Jpak Group, Inc. - FORM S-1/A

Attached files

file	filename
EX-5.1 - OPINION AND CONSENT - Jpak Group, Inc.	ex5one.htm
EX-23.1 - CONSENT - Jpak Group, Inc.	ex23one.htm

As filed with the Securities and Exchange Commission on January 11, 2010

Registration No. 333-164100

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

PRE-EFFECTIVE AMENDMENT 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

JPAK GROUP, INC.

(Name of small business issuer in its charter)

Nevada		2650		20-1977020
(State or jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

15 Xinghua Road

Qingdao, Shandong Province

Postal Code 266401

People’s Republic of China

(86-532) 84616387

(Address and telephone number of principal executive offices

and principal place of business)

Jpak Group, Inc.

15 Xinghua Road

Qingdao, Shandong Province

Postal Code 266401

People’s Republic of China

(86-532) 84616387

(Name, address and telephone number of agent for service)

Copies to:

Leser, Hunter, Taubman & Taubman

17 State Street, Flr. 20

New York, NY 10004

Tel: (212) 732-7184

Approximate date of proposed sale to the public:

As soon as practicable after the effective date of the registration statement

Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [x]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

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

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

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be Registered(1)		Proposed maximum offering price per share(2)		Proposed maximum aggregate offering price		Amount of registration fee
Shares of Common Stock Underlying Preferred Stock		687,106(3)	$	0.71	$	487,845.26	$	34.78
Shares of Common Stock Underlying Preferred Stock		12,000,000(4)	$	0.71	$	8,520,000.00	$	607.48
Shares of Common Stock		11,363,334(5)	$	0.71	$	8,067,967.14	$	575.25
Total		24,050,440	$	0.71	$	17,075,812.40	$	1217.51

(1)	In addition, pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement includes an indeterminate number of additional shares as may be issuable as a result of stock splits or stock dividends which occur during this continuous offering.
(2)	Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, an amended based upon the average of the bid and asked price of the Registrant's common stock as quoted on the OTC Bulletin Board of $0.71 on December 29, 2009.
(3)	Represents shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share, convertible into two shares of the company’s common stock, par value $0.001 per share. These securities were previously registered on Registration Statement No. 333-147264, whose latest Post Effective Amendment was declared effective on May 29, 2009. The registration fee for these securities was paid and is transferred and carried forward to this registration statement pursuant to Rule 429 under the Securities Act.
(4)	Represents shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share, convertible into one share of the Company’s common stock, par value $0.001 per share.
(5)	Represents shares of common stock issued pursuant to an exchange agreement between the Company and the holders of the warrants the Company issued pursuant to the financings that the Company consummated in 2007 and 2009 (see the Summary section below).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

EXPLANATORY NOTE

The registrant is filing a single prospectus in this Registration Statement on Form S-1 pursuant to Rule 429 under the Securities Act of 1933, as amended, in order to satisfy the requirements of the Securities Act and the rules and regulations thereunder for this and other offerings registered on earlier registration statements. Additionally, the combined prospectus in this registration statement relates to, and shall act, upon effectiveness, as a Post-Effective Amendment to Registration Statement No. 333-147264, whose latest Post Effective Amendment was declared effective on May 29, 2009. Please note that this Registration Statement is registering 23,363,334 additional shares of our common stock, which were not included in Registration Statement No. 333-147264; such shares represent: (i) the shares issued pursuant to the warrant exchange agreement discussed elsewhere in this Registration Statement and (ii) the shares of common stock underlying the preferred stock that were issued pursuant to the private financing that the Company completed in November 2009, as discussed elsewhere in this Registration Statement. Accordingly, the new amount of shares registered under our Registration Statement is 24,050,440.

We are filing this pre-effectiveamendment to include our annual financial statements for the fiscal year ending June 30, 2009, which were inadvertently omitted from our initial filing on December 31, 2009.

The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED

PROSPECTUS

24,050,440 Shares

JPAK GROUP, INC.

Common Stock

This prospectus relates to shares of common stock of Jpak Group, Inc., a Nevada company (the “Company”), that may be offered for sale for the account of the selling stockholders identified in this prospectus. The selling stockholders may offer and sell from time to time up to 24,050,440 shares of our common stock, which amount includes common shares underlying shares of our Series C Preferred Stock and additional shares of our common stock held by the selling stockholders.

The selling stockholders may sell all or any portion of their shares of common stock in one or more transactions on the over the counter stock market or in private, negotiated transactions. Each selling stockholder will determine the prices at which it sells its shares. Although we will incur expenses in connection with the registration of the common stock, we will not receive any of the proceeds from the sale of the shares of common stock by the selling stockholders.

Our common stock is listed on the OTC Bulletin Board and traded under the symbol “JPAK.OB.” On January 8, 2010, the closing price of the common stock quoted on the Over-the-Counter Bulletin Board (the “OTC Bulletin Board”), was $0.65 per share.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

An investment in our common stock is speculative and involves a high degree of risk. See “Risk Factors” beginning at page 11.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is January 11, 2010

TABLE OF CONTENTS

Summary	6

Risk Factors	11

Cautionary Statement Concerning Forward-Looking Statements	22

Use of Proceeds	22

Market Price and Dividends on Registrant’s Common Equity and Related Stockholder Matters	23

Management’s Discussion and Analysis or Plan of Operation	24

Business	30

Management	36

Summary Compensation Table	37

Principal Stockholders	40

About the Offering	43

Selling Stockholders	46

Plan of Distribution	46

Certain Relationships and Related Transactions	48

Description of Securities	50

Legal Matters	52

Experts	52

Disclosure of Commission Position on Indemnification for Securities Act Liabilities	53

Available Information	53

Index to Consolidated Financial Information	F-1

We have not authorized any person to give you any supplemental information or to make any representations for us. You should not rely upon any information about us that is not contained in this prospectus or in one of our public reports filed with the Securities and Exchange Commission (“SEC”) and incorporated into this prospectus. Information contained in this prospectus or in our public reports may become stale. You should not assume that the information contained in this prospectus, any prospectus supplement or the documents incorporated by reference are accurate as of any date other than their respective dates, regardless of the time of delivery of this prospectus or of any sale of the shares. Our business, financial condition, results of operations and prospects may have changed since those dates. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted.

In this prospectus the “company,” “we,” “us,” and “our” refer to Jpak Group, Inc., a Nevada corporation and its subsidiaries.

SUMMARY

You should read this summary in conjunction with the more detailed information and financial statements appearing elsewhere in this prospectus.

Our Company

We are engaged primarily in the development, manufacture, and distribution of aseptic liquid food and beverage cartons for milk, fruit juices, soy milk, yogurt drinks, iced tea, coffee, sauces and other liquid foods and beverages in China. Since 2004, we have started and focused on the research and development, and we believe we are the largest and leading domestic supplier of aseptic liquid food and beverage cartons in China. Our business is primarily in China, but we have recently begun contract manufacturing products for export primarily to Southeast Asia.

Our growth strategy consists of consolidating our market leader position among domestic liquid food and beverage aseptic carton suppliers and to pursue expansion in the China market as well as selective Asian and Middle Eastern markets. We intend to achieve our goal by pursuing the following strategies:

	·	Increasing output to further penetrate the China market;

	·	Offering bundled packaging materials and filling machines;

	·	Increasing sales to selective Asian and other markets; (including Russia and Eastern Europe)

	·	Establishing brand names and brand awareness.

Company History

RX Staffing, Inc

Our company was initially incorporated as Rx Staffing, Inc., a development stage company incorporated in the State of Nevada on December 6, 2004. It was formed as a full-service temporary personnel agency to better meet the supplemental staffing needs of healthcare providers. Its corporate purpose was (i) to provide personnel staffing services to institutions, occupational site healthcare organizations and alternative site healthcare organizations and (ii) to provide health care professionals such as nurses, specialty technicians and physicians with the flexibility to balance their professional and personal schedules.

For the period beginning on the date of inception through the date of the acquisition of Jpak Group, Inc., Rx Staffing generated minimal revenue from the sale of its medical staffing services.

On August 9, 2007, we completed a reverse acquisition of Jpak Group, Inc. (“Jpak”). Prior to the acquisition, Rx Staffing Inc. (“Rx Staffing”), was a public shell company, as that term is defined in Rule 12b-2 of the Exchange Act, established under the laws of Nevada on December 6, 2004. To accomplish the share exchange we issued 23,005,000 shares of common stock on a one to one ratio for a 100% equity interest in JPAK. Per the terms of the Share Exchange and Bill of Sale of assets of Rx Staffing and Shaun Jones, Rx Staffing was delivered with zero assets and zero liabilities at time of closing. The transaction was regarded as a reverse merger whereby JPAK was considered to be the accounting acquirer as its shareholders retained control of RX Staffing after the exchange. Although the Company is the legal parent company, the share exchange was treated as a recapitalization of JPAK. Thus, JPAK is the continuing entity for financial reporting purposes. The Financial Statements have been prepared as if JPAK had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock.

Jpak Group, Inc.

We commenced operations in China in 1958 as a state-owned, traditional printing and packaging company. In 2004, management completed the buyout of 88.23% of a state-owned equity interest in Qindao Renmin, a company located in Qingdao, Shandong Province of the People’s Republic of China; in the same year, we started developing aseptic liquid food and beverage cartons which was launched in the China market in 2005. Jpak Group Co., Ltd. (“Jpak Ltd”) was incorporated in the Cayman Islands on June 22, 2006 under the name Winner Dragon Limited; they changed their name to Jpak Ltd. on September 18, 2006. Also in September 2006, Jpak Ltd. acquired the 88.23% equity interest in Qingdao Renmin through Grand International, the 100% owned subsidiary of Jpak Ltd. Substantially, all of our operations are conducted in China through Qingdao Renmin. In July 2007, Grand International purchased the remaining 11.77% state-owned equity interest in Qingdao Renmin and now owns 100% equity interest in Qingdao Renmin.

In September 2006, Jpak Group Co., Ltd. (“JPAK”) – a private holding company established under the laws Cayman Islands June 22, 2006, acquired 88.23% equity interest in Qingdao Renmin through Grand International, the 100% owned subsidiary of JPAK. As a result of the acquisition, Qingdao Renmin became the majority owned subsidiary of Grand International and an indirect majority owned subsidiary of JPAK. The transaction was regarded as a reverse merger whereby Qingdao Renmin was considered to be the accounting acquirer as both Grand International and JPAK were holding companies with no significant operations and Qingdao Renmin continues as the primary operating entity even after the exchange, although JPAK is the legal parent company. As such, Qingdao Renmin (and its historical financial statements) is the continuing entity for financial reporting purposes and the share exchange was treated as a recapitalization of JPAK. Thus, JPAK is the continuing entity for financial reporting purposes. The Financial Statements have been prepared as if JPAK had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock. Accordingly, we have revised our financial statements to reflect reverse merger accounting).

On August 9, 2007, we entered into that certain Share Exchange, pursuant to which Jpak Ltd. became our wholly owned subsidiary and in connection with the Share Exchange, we changed our corporate name to Jpak Group, Inc.”

The Share Exchange and the Financing in 2007

On August 9, 2007, we entered into and consummated the transactions contemplated (the “Share Exchange”) under a Securities Exchange Agreement (the “SEA”) by and among us, Jpak and the shareholders of Jpak (namely Joyrich Group Limited, a British Virgin Islands (“BVI”) company, Fabregas Group Limited, a BVI company, Statepro Investments Ltd., a BVI company, Raytech Investments Limited, a BVI company, and Capital American Markets Limited, a BVI company), pursuant to which all the shares of Jpak were transferred to us and Jpak became a wholly-owned subsidiary of ours, and at the same time the shareholders of Jpak were issued 23,005,000 shares of our common stock, which represented 64.4% of all the issued and outstanding shares of our common stock (assuming conversion of the preferred stock described below) following the Share Exchange and the financing described below. The Share Exchange has been accounted for as a reverse acquisition under the purchase method of accounting for business combinations in accordance with generally accepted accounting principles in the United States of America, or “U.S. GAAP.” Reported results of operations of the combined group issued after completion of the transaction will reflect Jpak’s operations.

On August 9, 2007, we became a party to the Note Purchase Agreement by and among the Company, Jpak, Grand International and the Investors. NPA was originally entered into in May 2007 pursuant to which Jpak issued Convertible Promissory Notes in the aggregate principal amount of US$5.5 million to the Investors. As a result of the Share Exchange, the Notes automatically converted into 5,608,564 shares of Series A Convertible Preferred Stock outstanding. The shares of Series A Convertible Preferred Stock are convertible into an aggregate of 11,217,128 shares of common stock. Under the terms of the Notes, we also issued (i) Series A Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.60 per share until August 2013 (the “Series A Warrants”), (ii) Series B Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.70 per share until August 2013 (the “Series B Warrants”) and (iii) Series J Warrants to purchase (a) an aggregate of 5,000,000 shares of Series B Convertible Preferred Stock, which preferred stock shall contain the same terms as the Series A Convertible Preferred Stock (other than conversion price), which shares will be convertible into 8,333,333 shares of our common stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.72 per share (the “Series C Warrants”) and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.84 per share (the “Series D Warrants”). The Series J Warrants shall be exercisable at an exercise price of US$1.00 per warrant and shall only be exercisable until 90 days following the effective date of the registration statement for which this prospectus forms a part. Finally, we also granted warrants to purchase 990,000 shares of common stock with an exercise price of US$.50 per share to the placement agent in the financing transaction. These warrants have the same terms as the Series A and Series B Warrants, except that they contain a “cashless” exercise provision.

On August 9, 2007, we also entered into a Registration Rights Agreement with the Investors (the “Investor RRA”). Under the Investor RRA, we were required to prepare and file a registration statement for the sale of the Common Stock issuable to the Investors under the Series A and Series B Preferred Stock and the Warrants and to use our best efforts to cause, and to maintain, the effectiveness of the registration statement. We are filing this registration statement to fulfill our obligations under the RRA. We are subject to certain monetary obligations if, this registration statement is not declared effective by the SEC by March 31, 2008. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. Under the Investor RRA, the shareholders of Jpak were granted piggyback registration rights for 15,805,000 shares of our common stock.

However, the Investor RRA also made provisions if we cannot register all of the shares underlying all of the Series A and Series B Preferred Stock and Warrants due to the SEC’s application of Rule 415. Pursuant to those provisions, if the SEC issues us a 415 comment, then we must first try to register the common stock underlying the preferred stock (on a pro rata basis among the holders of the Preferred Stock) and then register all of the common underlying the Warrants (on a pro rata basis among the holders of the Warrants). The SEC did issue a 415 comment to us on March 27, 2008 and accordingly, we filed an Initial Registration Statement (File No. 333-147264) on Form S-1 to register for resale 687,106 shares of common stock underlying the Series A Preferred Stock, which was initially declared effective on January 7, 2009. The RRA requires that subsequent registration statements be filed to register the rest of the common stock underlying the preferred stock and warrants issued in the financing on the later of (i) 60 days following the sale of substantially all of the shares of common stock included in the Initial Registration Statement or any subsequent Registration Statement and (ii) 6 months following the effective date of the Initial Registration Statement or any subsequent Registration Statement, as applicable, or such earlier or later date as permitted or required by the Commission. Under the terms of the RRA, we are not required to register the remaining shares of common stock underlying the Series A Preferred Stock since they are now eligible to be sold pursuant to Rule 144. The registration statement must be declared effective by the earlier of (A) the 90th day following the filing date of such Registration Statement (or in the event such Registration Statement is reviewed by the Commission, the one hundred twentieth (120th) day following such filing date) or (B) 5 business days after SEC has no more comments. However, we do not have any monetary obligations for any securities that were not permitted to be included in a registration statement because of the SEC’s application of Rule 415 until such time as such securities are required to be filed pursuant to the Investor RRA. In such case, the liquidated damages shall be calculated to only apply to the percentage of securities which are permitted by the Commission to be included in the Registration Statement.

In addition to the Share Exchange, and the Investor RRA, on August 9, 2007, we also entered into a Securities Escrow Agreement (the “Escrow Agreement”) with the Investors, the principal stockholders named therein (the “Principal Stockholders”) and the escrow agent named therein (the “Escrow Agent”). Under the Escrow Agreement, the Principal Stockholders agreed to place an aggregate of 7,200,000 shares of Common Stock into escrow (the “Escrow Shares”) for the benefit of the Investors in the event the Company fails to achieve net income for the fiscal year ended June 30, 2008 (“Fiscal 2008”) of at least US$3.955 million (the “Fiscal 2008 Performance Threshold”). Since we met the Fiscal 2008 Performance Threshold, the Escrow Shares were returned to the Principal Stockholders.

In connection with the Financing, we issued H.C. Wainwright & Co., Inc., a broker-dealer member of FINRA who acted as our exclusive placement agent in connection with the financing received the following compensation for its services as placement agent: (i) a cash fee of 9% of the gross proceeds, plus expenses (an aggregate of $972,500) and (ii) warrants to purchase 990,000 shares of common stock at an exercise price equal to $0.50 per share, and warrants to purchase 750,000 shares of common stock at an exercise price equal to $0.60 per share, certain of which warrants were issued to officers and employees of the placement agent.

On December 28, 2007, the holders of our outstanding Series J Warrants exercised in full such warrants for aggregate gross proceeds of US$5.0 million to us. Upon exercise of the Series J Warrants and pursuant to their stated terms, we issued to the holders of the Series J Warrants (a) an aggregate of 5,000,000 shares of our Series B Convertible Preferred Stock, which are convertible into an aggregate of 8,333,333 shares of our common stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of our common stock at an exercise price of US$0.72 per share and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of our common stock (subject to adjustment) at an exercise price of US$0.84 per share. The Series C Warrants and Series D Warrants have a term of six years from the date of issuance.

In connection with such exercise, the holders of the Series J Warrants agreed not to exercise their demand registration rights with respect to the shares of our common stock underlying the Series B Convertible Preferred Stock, the Series C Warrants and the Series D Warrants during the period beginning on the date of exercise of the Series J Warrants and ending on the ninetieth (90th) day following the effective date of this prospectus.

The 2009 Financing

On November 3, 2009, we entered into a Securities Purchase Agreement with one investor, pursuant to which we received $6,000,000.00 and issued 12,000,000 units of our securities at a price of $0.50 per unit. Net proceeds from this offering were $5,916,500. Each unit consists of (i) one (1) share of our Series C Convertible Preferred Stock, par value $0.0001 per share, convertible into one share of our common stock, par value $0.001 per share, and (ii) a one-half Series E Warrant and one-half Series F Warrant. Each whole Series E Warrant may be exercised to purchase one share of Common Stock at an exercise price of $0.60 per share and each whole Series F Warrant may be exercised to purchase one share of Common Stock at an exercise price of $0.70 per share. The Warrants are exercisable for a period of five years from the date of issuance. In connection with the Offering, we paid $30, 000 to Tripoint Global Equities, LLC, who acted as placement agent in the 2009 Financing.

In connection with the 2009 Financing, we also entered into a Registration Rights Agreement (the “2009 Investor RRA”), pursuant to which we are required to prepare and file a registration statement for the resale of the Common Stock issuable to the purchaser upon conversion of the preferred stock and upon exercise of the warrants issued to him, before December 3, 2009 and to use our best efforts to cause the effectiveness of such registration statement which is no later than the earlier of (a) the date which is within three (3) business days after the date on which the Securities and Exchange Commission informs the Company (i) that the Commission will not review the Registration Statement, or (ii) that the Company may request the acceleration of the effectiveness of the registration statement, or (b) the 150th day following the filing date of such registration statement (or in the event the registration statement receives a “full review” by the Commission, the 180th day following the filing date). We are subject to certain monetary obligations if this registration statement is not declared effective by the effective date specified in the 2009 Investor RRA. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. The 2009 Investor RRA provides for specific registration procedures if the SEC issues a Rule 415 comment.

The Warrant Exchange

On December 16, 2009, we entered into an exchange agreement with all of the holders of our currently outstanding investor warrants, pursuant to which such holders and the Company agreed to exchange all of the warrants that such holders received pursuant to the 2007 and 2009 Financing, which represents warrants to purchase an aggregate of 31,333,334 shares of Common Stock, for shares of the Company’s common stock in an amount determined by the following formula:

	X = Y -	(A)(Y)
		B

Where	X =	the number of shares of Common Stock to be issued to the Holder.
	Y =	the number of shares of Common Stock purchasable upon exercise of all of the Holders’ Warrants.
	A =	the Warrant Price.
	B =	$1.00 per share of Common Stock.

The following table discloses the calculations related to the Warrant Exchange Agreement.

Warrants	Number of Warrants		Strike Price		Cashless Exercise Price		New Common Shares
Series A		5,500,000	$	0.56	$	1.00		2,420,000
Series B		5,500,000	$	0.63	$	1.00		2,035,000
Series C		4,166,667	$	0.64	$	1.00		1,500,000
Series D		4,166,667	$	0.71	$	1.00		1,208,334
Series E		6,000,000	$	0.60	$	1.00		2,400,000
Series F		6,000,000	$	0.70	$	1.00		1,800,000
Total		31,333,334						11,363,334

Upon effectiveness of the Warrant Exchange Agreement, the number of shares of common stock outstanding on December 16, 2009 was 36,368,334. There was no cash paid or received in conjunction with this exchange.

Principal Executive Office

Our offices are located at 15 Xinghua Road, Qingdao, Shandong Province, People’s Republic of China, (86-532) 8461 6387.

The Offering

This offering relates to the offer and sale of our common stock by the selling stockholders identified in this prospectus. The selling stockholders will determine when they will sell their shares, and in all cases will sell their shares at the current market price or at negotiated prices at the time of the sale. Although we have agreed to pay the expenses related to the registration of the shares being offered, we will not receive any proceeds from the sale of the shares by the selling stockholders.

Summary Financial Information

The following summary financial data for the fiscal years ended June 30, 2008 and for the fiscal quarter ended September 30, 2009 were derived from the consolidated financial statements of our recently acquired subsidiary, Jpak. This information is only a summary and does not provide all of the information contained in our financial statements and related notes. You should read the “Management’s Discussion and Analysis or Plan of Operation” beginning on page 24 of this prospectus and our financial statements and related notes included elsewhere in this prospectus.

Statement of Operations Data:

	For the year ended June 30,						For the three months ended September 30,
	2009			2008			2009			2008
	(in thousands)						(in thousands)
Revenues	$	40,409		$	37,264		$	16,562		$	9,430
Cost of sales		30,260			27,379			11,838			6,996
Gross profit		10,150			9,884			4,724			2,434
Operating expenses		9,383			6,054			2,888			2,108
Other income / (Expenses) net		(343	)		(25	)		(101	)		4
Income before provision for income tax		424			3,805			1,735			331
Provision for income taxes		308						243			-
Minority interest		(996	)		(1	)		(1)			(1	)
Foreign currency translation adjustment		(82	)		2,109			32			(39	)
Comprehensive income /(Loss)	$	(16	)	$	2,041			1,525		$	292

Balance Sheet Data:

	As of September 30, 2009		As of June 30, 2009

Cash and cash equivalents	$	1,411,453	$	2,969,699
Restricted cash		5,848,890		3,403,868
Accounts receivable, net of allowance for doubtful accounts of $1,498,766 and $1,496,723 at September 30, 2009 and June 30, 2009, respectively		11,367,055		9,063,973

Inventory		6,449,591		5,353,193
Prepaid expenses and other current assets		219,355		70,544
Deferred financing cost, net		-
Property and equipment, net		12,939,056		13,107,216
Total assets		42,555,038		36,120,083
Accounts payable and accrued expenses		4,923,976		3,277,973
Trade notes payable		5,209,267		3,212,704
Short term bank loans		2,347,200		2,344,000
Total liabilities		17,274,934		12,364,717
Minority interest		105,216		105,128
Shareholders’ equity		25,174,888		23,650,238

RISK FACTORS

An investment in our common stock is speculative and involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before purchasing any shares of our common stock. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties may also adversely impair our business operations. If any of the events described in the risk factors below actually occur, our business, financial condition or results of operations could suffer significantly. In such case, the value of your investment could decline and you may lose all or part of the money you paid to buy our common stock.

Risks Related To Our Business.

The price increase of raw materials, such as paper materials, polyethylene materials, and aluminum materials, could increase the cost of our products and reduce our profit margin. Paper materials, polyethylene materials, and aluminum materials are the major materials for our aseptic packaging products. In the last two years, the prices of paper materials, polyethylene materials and aluminum materials have fluctuated substantially, as have other raw materials, due to the increasing demand in China resulting from its rapid economic development. Although we have managed to minimize the impact of such fluctuation in the past, there is no assurance that we will be able to do so in the future. If the price for paper materials, polyethylene materials, aluminum materials, and other necessary raw materials increases significantly, our profit margin could decrease considerably and we may not be able to maintain our profitability.

We may not be able to secure financing needed for future operating needs on acceptable terms, or on any terms at all. From time to time, we may seek additional financing to provide the capital required to maintain or expand our production facilities, implement research and development and equipment and/or working capital initiatives, as well as to repay outstanding loans if cash flow from operations is insufficient. We cannot predict with certainty the timing or account of any such capital requirements. If such financing is not available on satisfactory terms, we may be unable to expand our business or develop new business at the desired rate. Consequently, our operating results may suffer. If we are able to incur debt, we may be subject to certain restrictions imposed by the terms of the debt and the repayment of such debt may limit our cash flow and our ability to grow. If we are unable to incur debt, we may be forced to issue additional equity, which could have a dilutive effect on our current stockholders.

Expansion of our business may put added pressure on our management and operational infrastructure impeding our ability to meet any increased demand for our products and services and possibly hurting our operating results . Our business plan is to significantly grow our operations to meet anticipated growth in demand for our products and services. Our planned growth includes the increase of our line of products and expansion of sales in our existing markets as well as new markets over the next few years. Growth in our business may place a significant strain on our personnel, management, financial systems and other resources. The evolution of our business also presents numerous risks and challenges, including, but not limited to:

the continued acceptance of our products and services by the packaging industries;

our ability to successfully and rapidly expand sales to potential customers in response to potentially increasing demand;

the costs associated with such growth, which are difficult to quantify, but could be significant;

rapid technological change; and

the highly competitive nature of the packaging industries.

If we are successful in obtaining rapid market growth of our products and services, we will be required to deliver large volumes of quality products and services to customers on a timely basis at a reasonable cost to those customers. Meeting any such increased demands will require us to expand our manufacturing facilities, to increase our ability to purchase raw materials, to increase the size of our work force, to expand our quality control capabilities and to increase the scale upon which we provide our products and services. Such demands would require more capital and working capital than we currently have available and we may be unable to meet the needs of our customers, this could adversely affect our relationship with customers, leading to a reduction in our revenues.

We have a history of operating losses, and there can be no assurance that we can sustain or increase profitability and, as a result, may not operate as a going concern. While we recently achieved an operating profit, we have had operating losses in some of the years since our inception and there can be no assurance that we can sustain or increase profitability. Unanticipated problems, expenses, and delays are frequently encountered in developing and marketing products. These include, but are not limited to, competition, the need to develop customers and market expertise, market conditions, sales, marketing, increases in the cost of raw materials and governmental regulation. Our failure to meet any of these conditions would have a materially adverse effect upon us and may force us to reduce or curtail our operations. Revenues and profits, if any, will depend upon various factors. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on our business and results of operations. In addition, we expect to incur additional general and administrative expenses as a public company in the United States which could also have a negative impact on our profitability.

Our existing indebtedness may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns. Our indebtedness aggregated approximately US$17 million as of September 30, 2009. As a result, we are subject to the risks associated with significant indebtedness, including:

we must dedicate a portion of our cash flows from operations to pay debt service costs and, as a result, we have less funds available for operations and other purposes;

it may be more difficult and expensive to obtain additional funds through financings, if available at all;

we are more vulnerable to economic downturns and fluctuations in interest rates, less able to withstand competitive pressures and less flexible in reacting to changes in our industry and general economic conditions; and

if we default under any of our existing credit facilities or if our creditors demand payment of a portion or all of our indebtedness, we may not have sufficient funds to make such payments.

We may be exposed to risks relating to our disclosure controls and our internal controls and may need to incur significant costs to comply with applicable requirements. Based on the evaluation done by our management at June 30, 2008, our internal controls over financial reporting were deemed ineffective, in that we did not have sufficient resources to discover and correctly account for the Share Exchange and related transactions, the impact of the issuance of certain warrants on our financial statements, the impact of extending the term of the Series A and Series B Warrants, and proper accounting of commission paid in connection with the exercise of Series J Warrants in our September 30, 2007, December 31, 2007 and March 31, 2008 financial statements so as to avoid a material misstatement in our financial statements that would not be prevented or detected in a timely manner. Due to SEC comments we received concerning our registration statement on Form S-1, we conducted further research about how to account for the share exchange and related activities and only then did management recognize the material weakness. This material weakness caused an error in our financial statements regarding how we accounted for the share exchange and the placement agent warrants issued in the financing that closed simultaneously with the share exchange. These mistakes flowed through to our financial statements for the quarters ending September 30, 2007 and December 31, 2007. On May 4, 2008, the Board of Directors concluded that we are required to restate our previously issued audited financial statements for the year ended June 30, 2007 and the periods ended September 30, 2007 and December 31, 2007. Restated financial statements for the year ending June 30, 2007 were included in the previous Amendment to our Registration Statement, and restated financials for the quarters ending September 30, 2007 and December 31, 2007 were included in amendments to the quarterly reports for such periods, which we filed on August 5, 2008. We then received additional SEC comments and determined that the financial statements for the quarter ending December 31, 2007 must be restated again, and that the financial statements for the quarter ending March 31, 2008 must be restated; these revisions impacted the financial statements for the quarter ended September 30, 2007 and as a result, we filed an amendment for that quarter to conform, and make consistent the disclosure contained therein with our other filings. This latest restatement was needed to properly account for the extension of the term of the Series A and Series B Warrants, as well as the compensation issued pursuant to the exercise of the Series J Warrants. We filed restated financials for the quarter ending December 31, 2007 and March 31, 2008 in a quarterly report on Form 10-Q for each such quarter on September 29, 2008.

We are seeking to recruit experienced professionals to augment and upgrade our financial staff to address issues of timeliness and completeness in financial reporting when we are preparing SEC filings. No assurances can be given that we will be able to adequately remediate existing deficiencies in our internal controls. Although we believe that these corrective steps – restating our financial statements and hiring a new Acting CFO (see Management section below) – will enable management to conclude that our internal controls over financial reporting are effective and these measures will remediate the material weaknesses discussed above when all of the additional financial staff positions are filled, we cannot assure you that this will be sufficient. We may be required to expend additional resources to identify, assess and correct any additional weaknesses in disclosure or internal control and to otherwise comply with the internal controls rules under Section 404 of the Sarbanes-Oxley Act which will be newly applicable to us for the first time at the end of this fiscal year.

We have pledged substantially all of our assets to secure our borrowings and are subject to covenants that may restrict our ability to operate our business. Our borrowings under our existing loan agreements are secured by substantially all of our assets. If we default under the indebtedness secured by our assets, those assets would be available to the secured creditor to satisfy our obligations to the secured creditor. In addition, our loan agreements impose certain restrictive covenants, including financial covenants. Failure to satisfy any of these covenants could result in all or any of the following:

acceleration of the payment of our outstanding indebtedness;

cross defaults to and acceleration of the payment under other financing arrangements;

our inability to borrow additional amounts under our existing financing arrangements; and

our inability to secure financing on favorable terms or at all from alternative sources.

Any of these consequences could adversely affect our ability to acquire consumer receivable portfolios and operate our business.

The failure to maintain our relationships with our existing customers or the failure to obtain new customers could negatively affect our revenues and decrease our earnings or have an adverse impact on our business. We maintain purchase orders for the sales of our products to our customers. Although we have entered into agreements to supply our customers, we cannot assure that such agreements will be renewed when the terms of such agreements expire or that our relationships with our customers will be maintained on satisfactory terms, if at all. The failure to maintain our relationships with our customers or the failure to obtain new customers could (i) negatively affect our revenues and decrease our earnings or (ii) adversely impact our business.

We rely on a limited number of suppliers and the loss of any of our suppliers, or delays or problems in the supply of materials used in our products, could materially and adversely affect our business, financial condition, results of operations and growth prospects. We generally rely on one or two suppliers for each of the primary materials used in our products, including paper, polyethylene and aluminum, and otherwise rely on a limited number of suppliers for the other materials used in our products. Our suppliers may not be able to supply the necessary materials without interruption. We may not have adequate remedies for their failure to supply us which could result in a shortage of our products. If one of our suppliers fails or refuses to supply us for any reason, it could take time and expense to obtain a new supplier. In addition, our failure to maintain existing relationships with our suppliers or to establish new relationships in the future could negatively affect our ability to obtain the materials used in our products in a timely manner. The search for new suppliers could potentially delay the manufacture of our products, resulting in shortages in the marketplace and may cause us to incur additional expense. Failure to comply with applicable legal requirements subjects our suppliers to possible legal or regulatory action, including shutdown, which may adversely affect their ability to supply us with the materials we need for our products. Any delay in supplying, or failure to supply, materials for our products by any of our suppliers could result in our inability to meet the commercial demand for our products, and could adversely affect our business, financial condition, results of operations and growth prospects.

We may not be able to adequately protect our intellectual property, which could harm our competitive advantage. We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Piracy of intellectual property is widespread in China and despite our efforts to protect our intellectual proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. Monitoring unauthorized use of our technology is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriations of our technology, particularly in countries where the laws may not protect our intellectual property rights as fully as in other countries such as the United States of America. In addition, third parties may seek to challenge, invalidate, circumvent or render unenforceable any intellectual property rights owned by us. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs, diversion of our management’s attention and diversion of our other resources.

The failure to increase our current manufacturing capacity could materially and adversely affect our business, financial condition, results of operations and growth prospects. We currently manufacture our products at a single facility with two production lines. Manufacturing products at a single site presents risks because a disaster, such as a fire or hurricane, may interrupt our manufacturing capability. In such an event, we will have to resort to alternative sources of manufacturing that could increase our costs as well as result in significant delays. Any increase in costs, slowdowns or shutdowns could have a material adverse affect on our business, financial condition, results of operations and growth prospects.

Our use of a single manufacturing facility with two production lines may restrict our ability to attract large customers who require certainty in the production process. We intend to expand our manufacturing operations by adding additional production lines, but there is no assurance that we will have the financial resources required for this planned expansion or that any such expansion will be successful or completed in a timely fashion or within budget. We may encounter difficulties and significant unexpected costs and delays in scaling up our manufacturing operations. The failure to scale-up manufacturing operations in a timely and cost-effective way may adversely affect our income. In the event the demand for our products rapidly increases or spikes in a certain period, we may not have the manufacturing ability to fulfill demand, either in our own facilities or through agreements with third parties. This lack of manufacturing capacity could have a material adverse affect on our business, financial condition, results of operations and growth prospects.

Our failure to successfully develop new business segments could have a material adverse affect on our business, financial condition, results of operations and growth prospects. We are currently pursuing and in the future may pursue new technologies and businesses segments internally or through acquisitions or combinations which involve significant risks. Any such acquisition or combination may involve, among other things, the payment of cash, the incurrence of contingent liabilities and the amortization of expenses related to goodwill and other intangible assets, and transaction costs, which may adversely affect our business, financial condition, results of operations and growth prospects. Our ability to integrate and organize any new businesses and/or products, whether internally developed or obtained by acquisition or combination, will likely require significant expansion of our operations. There is no assurance that we will have or be able to obtain the necessary resources to satisfactorily effect such expansion, and the failure to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, future acquisitions or combinations by us involve risks of, among other things, entering markets or segments in which we have no or limited prior experience, the potential loss of key employees or difficulty, delay or failure in the integration of the operations of any such new business with our current business and operating and financial difficulties of any new or newly combined operations, any of which could have a materially adverse effect on our business, financial condition, results of operations and growth prospects. Moreover, there can be no assurance that the anticipated benefits of any internally developed new business segment or business combination will be realized.

The loss of one or more members of our management team or other key employeescould affect our ability to successfully grow our business . Our success and future growth depends to a significant degree on the skills and continued services of our management team and other key employees, including but not limited to, Yijun Wang, our Chairman, Chief Executive Officer and President (and Chairman and Chief Executive Officer of Qingdao Renmin) and Qingjun Yang, the President of Qingdao Renmin. Qingdao Renmin currently has employment agreements with its named executive officers but does not currently maintain key person life insurance. If one or more members of our management or other key employees were to resign or no longer be able to serve as our employees, it could impair our revenue growth, business and future prospects. Further, our ability to execute our business plan is dependent on our ability to attract and retain additional highly skilled personnel.

We do not have a majority of independent directors serving on our board of directors, which could present the potential for conflicts of interest. We do not have a majority of independent directors serving on our board of directors and we cannot guarantee that our board of directors will have a majority of independent directors in the future. In the absence of a majority of independent directors, our executive officers could establish policies and enter into transactions without independent review and approval thereof. This could present the potential for a conflict of interest between us and our stockholders, generally, and the controlling officers, stockholders or directors.

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

As a public company, we will have significant additional requirements for enhanced financial reporting and internal controls. We will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting and at some point, a report by our independent registered public accounting firm addressing these assessments. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that we will not, in the future, identify additional areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

We face significant competition in each product we offer and each geographic market in which we operate, and if we fail to compete effectively, we may lose our market share and our profitability may be adversely affected. The aseptic liquid food and beverage carton market in China is rapidly evolving and highly competitive. We expect competition in this market to persist and intensify. We face competition in each major product line we offer and each geographic market in which we operate. We face nationwide competition primarily from Tetra Pack and SIG Cambibloc (“SIG”), both multi-national companies which currently have an estimated combined 90% of the aseptic carton market. We also face competition from domestic aseptic carton suppliers in China. Existing or future competing products may provide (i) better quality and technology, (ii) greater utility, lower cost or other benefits from their intended uses than our products, or (iii) may offer comparable performance at lower cost. Many of these companies are well-established, have substantially greater financial and other resources, and have more experience in manufacturing and marketing than we do. There can be no assurance that we will be able to compete successfully with such competitors. If our products fail to capture and maintain market share, we may not achieve sufficient product revenues, and our business could suffer.

High margins for the aseptic liquid food and beverage cartons business will attract more businesses to enter this field. Our business could suffer as a result of more competition. Our business has enjoyed relatively high profit margins so far due to the fact that we have concentrated in the aseptic liquid food and beverage carton business. Such high margins will attract more businesses to enter into this field. As a result, competition may intensify and our profits may drop significantly.

Risks Related To Doing Business in China

Changes in China’s political or economic situation could harm us and our operational results. Economic reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government could change these economic reforms or any of the legal systems at any time. This could either benefit or damage our operations and profitability. Some of the things that could have this effect are:

level of government involvement in the economy;

control of foreign exchange;

methods of allocating resources;

balance of payments position;

international trade restrictions; and

international conflict.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways. The economic reforms in China have been conducted under a tight grip of the Chinese government. As a result of these differences, we may not develop in the same way or at the same rate as might be expected if the Chinese economy were similar to those of the OECD member countries.

Our business is largely subject to the uncertain legal environment in China and your legal protection could be limited. The Chinese legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which precedents set in earlier legal cases are not generally used. The overall effect of legislation enacted over the past 20 years has been to enhance the protections afforded to foreign invested enterprises in China. However, these laws, regulations and legal requirements are relatively recent and are evolving rapidly, and their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to foreign shareholders, such as the right of foreign invested enterprises to hold licenses and permits such as requisite business licenses. Because most of our officers and directors reside outside of the United States, it may be difficult, if not impossible, to acquire jurisdiction over those persons if a lawsuit is initiated against us and/or its officers and directors by a shareholder or group of shareholders in the United States. Also, because our officers will likely be residing in the PRC at the time such a suit is initiated, achieving service of process against such persons would be extremely difficult. Furthermore, because the majority of our assets are located in the People’s Republic of China (“PRC”) it would also be extremely difficult to access those assets to satisfy an award entered against us in United States court. Moreover, we have been advised that the PRC does not have treaties with the United States providing for the reciprocal recognition and enforcement of judgments of courts.

Recent PRC regulations relating to mergers and acquisitions of domestic enterprises by foreign investorsmay increase the administrative burden we face and create regulatory uncertainties. On August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of Commerce (“MOFCOM”), the State Assets Supervision and Administration Commission (“SASAC”), the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission (“CSRC”), and the State Administration of Foreign Exchange, (“SAFE”), jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“New M&A Rule”), which became effective on September 8, 2006. The New M&A Rule purports, among other things, to require offshore special purpose vehicles (“SPVs”), formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.

On September 21, 2006, pursuant to the New M&A Rule and other PRC laws and regulations, the CSRC, in its official website, promulgated relevant guidance with respect to the issues of listing and trading of domestic enterprises’ securities on overseas stock exchanges (the “Administrative Permits”), including a list of application materials with respect to the listing on overseas stock exchanges by SPVs.

Based on our understanding of current PRC Laws, we believe that the New M&A Rule does not require us or our Chinese shareholders or our entities in China to obtain the CSRC approval in connection with the transaction contemplated by the share exchange agreement, by and among the Company, Jpak and the shareholders of Jpak named therein, dated as of August 9, 2007 (the “Securities Exchange Agreement” or “SEA”), in connection with the Share Exchange because Grand International completed the approval procedures of the acquisition of the 88.23% equity interest in Qingdao Renmin at MOFCOM before September 8, 2006 when the New M&A Rule became effective.

There are, however, substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations, including the New M&A Rule. Accordingly, we cannot assure you that PRC government authorities will not ultimately take a view contrary to our understanding that we do not need the CSRC approval, and PRC government authorities may impose some additional approvals and requirements.

Further, if the PRC government finds that we or our Chinese shareholders did not obtain the CSRC approval, which CSRC may think we should have obtained before our executing the Securities Exchange Agreement, we could be subject to severe penalties. The New M&A Rule does not stipulate the specific penalty terms, so we are not able to predict what penalties we may face, and how such penalties will affect our business operations or future strategy.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. China only recently has permitted provincial and local economic autonomy and private economic activities and, as a result, we are dependent on our relationship with the local government in the province in which we operate our business. Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

Future inflation in China may inhibit our activity to conduct business in China. In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation. During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%. These factors have led to the adoption by Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. While inflation has been more moderate since 1995, high inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Restrictions on currency exchange may limit our ability to receive and use our revenues effectively. The majority of our revenues will be settled in RMB (“RMB”) and, any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business. In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB.

The value of our securities will be affected by the foreign exchange rate between U.S. dollars and RMB. The value of our common stock will be affected by the foreign exchange rate between U.S. dollars and RMB, and between those currencies and other currencies in which our sales may be denominated. For example, to the extent that we need to convert U.S. dollars into RMB for our operational needs and should the RMB appreciate against the U.S. dollar at that time, our financial position, the business of the company, and the price of our common stock may be harmed. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent of our earnings from our subsidiaries in China would be reduced.

Government regulations and environmental matter in China may adversely impact on our business. Our manufacturing operations are subject to numerous laws, regulations, rules and specifications relating to human health and safety and the environment. These laws and regulations address and regulate, among other matters, wastewater discharge, air quality and the generation, handling, storage, treatment, disposal and transportation of solid and hazardous wastes and releases of hazardous substances into the environment. In addition, third parties and governmental agencies in some cases have the power under such laws and regulations to require remediation of environmental conditions and, in the case of governmental agencies, to impose fines and penalties. We make capital expenditures from time to time to stay in compliance with applicable laws and regulations.

We have obtained all permits and approvals and filed all registrations required for the conduct of its business, except where the failure to obtain any permit or approval or file any registration would not have a material adverse effect on our business, financial condition and results of operations. We are in compliance in all material respects with the numerous laws, regulations, rules, specifications and permits, approvals and registrations relating to human health and safety and the environment except where noncompliance would not have a material adverse effect on our business, financial condition and results of operations.

The PRC governmental authorities have not revealed any material environmental liability that would have a material adverse effect on us. We have not been notified by any governmental authority of any continuing noncompliance, liability or other claim in connection with any of our properties or business operations, nor are we aware of any other material environmental condition with respect to any of our properties or arising out of our business operations at any other location. However, in connection with the ownership and operation of our properties (including locations to which we may have sent waste in the past) and the conduct of our business, we potentially may be liable for damages or cleanup, investigation or remediation costs.

No assurance can be given that all potential environmental liabilities have been identified or properly quantified or that any prior owner, operator, or tenant has not created an environmental condition unknown to us. Moreover, no assurance can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the properties will not be affected by the condition of land or operations in the vicinity of the properties (such as the presence of underground storage tanks), or by third parties unrelated to us. State and local environmental regulatory requirements change often.

It is possible that compliance with a new regulatory requirement could impose significant compliance costs on us. Such costs could have a material adverse effect on our business, financial condition and results of operations.

We may have difficulty establishing adequate management, legal and financial controls in the PRC. The PRC historically has been deficient in Western style management and financial reporting concepts and practices, as well as in modern banking, computer and other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards.

Changes in foreign exchange regulations in the PRC may affect our ability to pay dividends in foreign currency or conduct other foreign exchange business. RMB is not a freely convertible currency currently, and the restrictions on currency exchanges may limit our ability to use revenues generated in RMB to fund our business activities outside the PRC or to make dividends or other payments in United States dollars. The PRC government strictly regulates conversion of RMB into foreign currencies. Over the years, foreign exchange regulations in the PRC have significantly reduced the government’s control over routine foreign exchange transactions under current accounts. In the PRC, the State Administration for Foreign Exchange, or the SAFE, regulates the conversion of the RMB into foreign currencies. Pursuant to applicable PRC laws and regulations, foreign invested enterprises incorporated in the PRC are required to apply for “Foreign Exchange Registration Certificates.” Currently, conversion within the scope of the “current account” (e.g. remittance of foreign currencies for payment of dividends, etc.) can be effected without requiring the approval of SAFE. However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE.

In addition, on October 21, 2005, SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies (“Notice 75”), which became effective as of November 1, 2005. Notice 75 replaced the two rules issued by SAFE in January and April 2005.

According to Notice 75:

prior to establishing or assuming control of an offshore company for the purpose of obtaining overseas equity financing with assets or equity interests in an onshore enterprise in the PRC, each PRC resident, whether a natural or legal person, must complete the overseas investment foreign exchange registration procedures with the relevant local SAFE branch;

an amendment to the registration with the local SAFE branch is required to be filed by any PRC resident that directly or indirectly holds interests in that offshore company upon either (1) the injection of equity interests or assets of an onshore enterprise to the offshore company, or (2) the completion of any overseas fund raising by such offshore company; and

an amendment to the registration with the local SAFE branch is also required to be filed by such PRC resident when there is any material change in the capital of the offshore company that does not involve any return investment, such as (1) an increase or decrease in its capital, (2) a transfer or swap of shares, (3) a merger or division, (4) a long term equity or debt investment, or (5) the creation of any security interests.

Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshore companies that have made onshore investments in the PRC in the past are required to complete the relevant overseas investment foreign exchange registration procedures by March 31, 2006. Under the relevant rules, failure to comply with the registration procedures set forth in Notice 75 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including the payment of dividends and other distributions to its offshore parent or affiliate and the capital inflow from the offshore entity, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration regulations.

In addition, SAFE issued updated internal implementing rules (“Implementing Rules”) in relation to Notice 75. The Implementing Rules were promulgated and became effective on May 29, 2007. Such Implementing Rules provide more detailed provisions and requirements regarding the overseas investment foreign exchange registration procedures. The Implementing Rules permits retroactive registration for PRC residents who have established or acquired control of offshore companies that have made onshore investments in the PRC in the past but did not complete the relevant overseas investment foreign exchange registration procedures before March 31, 2006. But there may be penalties on the relevant PRC residents and the relevant onshore company if any foreign exchange transactions were paid out from the relevant onshore company to the relevant offshore company between April 21, 2005 and the date of the application for the registration. However, even after the promulgation of Implementing Rules there still exist uncertainties regarding the SAFE registration for PRC residents’ interests in overseas companies. It remains uncertain whether PRC residents shall go through the overseas investment foreign exchange registration procedures under Notice 75 or Implementing Rules, who may indirectly hold our shares through the participation and exercise of incentive stock option granted by Joyrich Group Limited and Fabregas Group Limited, shareholders of our company.

As a result, we cannot predict how they will affect our business operations following our business combination. For example, our ability to conduct foreign exchange activities following a business combination, such as remittance of dividends and foreign-currency-denominated borrowings, may be subject to compliance with the SAFE registration requirements by such PRC residents, over whom we have no control. In addition, we cannot assure you that such PRC residents will be able to complete the necessary approval and registration procedures required by the SAFE regulations. We will require all our shareholders, following a business combination, who are PRC residents to comply with any SAFE registration requirements, if required by Notice 75, Implementing Rules or other applicable PRC laws and regulations, although we have no control over either our shareholders or the outcome of such registration procedures. Such uncertainties may restrict our ability to implement our business combination strategy and adversely affect our business and prospects following a business combination.

Our future employee stock option plan or stock ownership plan involving any PRC domestic individual will be subject to the administration of foreign exchange in the PRC . In accordance with the Measures of Administration on Foreign Exchange of Individuals promulgated on December 25, 2006 (the “Measures”) and the Implementing Rules of the Measures of Administration on Foreign Exchange of Individuals (the “Implementing Rules of Measures”), which became effective in February 2007, a PRC domestic individual (i.e., a Chinese citizen as defined) who participates in the employees stock option plan or stock plan of an overseas listed company shall conduct foreign exchange related affairs upon the prior approval of SAFE and/or its local branch through its employer or a PRC agency. The dividends of the shares or proceeds received from sale of shares under the stock option plan or stock ownership plan in foreign exchange by such PRC domestic individual shall be remitted and deposited into the special onshore foreign currency bank account in the PRC opened by the employer or the PRC agency. Furthermore, following the Implementing Rules of Measures, SAFE issued the Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company (Hui Zong Fa [2007] No. 78, the “Circular 78”) on April 6, 2007. Circular 78, which introduces a number of new and highly restrictive requirements, applies to any employee stock option plan or stock ownership plan offered by a PRC or non-PRC company whose shares are listed on an overseas stock exchange. Given these PRC regulations, if we approve and implement any employee stock option plan or stock ownership plan which will involve any PRC domestic individual, the SAFE registration for such PRC domestic individual participating in the employee stock ownership plan or stock option plan shall apply and be required. Nevertheless, Circular 78 only applies to the overseas listed company other than an overseas private company and as a result, the incentive stock option granted by Joyrich Group Limited and Fabregas Group Limited, shareholders of our company and private companies, to PRC residents do not fall into such SAFE registration under Circular 78. Currently it is silent in terms of PRC statutory requirements with respect to the PRC domestic individuals participating in employee stock ownership plan or stock option plan of an overseas private company, since there are no applicable PRC laws or regulations. It is unclear how future regulations will impact the incentive stock options granted by by Joyrich Group Limited and Fabregas Group Limited.

Risks Relating to Our Securities

Insiders have substantial control over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur. Our executive officers, directors, and principal stockholders who hold 5% or more of our outstanding common stock own, in the aggregate, approximately 89% of our outstanding common stock. These stockholders are able to control all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.

There is no active public trading market for our common stock and there can be no assurance that one will develop in the future. There is no active public trading market for our common stock. Our common stock is quoted on the OTC Bulletin Board. There can be no assurance that a regular trading market will develop or that if developed, will be sustained. The development of an active trading market will depend on the existence of willing buyers and sellers, the presence of which is not within our control, or the control of any market maker or specialist. The number of active buyers and sellers of our common stock at any particular time may be limited. Under such circumstances, our shareholders could have difficulty selling our shares on short notice, and, therefore, our common stock should not be viewed as a short-term or liquid investment. In the absence of a trading market, a shareholder will be unable to liquidate his investment except by private sale.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. Companies trading on the OTC Bulletin Board must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our company.

Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions, which could impair liquidity and make trading difficult. SEC Rule 15g-9, as amended, establishes the definition of a "penny stock" as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects the market liquidity for our common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. To approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market which, in highlight form, sets forth:

	·	the basis on which the broker or dealer made the suitability determination, and

	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.

The market for penny stocks has experienced numerous frauds and abuses which could adversely impact investors in our stock. OTC Bulletin Board securities are frequent targets of fraud or market manipulation, both because of their generally low prices and because OTC Bulletin Board reporting requirements are less stringent than those of the stock exchanges or NASDAQ.

Patterns of fraud and abuse include:

Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

“Boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

Our management is aware of the abuses that have occurred historically in the penny stock market.

In the event that we raise additional capital through the issuance of equity securities, or securities exercisable for or convertible into our equity securities, our stockholders could experience substantial dilution. If we raise additional capital by issuing equity securities or convertible debt securities, our existing stockholders may incur substantial dilution. Further, any shares so issued may have rights, preferences and privileges superior to the rights, preferences and privileges of our outstanding Securities.

The market price of our common stock may be volatile. The market price of our common stock will likely be highly volatile, as is the stock market in general, and the market for OTC Bulletin Board quoted stocks in particular. Some of the factors that may materially affect the market price of our common stock are beyond our control, such as changes in financial estimates by industry and securities analysts, conditions or trends in industries in which we operate, announcements made by our competitors or sales of our common stock. These factors may materially adversely affect the market price of our common stock, regardless of our performance.

In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our common stock.

We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock. We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future and any return on investment may be limited to the value of our stock. We plan to retain any future earnings to finance growth.

Future sales of our common stock may depress our stock price. Sales of a substantial number of shares of our common stock in the public market could cause a decrease in the market price of our common stock. As of January 8, 2010 , we had approximately 36,368,334 shares of common stock outstanding and that number could increase to 67,918,795(assuming conversion of our outstanding Series A, Series B and Series C preferred stock). We may also issue additional shares of stock and securities convertible into or exercisable for stock in connection with our business. In addition, we have agreed to file this registration statement covering the sale of the shares of our common stock underlying the preferred stock and shares of common stock issued in the financing transactions we completed in 2007 and 2009, which shares will be freely tradable following the effective date of this registration statement. Certain of our shareholders holding an aggregate of 23,005,000 shares of our common stock have agreed that, for a period of six months following the effectiveness of the registration statement for which this prospectus forms a part, they will not, subject to certain limited exceptions set forth in the Lock-Up Agreement (defined herein), including consent by the investors, offer, sell, contract to sell, assign, transfer, hypothecate, pledge or grant a security interest in or other dispose of any shares of common Stock. In addition, for a period of 12 months following such six month period, no such shareholder shall sell more than one-twelfth of their total shares of common stock during any one month period. If a significant portion of our shares of common stock were sold in the public market, the market value of our common stock could be adversely affected.

If you are not an institutional investor, you may purchase our securities in this offering only if you reside within certain states and may engage in resale transactions only in those states and a limited number of other jurisdictions. If you are not an “institutional investor,” you will need to be a resident of certain jurisdictions to purchase our securities in this offering. The definition of an “institutional investor” varies from state to state but generally includes financial institutions, broker-dealers, banks, insurance companies and other qualified entities. In order to prevent resale transactions in violation of states’ securities laws, you may engage in resale transactions only in the states and in other jurisdictions in which an applicable exemption is available or a registration application has been filed and accepted. This restriction on resale may limit your ability to resell the securities purchased in this offering and may impact the price of our shares.

We are planning to seek a listing in a securities manual. Publication of certain information with respect to us in a securities manual is significant because it will allow you, in certain circumstances, to sell the any shares of common stock that you purchase in this offering pursuant to a commonly used selling stockholder exemption to state securities registration known as the “manual exemption.” The manual exemption permits a security to be distributed in a particular state without being registered if the issuer of that security has a listing for that security in a securities manual recognized by the state. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions. Most of the accepted manuals are those published by Standard and Poor’s, Mergent Investor Relation Services, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals, although some states impose additional requirements. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. Other states do not have any provisions and therefore do not expressly recognize the manual exemption. If you are not an institutional investor, you generally will not be permitted to purchase shares in this offering unless there is an available exemption (including the manual exemption) or we register the shares covered by this prospectus in such states. You will be permitted to purchase shares in this offering in New York as we have taken the steps required by the state to allow for the secondary trading of securities under this registration statement.

Anti-takeover provisions of Nevada law, our articles of incorporation and our bylaws may prevent or delay an acquisition of us that shareholders may consider favorable or attempts to replace or remove our management that could be beneficial to our shareholders. Our articles of incorporation and bylaws contain provisions which could make it more difficult for a third party to acquire us without the consent of our board of directors. Our bylaws impose restrictions on the persons who may call special shareholder meetings. Furthermore, the Nevada Revised Statutes contain an affiliated transaction provision that prohibits a publicly-held Nevada corporation from engaging in a broad range of business combinations or other extraordinary corporate transactions with an “interested stockholder” unless, among others, (i) the transaction is approved by a majority of disinterested directors before the person becomes an interested shareholder or (ii) the transaction is approved by the holders of a majority of the corporation’s voting shares other than those owned by the interested shareholder. An interested shareholder is defined as a person who together with affiliates and associates beneficially owns more than 10% of the corporation’s outstanding voting shares. This provision may have the effect of delaying or preventing a change of control of our company even if this change of control would benefit our shareholders.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This prospectus and the documents to which we refer you and incorporate into this prospectus by reference contain forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential” or “continue” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including those described in this prospectus under the heading “Risk Factors” beginning on page 11. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this prospectus, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on these statements, which speak only as of the date of this prospectus. We are under no duty to update any of the forward-looking statements after the date of this prospectus to conform such statements to actual results.

USE OF PROCEEDS

We will not receive any proceeds from the sale by the selling stockholders of the shares of common stock covered by this prospectus.

In May 2007, we received gross proceeds of $5,500,000 in conjunction with the 2007 Financing. In December 2007 we received proceeds of $5,000,000 in connection with the exercise of our Series J Warrants. In November 2009, 23 received gross proceeds of $6,000,000 in conjunction with our Series C financing. We used these proceeds for working capital and general corporate purposes.

MARKET PRICE AND DIVIDENDS ON REGISTRANT’S COMMON EQUITY

AND RELATED STOCKHOLDER MATTERS

Our common stock commenced trading on the Over-The-Counter Bulletin Board on August 15, 2007 and trades under the symbol “JPAK.OB.”

The OTC Bulletin Board is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than NASDAQ, and quotes for stocks included on the OTC Bulletin Board are not listed in the financial sections of newspapers, as are those for the NASDAQ Stock Market.

Transactions in our common stock have been sporadic and do not constitute an active market. Prior to the Share Exchange our shares of common stock did not trade publicly.

The following table sets forth the quarterly high and low bid prices for the common stock since the quarter ended September 30, 2007, the first quarter during which our common stock was listed on an exchange. The prices set forth below represent inter-dealer quotations, without retail markup, markdown or commission and may not be reflective of actual transactions.

	High		Low
Quarter ended September 30, 2007	$	1.40	$	0.65
Quarter ended December 31, 2007	$	1.65	$	1.11
Quarter ended March 31, 2008	$	1.80	$	1.30
Quarter ended June 30, 2008	$	1.56	$	0.95
Quarter ended September 30, 2008	$	1.20	$	0.30
Quarter ended December 31, 2008	$	1.01	$	0.13
Quarter ended March 31, 2009	$	0.75	$	0.05
Quarter ended June 30, 2009	$	0.75	$	0.05
Quarter ended September 30, 2009	$	0.94	$	0.08

At January 8 2010 , the closing bid price of the common stock was $0.65 and we had approximately 39 record holders of our common stock, 4 record holders of our Series A Preferred Stock, 4 record holders of our Series B Preferred Stock and 1 record holder of our Series C Preferred Stock. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.

As a result of the Warrant Exchange Agreement described elsewhere in this Registration Statement, all of the warrants to purchase shares of our common stock that were previously issued to the investors of our 2007 and 2009 financings were exchanged for shares of our common stock. However, the warrants issued to the placement agent of such financings remain outstanding. Accordingly, as of January 8, 2010 , there are (i) warrants to purchase 990,000 shares of common stock at $0.50 per share, which were issued to the placement agent in the 2007 Financing, which will expire in 2013; and (ii) warrants to purchase 750,000 shares of common stock at $0.60 per share, which were issued to the placement agent in the exercise of the Series J Warrants, which will expire in 2013..

Effective August 11, 1993, the SEC adopted Rule 15g-9, which established the definition of a "penny stock," for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person's account for transactions in penny stocks; and (ii) that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) states that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Dividend Policy

We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.

Description of Equity Compensation Plans Approved By Shareholders

We do not have any equity compensation plans. Our Board of Directors may adopt one or more equity compensation plans in the future.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis of our financial condition and result of operations contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of the other reports we file with the Securities and Exchange Commission. Actual results may differ materially from those contained in any forward-looking statements.

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the financial statements of Jpak years ended June 30, 2009 and 2008, as well as the for the three months ended September 30, 2009 and 2008 and should be read in conjunction with such financial statements and related notes included in this report.

Overview

We are engaged primarily in the development, manufacture, and distribution of aseptic liquid food and beverage cartons for milk, fruit juices, soy milk, yogurt drinks, iced tea, wine, sauces and other liquid foods and beverages in China. Since 2004, we have focused on research and development and we believe that we are one of the largest and leading domestic supplier of aseptic liquid food and beverage cartons in China. Our business is primarily in China, but we recently began manufacturing products for export to several other countries.

Company History

Qingdao Renmin commenced operations in China in 1958 as a state-owned, traditional printing and packaging company. Management completed the buyout of 88.23% of the state-owned equity interest in 2004, and in the same year started the development of aseptic liquid food and beverage cartons which was launched in the China market in 2005.

On June 22, 2006, Jpak was incorporated in the Cayman Islands as Winner Dragon Limited. Winner Dragon Limited and was renamed Jpak Group Co., Ltd. on September 18, 2006. Additionally, during September 2006, Jpak completed the acquisition of 88.23% of the equity interest in Qingdao Renmin through Grand International, the 100% owned subsidiary of Jpak. Currently, substantially all of our operations are conducted in China through Qingdao Renmin.

In July 2007, Grand International completed the acquisition of the remaining 11.77% of the state-owned equity interest and now owns 100% of the equity interest of Qingdao Renmin.

Competitive environment

The market for packaging products is competitive. Our operations may be affected by technological advances of competitors, industry consolidation, competitive combination products and new information of marketed products or post-marketing surveillance.

Due to China’s new anti-monopoly laws, some of our larger competitors decreased the amounts of bundled products they offer. Although this may cause such competitors to lower their price points, we believe it will allow us to be more competitive with them. Since the sale of bundled products still maintains a large market share, we will continue to try and compete in the offering of bundled materials and equipment.

Milk scandal, economic crisis and their effects on Jpak

In September 2008, the Chinese health ministry announced that several babies died and thousands were sickened by contaminated milk formula powder during the previous months. The authorities later confirmed that the tainted powder was laced with melamine, an industrial chemical sometimes used to make plastics and fertilizer; adding the chemical to the milk makes the formula test at higher concentrations of protein.

After this scandal, the Chinese government began strengthening its supervision of both the milk and beverage industries. As a result, some smaller plants stopped their production and some larger companies within the industry continue to work on recovering from the damage caused by the scandal.

Prior to the milk scandal, we focused more on the dairy packaged segment as it typically has higher margins than the fruit juice market. Due to this scandal, we terminated our previously developed relationship with Sanlu and cancelled all of their orders. Additionally, orders from Taizinai, one of our other customers in the diary sector, have declined rapidly.

During the year after this milk scandal, management monitored both the short and long-term impact on our business and operations. Compared to the market before the scandal, prices of dairy products have decreased by nearly 10% and although we have been and continue to take every action necessary to minimize the impact of this scandal, since most of our customers are medium and small size companies, our short-term revenue has been adversely impacted and the performance in the fiscal year 2009 was significantly below expectations. However, management’s efforts to realign our marketing effort in the post-scandal market place have shown positive results, as demonstrated by our performance of the first quarter in fiscal year 2010. At present, packages for dairy and tea drink account for a large percentage of our products which cover more than 50% and 30% of our revenue, respectively.

In addition, since the downturn in the worldwide financial and credit markets in the year 2008, some of our key customers have been experiencing a challenging business situation in conjunction with mounting financial pressure.

We are seeing some signs of recovery: the sales volumes of the top two milk producers have almost reached the levels that existed before the scandal.

To limit the impact of the scandal and general market conditions, Management has tightened our credit control by installing ceilings on our customers’ credit limits and more closely monitoring the financial situation of our customers. In addition, we have been dedicated to maintaining our major customers and exploring new clients. Our sales department has developed as many as 35 new domestic clients which amounted to 10.64% of the total sales in the fiscal year 2009 and five more in the quarter ended September 30, 2009. Furthermore, we have signed a contract with one of the Chinese top three milk producers and begun cooperation. We expect we will receive trial orders of 100 million packs from this new customer in the first half of fiscal year 2010 before mass production. We believe this establishment of business relationship will enhance our business performance to a great extent.

Strategy

Our growth strategy consists of consolidating our market leader position among domestic liquid food and beverage aseptic carton suppliers and pursuing expansion in the China market as well as selective Asian and Middle Eastern markets. We intend to achieve our goal by pursuing the following strategies:

●	Increasing output to further penetrate the China market;
●	Offering bundled packaging materials and liquid filling machines;
●	Increasing sales to selective Asian and other markets;
●	Continuing and increasing the recent orders from Russia and other Eastern European markets;
●	Establishing brand names and brand awareness; and
●	Enhance the Company’s competitive advantages through R&D.

Research and Development

In October 2006, Qingdao Renmin invested in Qingdao Delikang Packing Machinery Co., Ltd., (“Qingdao Delikang”), a joint venture with Xi’an Heiniu Machinery, Co. Qingdao Renmin is the 51% owner of Qingdao Delikang. The main business of this joint venture is to research and develop filling machines. We are progressing with related technology and techniques and the filling machines are still in the development period. During our recent testings of the filling machines, they can run at 12,000 packages output per hour and we anticipate that the first machine will begin production trials with our customers in December 2009, which may take three months before client’s final acceptance.

In addition, we successfully developed packaging which can be used in the filling machines created by SIG. Currently, the new products are being tested among our customers and the manufacturing techniques are still being improved. We estimate that approximately US$300 thousand additional costs will incur with the Research and Development (the “R&D”) of this new product improvement. Provided that the product tests are successful, management believes this new packaging will be able to increase our revenue significantly with a relative higher gross margin.

Manufacturing, Sales and marketing

We support commercialized products with manufacturing, sales and marketing efforts. We are also moving forward with additional investments to enhance our infrastructure and business, including capital expenditures for the new production machinery. We have increased our annual capacity from 2 billion packs last year to approximately 3.5 billion packs for our current normal packaging. Additionally, once the packaging we developed for the SIG filling machines passes tests and is successfully launched into the market, if funding is available, management plans to introduce up to eight more production lines with annual capacity of 80 million packs per line.

Management continually reviews the business, including manufacturing operations, to identify actions that will enhance long-term competitiveness. By continuously streamlining the management of the production processes and improving production efficiency, we have decreased the scrap percentage and lowered our costs.

We have expanded our market by increasing the number of transactions with existing key clients and new clients; during fiscal year 2009, we gained a number of additional clients. We have received orders from customers in Russia and Eastern Europe, which currently only account for a small amount of our total sales, but we intend to increase the amount of customers in these regions. Management also believes we are well positioned to attain new strategic clients in the year 2010 with our new filling machines and SIG packaging.

Results of Operations

The following table shows the results of operations of our business.

Comparison of the fiscal year ended June 30, 2009 and 2008

Year Ended June 30,	2009			2008
Sales	$	40,409,375		$	37,263,624
Cost of sales	$	30,259,650		$	27,379,350
Total expenses	$	9,382,754		$	6,054,118
Other income (expense)	$	(342,898	)	$	(24,945	)
Income taxes	$	307,500		$	-
Minority interest	$	(996	)	$	(1,460	)
Net income (loss)	$	117,569		$	3,806,671
Beneficial conversion feature related to issuance of series A&B convertible preferred stock
series A&B convertible preferred stock convertible preferred stock	$	-		$	(3,875,079	)
Foreign currency translation adjustment	$	(82,252	)	$	2,109,409
Comprehensive income (loss)	$	(16,448	)	$	2,066,269

Sales. Total sales were approximately US$40.4 million for the fiscal year ended June 30, 2009 as compared to approximately US$37.3 million for the fiscal year ended June 30, 2008, an increase of approximately US$3.1 million, or 8.4%. As a result of the worldwide economic climate and the recent milk scandal, we reduced our prices in order to increase sales. This price reduction had a negative effect on revenue in the first half of our most recent fiscal year. With the improving macroeconomic environment coupled with our efforts to overcome recent difficulties, we were able to increase sales in the second half of our 2009 fiscal year and our overall year-to-year sales actually increased – although not as significantly as we originally expected.

Cost of Sales. Cost of sales for the fiscal year ended June 30, 2009 was approximately US$30.3 million, or 74.9% of sales, as compared to US$27.4 million, or 73.5% of sales, for the fiscal year ended June 30, 2008. Our cost of sales are primarily composed of the costs of direct raw materials (mainly paper materials, polyethylene materials, aluminum materials, printing materials), labor, depreciation and amortization of manufacturing equipment and facilities, and other overhead. Under the difficult market circumstance of economic crises, we began to lower our sales price beginning in the second quarter in order to enhance our competitive edge and attract new customers. As a result, our gross margins decreased by 1.4%.

Selling, general and administrative expenses. Selling, general and administrative expenses were approximately US$9.4 million for the fiscal year ended June 30, 2009 as compared to approximately US$6.0 million for the fiscal year ended June 30, 2008, an increase of approximately US$3.4 million, or 59%. The increase was mainly due to an increase of research and development expenses and the bad debt allowance for our 2009 fiscal year. The Company also continued to increase the research and development activities, which caused the total R&D expense to reach almost US$2.1 million, as compared to the R&D expense of US$1.3 million in the fiscal year ended June 30, 2008. For the fiscal year ended June 30, 2009, bad debt allowance was approximately US$1.5 million and was the result of a pervious major customer who was near bankruptcy. As a result, Management has tightened our credit control by having caps on our customers’credit limits and closely monitoring the financial situation of our customers.

Net income. Net income was approximately US$0.1 million for the fiscal year ended June 30, 2009 as compared to net income of approximately US$3.8 million for the fiscal year ended June 30, 2008, a decrease of approximately US$3.7 million. The decrease in net income was primarily due to the increase of selling, general and administrative expenses by US$3.4 million. In addition, the sales price reduction decreased the gross profit margin and therefore had a negative impact on net income.

Foreign currency translation adjustment. Our reporting currency is the US dollar. Our local currency, Renminbi (RMB), is our functional currency. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Currency translation adjustments resulting from this process are included in accumulated other comprehensive income in the consolidated statement of shareholders' equity and amounted to loss of US$0.08 as of June 30, 2009 as compared to gain of US$2.1 million as of June 30, 2008. The balance sheet amounts with the exception of equity at June 30, 2009 were translated at RMB6.8259 to US$1.00 as compared to RMB6.8540 at June 30, 2008. The equity accounts were stated at their historical rate. The average translation rates applied to income statement accounts for the years were average exchange rate during the years.

Comprehensive income (loss). The comprehensive loss, which adds the currency adjustment to net income or loss applicable to common stockholders, was approximately US$0.08 million for the fiscal year ended June 30, 2009 as compared to an income of US$2.1 million for the fiscal year ended June 30, 2008, a decrease of $2.2 million. The decrease of income was mainly due to the reduction of our operating profit in this period.

Liquidity and Capital Resources

As of June 30, 2009, we had working capital totaling approximately US$12.6 million, including cash and cash equivalents of US$6.4 million.

Net cash generated in operating activities was US$2.4 for the fiscal year ended June 30, 2009. This net cash generated was primarily due to the increased sales from our operations. The US$1.5 million bad debt provision was a onetime non-cash expense. Net cash generated in operating activities was US$0.9 for the fiscal year ended June 30, 2008. This net cash generated was primarily the result of revenue growth which led to an increase in net income.

Net cash used in investing activities for the fiscal year ended June 30, 2009 totaled US$2.8 million and related primarily to the purchase of property and equipment and non interest-bearing loans provided to a customer. Net cash used in investing activities for the fiscal year ended June 30, 2008 totaled US$3.6 million and related primarily to the purchase of property and equipment.

Net cash used in financing activities for the fiscal year ended June 30, 2009 was US$0.3 million and related primarily to the decrease of trade notes payable and repayment of short-term bank loan. Net cash generated in financing activities for the fiscal year ended June 30, 2008 was US$4.6 million and related primarily to capital contribution and issuance of trade notes payable during the year.

We have entered into several loan agreements with our primary lenders, Industrial and Commercial Bank of China and Qingdao City Commercial Bank, under which we have term loans. As of June 30, 2009, we had an aggregate principal amount of US$2.3 million outstanding under the loan agreements, with amounts mature in January 2010 and bear an interest rate of 5.31% per annum. The loan agreements contain customary affirmative and negative covenants and were secured by the property and equipment of Qindao Renmin. As of June 30, 2009, we were in material compliance with the terms of our loan agreements.

Comparison of the three months ended September 30, 2009 and 2008

Three Months Ended September 30	2009			2008
Sales	$	16,561,920		$	9,430,330
Cost of sales	$	11,837,612		$	6,995,902
Total expenses	$	2,888,343		$	2,107,661
Other income (expense)	$	(100,563	)	$	4,111
Income taxes	$	242,838		$	-
Minority interest	$	(56	)	$	(492	)
Net income	$	1,492,620		$	331,370
Undistributed income attributable to
Series A&B convertible preferred stockholders convertible preferred stock	$	(654,946	)	$	(146,079	)
Foreign currency translation adjustment	$	32,030		$	(38,908	)
Comprehensive income	$	1,524,650		$	292,462

Sales. Total sales were approximately US$16.6 million for the three months ended September 30, 2009 as compared to approximately US$9.4 million for the same period ended September 30, 2008, an increase of approximately US$7.1 million, or 75.6%. The significant increase of sales reflected the extent of our recovery and growth from the milk scandal in the same period of 2008. In addition to the new client development, we are improving our cooperation with our existing clients such as Yinlu and Wonderson which accounted for approximately 39% and 25% of total increased amount of sales, respectively.

Cost of Sales. Cost of sales for the three months ended September 30, 2009 was approximately US$11.8 million, or 71.5% of sales, as compared to US$7.0 million, or 74.2% of sales, for the same period ended September 30, 2008. Our cost of sales are primarily composed of the costs of direct raw materials (mainly paper materials, polyethylene materials, aluminum materials, printing materials), labor, depreciation and amortization of manufacturing equipment and facilities, and other overhead. The fall of the raw material prices, together with the rise of outputs which helped to increase the economic scale and reduce material wastage, led to an increase of gross margin by 2.7%.

Selling, general and administrative expenses. Selling, general and administrative expenses were approximately US$2.9 million for the three months ended September 30, 2009 as compared to approximately US$2.1 million for the same period ended September 30, 2008, an increase of approximately US$0.8 million, or 37%. The increase was mainly due to an increase of post-sale service expenses and research and development expenses. The Company continuously strengthened the research and development activities. The total R&D expense was almost US$0.7 million, compared to the R&D expense of US$0.6 million in the same period ended September 30, 2008. With the increase of sales in the three months ended September 30, 2009, post-sale service and freight expenses increased from US$0.07 million to US$0.55 million and from US$0.2 million to US$0.3 million, respectively.

Net income. Net income was approximately US$1.5 million for the three months ended September 30, 2009, compared to net income of approximately US$0.3 million for the same period ended September 30, 2008, an increase of approximately US$1.2 million, or 352%. The increase in net income was primarily due to the significant growth in revenue in the period ended September 30, 2009.

Currency translation adjustments resulting from this process are included in accumulated other comprehensive income in the consolidated statement of shareholders' equity and amounted to gain of US$0.03 million as of September 30, 2009 as compared to loss of US$0.04 million as of September 30, 2008. The balance sheet amounts with the exception of equity at September 30, 2009 were translated at RMB6.81663 to US$1.00 as compared to RMB6.83527 to US$1.00 at September 30, 2008. The equity accounts were stated at their historical rate. The average translation rates applied to income statement accounts for the three months were average exchange rate during the quarter.

Comprehensive income. The comprehensive income, which adds the currency adjustment to net income applicable to common stockholders, was approximately US$1.5 million for the three months ended September 30, 2009, compared to an income of US$0.3 million for the three months ended September 30, 2008, an increase of $1.2 million. The increase of comprehensive income was mainly due to the increase of our operating profit in this period.

Liquidity and Capital Resources

As of September 30, 2009, we had working capital totaling approximately US$16.2 million, including cash and cash equivalents of US$7.3 million.

Net cash used in operating activities was US$1,994,152 for the three months ended September 30, 2009. This net cash used was primarily due to the increase of accounts receivable, advanced payment and inventory balances as a result of the increase in sales. Net cash used in operating activities was US$158,266 for the same period ended September 30, 2008. This net cash used was primarily due to the decrease of account payable during the period.

Net cash used in investing activities for the three months ended September 30, 2009, totaled US$0.15 million and related primarily to the purchase of property and equipment. Net cash used in investing activities for the same period ended September 30, 2008 totaled US$0.25 million and also related primarily to the purchase of property and equipment.

Net cash generated in financing activities for the three months ended September 30, 2009, was US$3.0 million and related primarily to the issuance of trade notes payable and proceeds from additional borrowings from employees in this period. Net cash generated in financing activities for the same period ended September 30, 2008 was US$0.7 million and related primarily to issuance of trade notes payable during the period.

We have entered into several loan agreements with our primary lenders, Industrial and Commercial Bank of China and Qingdao City Commercial Bank, under which we have term loans. As of September 30, 2009, we had an aggregate principal amount of US$2.3 million outstanding under the loan agreements, with amounts mature in January 2010 and bear an interest rate of 5.31% per annum. The loan agreements contain customary affirmative and negative covenants and were secured by the property and equipment of Qindao Renmin. As of September 30, 2009, we were in material compliance with the terms of our loan agreements.

On November 3, 2009, JPAK completed a financing with one accredited investor. The financing raised gross proceeds of $6.0 million with net proceeds to JPAK of approximately $5.9 million. As a result of the financing, JPAK issued 12,000,000 shares of Series C Convertible Preferred Stock at a price of $.50 per share. In addition, JPAK also issued: (i) Series E Warrants to purchase an aggregate of 6,000,000 shares of common stock at an exercise price of $.60 per share until November 2014, (ii) Series F Warrants to purchase an aggregate of 6,000,000 shares of common stock at an exercise price of $.70 per share until November 2014. Under the terms of the financing agreements, these warrants can be exercised by cash payment or via cashless method in the event that an effective registration statement is not available as required by the registration rights agreement between JPAK and the investor. Management believes the new financing will provide additional capital for us to capture the opportunities for further growth.

Critical Accounting Policies and Estimates

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Jpak’s 2008 10-K for disclosures regarding Jpak’s critical accounting policies and estimates. The interim financial statements follow the same accounting policies and methods of computations as those for the year ended June 30, 2009.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Revenue recognition

We derive our revenues primarily from sales of printing packaging products. We generally recognize product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and the collectability is probable. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. We are generally not contractually obligated to accept returns.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On October 2, 2007, we appointed Patrizio & Zhao, LLC, as our independent registered public accounting firm to replace Bagell, Josephs, Levine & Company, LLC following their dismissal on October 2, 2007. This action was ratified by our board of directors on October 2, 2007. During our fiscal years ended December 31, 2006 and 2005 and the subsequent interim period through October 2, 2007, we had no disagreements with Bagell, Josephs, Levine & Company, LLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Bagell, Josephs, Levine & Company, LLC would have caused it to make reference to the subject matter of the disagreements in its report. Bagell, Josephs, Levine & Company, LLC’s report on our financial statements for the fiscal years ended December 31, 2006 and 2005 did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. A letter addressed to the SEC from Bagell, Josephs, Levine & Company, LLC stating that it agrees with the above statement was attached as an exhibit to our Current Report on 8-K filed with the SEC on October 8, 2007.

BUSINESS

Overview

We believe we are the largest and leading domestic supplier of aseptic liquid food and beverage cartons in China. Our business is primarily in China, but we have recently begun contract manufacturing products for the export market.

Established in 1958, Qingdao Renmin was a state-owned, traditional printing and packaging company. On August 21, 2006, Grand International entered into a sales and purchase agreement with three of the then-existing five shareholders (the “Original Shareholders”) of Qingdao Renmin, pursuant to which Grand International purchased 88.23% of the equity interest in Qingdao Renmin. The total purchase consideration was RMB 40,999,000 which was determined based upon the net asset value of Qingdao Renmin as of August 21, 2006. On September 5, 2006, this transfer was approved by the Qingdao Municipal Bureau of Foreign Trade and Economic Cooperation, and the registration with the Qingdao State Administration for Industry and Commerce was completed on December 7, 2006. As a result of this transfer, Grand International acquired an 88.23% equity interest in Qingdao Renmin. In July 2007, Grand International purchased the remaining 11.77% state-owned equity interest in Qingdao Renmin and now owns 100% equity interest in Qingdao Renmin.

The acquisition of Qingdao has been accounted for in the financial statements using the reverse merger accounting method.

We have experienced significant growth in our business in recent years. Our total net sales reached US$37.3 million for the fiscal year ended June 30, 2008, up $6.9 million from US$30.4 million for the fiscal year ended June 30, 2007 and US$30.4 million for the fiscal year ended June 30, 2007, up from US$22.6 million for the fiscal year ended June 30, 2006. Additionally, our total net sales for reached US$37.3 million for the year ended June 30, 2008 as compared to approximately US$30.4 million for the year ended June 30, 2007, an increase of approximately US$6.9 million or 23%.

Our Corporate Structure

We were incorporated in the state of Nevada on December 6, 2004 under the name RX Staffing, Inc. On August 9, 2007 we entered into that certain Share Exchange, pursuant to which Jpak became our wholly owned subsidiary. In connection with the Share Exchange, we changed our corporate name to Jpak Group, Inc. We function as a holding company and, through our subsidiaries, own 100% equity interest in Qingdao Renmin, our operating subsidiary.

Jpak was incorporated in the Cayman Islands on June 22, 2006 under the name Winner Dragon Limited. On September 18, 2006, Winner Dragon Limited was renamed Jpak Group Co., Ltd. In September 2006, Jpak completed the acquisition of 88.23% of the equity interest in Qingdao Renmin through Grand International, the 100% owned subsidiary of Jpak. Substantially, all of our operations are conducted in China through Qingdao Renmin. In July 2007, Grand International purchased the remaining 11.77% state-owned equity interest in Qingdao Renmin and now owns 100% equity interest in Qingdao Renmin.

Our Industry

We believe that the liquid food and beverage carton market in China is approximately 26 billion packages annually with sales of US$1.68 billion. We believe the key factor that will continue to drive the growth of the liquid food and beverage carton market in China is the rapidly increasing per capita consumptions of milk and non-carbonated beverages in the major coastal cities as well as the rural regions.

Based on studies we have completed, we believe the annual consumption in the Asian (excluding China and Japan) and Middle Eastern markets is estimated at 21 billion and 4 billion packages, respectively, with double digit annual growth rates expected in most countries. We attribute such growth to a steady increase in consumption of aseptic packaged milk and other beverage products. We also believe that multinational suppliers currently supply nearly 90% of aseptic packaged milk and other beverage products, whilst domestic suppliers supply the remaining 10% of the liquid food and beverage packaging market in China.

Our Growth Strategy

We strive to consolidate our market leader position among domestic liquid food and beverage aseptic carton suppliers and intend to pursue expansion in the China market as well as selective Asian and Middle Eastern markets. We intend to achieve our goal by pursuing the following strategies:

Increasing output to further penetrate the China market.

We are continuing our efforts to increase our production output as well as widen the range of aseptic carton products to further penetrate the packaged milk and other liquid food and beverage markets in China.

Offering bundled packaging materials and filling machines.

We are developing aseptic liquid filling machines to augment the sales of our aseptic carton packaging products, enabling us to offer a complete packaging solution as well as increase per customer sales.

Increasing sales to selective Asian and other markets.

We are aggressively pursuing Asian, Middle Eastern, Russsia, Eastern European and other markets to increase market penetration via direct sales and channel partnerships in selective countries.

Establishing brand names and brand awareness.

We are continuing to establish a strong corporate identity as well as enhance our product brand names and brand awareness to enhance an accelerated adoption of our existing and new products.

Our Products

We provide a wide variety of aseptic liquid food and beverage carton products intended to address the needs of our customers.

Aseptic Packaging Technology

We use aseptic packaging technology in our products. An aseptic liquid food and beverage processing and packaging ensure that the packaged contents and packaging materials are free of harmful bacteria and microorganisms in a closed, sterile production environment under ultra high temperature treatment.

Our cartons are designed and constructed for processing under aseptic conditions, keeping the liquid foods and beverages safe, fresh and flavorful without refrigeration or preservatives during storage, and allowing the liquid food and beverages to retain their nutrition, taste, texture and color.

Liquid Food and Beverage Cartons

Our aseptic liquid food and beverage cartons are made of multiple layers of polyethylene, paper board, and aluminum materials which are intended for the packaging of milk, fruit juices, soy milk, yogurt drinks, iced tea, coffee, sauces and others. Aseptic cartons are available in brick or pillow shapes in standard and slim formats, with various filling volume specifications.

Aseptic Carton Features and Advantages

Our aseptic liquid food and beverage cartons are produced with several proprietary, core product and process technologies which enable the packaging materials to have many distinctive features and advantages, including:

Aseptic packaging materials keep the liquid foods and beverages safe, fresh, and flavorful.

Cartons ensure the packaged contents are free of harmful bacteria and microorganisms.

Multi-layered materials are moisture-, air- and light-proof, allowing the packaged contents to retain their original nutrition, taste, texture and color.

Aseptic packaged materials allow liquid foods and beverages to be stored for a long period of time without refrigeration and preservatives.

Special printing process makes the carton package printing attractive and eye-catching.

Durable packaging materials are suitable for long distance shipping and handling.

A variety of shapes, forms and volume specifications to suit the various packaging needs.

Packaging materials of used and discarded cartons are renewable and recyclable.

Manufacturing

Our manufacturing and operations facility is 18,000 square meters with a current annual production output of up to 3.5 billion aseptic liquid food and beverage cartons. Our production facility is equipped with both imported and self-developed equipment and machines, including printing production lines, coating/forming processing lines, and other cutting and processing equipment.

We have established a stringent quality assurance system that is in conformance with ISO9001:2000, Aseptic Liquid Food Packaging Standards, and Food Safety and Management Requirements. We have obtained the certificates of ISO9001-2000, HACCP Food Safety and Management System as well as Advanced Technology and Product Enterprise.

We believe that our current production wastage ratio is one of the lowest in the industry. We are striving to minimize the wastage by enhancing online testing procedures, employee training as well as improving equipment and fixture efficiency.

Suppliers

Raw materials and supplies are generally procured from domestic suppliers, including paper materials, polyethylene materials, aluminum materials, and other materials. We rely on a single or limited number of suppliers for such raw materials, parts, components and other items. Although there are many suppliers for each of these raw materials, parts, components and other items, we are dependent on a limited number of suppliers for many of the significant raw materials and components. We do not have any long-term or exclusive purchase commitments with any of our suppliers.

Sales, Customers and Marketing

We sell and distribute our aseptic liquid food and beverage cartons directly to our customers who are manufacturers and suppliers of packaged milk, fruit juices, soy milk, yogurt drinks, iced tea, coffee, sauces and other liquid foods and beverages throughout China.

We are developing and expanding our customer base via distributors in selective Asian and the Middle Eastern countries to target manufacturers and suppliers of packaged milk, fruit juices, iced tea and other non-carbonated drinks. In the first quarter of our 2009 fiscal year, we began receiving orders from customers in Russia and Eastern Europe; although these customers currently only account for a small amount of our total sales, we plan to try and expand the amount of customers in these regions. Management also believes we are well positioned to attain new strategic clients in the coming year with our new filling machines and SIG packaging.

We conduct our marketing activities to further penetrate the China market and to enter selective Asian and Middle Eastern markets, including: attending industry trade shows, advertising in industry publications, using internet marketing, collaborating with the government as well as increasing brand and brand awareness.

Competition

China Market

The aseptic liquid food and beverage carton market in China is dominated by Tetra Pack, followed by SIG, both multi-national suppliers with a combined 90% of the market share. Tetra Pack provides packaging materials, packaging machines and processing solutions for the food and beverage industries. Worldwide, it is the dominant market leader in these industries. SIG is a Swiss public company that provides food and beverage carton and plastic bottle packaging materials and filling machines. In 2006 it had an estimated worldwide sales of 1.3 billion Euros. Domestic suppliers currently have an estimated 10% of the China aseptic carton market and have been gaining market shares from Tetra Pack and SIG. These gains have been primarily due to their lower offering price with comparable products. While domestic suppliers have penetrated the non-carbonated soft drink carton market, the higher growth milk carton market continues to be dominated by Tetra Pack and SIG.

We believe we currently lead the domestic suppliers with an annual production output of two billion packages. We plan to expand our production capacity and increase our market penetration with a bundle of sales of aseptic cartons and liquid filling machines to our existing and new customers.

Asian and Middle Eastern Markets

Tetra Pack dominates the aseptic carton packaging materials and filling machines as well as the liquid food and beverage processing markets in most of the Asian and Middle Eastern countries. Since 2004, SIG has established manufacturing plants in Thailand, Vietnam and Saudi Arabia and has taken market shares from Tetra Pack in these regional markets.

With the exception of China, where alternative domestic suppliers exist, Tetra Pack and SIG are not challenged by other suppliers in most Asian and Middle Eastern markets. China based suppliers however, like us, are beginning to enter these markets. Collectively, we are expected to capture a portion of the market share over the course of the next few years.

Our Competitive Strengths

Leveraging our competitive strengths, we believe that we have established ourselves as a leader among domestic suppliers in China and are in a strong position to challenge the dominant market positions held by other suppliers. We are aggressively penetrating the aseptic carton market and expect to take significant market shares within next few years. Our competitive strengths include:

Expedited development and time-to-market capability.

We have demonstrated our ability to timely develop and bring to market a line of aseptic carton products within an eighteen 18 month time frame. We will continue capitalizing on this capability for our newly developed products.

Substantially lower manufacturing system cost.

We have developed a complete manufacturing system for the production of aseptic cartons at a cost that we believe to be significantly lower than the industry’s average. We believe that this significant cost saving makes our products the most price-competitive in the market.

Significantly reduced direct cost and lower price.

We have developed proprietary product and process technologies that allow for minimal production wastage and we believe one of the lowest direct costs in the industry, collectively giving us a critical competitive edge and thus allowing us to offer attractive prices to customers.

High product quality and proven market acceptance.

Our aseptic carton products are proven to be comparable to those of Tetra Pak and SIG and are well-received by our customers.

Experienced and cohesive management team for rapid growth.

Most key executives have been with us and working together for over 20 years. This experienced and cohesive management team is committed and ready to rapidly grow our business.

Intellectual Property

We develop our own proprietary product and process technologies for the aseptic carton packaging materials. We have filed a total of 22 patents on material structure, production equipment fixtures, testing equipment and have been granted seven patents with another 15 pending. Our seven issued patents expire between April and November 2015.

We have submitted two registered trademark applications, one of which has been accepted by the State Administration for Industry and Commerce of China. We are in the process of submitting another registered trademark application.

Government Regulation

The PRC government regulates the printing and packaging industry. This section summarizes the principal PRC regulations relating to our businesses:

We operate our business in China under a legal regime consisting of the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under our authority, including the General Administration of Press and Publication, or GAPP, the State General Administration of the Quality Supervision, Inspection and Quarantine (“AQSIQ”), the State Administration for Industry and Commerce (“SAIC”), and their respective authorized local counterparts.

Regulations on Printing and Manufacturing of Food and Beverage Packaging Products

The principal regulations governing printing and manufacturing of food and beverage packaging products in China consist of the Regulations on the Administration of Printing Industry, the Interim Rules on Establishment of the Foreign Invested Printing Companies, the General Specification on the Manufacturing License of Food Packaging Products, Vessel, Tools and Other Products. Below is a summary of relevant provisions of these regulations.

Regulations on the Administration of Printing Industry

On August 2, 2001, the State Council enacted the Regulations on the Administration of Printing Industry, or Printing Regulations. Such Printing Regulations set forth detailed requirements on the qualification and operations of the operators of printing industry. Under the Printing Regulations, the operators of printing industry shall obtain the operating license, such as the “License for Printing Operations”. Our subsidiary, Qingdao Renmin, has been granted a License for Printing Operations issued by the Shandong Provincial Bureau of Press and Publication that allows Qingdao Renmin to operate the printing business. Qingdao Renmin has also obtained a License for Special Industry issued by the Qingdao Municipal Bureau of Public Security on August 9, 2001. However, such License for Special Industry has not been required for the printing industry since the promulgation of the Decision of the State Council on the Enactment of Administrative Licensing for the Expressly Reserved Items Subject to Administrative Examination and Approval Rules on June 29, 2004.

General Specification on the Manufacturing License of Food Packaging, Vessel, Tools and Other Products

Pursuant to the General Specification on the Manufacturing License of Food Packaging, Vessel, Tools and Other Products, or General Specification, promulgated by AQSIQ on July 18, 2006 and came into enforcement on the same day, the food and beverage packaging products must meet certain quality standards and the operators of the food packaging shall obtain a Manufacturing License from the AQSIQ. Such General Specification sets forth the detailed examination and approval procedures for applying the Manufacturing License, which include five steps to obtain the license: (i) preliminary examination at the local counterpart of AQSIQ, (ii) testing manufacturing, (iii) on-the-spot verification, (iv) examination of sample product and (v) the final approval and issuance of the license. We have obtained the Manufacturing License issued by AQSIQ in April 2007.

Regulations on Foreign Invested Printing Companies

Foreign invested printing companies are specifically governed by the Interim Rules on Establishment of the Foreign Invested Printing Companies, jointly promulgated by the GAPP and the Ministry of Commerce of China, or MOFCOM, in 2002 in accordance with the Law on Sino-Foreign Equity Joint Venture (2001), the Law on Sino-Foreign Contractual Joint Venture (2000), the Law on Wholly Foreign-Funded Enterprises (2000) and the Regulations on the Administration of Printing Industry.

The Interim Rules on Establishment of the Foreign Invested Printing Companies allow and encourage the establishment of the sino-foreign equity joint ventures and wholly foreign-funded enterprises engaged in the printing business of packaging products. Furthermore, such sino-foreign equity joint ventures and wholly foreign-funded enterprises shall also obtain the License for Printing Operations to operating the printing business in China, in accordance with the Regulations on the Administration of Printing Industry and other applicable laws and regulations.

We have applied and updated the License for Printing Operations for Qingdao Renmin since its 88.23% equity interests have been acquired by Grand International and subsequently transformed into the sino-foreign equity joint ventures.

Research and Development

Development focus

Our research and development effort focuses on developing proprietary technology in aseptic packaging materials and liquid filling machines to meet the growing market demand. Our research and development expenditures were approximately US$2.1 and US$1.30 million for the fiscal years ended June 30, 2009 and 2008, respectively.

Research team

We have an experienced and multi-disciplined research and development team of engineers and technicians with a proven track record working with aseptic packaging materials and machinery.

Laboratory equipment

Our research and development center has 6 laboratories and is built with state-of-the-art laboratory equipment for experiments on, but not limited to, packaging printing, plastic materials, aluminum materials, compound material strength, microorganism assessments and trial filling processing.

Projects and partnerships

We currently have 22 research and development projects ongoing, 4 of which are classified as “Focused Innovative Technology Development Projects” by Qingdao City. We have formed numerous strategic research and development partnerships with educational institutions, research institutions, material suppliers, machinery builders and liquid food and beverage manufacturers.

Product Pipeline

We have a continuous pipeline for (i) new products for aseptic liquid food and beverage carton packaging materials, (ii) current product extension and (iii) new products. In our efforts to develop our own line of liquid food and beverage filling machines, we launched a prototype of our liquid filling machine in the fourth quarter of 2008 and are hoping that after consumer testing, we can have a market launch date sometime in the first quarter of fiscal 2010. Currently, the filling machines can run at 12,000 packages output per hour during our tests and we are currently monitoring the stability of all parts of the machines to determine if any additional adjustments are needed.

In addition, we successfully developed packaging which can be used in the filling machines created by SIG (SIG is a Swiss public company that provides food and beverage carton and plastic bottle packaging materials and filling machines and maintains a huge portion of the market share.) Currently, the new products are being tested by ourselves and among our customers. Provided that the product tests are successful, the sales of SIG packaging are expected to generate a significant amount of revenue

Employees

As of June 30, 2009, we had 432 employees, consisting of 287 in manufacturing and operation, 37 in research and development, 20 in sales and marketing and 88 in general and administrative. All of our employees are full-time employees.

None of our personnel are represented under collective bargaining agreements. We consider our relations with our employees to be good.

Description of Property

All land in China is owned by the State. Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes. In the case of land used for industrial purposes, the land use rights are granted for a period of 50 years. This period may be renewed at the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations. Qingdao Renmin currently owns land use rights to approximately 277,480 square meters of land consisting of manufacturing facilities, employee quarters and office buildings in Qingdao, China. Qingdao Renmin holds four State-owned Land Use Rights and the Building Ownership Certificates for the land use rights and buildings owned by it. On the State-owned Land Use Rights and the Building Ownership Certificate (No.: Qing Fang Di Quan 3738), State-owned Land Use Rights and Building Ownership Certificate (No.: Qing Fang Di Quan 14621) and State-owned Land Use Rights and Building Ownership Certificate (No.: Qing Fang Di Quan 45171), there is a note stating that because the information of the land is incomplete, the land use right registration is pending. On the State-owned Land Use Rights and Building Ownership Certificate (No.: Qing Fang Di Quan 19508), the type of the land use right is shown as allocated, meaning that no consideration needed to be paid for the land use right.

We intend to expand our manufacturing facility over the next few years but believe that we currently have enough land to satisfy such expansion.

Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not aware of any pending or threatened legal proceeding that, if determined in a manner adverse to us, could have a material adverse effect on our business and operations.

MANAGEMENT

Executive Officers, Directors and Key Employees

The following individuals were appointed as our officers and directors upon the completion of the Share Exchange between us and Jpak. The officers and directors below were not affiliated with us prior to the Share Exchange. The officers and directors of the company prior to the Share Exchange resigned from their positions in connection with the Share Exchange. Additionally, on May 8, 2008, we appointed Dongliang (Frank) Su as our Acting Chief Financial Officer; Ming Qi resigned as our Chief Financial Officer on that same date, although he will maintain his position as a director on our Board. Mr. Su is not related to any of our directors or executive officers and is not involved in any transaction that is required to be disclosed under Item 404(a) of Regulation S-K. We appointed Mr. Su as part of our efforts to ensure the proper interpretation of accounting issues in the future and avoid future restatements of our financial statements. We believe that Mr. Su’s experience will benefit us greatly and assist us to maintain adequate controls and procedures, as well as accurately prepare our financial statements.

Name	Age	Position

Yijun Wang	57	Chairman of the Board of Directors, Chief Executive Officer and President

Dongliang (Frank) Su	41	Acting Chief Financial Officer

Qingjun Yang	53	Director and President (Qingdao Renmin)

Huatian Sha	53	Director and Secretary

Ming Qi	44	Director

Stewart Shiang Lor	45	Director

Yuanbo Wang	52	Vice President, Technology (Qingdao Renmin)

Ligui Jiao	50	Vice President, Manufacturing (Qingdao Renmin)

Mr. Yijun Wang, the Chairman of the Board and Chief Executive Officerand President. Mr. Wang is our current President and Chairman of the Board of Directors. He has over 30 years of working experience in corporate management, product development, manufacturing and operations, technology management as well as government relations. He has been with Qingdao Renmin and served as CEO since 1984. Prior to joining Qingdao Renmin, Mr. Wang served in several technical management positions at Qingdao Light Industrial Co., Ltd. He has received numerous government and industry awards and distinctions, among them the “Outstanding Corporate Executive - Qingdao”; and “National Top Executive in Packaging Industry”. Mr. Wang is a certified Senior Economist and a certified Senior Mechanical and Electrical Engineer. He graduated from Nanjing Machinery and Electrical Institute, Qingdao Light Industrial Management School, and National Economic Council University.

Mr. Dongliang (Frank) Su, Acting Chief Financial Officer. Prior to becoming our Acting CFO, he founded Kvalue Financial Services Co., Ltd. (Kvalue), an advisory firm specialized in providing CFO advisory services and IPO related financial services. Prior to Kvalue, Mr. Su worked as a Senior Manager for KPMG China, where he was one of the founders of the departments of Internal Audit Services and Business Performance Services at KPMG Shanghai. Mr. Su is also the CFO of Magiland Property, a company in Qingdao, China. Mr. Su has over sixteen years of experience in business, financial management, internal auditing and consulting and led many projects dealing with Sarbanes-Oxley Act Section 404, finance function transformation, assurance and internal auditing for Fortune 500 companies and local conglomerates in China. Mr. Su is a US Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), and Certified Internal Auditor (CIA). Mr. Su earned his Master of Business and Administration (MBA) with distinction from York University, Canada.

Mr. Qingjun Yang, Director. Mr. Yang is a Director and he serves as President of Qingdao Renmin and also leads the Marketing and Sales Division. He has been with Qingdao Renmin for over 30 years, starting as a technical manager on the production line and ultimately becoming the President in 2001. Mr. Yang is experienced in technical management, marketing and sales, distribution management, product development as well as manufacturing and operations. Mr. Yang has received several government and industry awards and distinctions, including the “Top Packaging Executive in Shandong Province - 2005”. He has completed several technical and management courses at Beijing Printing Institute, Ministry of Light Industry Management School, and Qinghua University. Mr. Yang received his bachelor degree in Mechanical Engineering from Qingdao Zhigong University.

Mr. Huatian Sha, Director and Secretary. Mr. Sha is a Direcotr and our Secretary. As Vice President, Accounting (Qindgao Renmin), he is responsible for Qingdao Renmin’s finance and accounting operations. He has more than 30 years of extensive experience in finance and accounting, operations management and technical management. Prior to joining Qingdao Renmin, Mr. Sha served various operations and accounting management positions at Xinhe Cultural and Sporting Co., Ltd., Qingdao State Holding Co., Ltd, and Qingdao Sewing Machinery Co., Ltd. Mr. Sha graduated from Shandong Mechanical and Industry College and Qingdao State Management School.

Mr. Ming Qi, Director. Mr. Qi is a Director of Qindgao Renmin. He has over 20 years of extensive experience in corporate and financial management, international trade and export management, manufacturing and operations, sales and marketing. Prior to joining Qingdao Renmin, he was General Manager at a Qingdao food process plant of Zhengda Group and served senior management positions at several Qingdao based companies. Mr. Qi received bachelor degree in Mechanical Engineering from Shandong University.

Mr. Stewart Shiang Lor, Director. Mr. Lor serves as Director. He has over 20 years of working experience in diverse disciplines including corporate management, manufacturing and operations, international trade, corporate finance and investment, information technology as well as sales and marketing. Mr. Lor cofounded Lorons International Corporation, PowerBridge Technology Co., Ltd. and Cmark Capital Co., Ltd. and served senior management positions at several U.S. and China based companies. Mr. Lor graduated from State University of New York at Stony Brook and studied Management at Baruch College.

Mr. Yuanbo Wang, Vice President, Technology (Qindgao Renmin). Mr. Wang is the Vice President, Technology (Qindgao Renmin) and is responsible for our research and development, quality assurance and equipment management. He has 35 years of extensive experience in product design and formulation, production process and equipment research, development and optimization as well as quality assurance and control. Prior to joining Qingdao Renmin, Mr. Wang served as Vice President at Qingdao Sensitization Material Co., Ltd. and Operations Manager at Qingdao Carpet Co., Ltd. He received bachelor degree in Mechanical Engineering from Shandong Chemical Engineering University.

Mr. Ligui Jiao, Vice President, Manufacturing (Qindgao Renmin). Mr. Jiao is the Vice President, Manufacturing (Qindgao Renmin) and is responsible for our manufacturing, inventory and material management operations. He has over 30 years of working experience in production planning, production management, inventory control, and material management as well as manufacturing resource planning applications. Prior to joining Qingdao Renmin, Mr. Jiao served in various equipment and manufacturing management positions at Qingdao Textile Electronics Equipment Co., Ltd. Mr. Jiao graduated from Qingdao Zhigong University in Mechanical and Process Engineering and Shandong Electrical and Industry College in Economics and Management.

Board Committees

Our board of directors intends to appoint such persons and form such committees as are required to meet the corporate governance requirements imposed by the national securities exchanges. Therefore, we intend that a majority of our directors will eventually be independent directors and at least one director will qualify as an “audit committee financial expert.” Additionally, our board of directors is expected to appoint an audit committee, nominating committee and compensation committee, and to adopt charters relative to each such committee. Until further determination by our board of directors, the full board of directors will undertake the duties of the audit committee, compensation committee and nominating committee.

Summary Compensation Table

The Company

We have not paid any compensation to our chief executive officer or any other executive officer during the last three fiscal years.

Jpak

The following table sets forth the compensation paid by Jpak to its chief executive officer and chief financial officer and to all other executive officers for services rendered during the last three fiscal years. In reviewing the table, please note that:

	·	The compensation amounts paid to Yijun Wang reflects compensation paid to him by the operating subsidiaries of Jpak during the reported periods; and

	·	No officer earned more than US$150,000 per annum

Summary Compensation Table

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)
(a)	(b)	(c)	(d)	(e)	(f)
Yijun Wang Chief Executive Officer	2009	120,000	0	0	0
Yijun Wang Chief Executive Officer	2008	50,000	0	0	0
Yijun Wang Chief Executive Officer	2007	50,000(1)	0	0	0
Ming Qi Chief Accounting Officer	2009	90,000	0	0	0
Ming Qi Chief Accounting Officer	2008	30,000(2)	0	0	0
Ming Qi Chief Accounting Officer	2007	30,000(3)	0	0	0
Dongliang (Frank) Su Acting Chief Financial Officer (3)	2009	72,000	0	20,000	0
Dongliang (Frank) Su Acting Chief Financial Officer	2008	18,000(4)	0	0	0
Dongliang (Frank) Su Acting Chief Financial Officer	2007	0	0	0	0


Name and Principal Position	Year	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All other Compensation ($)	Total ($)
(a)	(b)	(g)	(h)	(i)	(j)
Yijun Wang Chief Executive Officer	2009	0	0	0	120,000
Yijun Wang Chief Executive Officer	2008	0	0	0	50,000
Yijun Wang Chief Executive Officer	2007	0	0	0	0
Ming Qi Chief Accounting Officer	2009	0	0	0	90,000

Ming Qi Chief Accounting Officer	2008	30,000
Ming Qi Chief Accounting Officer	2007	0
Dongliang (Frank) Su Acting Chief Financial Officer	2009	92,000
Dongliang (Frank) Su Acting Chief Financial Officer	2008	0
Dongliang (Frank) Su Acting Chief Financial Oficer	2007	0

(1) The compensation for Yijun Wang reflects his salary at Qingdao Renmin prior to the Share Exchange.

(2) Ming Qi is a Director of Qingdao Renmin and served as our Chief Financial Officer from January 2007 until May 2008.

(3) The compensation for Ming Qi in 2007 reflects his salary at Qingdao Renmin prior to the Share Exchange.

(4) Frank Su has served as our Acting Chief Financial Officer since May 2008; accordingly, he did not receive any compensation from us prior to such time, however we are required to include him in the table for the preceding three fiscal years. Frank’s compensation includes costs incurred for his assistant, who worked mainly on Jpak’s Sarbanes-Oxley Section 404 compliance project. The market value of the 200,000 shares issued to Frank was US$20,000 at the date of issuance.

Potential Payments upon Termination

Our employment agreements with Yijun Wang, our Chief Executive Officer, and Ming Qi, our Chief Financial Officer provide for various payments and benefits upon termination of their employment. Ming Qi waived all potential payments and benefits upon his resignation as our CFO. Pursuant to a one year agreement that we entered into with Mr. Su, he agreed to serve as our Acting Chief Financial Officer until we find an adequate replacement. After we have negotiated the termination of the contract with the applicable employee, the employee shall be provided with a compensation subsidy as per relevant national, provincial and municipal regulations. We do not have any other policies, agreements or arrangements regarding potential payments upon termination of employment.

Compensation of Directors

We have not paid our directors fees in the past for attending scheduled and special meetings of our board of directors. In the future, we may adopt a policy of paying independent directors a fee for their attendance at board and committee meetings. We reimburse each director for reasonable travel expenses related to such director’s attendance at board of directors and committee meetings.

Limitation on Liability and Indemnification Matters

Article X of our Articles of Incorporation provide that no director or officer of the corporation past, present or future, shall be personally liable to the corporation or any of its shareholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the liability of a director for acts or omissions which involve intentional misconduct, fraud or knowing violation of law and for the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes is not so eliminated. The corporation shall advance or reimburse reasonable expenses incurred by this individual without regard to the limitations in Nevada Revised Statute 78.7502, or any other limitation which may hereafter be enacted to the extent such limitation may be disregarded if authorized by the Articles of Incorporation.

Our bylaws provide for the indemnification of our directors and officers, as to those liabilities and on those terms and conditions as appropriate.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial ownership of our common stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock. The information below indicates:

	·	each person who is known by us to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common stock or our issued and outstanding shares of Series A Preferred Stock, Series B Preferred Stock;

	·	each of our directors, executive officers and nominees to become directors; and

	·	all directors and executive officers as a group.

As used in this section, the term beneficial ownership with respect to a security is defined by Rule 13d-3 under the Securities Exchange Act of 1934, as amended, as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose of or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, subject to community property laws where applicable.

As of January 8, 2010 , we have 36,368,334 shares of common stock outstanding; 5,608,564 shares of Series A Preferred Stock outstanding, which convert into 11,217,128 shares of common stock; 5,000,000 shares of Series B Preferred Stock outstanding, which convert into 8,333,333 shares of common stock; and 12,000,000 shares of Series C Preferred Stock outstanding, which convert into 12,000,000 shares of common stock. Each holder of Series A and Series B Preferred Stock are entitled to vote on all matters, together with the holders of Common Stock, on an as converted basis up to 9.99% of (A) the Common Stock issuable upon conversion of the Series A and Series B Preferred Stock held by such holder, plus (B) all other shares of Common Stock beneficially owned by the holder at such time. However, based upon the terms of the preferred stock , the holders thereof may not convert such securities if on any date, such holder would be deemed the beneficial owner of either more than 4.9% or 9.9%, depending upon the holder’s specific cap, of the then outstanding shares of our common stock. See “Description of Securities.” Accordingly, the column entitled “Percent of Class” represents the total voting power that a shareholder possesses based on his/her current holdings, taking the ownership cap into account. In regards to the Series C Preferred Stock, except with respect to transactions upon which such Series C Preferred Stock shall be entitled to vote separately as a class and as otherwise required by Nevada law, the Series C Preferred Stock does not have any voting rights. Additionally, based upon the terms of the Series C Preferred Stock, the holders thereof may not convert such securities if on any date, such holder would be deemed the beneficial owner of more than 9.99% of the then outstanding shares of our common stock. See “Description of Securities.”

Except as otherwise indicated, each person and each group shown in the table has sole voting and investment power with respect to the shares of common stock, Series A, Series B and Series C Preferred Stock indicated. For purposes of the table below, in accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner, for purposes of any shares of common stock, Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock, over which he or she has or shares, directly or indirectly, voting or investment power, or of which he or she has the right to acquire beneficial ownership at any time within 60 days after January 8, 2010 . As used herein, “voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares.

Name and Address*	Amount and Nature of beneficial ownership(1)	Percent of Class(1)
Joyrich Group Limited (2)	17,023,700	30.44%
Fabregas Group Limited (3)	3,163,188	5.66%
Statepro Investments Ltd. (4)	1,170,954	2.09%
Vision Opportunity Master Fund (5)	10,309,782 (6)	18.44% (6)
Vision Capital Advantage Fund (5)	3,047,115(6)	5.45% (6)
QVT Fund LP (7)	12,021,208 (8)	21.50% (8)
Quintessence Fund LP (7)	1,335,690 (9)	2.39% (9)
Lee Wah Investments Limited (10)	16,200,000 (11)	28.97%
Yijun Wang	—	—
Qingjun Yang	—	—
Huatian Sha	—	—
Ming Qi	—	—
Yuanbo Wang	—	—
Ligui Jiao	—	—
Stewart Shiang Lor (12)	21,357,842	38.19%
All executive officers and directors as a group (seven persons)	21,357,842	38.19%

* The address for the officers and directors is 15 Xinghua Road, Qingdao, Shandong Province, the People’s Republic of China, (86-532) 8461 6387.

(1) The numbers are based on 67,918,795 shares of common stock, which represents the number of shares of common stock and preferred stock, on an as converted basis, currently outstanding. All Percentages have been rounded up to the nearest one hundredth of one percent and such percentage is based upon the amount of outstanding our common stock and preferred stock, on an as converted basis. The percentage assumes in the case of each shareholder listed in the above list that all warrants or options held by such shareholder that are exercisable currently or within 60 days were fully exercised by such shareholder, without the exercise of any warrants or options held by any other shareholders.

(2) Joyrich Group Limited is a BVI company of which Stewart Shiang Lor is the sole shareholder and has sole voting and dispositive power over these shares. Mr. Lor is a one of our directors.

(3) Fabregas Group Limited is a BVI company of which Stewart Shiang Lor is the sole shareholder and has sole voting and dispositive power over these shares. Mr. Lor is a one of our directors.

(4) Statepro Investments Ltd. is a BVI company of which Stewart Shiang Lor is the sole shareholder and has sole voting and dispositive power over these shares. Mr. Lor is a one of our directors.

(5) The investment manager for Vision Opportunity Master Fund, Ltd. (“VOMF”) and Vision Capital Advantage Fund, LP (“VCAF,” together with VOMF they are collectively referred to as “Vision”) is Vision Capital Advisors, LLC (“VCA”). Ultimate voting and dispositive control rests with Adam Benowitz, as VCA’s Senior Managing Member and the portfolio manager of VOMF and VCAF. Each of VCA and Adam Benowitz disclaim beneficial ownership of these shares. The amount listed under “Common Stock” represents shares of Common Stock issued as a result of the exchange of warrants and conversion of the preferred stock that are exercisable and convertible within 60 days of December 16, 2009.

(6) This amount represents 4.9% of the shares of common stock underlying Series A Preferred Stock and Series B Preferred Stocks Vision owns. Vision currently owns 2,804,282 shares of Series A Preferred Stock (convertible into 5,608,564 shares of common stock), 2,500,000 shares of Series B Preferred Stock (convertible into 4,166,667 shares of common stock) and 3,581,667 shares of common stock; however, pursuant to the ownership Cap explained above, they are only deemed to beneficially own the number listed in the table. As a result of a private transfer transaction between VOMF and VCAF, (i) VOMF currently owns 2,164,540 shares of Series A Preferred Stock (convertible into 4,329,080 shares of common stock), 1,929,674 shares of Series B Preferred Stock (convertible into 3,216,124 shares of common stock) and 2,764,579 shares of common stock; however, pursuant to the ownership Cap explained above, they are only deemed to beneficially own the number listed in the table and (ii) VCAF currently owns 639,742 shares of Series A Preferred Stock (convertible into 1,279,484 shares of common stock), 570,326 shares of Series B Preferred Stock (convertible into 950,543 shares of common stock) and 817,088 shares of common stock; however, pursuant to the ownership Cap explained above, they are only deemed to beneficially own the number listed in the table.

(7) Management of QVT Fund and Quintessence is vested in its general partner, QVT Associates GP LLC. QVT Financial LP is the investment manager for QVT Fund LP and shares voting and investment control over the securities held in QVT Fund LP. QVT Financial GP LLC is the general partner of QVT Financial LP and as such has complete discretion in the management and control of the business affairs of QVT Financial LP. AVT Associates GP LLC is the general partner of QVT Fund LP and may be deemed to beneficially own the securities. The managing members of QVT Financial GP LLC are Daniel Gold, Lars Bader, Tracy Fu and Nicholas Brumm. Each of QVT Financial LP, QVT Financial GP LLC, Daniel Gold, Lars Bader, Tracy Fu and Nicholas Brumm disclaims beneficial ownership of our securities held by QVT Fund and Quintessence, except to the extend of its pecuniary interest therein.

(8) This amount represents 9.9% of the shares of common stock underlying QVT’s Series A Preferred Stock and Series B Preferred Stock and shares of common stock. QVT currently owns 2,523,854 shares of Series A Preferred Stock (convertible into 5,047,708 shares of common stock), 2,250,000 shares of Series B Preferred Stock (convertible into 3,750,000 shares of common stock) and 3,223,500 shares of common stock; however, pursuant to the ownership Cap explained above, they are only deemed to beneficially own the number listed in the table.

(9) This amount represents 9.9% of the shares of common stock underlying Quintessence’s Series A Preferred Stock and Series B Preferred Stock and shares of common stock. Quintessence currently owns 280,428 shares of Series A Preferred Stock (convertible into 560,856 shares of common stock), 250,000 shares of Series B Preferred Stock (convertible into 416,667 shares of common stock) and 358,167 shares of common ; however, pursuant to the ownership Cap explained above, they are only deemed to beneficially own the number listed in the table.

(10) Lee Wah Investments Limited is a Hong Kong company of which Xuebin Zhang is the sole shareholder and director. Mr. Zhang has sole voting and dispositive power over these shares.

(11) This amount represents 9.99% of the shares of common stock underlying Lee Wah’s Series C Preferred Stock and shares of common stock they received upon exchange of warrants. Lee Wah currently owns 12,000,000 shares of Series C Preferred Stock (convertible into 12,000,000 shares of common stock) and 4,200,000 shares of common stock.

(12) Mr. Lor has sole voting and dispositive power over the shares of common stock beneficially owned by Joyrich Group Limited, Fabregas Group Limited and Statepro Investments Ltd. See footnotes (1) through (3).

ABOUT THE OFFERING

On August 9, 2007, we became a party to the NPA by and among the Company, Jpak, Grand International and the Investors. The NPA was originally entered into in May 2007 pursuant to which Jpak issued Convertible Promissory Notes in the aggregate principal amount of US$5.5 million to the Investors. As a result of the Share Exchange, the Notes automatically converted into 5,608,564 shares of Series A Convertible Preferred Stock outstanding. The shares of Series A Convertible Preferred Stock are convertible into an aggregate of 11,217,128 shares of common stock. Under the terms of the Notes, we also issued (i) Series A Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.60 per share until August 2013 (the “Series A Warrants”), (ii) Series B Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.70 per share until August 2013 (the “Series B Warrants”) and (iii) Series J Warrants to purchase (a) an aggregate of 5,000,000 shares of Series B Convertible Preferred Stock, which preferred stock shall contain the same terms as the Series A Convertible Preferred Stock (other than conversion price), which shares will be convertible into 8,333,333 shares of our common stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.72 per share (the “Series C Warrants”) and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.84 per share (the “Series D Warrants”). The Series J Warrants shall be exercisable at an exercise price of US$1.00 per warrant and shall only be exercisable until 90 days following the effective date of the registration statement for which this prospectus forms a part. Finally, we also granted warrants to purchase 990,000 shares of common stock with an exercise price of US$.50 per share to the placement agent in the financing transaction. These warrants have the same terms as the Series A and Series B Warrants, except that they contain a “cashless” exercise provision.

On August 9, 2007, we also entered into a Registration Rights Agreement with the Investors (the “Investor RRA”). Under the Investor RRA, we were required to prepare and file a registration statement for the sale of the Common Stock issuable to the Investors under the Series A and Series B Preferred Stock and the Warrants and to use our best efforts to cause, and to maintain, the effectiveness of the registration statement. We filed this registration statement to fulfill our obligations under the RRA. We are subject to certain monetary obligations if this registration statement is not declared effective by the SEC by March 31, 2008. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. Under the Investor RRA, the shareholders of Jpak were granted piggyback registration rights for 15,805,000 shares of our common stock.

However, the Investor RRA also made provisions if we cannot register all of the shares underlying all of the Series A and Series B Preferred Stock and Warrants due to the SEC’s application of Rule 415. Pursuant to those provisions, if the SEC issues us a 415 comment, then we must first try to register the common stock underlying the preferred stock (on a pro rata basis among the holders of the Preferred Stock) and then register all of the common underlying the Warrants (on a pro rata basis among the holders of the Warrants). The SEC did issue a 415 comment to us on March 27, 2008 and accordingly, we filed an Initial Registration Statement (File No. 333-147264) on Form S-1 to register for resale 687,106 shares of common stock underlying the Series A Preferred Stock, which was initially declared effective on January 7, 2009. The RRA requires that subsequent registration statements be filed to register the rest of the common stock underlying the preferred stock and warrants issued in the financing on the later of (i) 60 days following the sale of substantially all of the shares of common stock included in the Initial Registration Statement or any subsequent Registration Statement and (ii) 6 months following the effective date of the Initial Registration Statement or any subsequent Registration Statement, as applicable, or such earlier or later date as permitted or required by the Commission. Since it has been six months from the effective date of the Initial Registration Statement, we are filing this Registration Statement to register for resale 31,333,334 shares of common stock underlying the Warrants; under the terms of the RRA, we are not required to register the remaining shares of common stock underlying the Series A Preferred Stock since they are now eligible to be sold pursuant to Rule 144. This registration statement must be declared effective by the earlier of (A) the 90th day following the filing date of such Registration Statement (or in the event such Registration Statement is reviewed by the Commission, the one hundred twentieth (120th) day following such filing date) or (B) 5 business days after SEC has no more comments. However, we do not have any monetary obligations for any securities that were not permitted to be included in a registration statement because of the SEC’s application of Rule 415 until such time as such securities are required to be filed pursuant to the Investor RRA. In such case, the liquidated damages shall be calculated to only apply to the percentage of securities which are permitted by the Commission to be included in the Registration Statement.

In connection with the exercise of the Series J Warrants, we extended the term of our Series A Warrants and Series B Warrants from four years to six years, so that such warrants shall now expire on August 9, 2013, and the deadline for effectiveness of this registration statement was extended to March 31, 2008; however, pursuant to the Rule 415 comment and additional comments we received from the SEC, the effectiveness deadline was further extended.

In connection with the 2009 Financing, we also entered into a Registration Rights Agreement, pursuant to which we are required to prepare and file a registration statement for the resale of the Common Stock issuable to the purchaser upon conversion of the preferred stock and upon exercise of the warrants issued to him, before December 3, 2009 and to use our best efforts to cause the effectiveness of such registration statement which is no later than the earlier of (a) the date which is within three (3) business days after the date on which the Securities and Exchange Commission informs the Company (i) that the Commission will not review the Registration Statement, or (ii) that the Company may request the acceleration of the effectiveness of the registration statement, or (b) the 150th day following the filing date of such registration statement (or in the event the registration statement receives a “full review” by the Commission, the 180th day following the filing date). We are subject to certain monetary obligations if this registration statement is not declared effective by the effective date specified in the Investor RRA. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. The Investor RRA provides for specific registration procedures if the SEC issues a Rule 415 comment.

On December 16, 2009, we entered into an Exchange Agreement with Holders, pursuant to which the Holders and the Company agree to the exchange of the Holders’ Warrants to purchase an aggregate of 31,333,334 shares of Common Stock, for shares of Flush Securities of the Company in an amount determined by the following formula:

	X = Y -	(A)(Y)
		B

Where	X =	the number of shares of Common Stock to be issued to the Holder.
	Y =	the number of shares of Common Stock purchasable upon exercise of all of the Holders’ Warrants.
	A =	the Warrant Price.
	B =	$1.00 per share of Common Stock.

The following table provides information with respect to the Exchange Agreement under which Warrants are exchanged for newly issued common stock.

Warrants	Number of Warrants		Strike Price		Cashless Exercise Price		New Common Shares
Series A		5,500,000		$0.56		$1.00		2,420,000
Series B		5,500,000		$0.63		$1.00		2,035,000
Series C		4,166,667		$0.64		$1.00		1,500,000
Series D		4,166,667		$0.71		$1.00		1,208,334
Series E		6,000,000		$0.60		$1.00		2,400,000
Series F		6,000,000		$0.70		$1.00		1,800,000
Total		31,333,334						11,363,334

Upon effectiveness of the Exchange Agreement, the number of shares of common stock outstanding on December 16, 2009 was 36,368,334. There was no cash paid or received regarding this exchange.

SELLING STOCKHOLDERS

This prospectus relates to the offering and sale, from time to time, of up to 24,050,440 shares of our common stock held by the stockholders named in the table below.

Set forth below is information, to the extent known to us, setting forth the name of each selling stockholder and the amount and percentage of common stock owned by each (including shares that can be acquired upon the conversion of outstanding preferred stock) prior to the offering, the shares to be sold in the offering, and the amount and percentage of common stock to be owned by each (including shares that can be acquired upon the conversion of outstanding preferred stock) after the offering assuming all shares are sold.

Beneficial ownership is determined in accordance with Rule 13d-3 promulgated by the SEC, and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes to the table, we believe, based on information by each selling stockholder, that each selling stockholder possesses sole voting and investment power with respect to all of the shares of common stock owned by that selling stockholder. In computing the number of shares beneficially owned by a stockholder and the percentage ownership of that stockholder, shares of common stock subject to options or warrants held by that stockholder that are currently exercisable or are exercisable within 60 days after the date of the table are deemed outstanding. Those shares, however, are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person or group.

The selling stockholders may sell all or some of the shares of common stock they are offering, and may sell shares of our common stock otherwise than pursuant to this prospectus. The table below assumes that each selling stockholder converts all of shares of preferred stock being offered and sells all of the shares issued upon conversion thereof, and that each selling stockholder sells all of the shares offered by it in offerings pursuant to this prospectus, and does not acquire any additional shares. We are unable to determine the exact number of shares that will actually be sold or when or if these sales will occur. See “Plan of Distribution.”

The terms of the preferred stock prohibit conversion to the extent that such conversion would result in the holder, together with its affiliates, beneficially owning in excess of 4.9% for Vision Opportunity Master Fund, 9.9% for QVT Fund LP and Quintessence Fund LP, and 9.99% for Lee Wah Investments, in each case of our outstanding shares of our common stock.

Name of Selling Stockholder	Shares Beneficially Owned Prior to Offering (1)		Number of Shares to be Offered (2)		Number of Shares Beneficially Owned After Offering (3)		Percentage Ownership After Offering (4)
Vision Opportunity Master Fund Ltd. (5)		3,029,756(6)		3,029,756		0		0	%
Vision Capital Advantage Fund, Ltd.(5)		895,463(7)		895,463		0		0	%
QVT Fund LP(8)		3,532,698(9)		3,532,698		0		0	%
Quintessence Fund LP(8)		392,523(10)		392,523		0		0	%
LeeWah Investments(11)		16,200,000(12)		16,200,000		0		0	%
Total				24,050,440

* Less than 1%

Unless otherwise noted, the Selling Stockholder became one of our shareholders pursuant to the Financings we completed on August 9, 2007, November 4, 2009 and the Warrant Exchange we completed in December 2009. Accordingly, prior to the Offering, the Selling Stockholder only owned shares of common stock underlying the Preferred Stock received in the Financing (the “Securities”). However, the terms of the preferred stock prohibit conversion to the extent that conversion of the preferred stock would result in the holder, together with its affiliates, beneficially owning in excess of 4.9% for Vision Opportunity Master Fund, 9.9% for QVT Fund LP and Quintessence Fund LP, and 9.99% for Lee Wah, in each case of our outstanding shares of our common stock. Therefore, unless otherwise noted, this number represents the number of Securities the Selling Stockholder received in the Financing that he/she can own based upon the ownership cap.

2)	Additionally, the shares of common stock are subject to certain anti-dilution provisions, which would be triggered if we were to sell securities at a price below the price at which we sold the Notes. See “Prospectus Summary – Recent Developments - Financing” and “Description of Securities.”

Since we do not have the ability to control how many, if any, of their shares each of the selling shareholders listed above will sell, we have assumed that the selling shareholders will sell all of the shares offered herein for purposes of determining how many shares they will own after the Offering and their percentage of ownership following the offering; however this number also accounts for the ownership cap described above in footnote 1.

4)	All Percentages have been rounded up to the nearest one hundredth of one percent.

The investment manager for Vision Opportunity Master Fund, Ltd. (“VOMF”) and Vision Capital Advantage Fund, LP (“VCAF”) is Vision Capital Advisors, LLC (“VCA”). Ultimate voting and dispositive control rests with Adam Benowitz, as VCA’s Senior Managing Member and the portfolio manager of VOMF and VCAF. Each of VCA and Adam Benowitz disclaim beneficial ownership of these shares.

6)	This number represents the number of shares of common that VOMF received in exchange for their Warrants pursuant to the Warrant Exchange described above and the number of common shares underlying Series A Convertible Preferred Stock that VOMF owns

7)	This number represents the number of shares of common that VCA received in exchange for their Warrants pursuant to the Warrant Exchange described above and the number of common shares underlying Series A Convertible Preferred Stock that VCA owns.

Management of the fund is vested in its general partner, QVT Associates GP LLC. QVT Financial LP is the investment manager for the fund and shares voting and investment control over the securities held by the fund. QVT Financial GP LLC is the general partner of QVT Financial LP and as such has complete discretion in the management and control of the business affairs of QVT Financial LP. QVT Associates GP LLC is the general partner of the fund and may be deemed to beneficially own the securities. The managing members of QVT Financial GP LLC are Daniel Gold, Lars Bader, Tracy Fu and Nicholas Brumm. Each of QVT Financial LP, QVT Financial GP LLC, Daniel Gold, Lars Bader, Tracy Fu and Nicholas Brumm disclaims beneficial ownership of the securities held by the fund. QVT Associates GP LLC disclaims beneficial ownership of the securities held by the fund except to the extent of its pecuniary interest therein.

9)	This number represents the number of shares of common that QVT Fund received in exchange for their Warrants pursuant to the Warrant Exchange described above and the number of common shares underlying Series A Convertible Preferred Stock that QVT owns.

10)	This number represents the number of shares of common that Quintessence received in exchange for their Warrants pursuant to the Warrant Exchange described above and the number of common shares underlying Series A Convertible Preferred Stock that Quintessence owns.

11)	The person having voting power over Lee Wah is Mr. Xuebin Zhang.

12)

Lee Wah did not beneficially own any shares prior to the Offering since, except with respect to transactions upon which such Series C Preferred Stock shall be entitled to vote separately as a class and as otherwise required by Nevada law, the Series C Preferred Stock does not have any voting rights. Additionally, based upon the terms of the Series C Preferred Stock , Lee Wah may not convert such securities if on any date, it would be deemed the beneficial owner of more than 9.99% of the then outstanding shares of our common stock. See “Description of Securities.

13)	These shares represent the number of common shares that Lee Wah received pursuant to the Warrant Exchange Agreement and the shares of common stock underlying the Series C Preferred Stock that Lee Wah received in the 2009 Financing.

None of the selling stockholders is a broker-dealer or affiliate of a broker-dealer. Each of such selling stockholders has indicated to us that it or he obtained the shares of our common stock such selling stockholder owns in the ordinary course and that such selling stockholder has no agreement or understanding with respect to distributing those shares.

Except as described above or as described elsewhere in this prospectus, including under “Certain Relationships and Related Transactions”, none of the other selling stockholders has held any position or office or had any material relationship with us or any of our predecessors or affiliates within three years of the date of this prospectus.

Company's Intention and Ability to Satisfy its Obligations to Selling Stockholders

We have the intention, and a reasonable basis to believe, we will have the financial ability to make payments on the outstanding preferred stock and warrants (including the shares of common stock underlying such securities) both in cash and shares of our common stock, if any. We have duly accounted for such payments as part of our strategic plan.

Existing Short Positions by Selling Stockholders

Based upon information provided by the selling stockholders, we have a reasonable belief no selling stockholders currently have a short position in our common stock.

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, donees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock being offered under this prospectus on any stock exchange, market or trading facility on which shares of our common stock are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when disposing of shares:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resales by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

to cover short sales made after the date that the registration statement of which this prospectus is a part is declared effective by the Commission;

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

a combination of any of these methods of sale; and

any other method permitted pursuant to applicable law.

The shares may also be sold under Rule 144 under the Securities Act of 1933, as amended, if available, rather than under this prospectus. The selling stockholders have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if they deem the purchase price to be unsatisfactory at any particular time.

The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares.

Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, which commissions as to a particular broker or dealer may be in excess of customary commissions to the extent permitted by applicable law.

If sales of shares offered under this prospectus are made to broker-dealers as principals, we would be required to file a post-effective amendment to the registration statement of which this prospectus is a part. In the post-effective amendment, we would be required to disclose the names of any participating broker-dealers and the compensation arrangements relating to such sales.

The selling stockholders and any broker-dealers or agents that are involved in selling the shares offered under this prospectus may be deemed to be “underwriters” within the meaning of the Securities Act in connection with these sales. Commissions received by these broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Any broker-dealers or agents that are deemed to be underwriters may not sell shares offered under this prospectus unless and until we set forth the names of the underwriters and the material details of their underwriting arrangements in a supplement to this prospectus or, if required, in a replacement prospectus included in a post-effective amendment to the registration statement of which this prospectus is a part.

The selling stockholders and any other persons participating in the sale or distribution of the shares offered under this prospectus will be subject to applicable provisions of the Exchange Act, and the rules and regulations under that act, including Regulation M. These provisions may restrict activities of, and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other person. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and other activities with respect to those securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions. All of these limitations may affect the marketability of the shares.

If any of the shares of common stock offered for sale pursuant to this prospectus are transferred other than pursuant to a sale under this prospectus, then subsequent holders could not use this prospectus until a post-effective amendment or prospectus supplement is filed, naming such holders. We offer no assurance as to whether any of the selling stockholders will sell all or any portion of the shares offered under this prospectus.

We have agreed to pay all fees and expenses we incur incident to the registration of the shares being offered under this prospectus. However, each selling stockholder and purchaser is responsible for paying any discounts, commissions and similar selling expenses they incur.

We and the selling stockholders have agreed to indemnify one another against certain losses, damages and liabilities arising in connection with this prospectus, including liabilities under the Securities Act.

Pursuant to a requirement by the Financial Industry Regulatory Authority, or FINRA, the maximum commission or discount to be received by any FINRA member or independent broker/dealer may not be greater than 8.0% of the gross proceeds received by a selling stockholder from the sale of any of its securities registered hereunder pursuant to SEC Rule 415.

Any member of FINRA participating in the distribution of the shares offered under this prospectus will be subject to compliance with FINRA rules and regulations, including rules governing the timely filing of documents and disclosures with the Corporate Finance Department of FINRA.

H.C. Wainwright & Co., Inc. acted as the placement agent in connection with the 2007 Financing. In addition to cash compensation and fees and expenses paid to the placement agent, we issued warrants to purchase up to 990,000 shares of our common stock, with an exercise price of US$.50 per share, and warrants to purchase up to 750,000 shares of our Common Stock, with an exercise price of US$0.60 per share, to the placement agent and affiliates of the placement agent. The placement agent warrants have the same terms as our other warrants, except that they contain a “cashless” exercise provision and expire four years after issuance. The warrants issued to our placement agent and its affiliates have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up from the date of this prospectus pursuant to Rule 2710(g)(1) of the Conduct Rules of FINRA. Additionally, the warrants may not be sold, transferred, assigned, pledged or hypothecated for a period of 180 days following the date of this prospectus. However, the warrants may be transferred to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. Thereafter, the warrants will be transferable provided such transfer is in accordance with the provisions of the Securities Act. Such warrants contain customary anti-dilution protection for stock splits, dividends and recapitalization consistent with FINRA regulations.

We have also granted H.C. Wainwright a right of first refusal, for a period of 18 months from the August 2007 Share Exchange, to act as lead underwriter or placement agent for any and all future public and private equity and debt offerings.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have not entered into any transactions during the last two fiscal years with any director, executive officer, director nominee, 5% or more shareholder, nor have we entered into transactions with any member of the immediate families of the foregoing person (include spouse, parents, children, siblings, and in-laws) nor is any such transaction proposed, except as follows:

Reorganization of Qingdao Renmin

On August 21, 2006, Grand International entered into a sales and purchase agreement with three of the then-existing five shareholders (the “Original Shareholders”) of Qingdao Renmin, pursuant to which Grand International purchased 88.23% of the equity interest in Qingdao Renmin. The total purchase consideration was RMB40,999,000 which was determined based upon the net asset value of Qingdao Renmin as of August 21, 2006. On September 5, 2006, this transfer was approved by the Qingdao Municipal Bureau of Foreign Trade and Economic Cooperation, and the registration with the Qingdao State Administration for Industry and Commerce was completed on December 7, 2006. As a result of this transfer, Grand International acquired an 88.23% equity interest in Qingdao Renmin. In July 2007, Grand International purchased the remaining 11.77% state-owned equity interest in Qingdao Renmin and now owns 100% equity interest in Qingdao Renmin.

In March 2007, Joyrich Group Limited and Fabregas Group Limited, two of our principal shareholders, issued stock options to the executives and management team of Qingdao Renmin pursuant to which such persons will be entitled to acquire shares of Joyrich Group Limited and Fabregas Group Limited. Under the terms of the options, such person will have the right to purchase 100% of the outstanding capital stock of Joyrich Group Limited and 43.63% of the outstanding capital stock of Fabregas Group Limited. These options may be exercised in accordance with the following schedule: 75% of the shares subject to these options vested; 25% of the shares subject to these options shall be vested as of December 31, 2007; provided, that the revenue of Qingdao Renmin for the period from October 1, 2007 to December 31, 2007 reaches RMB 30,000,000.

Share Exchange

On August 9, 2007, we entered into and consummated the transactions contemplated under a Securities Exchange Agreement, pursuant to which all the shares of Jpak were transferred to us and Jpak became our wholly-owned subsidiary and at the same time the shareholders of Jpak were issued 23,005,000 shares of our common stock, which represented 64.4% of all the issued and outstanding shares of our common stock (assuming conversion of the preferred stock described below) following the Share Exchange and the Financing.

Registration Rights Agreement

On August 9, 2007, we entered into a Registration Rights Agreement with the Investors (the “2007 Investor RRA”). Under the 2007 Investor RRA, we are required to prepare and file a registration statement for the sale of the common stock issuable to the Investors under the Series A Preferred Stock and the Series A and Series B Warrants and to use our best efforts to cause, and to maintain, the effectiveness of the registration statement. We are subject to certain monetary obligations if this registration statement is not declared effective by the effective date specified in the 2007 Investor RRA. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. The 2007 Investor RRA provides for specific registration procedures if the SEC issues a Rule 415 comment. Since we received a Rule 415 comment, we are required to register a certain number of shares of common stock underlying the Series A Preferred Stock in this registration statement; subsequent registration statements will be filed to register the rest of the common stock underlying the preferred stock and warrants. Each such subsequent registration statement must be declared effective by the earlier of (A) the 90th day following the filing date of such Registration Statement (or in the event such Registration Statement is reviewed by the Commission, the one hundred twentieth (120th) day following such filing date) or (B) 5 business days after SEC has no more comments. We do not have any monetary obligations for any securities that were not permitted to be included in a registration statement because of the SEC’s application of Rule 415 until such time as such securities are required to be filed pursuant to the 2007 Investor RRA. In such case, the liquidated damages shall be calculated to only apply to the percentage of securities which are permitted by the Commission to be included in the Registration Statement.

Under the 2007 Investor RRA, the shareholders of Jpak were granted piggyback registration rights with respect to the registration statement to be filed under the 2007 Investor RRA for 15,805,000 shares of common stock.

On November 3, 2009, we entered into a Registration Rights Agreement with one investor (the “2009 Investor RRA”), pursuant to which we are required to prepare and file a registration statement for the resale of the Common Stock issuable to the purchaser upon conversion of the preferred stock and upon exercise of the warrants issued to him, before December 3, 2009 and to use our best efforts to cause the effectiveness of such registration statement which is no later than the earlier of (a) the date which is within three (3) business days after the date on which the Securities and Exchange Commission informs the Company (i) that the Commission will not review the Registration Statement, or (ii) that the Company may request the acceleration of the effectiveness of the registration statement, or (b) the 150th day following the filing date of such registration statement (or in the event the registration statement receives a “full review” by the Commission, the 180th day following the filing date). We are subject to certain monetary obligations if this registration statement is not declared effective by the effective date specified in the 2009 Investor RRA. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. The 2009 Investor RRA provides for specific registration procedures if the SEC issues a Rule 415 comment.

Securities Escrow Agreement

In addition, on August 9, 2007, we entered into the securities escrow agreement with the Investors, the principal stockholders named therein (the “Escrow Stockholders”) and the escrow agent named therein (the “Escrow Agent”), (the “Securities Escrow Agreement”). Under the Securities Escrow Agreement, the Escrow Stockholders agreed to place an aggregate of 7.2 million shares of common stock into escrow for the benefit of the Investors in the event we fail to achieve net income for Fiscal 2008 of at least US$3.955 million (the “Fiscal 2008 Performance Threshold”). We obtained the Fiscal 2008 Performance Threshold and therefore all of the escrowed shares were returned to the Escrow Stockholders.

Lock-Up Agreement

Pursuant to that certain lock-up agreement, dated as of August 9, 2007 entered into by the former Jpak shareholders (the “Lock-Up Agreement”), shareholders holding an aggregate of 23,005,000 shares of our common stock have agreed that, for a period of six months following the effectiveness of the registration statement, of which this prospectus is a part, they will not, subject to certain limited exceptions set forth in the Lock-Up Agreement, including consent by the Investors, offer, sell, contract to sell, assign, transfer, hypothecate, pledge or grant a security interest in or other dispose of any shares of common stock. In addition, for a period of 12 months following such six month period, no such shareholder shall sell more than one-twelfth of their total shares of common stock during any one month period.

Review, Approval and Ratification of Related Party Transactions

Given our small size and limited financial resources, we had not adopted, prior to the Share Exchange, formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, directors and significant shareholders. However, we intend that such transactions will, on a going-forward basis, be subject to the review, approval or ratification of our board of directors, or an appropriate committee thereof.

Director Independence

Presently, we are not required to comply with the director independence requirements of any securities exchange. In determining whether our directors are independent, however, we intend to comply with the rules of the NYSE Altnernext (formerly the American Stock Exchange). The board of directors also will consult with counsel to ensure that the board of directors’ determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors, including those adopted under the Sarbanes-Oxley Act of 2002 with respect to the independence of audit committee members. The NYSE Alternext listing standards define an “independent director” generally as a person, other than an officer of a company, who does not have a relationship with the company that would interfere with the director’s exercise of independent judgment.

Currently we do not satisfy the “independent director” requirements of the NYSE Alternext, which requires that a majority of a company’s directors be independent. Our board of directors intends to appoint additional members, each of whom will satisfy such independence requirements.

DESCRIPTION OF SECURITIES

Common Stock

We are authorized to issue up to 300,000,000 shares of common stock, par value $0.001 per share, of which 36,368,334 shares are currently issued and outstanding.

Each outstanding share of common stock entitles the holder thereof to one vote per share on matters submitted to a vote of shareholders. Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock.

The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend. Should we decide in the future to pay dividends, it will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the Board of Directors considers relevant. Each share shall be entitled to the same dividend. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.

All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.

Preferred Stock

We are authorized to issue up to 200,000,000 shares of preferred stock, par value $0.001 per share.

Our certificate of incorporation gives our board of directors the power to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock. We currently have a class of Series A and Series B preferred stock outstanding and recently designated and issued shares of a Series C class of preferred stock; other than as previously disclosed, we have no present plans to issue any shares of preferred stock.

Convertible Preferred Stock

Series A Preferred Stock

The board of directors has created a series of Series A preferred stock consisting of 5,800,000 shares of which 5,608,564 shares are issued and outstanding. Each share of Series A preferred stock is convertible into a number of fully paid and nonassessable shares of common stock equal to the quotient of (i) the original Series A issue price set forth therein divided by (ii) the conversion price. The initial issue price shall be US$1.00 and the initial conversion price shall be US$.50. Currently, the Series A preferred stock is convertible into 11,217,128 shares of common stock.

The Series A preferred stock has no preemptive rights. The Series A preferred stock will not accrue dividends. However, in the event that any dividends are paid on our common stock, the holders of Series A preferred stock shall share with the holders of common stock on an as converted basis in such dividends.

The Series A preferred stock has certain class voting rights. Each holder of Series A preferred stock shall be entitled to vote on all matters, together with the holders of common stock, on an as converted basis, subject to a 9.99% limitation. So long as any shares of Series A preferred stock are outstanding, we shall not, without the affirmative approval of at least a majority of the shares of the Series A preferred stock outstanding, (i) amend, alter or repeal the provisions of the Series A preferred stock, so as to adversely affect any right, preference, privilege or voting power of the Series A preferred stock; or (ii) amend our Articles of Incorporation or By-Laws so as to affect materially and adversely any right, preference, privilege or voting power of the Series A preferred stock.

The holders of record of shares of Series A preferred stock shall not be entitled to receive any liquidation preference in the event of the liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary.

Series B Preferred Stock

The board of directors has created a series of Series B preferred stock consisting of 5,000,000 shares of which 5,000,000 shares are issued and outstanding. Each share of Series B preferred stock is convertible into a number of fully paid and nonassessable shares of common stock equal to the quotient of (i) the original Series B issue price set forth therein divided by (ii) the conversion price. The initial issue price shall be US$1.00 and the initial conversion price shall be US$.60. Currently, the Series B preferred stock is convertible into 8,333,333 shares of common stock.

The Series B preferred stock has no preemptive rights. The Series B preferred stock will not accrue dividends. However, in the event that any dividends are paid on our common stock, the holders of Series B preferred stock shall share with the holders of common stock on an as converted basis in such dividends.

The Series B preferred stock has certain class voting rights. Each holder of Series B preferred stock shall be entitled to vote on all matters, together with the holders of common stock, on an as converted basis, subject to a 9.99% limitation. So long as any shares of Series B preferred stock are outstanding, we shall not, without the affirmative approval of at least a majority of the shares of the Series B preferred stock outstanding, (i) amend, alter or repeal the provisions of the Series B preferred stock, so as to adversely affect any right, preference, privilege or voting power of the Series B preferred stock; or (ii) amend our Articles of Incorporation or By-Laws so as to affect materially and adversely any right, preference, privilege or voting power of the Series B preferred stock.

The holders of record of shares of Series B preferred stock shall not be entitled to receive any liquidation preference in the event of the liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary.

Series C Preferred Stock

The Board of Directors has created a series of Series C preferred stock consisting of 12,000,000 shares, of which 12,000,000 are issued and outstanding. Each share of Series C preferred stock is convertible into a number of fully paid and nonassessable shares of common stock equal to the quotient of (i) the Series C Liquidation Preference Amount of the shares of Series C Preferred Stock divided by (ii) the conversion price. The initial issue price shall be US$.60 and the initial conversion price shall be US$.50. Currently, the Series C preferred stock is convertible into 12,000,000 shares of common stock.

The Series C preferred stock has no preemptive rights. The Series C preferred stock will not accrue dividends. However, in the event that any dividends are paid on our common stock, the holders of Series C preferred stock shall share with the holders of common stock on an as converted basis in such dividends.

Except with respect to transactions upon which the Series C Preferred Stock shall be entitled to vote separately as a class and as otherwise required by Nevada law, the Series C Preferred Stock shall have no voting rights with the Common Stock or other equity securities of the Company. So long as any shares of Series C preferred stock are outstanding, we shall not, without the affirmative approval of at least a majority of the shares of the Series C preferred stock outstanding, (i) amend, alter or repeal the provisions of the Series C preferred stock, so as to adversely affect any right, preference, privilege or voting power of the Series C preferred stock; or (ii) amend our Articles of Incorporation or By-Laws so as to affect materially and adversely any right, preference, privilege or voting power of the Series C preferred stock.

In the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of shares of Series C Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, an amount equal to $0.60 per share of the Series C Preferred Stock (the “ Series C Liquidation Preference Amount”) before any payment shall be made or any assets distributed to the holders of the Common Stock or any other Junior Stock. If the assets of the Company are not sufficient to pay in full the Series C Liquidation Preference Amount payable to the holders of outstanding shares of the Series C Preferred Stock and any series of Preferred Stock or any other class of stock ranking pari passu, as to rights on liquidation, dissolution or winding up, with the Series C Preferred Stock, then all of said assets will be distributed among the holders of the Series C Preferred Stock and the other classes of stock ranking pari passu with the Series C Preferred Stock, if any, ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. The liquidation payment with respect to each outstanding fractional share of Series C Preferred Stock shall be equal to a ratably proportionate amount of the liquidation payment with respect to each outstanding share of Series C Preferred Stock. All payments for which this paragraph provides shall be in cash, property (valued at its fair market value as determined by an independent appraiser chosen by the Company and reasonably acceptable to the holders of a majority of the Series C Preferred Stock) or a combination thereof; provided , however , that no cash shall be paid to holders of Junior Stock unless each holder of the outstanding shares of Series C Preferred Stock has been paid in cash the full Series C Liquidation Preference Amount to which such holder is entitled as provided herein.

Warrants

Pursuant to the Warrant Exchange Agreement described elsewhere in this Registratino Statement, we do not have any common stock purchase warrants issued or outstanding, other than the placement agent warrants described below.

Placement Agent Warrants

We have 990,000 placement agent warrants that were issued to the placement agent in our 2007 Financing and are exercisable at US$0.50 per share. We also have 750,000 placement agent warrants that were issued to the placement agent in connection with the Series J Warrant exercise and are exercisable at US$0.60 per share. The placement agent warrants have the same terms as our other warrants, except that they contain a “cashless” exercise provision, they do not contain weighted average anti dilution protection and are for a term of six years.

Anti-Dilution Provisions in Preferred Stock and Warrants.

If certain changes occur to our capitalization, such as a stock split or stock dividend of the common stock, then the exercise price and number of shares issuable upon conversion or exercise of the preferred stock will be adjusted appropriately. In the event that we issue or are deemed to issue additional shares of our common stock in certain non-exempt transactions for a price less than the conversion price or exercise price per share under the preferred stock, then the conversion price or the exercise price, as the case may be, will be adjusted downward as follows (i) with respect to the Series A Preferred until August 9, 2008, to the actual per share price at which we issue or are deemed to issue the additional shares or (y) following August 9, 2008, to a conversion price or exercise price that is calculated based on a “weighted average” formula described therein; (ii) with respect to the Series B, to a conversion price that is calculated based on a "weighted average" formula described therein.

Generally, if we have any capital reorganization, reclassification of our capital stock, consolidation or merger in which we are not the survivor, or sale, transfer or other disposition of all or substantially all of our assets to another corporation, then the holder will have the right to receive in lieu of the shares issuable upon conversion or exercise of their securities, securities or assets as would have been issuable or payable with respect to or in exchange for a number of shares equal to the number of shares immediately convertible or exercisable before such transaction took place and appropriate adjustments to the terms of the preferred stock, as the case may be, including the conversion price or exercise price, will be made.

Dividends

We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the Board of Directors considers relevant.

Transfer Agent

The transfer agent for our common stock and preferred stock is Holladay Stock Transfer, 2939 N 67th Place, No. C, Scottsdale, Arizona 85251.

LEGAL MATTERS

Certain legal matters with respect to the shares of common stock offered hereby will be passed upon for us by Leser, Hunter, Taubman & Taubman, New York, New York.

EXPERTS

The financial statements for the fiscal years ended June 30, 2009 and 2008 and for the fiscal quarters ended September 30, 2009 and 2008 included in this prospectus have been audited by Patrizio & Zhao, LLC, independent auditors, as stated in its report appearing in this prospectus and elsewhere in the registration statement of which this prospectus forms a part, and have been so included in reliance upon the reports of such firm given upon its authority as experts in accounting and auditing.

DISCLOSURE OF COMMISSION POSITION ON

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by that director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether that indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of that issue.

AVAILABLE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance therewith, file reports and other information with the SEC. Our reports and other information filed pursuant to the Securities Exchange Act of 1934 may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a Web site that contains reports and other information regarding registrants that file electronically with the SEC. The address of the SEC’s Web site is http://www.sec.gov .

We have filed with the SEC a registration statement on Form S-1 under the Securities Act of 1933 with respect to the common stock offered hereby. As permitted by the rules and regulations of the SEC, this prospectus, which is part of theregistration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. Copies of the registration statement and the exhibits are on file with the SEC and may be obtained from the SEC’s Web site or upon payment of the fee prescribed by the SEC, or may be examined, without charge, at the offices of the SEC set forth above. For further information, reference is made to the registration statement and its exhibits.

JPAK GROUP, INC.

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009 AND 2008

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations and Comprehensive Income (loss)	F-4

Consolidated Statements of Stockholders’ Equity	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7

SEPTEMBER 30, 2009 AND 2008

Report of Independent Registered Public Accounting Firm	F-27

Consolidated Balance Sheet as of September 30, 2009 (unaudited)	F-28

Consolidated Statements of Operations and Comprehensive Income for the Fiscal Quarter ended September 30, 2009	F-29

Consolidated Statements of Cash Flows for the Fiscal Quarter ended September 30, 2009	F-30

Notes to Condensed Consolidated Financial Statements	F-31

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

JPAK Group, Inc.

We have audited the accompanying consolidated balance sheets of JPAK Group, Inc. and Subsidiaries (the “Company”) as of June 30, 2009 and 2008, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the years then ended. 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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of JPAK Group, Inc. and Subsidiaries as of June 30, 2009 and 2008, and the consolidated results of their operations and their consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Patrizio & Zhao, LLC

PATRIZIO & ZHAO, LLC

Certified Public Accountants and Consultants

Parsippany, New Jersey

September 10, 2009

F-2

Consolidated Balance Sheets

	June 30,			June 30,
	2009			2008
Assets
Current assets
Cash and cash equivalents	$	2,969,699		$	3,433,948
Restricted cash		3,403,868			3,784,956
Accounts receivable, net of allowance for doubtful accounts of $1,496,723
and $45,359 at June 30, 2009 and 2008, respectively		9,063,973			9,026,455
Inventory		5,353,193			5,420,631
Other receivables		1,205,983			1,131,511
Loan receivable		175,800			-
Advance payments		503,143			1,367,622
Prepaid expenses and other current assets		70,544			96,751
Prepaid other taxes		266,664			-
Total current assets		23,012,867			24,261,874

Property and equipment, net		13,107,216			11,660,063

Total assets	$	36,120,083		$	35,921,937

Liabilities
Current liabilities
Accounts payable and accrued expenses	$	3,277,973		$	3,442,859
Trade notes payable		3,212,704			3,784,956
Advance payments from customers		327,898			208,913
Short term bank loans		2,344,000			3,063,900
Current portion of long-term debt		951,811			1,263,786
Income tax payable		167,429			-
Other taxes payable		-			155,873
Other current liabilities		97,827			50,948
Total current liabilities		10,379,642			11,971,235

Long-term debt		1,985,075			655,091

Total liabilities		12,364,717			12,626,326

Equity
Stockholders’ equity
Series A convertible preferred stock, $0.0001 par value, 5,608,564
shares authorized, issued and outstanding		561			561
Common stock, $0.001 par value, 300,000,000 shares authorized,
25,005,000 and 24,505,000 shares issued and outstanding at
June 30, 2009 and 2008, respectively		25,005			24,505
Series B convertible preferred stock, $0.0001 par value, 5,000,000
shares authorized, issued and outstanding		500			500
Series A preferred shares		2,484,226			2,484,226
Series B preferred shares		1,390,853			1,390,853
Warrants		4,634,678			4,634,678
Placement agent warrants		1,172,487			1,172,487
Additional paid-in capital		11,473,104			11,048,604
Retained earnings (deficit)		(1,106,478	)		(1,063,713	)
Statutory reserves		1,010,026			849,692
Accumulated other comprehensive income		2,565,276			2,647,528
Total stockholders’ equity		23,650,238			23,189,921

Noncontrolling interest		105,128			105,690

Total equity		23,755,366			23,295,611

Total liabilities and equity	$	36,120,083		$	35,921,937

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

F-3

Consolidated Statements of Operations and Comprehensive Income (loss)

	For the Years Ended June 30,
	2009			2008

Sales	$	40,409,375		$	37,263,624

Cost of sales		30,259,650			27,379,350

Gross profit		10,149,725			9,884,274

Operating expenses
Selling, general and administrative		9,382,754			6,054,118

Income from operations		766,971			3,830,156

Other income (expenses):
Non-operating income		30,073			43,154
Interest Income		161,169			90,801
Interest expense		(410,001	)		(356,589	)
Non-operating expense		(124,139	)		(21,644	)
Government subsidy income		-			219,333

Total other income (expenses)		(342,898	)		(24,945	)

Income before provision for income taxes		424,073			3,805,211

Provision for income taxes		307,500			-

Net income before minority interest		116,573			3,805,211

Minority interest		(996	)		(1,460	)

Net income		117,569			3,806,671

Beneficial conversion feature related to Issuance of series A convertible
preferred stock		-			(2,484,226	)

Beneficial conversion feature related to issuance of series B convertible
preferred stock		-			(1,390,853	)

Undistributed income (loss) attributable to preferred stockholders		51,765			(25,268	)

Net income (loss) applicable to common stockholders		65,804			(43,140	)

Other comprehensive income
Foreign currency translation adjustment		(82,252	)		2,109,409

Comprehensive income (loss)	$	(16,448	)	$	2,066,269

Basic earnings per common share	$	0.00		$	(0.00	)
Diluted earnings per common share	$	0.00		$	(0.00	)

Weighted average number of common shares outstanding
Basic		24,852,671			24,341,066
Diluted		44,403,132			24,341,066

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

F-4

Consolidated Statements of Stockholders’ Equity

					Series A				Series B
					Convertible preferred				Convertible preferred				Allocation of		Allocation of						Commission Series A		Commission Series B										Accumulated Other			Total
	Common Stock				Stock				Stock				Series A		Series B				Placement		of		of		Additional			Retained					Compre-			Stock-
			Par				Par				Par		Preferred		Preferred				Agent		Preferred		Preferred		Paid-in			Earnings			Statutory		hensive			holders’
	Shares		Value		Shares		Value		Shares		Value		Shares		Shares		Warrants		Warrants		Shares		Shares		Capital			(Deficit)			Reserves		Income			Equity
Balance June 30, 2007		23,005,000	$	23,005		-	$	-		-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	5,676,259		$	1,896,256		$	348,009	$	538,119		$	8,481,648

Common stock issued
in conjunction
with RX Staffing
recapitalization		1,500,000		1,500		-		-		-		-		-		-		-		-		-		-		(1,500	)		-			-		-			-

Proceeds of preferred shares
allocated on
Aug 9, 2007		-		-		-		-		-		-		2,484,226		-		2,327,600		332,937		355,237		-		(5,500,000	)		-			-		-			-

Proceeds of preferred shares
allocated on
Dec 8, 2007		-		-		-		-		-		-		-		1,390,853		2,307,078		839,550		-		462,519		(5,000,000	)		-			-		-			-

Series A & B convertible
Preferred stock		-		-		5,608,564		561		5,000,000		500		-		-		-		-		-		-		-			-			-		-			1,061

Capital contribution		-		-		-		-		-		-		-		-		-		-		-		-		11,181,010			(2,389,878	)		-		-			8,791,132

Net income		-		-		-		-		-		-		-		-		-		-		-		-		-			3,806,671			-		-			3,806,671

Beneficial conversion feature related to
issuance of
Series A convertible
preferred stock		-		-		-		-		-		-		-		-		-		-		-		-		2,484,226			(2,484,226	)		-		-			-

Beneficial conversion feature related to
issuance of
Series B convertible
preferred stock		-		-		-		-		-		-		-		-		-		-		-		-		1,390,853			(1,390,853	)		-		-			-

Statutory reserves		-		-		-		-		-		-		-		-		-		-		-		-		-			(501,683	)		501,683		-			-

Other comprehensive income		-		-		-		-		-		-		-		-		-		-		-		-		-			-			-		2,109,409			2,109,409

Balance June 30, 2008		24,505,000	$	24,505		5,608,564	$	561		5,000,000	$	500	$	2,484,226	$	1,390,853	$	4,634,678	$	1,172,487	$	355,237	$	462,519	$	10,230,848		$	(1,063,713	)	$	849,692	$	2,647,528		$	23,189,921

Issuance of common shares		500,000		500		-		-		-		-		-		-		-		-		-		-		424,500			-			-		-			425,000

Net income		-		-		-		-		-		-		-		-		-		-		-		-		-			117,569			-		-			117,569

Statutory reserves		-		-		-		-		-		-		-		-		-		-		-		-		-			(160,334	)		160,334		-			-

Other comprehensive income		-		-		-		-		-		-		-		-		-		-		-		-		-			-			-		(82,252	)		(82,252	)

Balance June 30, 2009		25,005,000	$	25,005		5,608,564	$	561		5,000,000	$	500	$	2,484,226	$	1,390,853	$	4,634,678	$	1,172,487	$	355,237	$	462,519	$	10,655,348		$	(1,106,478	)	$	1,010,026	$	2,565,276		$	23,650,238

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

F-5

Consolidated Statements of Cash Flows

	For the Years Ended June 30,
	2009			2008

Cash flows from operating activities:
Net income	$	117,569		$	3,806,671
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Minority interest		(996	)		(1,460	)
Depreciation and amortization		1,248,849			1,048,719
Share based payment		425,000			-
Loss (gain) on disposal of fixed assets		85,652			(10,955	)
Provision for bad debts		1,451,177			2,029
Changes in assets and liabilities:
Accounts receivable		(1,451,575	)		466,883
Inventory		89,730			(1,561,951	)
Other receivables		(69,819	)		(1,067,840	)
Advance payments		789,528			(1,290,664	)
Prepaid expenses and other current assets		26,605			686,148
Accounts payable and accrued expenses		(178,961	)		(1,390,329	)
Advance payments from customers		118,126			197,157
Income tax payable		167,429			-
Other taxes payable		(423,179	)		-
Other current liabilities		46,669			(20,374	)
Total adjustments		2,324,235			(2,942,637	)

Net cash provided by operating activities		2,441,804			864,034

Cash flows from investing activities:
Additions to property and equipment		(2,718,595	)		(4,399,318	)
Proceeds from disposal of fixed assets		65,467			716,936
Loan receivable		(175,800	)		-
Proceeds from minority interest		-			101,202

Net cash used in investing activities		(2,828,928	)		(3,581,180	)

Cash flows from financing activities:
Additional paid-in capital		-			4,043,414
Issuance (repayment) of trade notes payable		(587,817	)		3,021,211
Repayment of bank loans		(732,500	)		(2,440,521	)
Proceeds from long-term debt		1,010,118			-

Net cash provided by (used in) financing activities		(310,199	)		4,624,104

Effect of foreign currency translation on cash		(148,014	)		373,746

Net increase (decrease) in cash and cash equivalents		(845,337	)		2,280,704

Cash and cash equivalents and restricted cash at beginning of year		7,218,904			4,938,200

Cash and cash equivalents and restricted cash at end of year	$	6,373,567		$	7,218,904

Supplemental schedule of non cash activities
Advance payments exchanged for property and equipment	$	80,575		$	-

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

F-6

Note 1 – Organization and Nature of Business

JPAK Group, Inc. (Formerly Rx Staffing Inc.), a public shell company as defined in Rule 12b-2 of the Exchange Act of 1934, was established under the laws of Nevada on December 6, 2004. The accompanying consolidated financial statements include the financial statements of JPAK Group, Inc. and its subsidiaries (the “Company”). The Company’s primary business is to print and produce packaging products for sale to the beverage and other industries.

On August 9, 2007, Rx Staffing Inc. (“Rx Staffing”) completed a reverse acquisition of JPAK Group Co., Ltd., (“JPAK”), which was incorporated in the Cayman Islands on June 22, 2006. To accomplish the exchange of shares Rx Staffing issued 23,005,000 shares of common stock on a one to one ratio for a 100% equity interest in JPAK, per the terms of the Share Exchange and Bill of Sale of assets of Rx Staffing and Shaun Jones. Rx Staffing was delivered with zero assets and zero liabilities at time of closing. Following the reverse acquisition, Rx Staffing changed the name to JPAK Group, Inc. The transaction was regarded as a reverse merger whereby JPAK was considered to be the accounting acquirer as its shareholders retained control of RX Staffing after the exchange. Although the Company is the legal parent company, the share exchange was treated as a recapitalization of JPAK. Thus, JPAK is the continuing entity for financial reporting purposes. The Financial Statements have been prepared as if JPAK had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock.

In September 2006, JPAK acquired 100% interest in Grand International Industrial Ltd. which was incorporated on August 4, 2006, in the city of Hong Kong, the People’s Republic of China (“PRC”). In August 2006, Grand International acquired 88.23% interest in Qingdao Renmin, which was incorporated in May 2001 in the city of Qingdao, the People’s Republic of China. On July 3, 2007, Grand International acquired the remaining 11.77% interest in Qingdao Renmin. The consolidated financial statements reflect all predecessor statements of income and cash flow from the inception of Qingdao Renmin in August 2006. In October 2007, Qingdao Renmin invested in Qingdao Delikang Packing Machinery Co., Ltd., (“Qingdao Delikang”), a joint venture with Xi’an Heiniu Machinery, Co. Qingdao Renmin acquired 51% interest of Qingdao Delikang.

Substantially all of the Company’s business is conducted through Qingdao Renmin, an operating subsidiary established in the Peoples Republic of China, in which the Company indirectly holds a 100% interest.

Note 2 – Summary of Significant Accounting Policies

Basis Of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America. The consolidated financial statements include the accounts of JPAK Group Inc. and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.

Cash And Cash Equivalents

In accordance with Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows,” the Company considers all highly liquid instruments with original maturities of three months or less to be “cash equivalents”.

F-7

Accounts Receivable

Trade accounts receivable are stated at original invoice amount less allowance for doubtful receivables which is based on management’s periodic review of aging of outstanding balances and customer credit history. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The balance of allowance for doubtful accounts amounted to $1,496,723 and $45,359 as of June 30, 2009 and 2008, respectively. An allowance amounted to $1,458,108 accrued in the year 2009 was mainly resulted from a previous major customer, who was near bankruptcy as of June 30, 2009.

F-8

Note 2 – Summary of Significant Accounting Policies (continued)

Inventory

Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required that could negatively impact our gross margin and operating results. The Company did not record any provision for slow-moving and obsolete inventory as of June 30, 2009 and 2008.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets as follows:

	Vehicles	5 to 10 years
	Furniture, machinery and equipment	5 to 20 years
	Buildings and improvements	40 years

Construction in progress primarily represents the renovation costs of plant, machinery and equipment. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences.

Cost of repairs and maintenance is expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of operations.

Long-Lived Assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions, which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future discounted cash flows. If the total of the expected future discounted cash flows is less than the total carrying value of the assets, a loss is recognized for the difference between the fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets.

F-9

Revenue Recognition

The Company derives its revenues primarily from sale of printed packaging products. In accordance with the provisions of Staff Accounting Bulletin No. 104, revenue should not be recognized until it is realized or realizable and earned. Revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. In this regard, the Company’s revenue is recognized when merchandise is received by customers or shipped by the Company pursuant to contractual terms of sales, title and risk of loss passes to the customers and the collectibility is reasonably assured.

Research and Development

Research and development costs are expensed when incurred. Research and development costs for the years ended June 30, 2009 and 2008 was $2,111,469 and $1,299,157, respectively.

F-10

Note 2 – Summary of Significant Accounting Policies (continued)

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. No differences were noted between the book and tax bases of the Company’s assets and liabilities, respectively. Therefore, there are no deferred tax assets or liabilities for the years ended June 30, 2009 and 2008.The standard corporate income tax rate decreased from 33% to 25% beginning on January 1, 2008, when the new Chinese tax law became effective.

As a PRC Foreign Enterprise, Qingdao Renmin is also entitled to be exempted from Foreign Enterprise Income Tax (“FEIT”) for a 2-year period starting from their first profit-making year followed by a 50% reduction of FEIT payable for the subsequent three years. Since January 1, 2009, the Company has commenced the 3-year period of tax holidays by a 50% reduction of FEIT with an effective tax rate of 12.5%.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, investment securities, accounts receivable, accounts payable, accrued expenses and other obligations, approximate their fair value due to the short-term maturities of the related instruments.

Foreign Currency Translation and Transactions

The financial position and results of operations of the Company is determined using local currency (Chinese Yuan) as the functional currency. Assets and liabilities are translated at the prevailing exchange rate in effect at each year end. Contributed capital accounts are translated using the historical rate of exchange when capital is contributed. Income statement accounts are translated at the average rate of exchange during the year. Currency translation adjustments arising from the use of different exchange rates are included in accumulated other comprehensive income (loss) in shareholders' equity. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations.

F-11

Comprehensive Income (Loss)

The Company has adopted SFAS No. 130, Reporting Comprehensive Income, which establishes rules for the reporting and display of comprehensive income, its components and accumulated balances. SFAS No. 130 defines comprehensive income (loss) to include all changes in equity, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on available-for-sale marketable securities, except those resulting from investments by owners and distributions to owners.

Share-Based Payments

The Company accounts for stock based compensation issued to employees and non-employees in accordance with SFAS No. 123R and Emerging Issues Task Force (“EITF”) Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in conjunction with Selling Goods or Services.” SFAS NO.123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). The EITF No. 96-18 reached a consensus that the issuer should measure the fair value of the equity instruments using the stock price and other measurement assumptions as of the earlier of either of the following: (1) The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a "performance commitment"); or (2) The date at which the counterparty's performance is complete.

F-12

Note 2 – Summary of Significant Accounting Policies (continued)

Earnings (Loss) Per Share

In accordance with SFAS No. 128, “Computation of Earnings Per Share” (“SFAS No. 128”) and EITF No. 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128” (“EITF No. 03-6”), basic earnings per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two class method, net income is allocated between ordinary shares and other participating securities based on their respective participating rights. Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the convertible preferred shares (using the if-converted method) and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method).

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation reserves for accounts receivable, inventory and income taxes and valuation of goodwill. Actual results could differ from those estimates

Recent Accounting Pronouncements

In April 2009, FASB Staff Position (FSP) No. FSP 107-1 and APB 28-1 was issued to amend SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods as well as for annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. FSP 107-1 and APB 28-1 are effective for interim reporting periods ending after June 15, 2009. Adoption of this guidance did not have a material impact on our consolidated financial statements.

In April 2009, FSP 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, was issued to provide additional guidance for estimating fair value in accordance with SFAS No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also provides guidance on identifying circumstances which indicate that a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Adoption of this guidance did not have a material impact on our consolidated financial statements.

In October 2008, the FASB issued FSP 157-3, Determining Fair Value of a Financial Asset in a Market That Is Not Active (“FSP 157-3”). FSP 157-3 clarifies the application of Statement of Financial Accounting Standards No. 157, Fair Value Measurements, in an inactive market. It demonstrates how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The Company’s implementation of this standard did not impact its consolidated results of operations or financial condition.

F-13

Note 2 – Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In September 2008, the FASB issued FSP FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees, an Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 (“FSP FAS 133-1 and FIN 45-4”). FSP FAS133-1 and FIN 45-4 amends Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. FSP FAS 133-1 and FIN 45-4 also amend FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others (“FIN 45”), to require additional disclosure about the current status of the payment/performance risk of a guarantee. The provisions of the FSP that amend SFAS 133 and FIN 45 are effective for reporting periods ending after November 15, 2008. FSP FAS 133-1 and FIN 45-4 also clarifies the effective date in Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”). Disclosures required by SFAS 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company’s adoption of FSP FAS 133-1 and FIN 45-4 on January 1, 2009, had no impact to its consolidated results of operations or financial condition.

Reclassification

Certain amounts of June 30, 2008 were reclassified for presentation purposes.

Note 3– Restricted Cash

As of June 30, 2009 and 2008, the Company had $3,403,868 and $3,784,956 restricted cash, respectively. These restricted cash balances are reserved for settlement of trade notes payable and open letter of credit in connection with inventory purchases. The cash held in custody by bank issuing the trade notes payable and letter of credit is restricted as to withdrawal or use, and is currently earning interest.

Note 4 – Inventory

Inventory at June 30, 2009 and 2008 consists of the following:

	June 30, 2009		June 30, 2008

Finished goods	$	939,428	$	787,872
Raw materials		3,912,953		4,011,065
Parts and supplies		84,806		66,599
Work in process		416,006		555,095

Total	$	5,353,193	$	5,420,631

Note 5 – Advance Payments

The Company makes advances to certain vendors for inventory and equipment. The advances on purchase of inventory amounted to $210,449 and $825,795 as of June 30, 2009 and 2008, respectively. Additionally, the Company made advances on equipment purchases amounted to $292,694 and $541,827 as of June 30, 2009 and 2008, respectively.

F-14

Note 6 – Property and Equipment

Property and equipment at June 30, 2009 and 2008 consists of the following:


	June 30, 2009		June 30, 2008

Buildings	$	4,463,528	$	3,972,267
Machinery and equipment		16,817,851		13,973,256
Subtotal		21,281,379		17,945,523
Less: Accumulated depreciation		8,174,163		7,023,582
		13,107,216		10,921,941
Add: Construction in progress		-		738,122
Total	$	13,107,216	$	11,660,063

Depreciation expenses for the years ended June 30, 2009 and 2008 were $1,248,849 and $1,048,719, respectively.

Note 7 – Loan Receivable

The Company has given a non interest-bearing loan in the amount of $175,800 to a certain customer for purchasing a filling machine, with a commitment from the customer on buying an agreed quantity of packaging supplies from the Company. The customer agreed to pay back the loan in four installments by June 30, 2010.

Note 8 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at June 30, 2009 and 2008 consist of the following:

	June 30, 2009		June 30, 2008

Accounts payable	$	3,032,577	$	3,256,552
Accrued expenses		245,396		186,307

Total	$	3,277,973	$	3,442,859

F-15

The carrying values of accounts payable and accrued expenses approximate their fair values due to the short-term nature of these obligations.

Note 9 – Trade Notes Payable

Trade notes payable consist of non-collateralized non-interest bearing promissory notes issued in connection with the acquisition of certain inventory and equipment. Balances outstanding under the notes as of June 30, 2009 and 2008 were $3,212,704 and $3,784,956, respectively.

Note 10 – Short Term Bank Loans

Short term bank loans at June 30, 2009 and 2008 consist of the following:

	June 30, 2009		June 30, 2009

On January 29, 2008, the Company obtained a loan from Qingdao City
Commercial Bank, out of which, the principal was paid in full by January 29,
2009. Interest was calculated using an annual fixed rate of 7.47% and paid
monthly. The loan was secured by the company's equipment.	$	-	$	2,334,000

F-16

Note 10 – Short Term Bank Loans (continued)


On May 30, 2008, the Company obtained a loan from China Industrial and
Commercial Bank, out of which, the principal was paid in full by May 29,
2009. Interest was calculated using an annual fixed rate of 7.47% and
paid monthly. The loan was secured by the company's equipment.	$	-	$	729,500

On January 22 2009, the Company obtained a loan from Qingdao City
Commercial Bank, out of which, the principal is to be paid in full by January
22, 2010. Interest is to be calculated using an annual fixed rate of 5.31% and
paid monthly. The loan is secured by the company's property and equipment.	$	2,344,000	$	-

Total short term bank loans	$	2,344,000	$	3,063,900

Note 11 – Income Taxes

JPAK Group Co., Ltd. was incorporated in the Cayman Islands. Under the laws of Cayman Islands, the Company is not subject to tax on income or capital gain.

The operating subsidiary Qingdao Renmin is a wholly foreign-owned enterprise incorporated in the PRC and subject to PRC Foreign Enterprise Income Tax (“FEIT”) Law. Pursuant to FEIT Law, foreign invested enterprises (“FIEs”) are subject to FEIT at a state tax rate of 30% plus a local tax rate of 3% on PRC taxable income. FIEs are also entitled to be exempted from FEIT for a 2-year period starting from their first profit-making year followed by a 50% reduction of FEIT payable for the subsequent three years, if they fall into the category of production-oriented enterprises with an operational period of more than 10 years in China. Qingdao Renmin started its tax holiday period on January 1, 2007, which will end on December 31, 2011.

On March 16, 2007, the National People’s Congress of China enacted a new Corporate Income Tax (“CIT”) law, under which FIEs and domestic companies would be subject to CIT at a uniform rate of 25%. The new CIT law became effective on January 1, 2008. The grandfathering treatments for unutilized tax holiday are provided for certain qualified FIEs. For those FIEs which have already commenced their qualified tax holidays before 2008, they can continue to enjoy the remaining unutilized tax holidays until expiry. For those qualified old FIEs which have not commenced their tax holidays before 2008 due to cumulative losses, their tax holidays will be deemed to commence in 2008 and can be utilized until expiry. Currently, the Company does not believe that the new CIT law will affect the preferential tax treatments (i.e. the unutilized tax holiday) that it is entitled to. Accordingly, since January 1, 2009, the Company has commenced the 3-year period of tax holidays by a 50% reduction of FEIT with an effective tax rate of 12.5%, and for the period ended June 30, 2009, the income tax expense was $307,500.

F-17

On February 22, 2008, the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) jointly issued Cai Shui [2008] Circular 1 (“Circular 1”). According to Article 4 of Circular 1, distributions of accumulated profits earned by a FIE prior to January 1, 2008 to foreign investor(s) in 2008 or after will be exempt from withholding tax (“WHT”) while distribution of the profit earned by an FIE after January 1, 2008 to its foreign investor(s) shall be subject to WHT. Since the Company intend to reinvest its earnings to further expand its businesses in mainland China, its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future.

Note 12 – Long-Term Debt

As of June 30, 2009, the Company had an outstanding long-term debt of $2,936,886, including the current portion of $951,811. As of June 30, 2008, the Company had an outstanding long-term debt of $1,918,877, including the current portion of $1,263,786. These loans represent borrowings from employees at an annual interest rate of 10%. Interest payments are made semi-annually with no principal payments due until May 31, 2010, as per the terms of the loan agreement.

F-18

Note 13 – Employee Welfare Plan

The Company has established an employee welfare plan in accordance with Chinese laws and regulations. Full-time employees of the Company in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits was $ 440,169 and $ 356,359 for the years ended June 30, 2009 and 2008, respectively.

Note 14 – Statutory Common Welfare Fund

As stipulated by the People’s Republic of China (PRC), net income after tax can only be distributed as dividends after appropriation has been made for the following:

(i)

Making up cumulative prior years’ losses, if any;

(ii)

Allocations to the “Statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital;

(iii)

Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's “Statutory common welfare fund”, which is established for the purpose of providing facilities and other collective benefits to the Company employees;

Allocations to the discretionary surplus reserve were approved in the shareholders’ general meeting. The Company provided the statutory surplus reserve of $160,334 and $501,683 for the years ended June 30, 2009 and 2008, respectively.

Note 15 – Risk Factors

In the years ended June 30, 2009 and 2008, five vendors accounted for approximately 70% and 62% of the Company’s purchases, respectively. Total purchases from these vendors were $24,923,202 and $21,061,635 for the years ended June 30, 2009 and 2008, respectively.

In the years ended June 30, 2009 and 2008, five customers accounted for approximately 55% and 57% of the Company’s revenue, respectively. Total sales to these customers were $22,096,132 and $21,009,545, for the years ended June 30, 2009 and 2008, respectively.

F-19

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

Note 16 - Concentrations of Credit Risk

Financial instruments which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments.

F-20

Note 17 – Supplemental Cash Flow Information

	Years Ended June 30,
	2009		2008

Cash paid for interest	$	399,488	$	356,589
Cash paid for income taxes	$	140,071	$	-

Note 18 – Share-Based Payments

On April 1, 2008, JPAK entered into a consulting agreement with Tripoint Capital advisors, LLC to provide consulting services for one year. As a result, JPAK agreed to issue to Tripoint and/or its affiliates 300,000 shares of its capital stock on July 1, 2008. The shares were issued on July 1, 2008. 150,000 shares were vested immediately and the remaining 150,000 will be vested in equal installments in the next two quarters. The fair value on April 1, 2008 was $404,700 based on the quoted price of the Company’s common stock.

On April 1, 2009, the board of directors approved to issue 200,000 shares of the Company’s common stock to Mr. Dongliang (Frank) Su, the Acting CFO of the Company and the shares vested on July 1, 2009. The fair value on April 1, 2009 was $20,000 based on the quoted price of the Company’s common stock on that day.

Note 19 – Earnings Per Share

The Company presents earnings per share (“EPS”) on a basic and diluted basis. Basic earnings per share have been computed by dividing income available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share have been computed by dividing income available to common shareholders by the weighted average number of shares outstanding including the dilutive effect of equity securities. All share and per share data have been adjusted retroactively to reflect the recapitalization of the Company pursuant to the Securities Exchange Agreement with Rx Staffing.

The Company uses two-class method to calculate the basic earnings per share. Under the two class method, net income is allocated between ordinary shares and other participating securities based on their respective participating rights. The Company’s Series A and Series B preferred shares are participating securities. In the event that any dividends are paid on our common stock, the holders of Series A and Series B preferred stock shall share with the holders of common stock on an as converted basis in such dividends. The 5,608,564 shares of Series A Preferred Stock are convertible into an aggregate of 11,217,128 shares of common stock.

F-21

Note 19 – Earnings Per Share (continued)

The 5,000,000 shares of Series B Preferred Stock are convertible into an aggregate of 8,333,333 shares of common stock.

Basic EPS for the year ended June 30, 2009 was computed as follows:

Net income					$	117,569
Less dividends paid to:
Common shareholders						-
Series A convertible preferred shareholders						-
Series B convertible preferred shareholders						-
Undistributed 2009 earnings					$	117,569

Basic earnings per share amounts:
			Series A		Series B
	Common		convertible		convertible
	Stock		preferred stock		preferred stock

Distributed earnings	$	0.00	$	0.00	$	0.00
Undistributed earnings		0.00		0.01		0.00
Totals	$	0.00	$	0.01	$	0.00

F-22

Note 19 – Earnings Per Share (continued)

Diluted EPS for the year ended June 30, 2009 was computed as follows using the If-Converted Method:

	Distributed &
	Undistributed
	earnings to
	Common		Common		Earnings
	Stock		Shares		Per Share

As reported - Basic	$	65,804		24,852,671	$	0.00
Warrants		-		-		-
		65,804		24,852,671	$	0.00
Series A preferred stock conversion		29,700		11,217,128		-
Series B preferred stock conversion		22,065		8,333,333		-
Diluted earnings for common stock	$	117,569		44,403,132	$	0.00

Basic EPS for the year ended June 30, 2008 was computed as follows:

Net income							$	3,806,671
Less dividends paid to:
Common shareholders								-
Series A convertible preferred shareholders								2,484,226
Series B convertible preferred shareholders								1,390,853
Undistributed 2008 loss							$	(68,408	)

Basic earnings per share amounts:
				Series A			Series B
	Common			convertible			convertible
	Stock			preferred stock			preferred stock

Distributed earnings	$	(0.00	)	$	0.50		$	0.55
Undistributed earnings		(0.00	)		(0.00	)		(0.00	)
Totals	$	(0.00	)	$	0.50		$	0.55

F-23

Note 19 – Earnings Per Share (continued)

We consider the beneficial conversion feature as dividend in kind distributed to the preferred shareholders.

Diluted EPS for the year ended June 30, 2008 was computed as follows using the If-Converted Method:

	Distributed &
	Undistributed
	earnings to
	Common			Common		Earnings
	Stock			Shares		Per Share

As reported - Basic	$	(43,140	)		24,341,066	$	(0.00	)
Warrants		-			-		--
		(43,140	)		24,341,066	$	(0.00	)
Series A preferred stock conversion		-			-		--
Series B preferred stock conversion		-			-		--
Diluted earnings for common stock	$	(43,140	)		24,341,066	$	(0.00	)

F-24

Note 20 – Liquidated Damages for Ineffective Registration Statement

On August 9, 2007, the Company entered into a Registration Rights Agreement with the Investors (the “Investor RRA”). Under the Investor RRA, the Company was required to prepare and file a registration statement for the sale of the Common Stock issuable to the Investors under the Series A and Series B Preferred Stock and the Warrants and to use the Company’s best efforts to cause, and to maintain, the effectiveness of the registration statement. The Company filed this registration statement to fulfill the Company’s obligations under the RRA. The Company is subject to certain monetary obligations if, the registration statement is not declared effective by the SEC by March 31, 2008. The obligations are payments in an amount equal to 2% of the aggregate amount invested by such Investor (based upon the number of Registrable Securities then owned by such Investor) for each 30 day period or any portion thereof following the date by which such Registration Statement should have been effective, up to a maximum amount of 10%. Under the Investor RRA, the shareholders of JPAK were granted piggyback registration rights for 15,805,000 shares of the Company’s common stock.

The Investor “RAA” also contains provisions for the inability to register all of the shares underlying all of the Series A and Series B Preferred Stock and Warrants due to the SEC’s application of Rule 415. Pursuant to those provisions, if the SEC issues us a 415 comment, then the Company must first try to register the common stock underlying the preferred stock (on a pro rata basis among the holders of the Preferred Stock) and then register all of the common stock underlying the Warrants (on a pro rata basis among the holders of the Warrants). The Company is filing the Registration Statement to register for resale 687,106 shares of common stock underlying the Series A Preferred Stock, as required by the terms of the Investor RRA. Subsequent registration statements required to be filed to register the rest of the common stock underlying the preferred stock and warrants issued in the financing will be filed on the later of (i) 60 days following the sale of substantially all of the shares of common stock included in this Registration Statement or any subsequent Registration Statement and (ii) 6 months following the effective date of this Registration Statement or any subsequent Registration Statement, as applicable, or such earlier or later date as permitted or required by the Commission. Each such subsequent registration statement must be declared effective by the earlier of (A) the 90th day following the filing date of such Registration Statement (or in the event such Registration Statement is reviewed by the Commission, the one hundred twentieth (120th) day following such filing date) or (B) 5 business days after SEC has no more comments. However, the Company does not have any monetary obligations for any securities that were not permitted to be included in a registration statement because of the SEC’s application of Rule 415 until such time the securities are required to be filed pursuant to the Investor RRA. In such case, the liquidated damages shall be calculated to only apply to the percentage of securities which are permitted by the Commission to be included in the Registration Statement.

Since the Company is only able to register 687,106 common shares and the total common shares underlying the Series A convertible preferred stock is 11,217,128, the Company is only required to pay 6.13% (687,106/11,217,128) of the 2 percent of 5,500,000 shares of common stock ($110,000) due per month under the terms of the Company’s RAA. Therefore, the Company’s monthly liquated damages will be approximately $6,738. Pursuant to discussions with SEC staff covering interpretations of Rule 415, the Company based the number of shares eligible for registration on the number of shares currently outstanding (24,505,000) and the number of common shares currently held by non-affilates (1,500,000 issued by RX Staffing prior to the reverse merger and the 561,322 shares issued to the American Capital Markets, Ltd. as part of the merger).

On January 7, 2009, the registration statement of the Company was declared effective by SEC and therefore the monetary obligations were terminated therefrom. The total amount of liquidated damages was $60,642 for the year ended June 30, 2009.

Note 21 – Reclassification of Prior Year Retained Earnings (Deficit)

As per the laws of the People’s Republic of China (PRC), the Company is required to allocate 10% of its income (net of tax) to the statutory reserve for the benefit of the Company’s employees. The Company has reclassified an amount of $501,683 to the statutory reserve from the retained earnings of June 30, 2008. This reclassification has no effect on the net income and the earnings per share. A reconciliation of the retained earnings of June 30, 2008 after reclassification is presented as follows:

F-25

Note 21 – Reclassification of Prior Year Retained Earnings (Deficit) (continued)

	Retained Earnings
	(Deficit)			Statutory Reserves

Balance at June 30, 2008	$	(562,030	)	$	348,009

Reclassification to statutory reserve
for the year ended June 30, 2008		(501,683	)		501,683

Adjusted balance at June 30, 2008	$	(1,063,713	)	$	849,692

Note 22 – Subsequent Events

None.

F-26

Interim Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

JPAK Group, Inc.

We have reviewed the accompanying consolidated balance sheet of JPAK Group, Inc. and Subsidiaries (the ÒCompanyÓ) as of September 30, 2009, and the related consolidated statements of operations and comprehensive income, and cash flows for the three months ended September 30, 2009 and 2008. These consolidated financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), the balance sheet of JPAK Group, Inc. and Subsidiaries as of June 30, 2009, and the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated September 10, 2009, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of June 30, 2009, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

/s/ Patrizio & Zhao, LLC

Patrizio & Zhao, LLC

Parsippany, New Jersey

November 6, 2009

F-27

JPAK GROUP, INC.

Consolidated Balance Sheets

	September 30,		June 30,
	2009		2009
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	1,411,453	$	2,969,699
Restricted cash		5,848,890		3,403,868
Accounts receivable, net of allowance for doubtful accounts of $1,498,766
and $$1,496,723 at September 30, 2009 and June 30, 2009, respectively		11,367,055		9,063,973
Inventory		6,449,591		5,353,193
Trade notes receivable		88,020		-
Other receivables		1,278,933		1,205,983
Loan receivable		132,030		175,800
Advance payments		2,820,655		503,143
Prepaid expenses and other current assets		219,355		70,544
Prepaid other taxes		-		266,664
Total current assets		29,615,982		23,012,867

Property and equipment, net		12,939,056		13,107,216

Total assets	$	42,555,038	$	36,120,083

Liabilities
Current liabilities
Accounts payable and accrued expenses	$	4,923,976	$	3,277,973
Trade notes payable		5,209,267		3,212,704
Advance payments from customers		311,727		327,898
Short term bank loans		2,347,200		2,344,000
Current portion of long-term debt		151,101		951,811
Income tax payable		242,987		167,429
Other current liabilities		261,273		97,827
Total current liabilities		13,447,531		10,379,642

Long-term debt		3,827,403		1,985,075

Total liabilities		17,274,934		12,364,717

Equity
Stockholders’ equity
Series A convertible preferred stock, $0.0001 par value, 5,608,564
shares authorized, issued and outstanding		561		561
Series B convertible preferred stock, $0.0001 par value, 5,000,000
shares authorized, issued and outstanding		500		500
Common stock, $0.001 par value, 300,000,000 shares authorized,
25,005,000 shares issued and outstanding at September 30, 2009 and
June 30, 2009, respectively		25,005		25,005
Series A preferred shares		2,484,226		2,484,226
Series B preferred shares		1,390,853		1,390,853
Warrants		4,634,678		4,634,678
Placement agent warrants		1,172,487		1,172,487
Additional paid-in capital		11,473,104		11,473,104
Retained earnings (deficit)		386,142		(1,106,478	)
Statutory reserves		1,010,026		1,010,026
Accumulated other comprehensive income		2,597,306		2,565,276
Total stockholders’ equity		25,174,888		23,650,238

Noncontrolling interest		105,216		105,128

Total equity		25,280,104		23,755,366

Total liabilities and equity	$	42,555,038	$	36,120,083

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

F-28

JPAK GROUP, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

	For the Three Months Ended
	September 30,
	2009			2008

Sales	$	16,561,920		$	9,430,330

Cost of sales		11,837,612			6,995,902

Gross profit		4,724,308			2,434,428

Operating expenses
Selling, general and administrative		2,888,343			2,107,661

Income from operations		1,835,965			326,767

Other income (expenses):
Interest expense, net		(97,051	)		(8,525	)
Non-operating expense, net		(3,512	)		12,636

Total other income (expenses)		(100,563	)		4,111

Income before provision for income taxes		1,735,402			330,878

Provision for income taxes		242,838			-

Net income before noncontrolling interest		1,492,564			330,878

Noncontrolling interest		(56	)		(492	)

Net income		1,492,620			331,370

Undistributed income attributable to preferred stockholders		654,946			146,079

Net income applicable to common stockholders		837,674			185,291

Other comprehensive income
Foreign currency translation adjustment		32,030			(38,908	)

Comprehensive income	$	1,524,650		$	292,462

Basic earnings per common share	$	0.03		$	0.01
Diluted earnings per common share	$	0.03		$	0.01

Weighted average number of common shares outstanding
Basic		25,005,000			24,798,478
Diluted		44,555,461			51,681,761

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

F-29

JPAK GROUP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended
	September 30,
	2009			2008

Cash flows from operating activities:
Net income	$	1,492,620		$	331,370
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Noncontrolling interest		(56	)		(492	)
Depreciation		382,499			296,909
Share-based payment		-			202,500
Loss on disposal of fixed assets		2,354			-
Provision for bad debts		-			150,782
Changes in assets and liabilities:
Accounts receivable		(2,289,303	)		472,126
Inventory		(1,088,422	)		125,185
Trade notes receivable		(87,966	)		-
Other receivables		(71,260	)		(90,037	)
Advance payments		(2,315,404	)		(554,020	)
Prepaid expenses and other current assets		(148,704	)		(3,397	)
Accounts payable and accrued expenses		1,640,738			(1,045,312	)
Advance payments from customers		(16,609	)		-
Income tax payable		75,283			-
Other current liabilities		430,078			(43,880	)
Total adjustments		(3,486,772	)		(489,636	)

Net cash used in operating activities		(1,994,152	)		(158,266	)

Cash flows from investing activities:
Additions to property and equipment		(198,913	)		(247,665	)
Loan receivable		43,983			-

Net cash used in investing activities		(154,930	)		(247,665	)

Cash flows from financing activities:
Issuance of trade notes payable		1,990,955			585,547
Proceeds from long-term debt		1,036,973			125,164

Net cash provided by financing activities		3,027,928			710,711

Effect of foreign currency translation on cash		7,930			(82,849	)

Net increase in cash and cash equivalents		886,776			221,931

Cash and cash equivalents and restricted cash – beginning		6,373,567			7,218,904

Cash and cash equivalents and restricted cash – ending	$	7,260,343		$	7,440,835

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

F-30

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

On August 9, 2007, Rx Staffing Inc. (“Rx Staffing”) completed a reverse acquisition of JPAK Group Co., Ltd., (“JPAK Co.”) which was incorporated in the Cayman Islands on June 22, 2006. To accomplish the exchange of shares Rx Staffing issued 23,005,000 shares of common stock on a one to one ratio for a 100% equity interest in JPAK Co., per the terms of the Share Exchange and Bill of Sale of assets of Rx Staffing and Shaun Jones. Rx Staffing was delivered with zero assets and zero liabilities at time of closing. Following the reverse acquisition, Rx Staffing changed the name to JPAK Group, Inc. (“JPAK”). The transaction was regarded as a reverse merger whereby JPAK Co. was considered to be the accounting acquirer as its shareholders retained control of RX Staffing after the exchange. Although the Company is the legal parent company, the share exchange was treated as a recapitalization of JPAK Co.. Thus, JPAK Co. is the continuing entity for financial reporting purposes. The financial statements have been prepared as if JPAK Co. had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock.

In September 2006, JPAK Co. acquired 100% interest in Grand International Industrial Ltd. which was incorporated on August 4, 2006, in the city of Hong Kong, the People’s Republic of China (“PRC”). In August 2006, Grand International acquired 88.23% interest in Qingdao Renmin, which was incorporated in May 2001 in the city of Qingdao, the People’s Republic of China. On July 3, 2007, Grand International acquired the remaining 11.77% interest in Qingdao Renmin. The consolidated financial statements reflect all predecessor statements of income and cash flows from the inception of Qingdao Renmin in August 2006. In October 2007, Qingdao Renmin invested in Qingdao Delikang Packing Machinery Co., Ltd., (“Qingdao Delikang”), a joint venture with Xi’an Heiniu Machinery, Co. Qingdao Renmin acquired 51% interest of Qingdao Delikang.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Company’s consolidated financial statements include the accounts of its direct wholly-owned subsidiaries and of its indirect proportionate share of subsidiaries owned by the wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

INTERIM FINANCIAL STATEMENTS

These interim financial statements should be read in conjunction with the audited financial statements for the years ended June 30, 2009 and 2008, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements for the years ended June 30, 2009 and 2008.

F-31

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

On July 1, 2009, the Financial Accounting Standards Board (“FASB”) officially launched the FASB Accounting Standards Codification (“ASC”), which has become the single official source of authoritative nongovernmental U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission. The ASC is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the ASC carries an equal level of authority. The ASC is effective for all interim and annual periods ending after September 15, 2009. The Company’s implementation of this guidance effective July 1, 2009 did not have a material effect on the Company’s condensed consolidated financial statements.

RECLASSIFICATION

Certain amounts of September 30, 2008 were reclassified for presentation purposes.

NOTE 3– RESTRICTED CASH

As of September 30, 2009 and June 30, 2009, the Company had restricted cash of $5,848,890 and $3,403,868, respectively. These restricted cash balances are reserved for settlement of trade notes payable and open letter of credit in connection with inventory purchases. The cash held in custody by bank issuing the trade notes payable and letter of credit is restricted as to withdrawal or use, and is currently earning interest.

NOTE 4– ACCOUNTS RECEIVABLE

Trade accounts receivable are stated at original invoice amount less allowance for doubtful receivables based on management’s periodic review of aging of outstanding balances and customer credit history. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

The balance of allowance for doubtful accounts amounted to $1,498,766 and $1,496,723 as of September 30, 2009 and June 30, 2009, respectively. The allowance was mainly because a major customer was near bankruptcy as of September 30, 2009.

NOTE 5 – INVENTORY

Inventory at September 30, 2009 and June 30, 2009 consists of the following:

	September 30, 2009		June 30, 2009

Finished goods	$	2,264,747	$	939,428
Raw materials		3,630,333		3,912,953
Parts and supplies		154,465		84,806
Work in process		400,046		416,006

Total	$	6,449,591	$	5,353,193

F-32

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 6 – ADVANCE PAYMENTS

The Company makes advances to certain vendors for inventory and equipment. The advances for the purchase of inventory amounted to $1,793,557 and $210,449 as of September 30, 2009 and June 30, 2009, respectively. Additionally, the advances for the purchase of equipment amounted to $1,027,098 and $292,694 as of September 30, 2009 and June 30, 2009, respectively.

NOTE 7 – LOAN RECEIVABLE

The Company has given a non interest-bearing loan in the amount of $132,030 to a certain customer for purchasing a filling machine, with a commitment from the customer to buy an agreed quantity of packaging supplies from the Company. The customer agreed to pay back the loan in four installments by June 30, 2010.

NOTE 8 – PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2009 and June 30, 2009 consists of the following:


	September 30, 2009		June 30, 2009

Buildings	$	4,495,198	$	4,463,528
Machinery and equipment		17,007,960		16,817,851
Subtotal		21,503,158		21,281,379
Less: Accumulated depreciation		8,565,898		8,174,163
		12,937,260		13,107,216
Add: Construction in progress		1,796		-
Total	$	12,939,056	$	13,107,216

Depreciation expenses for the three months ended September 30, 2009 and 2008 were $382,499 and $296,909, respectively.

NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at September 30, 2009 and June 30, 2009 consist of the following:

	September 30, 2009		June 30, 2009

Accounts payable	$	4,746,966	$	3,032,577
Accrued expenses		177,010		245,396

Total	$	4,923,976	$	3,277,973

The carrying values of accounts payable and accrued expenses approximate their fair values due to the short-term nature of these obligations.

NOTE 10 – TRADE NOTES PAYABLE

Trade notes payable consist of non-collateralized non-interest bearing promissory notes issued in connection with the acquisition of certain inventory and equipment. Balances outstanding under the notes as of September 30, 2009 and June 30, 2009 were $5,209,267 and $3,212,704, respectively.

F-33

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 11 – SHORT TERM BANK LOANS

Short term bank loans at September 30, 2009 and June 30, 2009 consist of the following:

	September 30,		June 30,
	2009		2009
On January 22, 2009, the Company obtained a loan from Qingdao City
Commercial Bank, out of which, the principal is to be paid in full by January
22, 2010. Interest is to be calculated using an annual fixed rate of 5.31%
and paid monthly. The loan is secured by the company's property and
equipment.	$	2,347,200	$	2,344,000

Total short term bank loans	$	2,347,200	$	2,344,000

NOTE 12 – INCOME TAXES

JPAK Group Co., Ltd. was incorporated in the Cayman Islands. Under the laws of Cayman Islands, the Company is not subject to tax on income or capital gain.

On March 16, 2007, the National People’s Congress of China enacted a new Corporate Income Tax (“CIT”) law, under which FIEs and domestic companies would be subject to CIT at a uniform rate of 25%. The new CIT law became effective on January 1, 2008. The grandfathering treatments for unutilized tax holiday are provided for certain qualified FIEs. For those FIEs which have already commenced their qualified tax holidays before 2008, they can continue to enjoy the remaining unutilized tax holidays until expiry. For those qualified old FIEs which have not commenced their tax holidays before 2008 due to cumulative losses, their tax holidays will be deemed to commence in 2008 and can be utilized until expiry. Currently, the Company does not believe that the new CIT law will affect the preferential tax treatments (i.e. the unutilized tax holiday) that it is entitled to. Accordingly, since January 1, 2009, the Company has commenced the 3-year period of tax holidays by a 50% reduction of FEIT with an effective tax rate of 12.5%, and for the quarter ended September 30, 2009, the income tax expense was $242,838.

On February 22, 2008, the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) jointly issued Cai Shui [2008] Circular 1 (“Circular 1”). According to Article 4 of Circular 1, distributions of accumulated profits earned by a FIE prior to January 1, 2008 to foreign investor(s) in 2008 or after will be exempt from withholding tax (“WHT”) while distribution of the profit earned by an FIE after January 1, 2008 to its foreign investor(s) shall be subject to WHT. Since the Company intends to reinvest its earnings to further expand its businesses in mainland China, its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable future.

NOTE 13 – LONG-TERM DEBT

As of September 30, 2009, the Company had an outstanding long-term debt of $3,978,504, including the current portion of $151,101. As of June 30, 2009, the Company had an outstanding long-term debt of $2,936,886, including the current portion of $951,811. These loans represent borrowings from employees at an annual interest rate of 10%. Interest payments are made semi-annually with no principal payments due until May 31, 2010, as per the terms of the loan agreement.

F-34

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 14 – STOCKHOLDERS’ EQUITY AND RELATED FINANCING AGREEMENTS

On August 9, 2007, the shareholders of JPAK were issued 23,005,000 shares of Rx Staffing’s common stock, which represented 64.4% of all the issued and outstanding shares of JPAK’s common stock, under a Securities Exchange Agreement (the “SEA”), pursuant to which all the shares of Rx Staffing were transferred and JPAK became a wholly-owned subsidiary of Rx Staffing. In connection with the Share Exchange, the company changed its name to JPAK Group, Inc.

On August 9, 2007, JPAK became a party to the Note Purchase Agreement dated May 17, 2007 (“NPA”). Pursuant to the NPA, JPAK issued Convertible Promissory Notes in the aggregate principal amount of $5.5 million to the Investors. As a result of the Share Exchange, and under the terms of the Notes and the NPA, the notes converted to the following: (i) 5,608,564 shares of the Company’s Series A Convertible Preferred Stock, par value $.0001 per share, convertible into an aggregate of 11,217,128 shares of Common Stock, (ii) Series A Warrants to purchase an aggregate of 5,500,000 shares of Common Stock (subject to adjustment) at an exercise price of $.60 per share until August 2011 (the “Series A Warrants”), (iii) Series B Warrants to purchase an aggregate of 5,500,000 shares of Common Stock (subject to adjustment) at an exercise price of $.70 per share until August 2011 (the “Series B Warrants”) and (iv) Series J Warrants to purchase (a) an aggregate of 5,000,000 shares of Series B Preferred Stock, which shall contain the same terms as the Series A Preferred Stock (other than conversion price), and will be convertible into 8,333,333 shares of the Company’s Common Stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of Common Stock (subject to adjustment) at an exercise price of $.72 per share (the “Series C Warrants”) and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of Common Stock (subject to adjustment) at an exercise price of $.84 per share (the “Series D Warrants” and together with the Series A Warrants, Series B Warrants and Series C Warrants, the “Warrants”). The Series J Warrants were exercisable until 90 days following the effective date of a registration statement registering for sale of shares of common stock underlying the securities issued in the financing. Finally, the Company also granted warrants to purchase 990,000 shares of common stock at an exercise price of $.50 per share and 750,000 shares of common stock at an exercise price of $.60 per share to the placement agent in the financing transaction. These warrants have the same terms as the Series A and Series B Warrants, except that they contain a “cashless” exercise provision.

On December 28, 2007, the holders of the JPAK’s outstanding Series J Warrants exercised in full such warrants for aggregate gross proceeds of $5.0 million to The Company. Upon exercise of the Series J Warrants and pursuant to their stated terms, the Company issued to the holders of the Series J Warrants (a) an aggregate of 5,000,000 shares of the Company’s Series B Convertible Preferred Stock, which are convertible into an aggregate of 8,333,333 shares of the Company’s common stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of the Company’s common stock at an exercise price of $0.72 per share and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of the Company’s common stock (subject to adjustment) at an exercise price of $0.84 per share. The Series C Warrants and Series D Warrants have a term of six years from the date of issuance.

In connection with the exercise of the Series J Warrants, the term of Series A and Series B Warrants was extended from four years to six years, so that such warrants shall now expire on August 9, 2013. The extension of the term of the Series A and Series B Warrants was a condition of the exercise of the Series J Warrants and the subsequent issuance of the Series B Preferred stock (the “Series B financing”). In this way, the conversion of Series A and Series B convertible Preferred Stock is deemed as “in the money” and therefore contain a beneficial conversion feature which amounted to $2,484,226 and $1,390,853, respectively, after allocation.

On April 1, 2008, JPAK entered into a consulting agreement with Tripoint Capital advisors, LLC to provide consulting services for one year. As a result, JPAK agreed to issue to Tripoint and/or its affiliates 300,000 shares of its capital stock on July 1, 2008. The shares were issued on July 1, 2008. 150,000 shares were vested immediately and the remaining 150,000 were to be vested in equal installments in the next two quarters. The fair value on April 1, 2008 was $404,700 based on the quoted price of the Company's common stock.

F-35

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 14 – STOCKHOLDERS’ EQUITY AND RELATED FINANCING AGREEMENTS (CONTINUED)

On April 1, 2009, the board of directors approved to issue 200,000 shares of the Company’s common stock to Mr. Dongliang (Frank) Su, the acting CFO of the Company and the shares were vested on July 1, 2009. The fair value on April 1, 2009 was $20,000 based on the quoted price of the Company's common stock on that day.

NOTE 15 – EMPLOYEE WELFARE PLAN

The Company has established an employee welfare plan in accordance with Chinese laws and regulations. Full-time employees of the Company in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits was $109,266 and $119,482 for the quarters ended September 30, 2009 and 2008, respectively.

NOTE 16 – RISK FACTORS

In the three months ended September 30, 2009 and 2008, five vendors accounted for approximately 79% and 64% of the Company's purchases, respectively. Total purchases from these vendors were $12,914,455 and $5,765,152 for the three months ended September 30, 2009 and 2008, respectively.

In the three months ended September 30, 2009 and 2008, five customers accounted for approximately 59% and 47% of the Company's revenue, respectively. Total sales to these customers were $9,692,619 and $4,431,837 for the three months ended September 30, 2009 and 2008, respectively.

NOTE 17 - CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions that hold the Company's cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments.

NOTE 18 – EARNINGS PER SHARE

The Company uses the two-class method to calculate the basic earnings per share. Under the two class method, net income is allocated between ordinary shares and other participating securities based on their respective participating rights. The Company's Series A and Series B preferred shares are participating securities. In the event that any dividends are paid on our common stock, the holders of Series A and Series B preferred stock shall share with the holders of common stock on an as converted basis in such dividends. The 5,608,564 shares of Series A Preferred Stock are convertible into an aggregate of 11,217,128 shares of common stock. The 5,000,000 shares of Series B Preferred Stock are convertible into an aggregate of 8,333,333 shares of common stock.

F-36

JPAK GROUP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

NOTE 18 – EARNINGS PER SHARE (CONTINUED)

Basic EPS for the quarter ended September 30, 2009 was computed as follows:

Net income					$	1,492,620
Less dividends paid to:
Common shareholders						-
Series A convertible preferred shareholders						-
Series B convertible preferred shareholders						-
Undistributed 2009 earnings					$	1,492,620

Basic earnings per share amounts:
			Series A		Series B
	Common		convertible		convertible
	Stock		preferred stock		preferred stock

Distributed earnings	$	0.00	$	0.00	$	0.00
Undistributed earnings		0.03		0.07		0.06
Totals	$	0.03	$	0.07	$	0.06

Diluted EPS for the quarter ended September 30, 2009 was computed as follows using the If-Converted Method:

	Distributed &
	Undistributed
	earnings to
	Common		Common		Earnings
	Stock		Shares		Per Share

As reported - Basic	$	837,674		25,005,000	$	0.03
Warrants		-		-		--
		837,674		25,005,000	$	0.03
Series A preferred stock conversion		375,777		11,217,128		-
Series B preferred stock conversion		279,169		8,333,333		--
Diluted earnings for common stock	$	1,492,620		44,555,461	$	0.03

Basic EPS for the quarter ended September 30, 2008 was computed as follows:

Net income					$	331,370
Less dividends paid to:
Common shareholders						-
Series A convertible preferred shareholders						-
Series B convertible preferred shareholders						-
Undistributed earnings					$	331,370

Basic earnings per share amounts:
			Series A		Series B
	Common		convertible		convertible
	Stock		preferred stock		preferred stock

Distributed earnings	$	0.00	$	0.00	$	0.00
Undistributed earnings		0.01		0.01		0.01
Totals	$	0.01	$	0.01	$	0.01

F-37

NOTE 18 – EARNINGS PER SHARE (CONTINUED)

Diluted EPS for the quarter ended September 30, 2008 was computed as follows using the If-Converted Method:

	Distributed &
	Undistributed
	earnings to
	Common		Common		Earnings
	Stock		Shares		Per Share

As reported - Basic	$	185,291		24,798,478	$	0.01
Warrants		-		7,332,822		--
		185,291		32,131,300	$	0.01
Series A preferred stock conversion		83,813		11,217,128		-
Series B preferred stock conversion		62,266		8,333,333		--
Diluted earnings for common stock	$	331,370		51,681,761	$	0.01

NOTE 19 – SUPPLEMENTAL CASH FLOW INFORMATION

	Three Months Ended September 30,
	2009		2008

Cash paid for interest	$	126,967	$	29,691
Cash paid for income taxes	$	167,429	$	-

NOTE 20 – SUBSEQUENT EVENTS

F-38

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.

Other Expenses of Issuance and Distribution.

The following table sets forth estimated expenses we expect to incur in connection with the sale of the shares being registered. All such expenses are estimated except for the SEC and FINRA registration fees.

SEC registration fee	$	1217.51
FINRA registration fee	$	6,450.00
Printing expenses	$	5,000.00
Fees and expenses of counsel for the Company	$	30,000.00
Fees and expenses of accountants for Company	$	10,000.00
Blue Sky fees and expenses	$	5,000.00
Miscellaneous	$	12,224.00
*Total	$	69,891.51

Item 14.

Indemnification of Directors and Officers.

Article X of our Articles of Incorporation provides that no director or officer of the corporation past, present or future, shall be personally liable to the corporation or any of its shareholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the liability of a director for acts or omissions which involve intentional misconduct, fraud or knowing violation of law and for the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes is not so eliminated. The corporation shall advance or reimburse reasonable expenses incurred by this individual without regard to the limitations in Nevada Revised Statute 78.7502, or any other limitation which may hereafter be enacted to the extent such limitation may be disregarded if authorized by the Articles of Incorporation.

Our bylaws provide for the indemnification of our directors and officers, as to those liabilities and on those terms and conditions as appropriate.

Item 15.

Recent Sales of Unregistered Securities.

On August 9, 2007, we issued 23,005,000 shares of common stock in exchange for all of the issued and outstanding shares of Jpak Group Co., Ltd, (“Jpak”).

On August 9, 2007, we became a party to that certain Note Purchase Agreement (the “NPA”) by and among Jpak, Grand International Industrial Limited and the investors named therein (collectively, the “Investors”). The NPA was originally entered into in May 2007 pursuant to which Jpak issued Convertible Promissory Notes (the “Financing”) in the aggregate principal amount of US$5.5 million to the Investors (the “Notes”). As a result of the Share Exchange, under the terms of the NPA and the Notes, the Notes automatically converted into (i) 5,608,564 shares of our Series A Convertible Preferred Stock, par value $.001 per share (the “Preferred Stock”), which shares are convertible into an aggregate of 11,217,128 shares of common stock, (ii) Series A Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.60 per share until August 2011 which were amended on December 28, 2007 to extend the term to August 2013 (the “Series A Warrants”), (iii) Series B Warrants to purchase an aggregate of 5,500,000 shares of common stock (subject to adjustment) at an exercise price of US$.70 per share until August 2011 which were amended on December 28, 2007 to extend the term to August 2013 (the “Series B Warrants”) and (iv) Series J Warrants to purchase (a) an aggregate of 5,000,000 shares of Series B Preferred Stock, which preferred stock shall contain the same terms as the Series A Preferred Stock (other than conversion price), which shares will be convertible into 8,333,333 shares of our common stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.72 per share (the “Series C Warrants”) and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of common stock (subject to adjustment) at an exercise price of US$.84 per share (the “Series D Warrants”. The Series J Warrants shall be exercisable at an exercise price of US$1.00 per warrant and shall only be exercisable until 90 days following the effective date of this registration statement.

On December 28, 2007, the holders of the Company's outstanding Series J Warrants exercised in full such warrants for aggregate gross proceeds of US$5.0 million to the Company. Pursuant to the terms of the Series J Warrants, the Company issued to the holders of the Series J Warrants (a) an aggregate of 5,000,000 shares of the Company's Series B Convertible Preferred Stock, which will be convertible into an aggregate of 8,333,333 shares of the Company's Common Stock, (b) Series C Warrants to purchase an aggregate of 4,166,667 shares of the Company's Common Stock at an exercise price of US$0.72 per share and (c) Series D Warrants to purchase an aggregate of 4,166,667 shares of the Company's Common Stock (subject to adjustment) at an exercise price of US$0.84 per share. The Series C Warrants and Series D Warrants have a term of six years from the date of issuance.

II-1

In connection with the Financing, we also granted warrants to purchase 990,000 shares of common stock with an exercise price of US$.50 per share to the placement agent in the Financing. These warrants have the same terms as the Series A and Series B Warrants, except that they contain a “cashless” exercise provision.

None of the above transactions involved a public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(2) of the Securities Act and Rule 506 of Regulation D as promulgated by the SEC.

In April 2008, we engaged TriPoint Capital Advisors, LLC to provide us with business development and U.S. corporate compliance services. The initial term of the agreement is one year. Pursuant to the agreement, TriPoint shall receive 300,000 shares of our restricted common stock – all of which was issued on July 14, 2008, with 175,000 vesting immediately and the remainder to vest in equal installments of 75,000 every 90 days thereafter - in consideration for their services. The shares were valued at $0.30 per share, the closing bid price for shares of our common stock on the date of issuance. The shares were issued in accordance with the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(2) of such Act for issuances not involving any public offering.

On April 1, 2009, we issued 200,000 restricted shares to Dongliang (Frank) Su for the Acting CFO duties he will provide to us from April 1, 2009 through March 31, 2010. The shares were issued in accordance with the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(2) of such Act for issuances not involving any public offering.

On November 3, 2009, we issued 12,000,000 units of our securities at a price of $0.50 per unit; each unit consists of (i) 1 share of our Series C Convertible Preferred Stock, par value $0.0001 per share, convertible into one share of our common stock, par value $0.001 per share, and (ii) a one-half Series E Warrant and one-half Series F Warrant pursuant to a Securities Purchase Agreement. (The warrants have now been exchanged for shares of common stock pursuant to the Warrant Exchange Agreement.) The shares were issued in accordance with the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(2) of such Act for issuances not involving any public offering.

II-2

Item 16.

Exhibits.

Exhibit No.		Description

2.1		Securities Exchange Agreement by and among Jpak Group, Inc., Jpak Group Co., Ltd., the shareholders of Jpak Group Co., Ltd. named therein and the selling party named therein, dated as of August 9, 2007 (incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K filed on August 15, 2007).

3.1		Articles of Incorporation of Jpak Group, Inc. (f/k/a Rx Staffing, Inc.), filed with the Secretary of State of Nevada on December 6, 2004 (incorporated by reference to Exhibit 3 of the Registrant’s Form SB-2 filed on June 10, 2005).

3.1(a)		Certificate of Amendment to Articles of Incorporation, filed with the Secretary of State of Nevada on November 29, 2006 (incorporated by reference to Exhibit 3.1(a) of the Registrant’s Form 8-K filed on August 15, 2007).

3.1(b)		Certificate of Amendment to Articles of Incorporation, filed with the Secretary of State of Nevada on July 27, 2007.

3.2		By-laws of Jpak Group, Inc. (f/k/a Rx Staffing, Inc.), adopted on December 10, 2004 (incorporated by reference to Exhibit 3 of the Registrant’s Form SB-2 filed on June 10, 2005).

3.2(a)		First Amendment to By-laws adopted on July 27, 2007 (incorporated by reference to Exhibit 3.2(a) of the Registrant’s Form 8-K filed on August 15, 2007).

4.1		Certificate of Designation of the Relative Rights and Preferences of the Series A Convertible Preferred Stock of Jpak Group, Inc., filed with the Secretary of State of Nevada on August 9, 2007 (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on August 15, 2007).

4.1(a)		Amendment to the Certificate of Designation of the Relative Rights and Preferences of the Series A Convertible Preferred Stock of Jpak Group, Inc., filed with the Secretary of State of Nevada on October 1, 2007 (incorporated by reference to Exhibit 4.1(a) of the Registrant’s Form 8-K filed on October 9, 2007).

4.2		Certificate of Designation of the Relative Rights and Preferences of the Series B Convertible Preferred Stock of Jpak Group, Inc. (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on January 4, 2008).

4.3		Series A Warrant to Purchase shares of common stock of Jpak Group, Inc., issued on August 9, 2007 (incorporated by reference to Exhibit 4.2 of Rx Staffing, Inc.’s Form 8-K filed on January 4, 2008).

4.4		Series B Warrant to Purchase shares of common stock of Jpak Group, Inc., issued on August 9, 2007 (incorporated by reference to Exhibit 4.3 of Rx Staffing, Inc.’s Form 8-K filed on January 4, 2008).

4.5		Series C Warrant to Purchase shares of common stock of Jpak Group, Inc. (incorporated by reference to Exhibit 4.4 of the Registrant’s Form 8-K filed on January 4, 2008).

4.7		Series D Warrant to Purchase shares of common stock of Jpak Group, Inc. (incorporated by reference to Exhibit 4.5 of the Registrant’s Form 8-K filed on January 4, 2008).

4.8		Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock of Jpak Group, Inc. (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on November 5, 2009).

4.9		Series E Warrant to Purchase shares of common stock of Jpak Group, Inc. (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed on November 5, 2009).

4.10		Series F Warrant to Purchase shares of common stock of Jpak Group, Inc. (incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K filed on November 5, 2009).

5.1		Opinion and Consent of Leser, Hunter, Taubman & Taubman.

10.1		Note Purchase Agreement by and among Jpak Group Co., Ltd, Grand International Industrial Limited and the investors identified therein, dated as of May 17, 2007 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on August 15, 2007).

10.2		Joinder Agreement executed by Jpak Group, Inc., dated as of August 9, 2007 (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on August 15, 2007).

10.3		Registration Rights Agreement by and among Jpak Group, Inc. and the purchasers named therein, dated as of August 9, 2007 (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed on August 15, 2007).

10.4		Securities Escrow Agreement by and among Jpak Group, Inc., the purchasers named therein, the principal stockholders of Jpak Group, Inc. named therein and the escrow agent named therein, dated as of August 9, 2007 (incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K filed on August 15, 2007).

II-3

10.5		Lock-Up Agreement by and among Jpak Group, Inc. and the shareholders of Jpak Group, Inc. named therein, dated as of August 9, 2007 (incorporated by reference to Exhibit 10.5 of the Registrant’s Form 8-K filed on August 15, 2007).

10.6		Working Capital Loan Contract, effective as of August 27, 2006, by and between Qingdao Renmin Printing Co., Ltd., as borrower, and Industrial and Commercial Bank of China, Qingdao Branch, as lender (incorporated by reference to Exhibit 10.6 of the Registrant’s Form 8-K filed on August 15, 2007).

10.7		Working Capital Loan Contract, effective as of February 12, 2007, by and between Qingdao Renmin Printing Co., Ltd., as borrower, and Qingdao City Commercial Bank, Yongping Branch, as lender (incorporated by reference to Exhibit 10.7 of the Registrant’s Form 8-K filed on August 15, 2007).

10.8		Working Capital Loan Contract, effective as of February 12, 2007, by and between Qingdao Renmin Printing Co., Ltd., as borrower, and Industrial and Commercial Bank of China, Qingdao Branch, as lender (incorporated by reference to Exhibit 10.8 of the Registrant’s Form 8-K filed on August 15, 2007).

10.9		Working Capital Loan Contract, effective as of April 10, 2007, by and between Qingdao Renmin Printing Co., Ltd., as borrower, and Industrial and Commercial Bank of China, Qingdao Branch, as lender (incorporated by reference to Exhibit 10.9 of the Registrant’s Form 8-K filed on August 15, 2007).

10.10		Employment Agreement, effective June 1, 2001, by and between Qingdao Renmin Printing Co., Ltd, as employer, and Yijun Wang, as employee (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1 filed on November 09, 2007.

10.11		Employment Agreement, effective February 26, 2007, by and between Qingdao Renmin Printing Co., Ltd, as employer, and Ming Qi, as employee (incorporated by reference to Exhibit 10.11 of the Registrant’s Registrant's Registration Statement on Form S-1 filed on November 09, 2007).

10.12		Letter of Agreement by and among Jpak Group, Inc. and the holders of Series J Warrants, dated as of December 28, 2007 (incorporated by reference to Exhibit 10.1 of the Registrant's form 8-K filed on January 4, 2008).

10.13		Securities Purchase Agreement by and among JPak Group, Inc. and Lee Wah Investments Limited, dated as of November 3, 2009 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on November 5, 2009).

10.14		Registration Rights Agreement by and among JPak Group, Inc. and Lee Wah Investments Limited, dated as of November 3, 2009 (incorporated by reference to Exhibit 10.5 of the Registrant’s Form 8-K filed on November 5, 2009).

10.15		Form of Warrant Exchange Agreement dated as of December 16, 2009 2009 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on December 16, 2009) .


21.1		List of Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 of the Registrant’s Form 8-K filed on August 15, 2007).

23.1		Consent of Patrizio & Zhao, LLC, Independent Registered Public Accounting Firm.

23.3		Consent of Leser, Hunter, Taubman & Taubman (included in Exhibit 5.1).

II-4

Item 17.

Undertakings.

The undersigned registrant hereby undertakes to:

(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");

(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and

(iii) Include any additional or changed material information on the plan of distribution.

(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

(4) For determining liability of the undersigned registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5) The undersigned registrant issuer hereby undertakes to provide to the underwriters, at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(6) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-5

(7) For determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this registration statement as of the time it was declared effective.

For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time as the initial bona fide offering thereof.

(8) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has and authorized this Pre-Effective Amendment 1 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Qingdao, China on January 11, 2010.

	By:	/s/ Yijun Wang
		Yijun Wang Chief Executive Officer and Principal Accounting Officer

	By:	/s/ Dongliang (Frank) Su
		Dongliang (Frank) Su Acting Chief Financial Officer

In accordance with the requirements of the Securities Act of 1933, this Pre-Effective Amendment 1 to Registration Statement on Form S-1 was signed by the following persons in the capacities and on the dates stated.

Signatures	Title	Date

/s/ Yijun Wang	Chief Executive Officer, President, Director (Principal Executive Officer) and Principal Accounting Officer	January 11, 2010
Yijun Wang

/s/ Ming Qi	Director	January 11, 2010
Ming Qi

/s/ Huatian Sha	Corporate Secretary, Director	January 11, 2010
Huation Sha

/s/ Qingjun Yang	Director	January 11, 2010
Qingjun Yan

/s/ Stewart Shiang Lor	Director	January 11, 2010
Stewart Shiang Lor

/s/ Dongliang (Frank) Su	Acting Chief Financial Officer	January 11, 2010
Dongliang (Frank) Su

II-7

Attached files

Stock widget

Investing forum

Jpak Group, Inc. Reports

Also read