with the Pharmaceutical  Industrial  Standards and
Regulations  of China,  which are based on  international  standards.  The plant
itself is 4300 square  meters,  which includes a Biological  Safety  Laboratory,
Cell Culturing Workshop,  Pilot Trial Production Workshop,  Reagents Manufacture
Workshop,  and Research Lab for R&D of the Split Flu Vaccine.  Moreover,  within
the plant,  there is reserved space of about 1500 square  meters,  which will be
used as a vaccine manufacture  workshop.  The plant is situated on 20,000 square
meters  of land,  and has  reserved  an  additional  10,0000  square  meters  in
anticipation  of future  expansion.  The land is already  facilitated  with full
amenities.


Tangshan Yian provides Sinovac with a low-cost R & D and manufacturing base. The
cost of Tangshan  Yian's land is about 20% of its  equivalent  in Beijing  while
salaries  are  about  50% of those  paid to  equivalent  personnel  in  Beijing.
Furthermore,  the acquisition of Tangshan Yian contributes  talented  management
and scientists who will add significant  value to Sinovac's  progress in vaccine
development  and  manufacture.  These  favorable  attributes  are  even  further
compounded with the addition of Tanshan Yian's  state-of-the-art  facilities and
expanded manufacturing capabilities. These advantages could prove invaluable for
enhancing Sinovac's  competitive position in its progression towards large-scale
flu and potentially SARS vaccine manufacture.


Sinovac's  Beijing  operation  has  workshops  for  large-scale   production  of
inactivated  Hepatitis  A  vaccine  and  Hepatitis  A & B  combination  vaccine.
However,  according to GMP regulations  (government  regulated  standards called
Good Manufacturing Practices),  these workshops cannot be used for any other new
vaccine development. Therefore, the research and pilot production activities for
the flu vaccine and potential SARS vaccine  actually take place inside  Tangshan
Yian.


Sinovac's  potential  SARS vaccine has been approved for clinical  trials by the




<PAGE>






Chinese FDA (SFDA).  Tangshan Yian has produced  20,000 doses of this vaccine to
date and has the ability and  capacity to produce  more of the SARS  vaccine for
use in these  clinical  trials.  The  Company  will thus be able to  efficiently
produce  further  required  quantities  of the  vaccine  in  timely  manner.  Of
particular note is Tangshan Yian's  production-scaled  Biological Safety Level 3
laboratory,   which  includes  a  negative  pressure   facility.   These  highly
specialized,  so-called P3 labs, are necessary for research on highly infectious
and contagious  viruses and production of their associated  vaccines.  There are
only a few of these state-of-the-art labs in China.


Sinovac has conducted  clinical  trials on its flu vaccine.  In order to receive
further  approvals from the SFDA (Chinese Food and Drug  Administration),  a flu
vaccine  production  line must be built  and the  resulting  manufactured  final
product must meet SFDA standards. To achieve this production capability, Sinovac
is building a large-scale flu vaccine  production line at Tangshan Yian. Sinovac
is targeting to produce an initial  500,000 doses of flu vaccine for sale in the
flu season of 2004/5.  Actual production capacity is expected to be much greater
than this  quantity.  Market demand for a high quality but low-cost  inactivated
flu vaccine in China is certainly expected to number in the millions each year.


For further  information please refer to the Company's 6K filing with the SEC on
EDGAR or refer to Sinovac's website at http://www.sinovac.com/.
                                       -----------------------


Contact: Graham Taylor at (888) 888 8312 or (604) 684-5990.


MANAGEMENT  OF NET FORCE  WHO TAKE  FULL  RESPONSIBILITY  FOR ITS  CONTENTS  HAS
PREPARED  THIS NEWS  RELEASE.  THIS NEWS  RELEASE  MAY  INCLUDE  FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT
OF 1933,  AS  AMENDED,  AND  SECTION  21E OF THE UNITED  STATES  SECURITIES  AND
EXCHANGE  ACT  OF  1934,  AS  AMENDED,   WITH  RESPECT  TO  ACHIEVING  CORPORATE
OBJECTIVES,  DEVELOPING  ADDITIONAL PROJECT  INTERESTS,  NET FORCE'S ANALYSIS OF
OPPORTUNITIES  IN THE ACQUISITION  AND DEVELOPMENT OF VARIOUS PROJECT  INTERESTS
AND CERTAIN OTHER  MATTERS.  THESE  STATEMENTS  ARE MADE UNDER THE "SAFE HARBOR"
PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
AND INVOLVE RISKS AND  UNCERTAINTIES  WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING  STATEMENTS  CONTAINED HEREIN. THIS
NEWS RELEASE  SHALL NOT  CONSTITUTE AN OFFER TO SELL OR THE  SOLICITATION  OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION
IN  WHICH  SUCH  OFFER,   SOLICITATION  OR  SALE  WOULD  BE  UNLAWFUL  PRIOR  TO
REGISTRATION   OR   QUALIFICATION   UNDER  THE  SECURITIES   LAWS  OF  ANY  SUCH
JURISDICTION.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>8
<FILENAME>sinovacmst.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, MINISTRY - SCIENCE & TECH DOC
<TEXT>


EXHIBIT 99.5
- ------------



               Document from the Ministry of Science & Technology

                             Guokefaji [2003] No.135
    ------------------------------------------------------------------------



                   Re: "10th Five" Major Project of Plan 863.
                        Official reply for launching the
            "Key Technology & Product R&D for SARS Prevention & Cure"


Office of Plan 863, Biology & Modern Agriculture Technology, and other related
Departments:


Your request for launching the "Key Technology and Product R&D for SARS

Prevention & Cure" of the "10th Five" Major Project of Plan 863 has been

received. After studying your request, here is the reply for relevant tasks on

launching the Project:


1.   The major project of "Key Technology and Product R&D for SARS Prevention &

     Cure" was set up under a central plan by the National SARS Prevention &

     Cure Command, in accordance with the rapid response scheme of Plan 863. The

     Project is very important for rapidly identifying the origin and means of

     spreading of SARS; proposing effective means and methods to stop its

     spreading; developing specific treatment methods and drugs and prevention

     drugs; raising the cure rate and lowering the death rate; strengthening the

     self protection capability of the masses, especially that of the front line

     medical workers; completely blocking the spreading of the disease; bringing

     along related infrastructure and raising the nation's capability in

     effectively dealing with the sudden outburst of this kind of infectious

     diseases.








                                       -1-
<PAGE>






2.   We agree in principle to the mission and goals proposed by this Project.

     The Project will be assessed according to the following goals:

     i.        Trace the origin of the virus; study the means and pattern in

               which SARS spreads and establish a model of prediction for the

               SARS Epidemiology.

     ii.       Study and screen specific clinical treatment methods and provide

               systematic means of treatment especially for the purpose of

               lowering the death rate of the seriously ill.

     iii.      Research and develop specific diagnostic reagents, effective

               prevention and treatment drugs for SARS.

     iv.       Research and develop modern biological protective gears and

               equipment and disinfectants.

     v.        Reinforce the development of preventive technology against the

               sudden outburst of SARS; effectively raising the nation's

               technological capability in dealing with sudden outburst of

               infectious diseases.

3.   We agree in principle the direction in which the research will be carried

     out and its major contents and that tasks for research will be organized

     around the five areas of Epidemiological studies, clinical diagnosis and

     treatment, drug research and manufacturing, protective technology and the

     development of protection capability.

4.   The financial allocation from the state for the Project is sixty million

     dollars

5.   The Project's number is 2003AA208000. The implementation year of the

     Project is from 2003 to 2004.


Please seriously organize and carry out the Project in accordance with the

relevant regulations on the Administration of Plan 863, to ensure the

realization of the goals of the Project.








                                       -2-
<PAGE>






Attachment: First list of Tasks for "Key Technology and Product R&D for SARS

Prevention & Cure" of the "10th Five" Major Project of Plan 863.


[Seal of the Ministry of Science & Technology of the People's Republic of China]
- --------------------------------------------------------------------------------


May 9, 2003





























Subject: Reply. SARS Project. Plan 863.

- --------------------------------------------------------------------------------

Office of Ministry of Science & Technology.                   Sent May 9, 2003

- --------------------------------------------------------------------------------




                                       -3-
<PAGE>






Attachment:

                             First list of Tasks for
                             -----------------------

      "Key Technology and Product R&D for SARS Prevention and Cure" of the
      --------------------------------------------------------------------
                     "10th Five" Major Project of Plan 863.
                     --------------------------------------


<TABLE>
<CAPTION>
 Number    Task number                   Task name                                 Unit in charge                  Person in charge
- --------  --------------  ---------------------------------------  ----------------------------------------------  ----------------

<S>        <C>             <C>                                      <C>                                             <C>
   1       2003AA208101    Clinical research on the treatment of    Chinese Medicine Research Institute of          Liu Baoyan.
                           SARS with combined traditional           China, Beijing You An Hospital, Beijing
                           Chinese & Western medicine               Ditan Hospital, Beijing Friendship Hospital,    Tang Xudong
                                                                    Beijing Combined Traditional Chinese &
                                                                    Western Medicine Hospital.

   2       2003AA208102    Treating & curing serious SARS           Guangzhou Respiratory Disease Research          Zhong Nanshan.
                           patients                                 Institute, Beijing Chaoyang Hospital.           Wang Chen.

   3       2003AA208103    Research of SARS clinical diagnosis      Concord Hospital of the Chinese Medical         Li Taisheng
                           guide and treatment scheme               Science Academy

   4       2003AA208104    Preparation of pooled blood plasma       Concord Medical University                      Liu Qian
                           of recovered SARS patients &
                           treatment research

   5       2003AA208105    SARS pathological analysis, sample       Medical Department of Beijing University        Gu Jiang
                           collection & study of pathological
                           mechanism

   6       2003AA208201    R&D of SARS vaccine inactivated          Military Medical Science Academy, Beijing       Qin Ede
                                                                    Sinovac Biotech Co. Ltd, Center for Disease
                                                                    Control of China, Huada Gene Research           Yi Weidong
                                                                    Center, National Institute for the Control
                                                                    of Pharmaceutical & Biological Products.
</TABLE>








                                      -4-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>9
<FILENAME>sinovactestrpts.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, TEST REPORTS
<TEXT>


EXHIBIT 99.6
- ------------




(2002) Liangren (Guo) No.S0599          No.L0001






   National Institute for the Control of Pharmaceutical & Biological Products
   --------------------------------------------------------------------------




                                   TEST REPORT
                                   -----------


                                                           Report No.SH200301297






Name of test sample: SARS virus strain Sino1.



Sample supplier: Beijing Sinovac Biotech Co. Ltd.



Test purpose: Contract test.



Basis for test:

{{Main Technical Points for SARS Vaccine Inactivated Pre-Clinical Research}}

{{Regulations for Biological Products of China>>2000 Edition}}



<PAGE>






<TABLE>
<CAPTION>
             TEST REPORT FROM NATIONAL INSTITUTE FOR THE CONTROL OF
                     PHARMACEUTICAL AND BIOLOGICAL PRODUCTS
         [Seal for test reports of National Institute for the Control of
                     Pharmaceutical and Biological Products]

Report No. SH200301297                                                                  Page 1 of 1
- ----------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                           <C>
Name of Test Sample     SARS virus strain Sino1     Test Sample Number            SHBE200300674

Sample Supplier         Beijing Sinovac Biotech     Sample Series/Type            /
                        Co. Ltd.

Sample Source           /                           Test Sample State             Liquid

Test Purpose            Contract test               Test Sample Quantity          20ml

Test Items              Complete test               Sample Reception Date         October 8, 2003

Basis for test          {{Main Technical Points for SARS Vaccine Inactivated Pre-Clinical Research}}
                        {{Regulations for Biological Products of China}} 2000 Edition
- ----------------------------------------------------------------------------------------------------
Test Item                                Standard Requirement             Test Result
- ---------                                --------------------             -----------

Virus titre (Cytopathy method)                                            7.0logCCID50/ml

Virus titre (Plaque titration method)                                     6.48logPFU/ml

Sterility test                           There should no growth of        Satisfies the requirement
                                         bacteria and fungi

Mycoplasma examination                   There should be no growth of     Satisfies the requirement
(Cultivation method)                     mycoplasmas

Exogenous factor examination

Blood absorption test                    No blood absorption              Satisfies the requirement

Non-blood absorption test                No cytopathy                     Satisfies the requirement

Exogenous factor examination on          All animals should be alive      Satisfies the requirement
animals                                  and healthy, chick embryo
                                         allantoic fluid agglutination
                                         test negative

                                         END






- ----------------------------------------------------------------------------------------------------
Test Conclusion         This sample was tested according to the {{Main Technical Points for SARS
                        Vaccine Inactivated Pre-Clinical Research}} and the {{Regulations for
                        Biological Products of China}} 2000 Edition and the results satisfy the
                        requirements.

Technology Officer      [Signature]                 Date of Issue                 October 16, 2003
- ----------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>








(2002) Liangren (Guo) No.S0599          No.L0001






   National Institute for the Control of Pharmaceutical & Biological Products
   --------------------------------------------------------------------------




                                   TEST REPORT
                                   -----------


                                                           Report No.SH200301298






Name of test sample: SARS virus strain Sino3.



Sample supplier: Beijing Sinovac Biotech Co. Ltd.



Purpose of certification: Contract test.



Basis for test:

{{Main Technical Points for SARS Vaccine Inactivated Pre-Clinical Research}}

{{Regulations for Biological Products of China}} 2000 Edition



<PAGE>






<TABLE>
<CAPTION>
             TEST REPORT FROM NATIONAL INSTITUTE FOR THE CONTROL OF
                     PHARMACEUTICAL AND BIOLOGICAL PRODUCTS
         [Seal for test reports of National Institute for the Control of
                     Pharmaceutical and Biological Products]

Report No. SH200301298                                                                  Page 1 of 1
- ----------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                           <C>
Name of Test Sample     SARS virus strain Sino3     Test Sample Number            SHBE200300675

Sample Supplier         Beijing Sinovac Biotech     Sample Series/Type            /
                        Co. Ltd.

Sample Source           /                           Test Sample State             Liquid

Test Purpose            Contract test               Test Sample Quantity          20ml

Test Items              Complete test               Sample Reception Date         October 8, 2003

Basis for test          {{Main Technical Points for SARS Vaccine Inactivated Pre-Clinical Research}}
                        {{Regulations for Biological Products of China}} 2000 Edition
- ----------------------------------------------------------------------------------------------------
Test Item                                Standard Requirement             Test Result
- ---------                                --------------------             -----------

Virus titre (Plaque titration method)                                     6.95logPFU/ml

Sterility test                           There should be no growth of     Satisfies the requirement
                                         bacteria and fungi

Mycoplasma examination                   There should be no growth of     Satisfies the requirement
(Cultivation method)                     mycoplasmas

Exogenous factor examination

Blood absorption test                    No blood absorption              Satisfies the requirement

Non-blood absorption test                No cytopathy                     Satisfies the requirement

Exogenous factor examination on          All animals should be alive      Satisfies the requirement
animals                                  and healthy, chick embryo
                                         allantoic fluid agglutination
                                         test negative

                                         END






- ----------------------------------------------------------------------------------------------------
Test                    Conclusion This sample was tested according to the {{Main Technical Points
                        for SARS Vaccine Inactivated Pre-Clinical Research}} and the {{Regulations
                        for Biological Products of China}} 2000 Edition and the results satisfy the
                        requirements.

Technology Officer      [Signature]                 Date of Issue                 October 16, 2003
- ----------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>








(2002) Liangren (Guo) No.S0599          No.L0001






   National Institute for the Control of Pharmaceutical & Biological Products
   --------------------------------------------------------------------------




                                   TEST REPORT
                                   -----------


                                                           Report No.SZ200303628






Name of test sample: SARS Vaccine Inactivated.



Sample supplier: Beijing Sinovac Biotech Co. Ltd.



Purpose of certification: Registration testing. (Application for new drug
clinical research)



Basis for test: Regulations for Business Declaration.



[Seal for Test Reports of National Institute for the Control of Pharmaceutical &
- --------------------------------------------------------------------------------
Biological Products]
- --------------------


<PAGE>






<TABLE>
<CAPTION>
             TEST REPORT FROM NATIONAL INSTITUTE FOR THE CONTROL OF
                     PHARMACEUTICAL AND BIOLOGICAL PRODUCTS
         [Seal for test reports of National Institute for the Control of
                     Pharmaceutical and Biological Products]

Report No. SZ200303628                                                                        Page 1 of 2
- ----------------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                           <C>
Name of Test Sample     SARS Vaccine                Test Sample Number            SZBE200305345
                        Inactivated

Manufacturer            Beijing Sinovac Biotech     Lot Number                    20030904
                        Co. Ltd.

Sample Supplier         Beijing Sinovac Biotech     Specification                 1.0ml/vial
                        Co. Ltd.

Test Purpose            Registration test (New      Dosage Form                   Liquid (water
                        drug application for                                      injection)
                        clinical research)

Test Items              Complete test               Packaging Specification       /

Sample Reception Date   Oct. 20, 2003               Expiry Date                   August 2004

Test Quantity           55 vials                    Signed and Sealed Quantity    /

Basis for test          Regulations for Business Declaration
- ----------------------------------------------------------------------------------------------------------
Test Item                                Standard Requirement             Test Result
- ---------                                --------------------             -----------

Stock solution assay
   Protein content assay                 <=50ug/ml                        5ug/ml
   Vero cell residual NDA content        <=10ng/dosage                    <10ng/dosage
    assay
   Residual bovine serum protein
    content assay                        <=50ng/dosage                    <6ng/dosage
   Inactivation test
                                         Three generations of [one        Satisfies the requirement
                                         character illegible] passage;
                                         fluorescence detection for
                                         each generation is negative
Finished product assay
   Identification test
   Appearance                            Same effectiveness test          Same effectiveness test
                                         No colour or light cream white   Satisfies the requirement
                                         liquid with no foreign object

   pH value                              6.5~8.0                          7.3

   Examination of toxin within           less than 100EU/ml               =>6<13EU/ml
    bacteria

   Sterility test                        There should be no growth of     Satisfies the requirement
                                         bacteria or fungi

   Effectiveness test (Immune mouse      To be determined                 Sino1 Strain - 1:275.9
   method)                                                                (Original time vaccine);
                                                                          1:240.0 (1:4 times vaccine);
                                                                          1:105.4 (1:16 times vaccine);
                                                                          1:45.4 (1:64 times vaccine)
                                                                          GZ01 Strain -  =>1:495.2
                                                                          (Original time vaccine);
                                                                          =>1:519.9 (1:4 times vaccine);
                                                                          1:450.1 (1:16 times vaccine);
                                                                          1:192.0 (1:64 times vaccine

                                                                          To be continued on the next page
- ----------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>








                                        No.L0001






   National Institute for the Control of Pharmaceutical & Biological Products
   --------------------------------------------------------------------------




                                   TEST REPORT
                                   -----------


                                                           Report No.SH200301357






Name of test sample: Vero Cell (Generation 143)



Sample supplier: Beijing Sinovac Biotech Co. Ltd.



Purpose of certification: Contract test.



Basis for test: {{Regulations for Biological Products of China}} 2000 Edition



[Seal for Test Reports of National Institute for the Control of Pharmaceutical &
- --------------------------------------------------------------------------------
Biological Products]
- --------------------


<PAGE>






<TABLE>
<CAPTION>
             TEST REPORT FROM NATIONAL INSTITUTE FOR THE CONTROL OF
                     PHARMACEUTICAL AND BIOLOGICAL PRODUCTS
         [Seal for test reports of National Institute for the Control of
                     Pharmaceutical and Biological Products]

Report No. SH200301357                                                                   Page 1 of 1
- ----------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                           <C>
Name of Test Sample     Vero Cell (Gen. 143)        Test Sample Number            SHBB200300556

Sample Supplier         Beijing Sinovac Biotech     Sample Series/Type            /
                        Co. Ltd.

Sample Source           Beijing Sinovac Biotech     Test Sample State             /
                        Co. Ltd.

Test Purpose            Contract test               Test Sample Quantity          5 bottles

Test Items              Complete test               Sample Reception Date         August 26, 2003

Basis for test          {{Regulations for Biological Products of China}} 2000 Edition
- ----------------------------------------------------------------------------------------------------
Test Item                                Standard Requirement             Test Result
- ---------                                --------------------             -----------

Sterility test                           No growth of bacteria            Satisfies the requirement

Mycoplasma examination
   Cultivation method                    Negative                         Satisfies the requirement
   DNA staining method                   Negative                         Satisfies the requirement

Cell culture direct observation          Normomorph                       Satisfies the requirement

Examination of passage culture of
different cells
   Monkey originated Vero cells          Normomorph                       Satisfies the requirement
   Human originated 2B2 cells            Normomorph                       Satisfies the requirement
   Same type of cells in                 Normomorph                       Satisfies the requirement
    different batches

Red cell absorption test                 Negative                         Satisfies the requirement

Animal and chick embryo
examination (survival rate %)
   Suckling mouse                        Suckling mouse =>80%             Suckling mouse 90%
   Adult mouse                           Adult mouse =>80%                Adult mouse 100%
   Guinea pig                            Guinea pig =>80%                 Guinea pig 100%
   Rabbit                                Rabbit  =>80%                    Rabbit 100%
   Chick embryo                          Chick embryo =>80%               Chick embryo 100%

Chick embryo allantoic fluid red cell    Negative                         Satisfies the requirement
agglutination test

Oncogenic test                           No growth of tumour              Satisfies the requirement

Identification test
   Isozyme                               Monkey originated                Satisfies the requirement

Reverse transcription virus              Negative                         Satisfies the requirement
examination
- ----------------------------------------------------------------------------------------------------
Test Conclusion         This sample was tested according to the {{Regulations for Biological
                        Products of China}} 2000 Edition and the results satisfy the requirements.

Technology Officer      [Signature]                 Date of Issue                 November 13, 2003
- ----------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>






(2002) Liangren (Guo) No.S0599          No.L0001






   National Institute for the Control of Pharmaceutical & Biological Products
   --------------------------------------------------------------------------




                                   TEST REPORT
                                   -----------


                                                           Report No.SH200301352






Name of test sample: Vero Cell (Generation 160)



Sample supplier: Beijing Sinovac Biotech Co. Ltd.



Purpose of certification: Contract test.



Basis for test: {{Regulations for Biological Products of China}} 2000 Edition



[Seal for Test Reports of National Institute for the Control of Pharmaceutical &
- --------------------------------------------------------------------------------
Biological Products]
- --------------------



<PAGE>






<TABLE>
<CAPTION>
             TEST REPORT FROM NATIONAL INSTITUTE FOR THE CONTROL OF
                     PHARMACEUTICAL AND BIOLOGICAL PRODUCTS
         [Seal for test reports of National Institute for the Control of
                     Pharmaceutical and Biological Products]

Report No. SH200301352                                                                  Page 1 of 1
- ----------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                           <C>
Name of Test Sample     Vero Cell (Gen. 160)        Test Sample Number            SHBB200300626

Sample Supplier         Beijing Sinovac Biotech     Sample Series/Type            /
                        Co. Ltd.

Sample Source           Beijing Sinovac Biotech     Test Sample State             /
                        Co. Ltd

Test Purpose            Contract test               Test Sample Quantity          4 bottles

Test Items              Partial test                Sample Reception Date         September 16, 2003

Basis for test          {{Regulations for Biological Products of China}} 2000 Edition

- ----------------------------------------------------------------------------------------------------
Test Item                                Standard Requirement             Test Result
- ---------                                --------------------             -----------

Oncogenic test                           No growth of tumour              Satisfies the requirement



                                         END






















- ----------------------------------------------------------------------------------------------------
Test Conclusion         This sample was tested according to the {{Regulations for Biological
                        Products of China}} 2000 Edition and the results satisfy the requirements.

Technology Officer      [Signature]                 Date of Issue                 November 12, 2003
- ----------------------------------------------------------------------------------------------------
</TABLE>





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.7
<SEQUENCE>10
<FILENAME>sinovaccert.txt
<DESCRIPTION>SINOVAC BIOTECH 6K, FDA CERTIFICATION
<TEXT>


EXHIBIT 99.7
- ------------

                                  (Translation)


<TABLE>
<CAPTION>
                        State Food & Drug Administration
                        --------------------------------
                       Approval for Drug Clinical Research
                       -----------------------------------

Original No.
Acceptance No.X0306208                                    Approval No.2004L00315

- ----------------------------------------------------------------------------------------------------------
<S>                     <C>                        <C>                             <C>
Name of Drug            SARS Vaccine Inactivated

English/Latin Name      SARS Vaccine Inactivated

Form of Drug            Water injection            Matter under application        New drug

Specifications          1.0 ml/dose                Registration Classification     Type 1 of Preventive
                                                                                   Biological Product

                        Beijing Sinovac Biotech Co. Ltd, Laboratory Animal Research Institute of Chinese
Applicants              Medical Science Academy, Institute for Viral Disease Control of the Chinese
                        Center for Disease Control

                        In accordance with the {{Drug Control Act of the People's Republic of China}},
                        the product has been examined to conform to the regulations for approval for new
                        drugs. Permission is hereby granted for one phase of clinical research.

Conclusion              Due to the specific characteristics of the SARS Vaccine Inactivated, the
                        following steps must be taken besides meeting the requirements of GCP drug
                        clinical research:  1. the clinical research scheme of this product must be
                        examined and approved by the Ethics Committee before being carried out.  2. The
                        research Subject should be selected from among healthy people in an area
                        unaffected by SARS; results of physical exam and lab tests should be normal; SARS
                        antibody must be negative; no past history of special or chronic diseases; no
                        allergy; and are between 20-50 years of age.  3. In the Informed Consent, the
                        Subject should be made fully aware of the risks associated with participating in
                        the research. This product is being tested on a human body for the first time in
                        the world and there has not been sufficient basic and animal test research. As a
                        result, several kinds of harmful reactions may occur to the Subject after
                        injection of this product, including seriously harmful reactions such as
                        anaphylactic shock, allergy of the central nervous system, contracting SARS, or
                        having immunopotentiative reaction when infected with the SARS virus.  4.
                        Presently, there is no clear knowledge of what would happen after the clinical
                        application of this product. Therefore, all Subjects must remain under the tight
                        supervision of the Clinical Research Unit during the entire research period. In
                        the event of infection, quarantine protective treatment should be initiated
                        immediately.  5. For a certain period of time after the clinical research (before
                        the specific antibody basically disappears), the Subject should be kept in touch
                        and given follow-up visits.  6. Samples used in the clinical research must be
                        approved by the National Institute for the Control of Pharmaceutical & Biological
                        Products before being used.
                        See Attachment for other research work to be performed
                        during the Clinical Research period.

                        Beijing Sinovac Biotech Co. Ltd, Laboratory Animal Research Institute of Chinese
Original to:            Medical Science Academy, Institute of Viral Disease Control of the Chinese Center
                        for Disease Control

                        Beijing Drug Administration Bureau, National Institute for the Control of
Copy to:                Pharmaceutical & Biological Products, Drug Testing Center of the State Food &
                        Drug Administration

Remark                  Attachment
- ----------------------------------------------------------------------------------------------------------
</TABLE>


[Drug Registration Seal of the State Food & Drug Administration]
- ----------------------------------------------------------------

January 19, 2004


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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