Hubei Minkang Pharmaceutical Ltd. - FORM 10-Q

Attached files

file	filename
EX-32.2 - Hubei Minkang Pharmaceutical Ltd.	v211021_ex32-2.htm
EX-32.1 - Hubei Minkang Pharmaceutical Ltd.	v211021_ex32-1.htm
EX-31.2 - Hubei Minkang Pharmaceutical Ltd.	v211021_ex31-2.htm
EX-31.1 - Hubei Minkang Pharmaceutical Ltd.	v211021_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2010.

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

For the transition period from to to

Commission File Number : 333-137460.

HUBEI MINKANG PHARMACEUTICAL LTD.

(Exact name of registrant as specified in its charter)

Nevada	26-24106855
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2808 Cowan Circle Las Vegas, NV (Address of principal executive offices)	89107 (Zip Code)

866-446-1869

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨ Yes ¨ No

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

¨ Yes ¨ No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 8,095,747 shares of common stock with a par value of $0.001 as of February 1, 2011.

TABLE OF CONTENTS

USE OF NAMES	1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	1
PART I – FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	6
Item 4T. Controls and Procedures.	7
PART II - OTHER INFORMATION	8
Item 1. Legal Proceedings	8
Item 1A. Risk Factors	8
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3. Defaults upon Senior Securities	9
Item 4. [Removed and Reserved]	9
Item 5. Other Information	9
Item 6. Exhibits	9

USE OF NAMES

In this annual report, the terms “Hubei Minkang,” “Company,” “we,” or “our,” unless the context otherwise requires, mean Hubei Minkang Pharmaceutical Ltd. and its subsidiaries, if any.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this quarterly report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:

·	dependence on key personnel;

·	competitive factors;

·	degree of success of exploration and development programs;

·	the operation of our business; and

·	general economic conditions in the United States.

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this quarterly report.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our unaudited financial statements included in this Form 10-Q are as follows:

F-1	Balance Sheets as of December 31, 2010 (unaudited) and March 31, 2010 (unaudited);

F-2	Statements of Operations for the three and nine months ended December 31, 2010 and 2009 and period from April 17, 2006 (inception) to December 31, 2010 (unaudited);

F-3	Statement of Stockholders’ Equity (Deficit) for period from April 17, 2006 (inception) to December 31, 2010 (unaudited);

F-4	Statements of Cash Flows for the nine months ended December 31, 2010 and 2009 and period from April 17, 2006 (inception) to December 31, 2010 (unaudited); and

F-5	Notes to Financial Statements.

These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2010, are not necessarily indicative of the results that can be expected for the full year.

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

As at December 31, 2010 and March 31, 2010

	December 31, 2010			March 31, 2010
	(unaudited)			(unaudited)
ASSETS
Current assets
Cash	$	12,611		$	7,350
Prepaid expenses		-			-
Total current assets		12,611			7,350

Oil and gas properties ( successful efforts basis)		647,450			647,450

Property and equipment – Note 3		-			-

TOTAL ASSETS	$	660,061		$	654,800

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities	$	62,193		$	134,864
Shareholders’ loans – Note 5		357,393			1,688,793

Total current liabilities		419,586			1,823,657

TOTAL LIABILITIES		419,586			1,823,657

STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $.001 par value, 168,750,000 shares authorized, 8,117,592 (March 31, 2010: 56,413,000) shares issued and outstanding		64,787			56,413
Additional paid in capital		2,509,144			1,014,978
Deficit accumulated during the development stage		(2,333,456	)		(2,240,248	)
Total stockholders’ equity (deficit)		240,475			(1,168,857	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	660,061		$	654,800

See accompanying notes to financial statements.

F-1

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (Unaudited)

Three Months and Nine Months ended December 31, 2010 and 2009

Period from April 17, 2006 (Inception) to December 31, 2010

	Three months ended December 31, 2010			Three months ended December 31, 2009			Nine months ended December 31, 2010			Nine months ended December 31, 2009			Period from April 17, 2006 (Inception) to December 31, 2010

Revenues	$	- 0-		$	-0-		$	-0-		$	-0-		$	-0-

General and administrative expenses:
Professional fees		4,841			59,715			36,259			62,318			383,188
Amortization		-0-			5			-0-			385			2,379
Bank charges and interest		-0-			52			-0-			196			1,781
Foreign exchange loss (gain)		-0-			(85	)		-0-			(85	)		92
Filing and registration		811			2,277			7,184			3,570			19,661
Product development		-0-			-0-			-0-			-0-			30,455
Office and miscellaneous		-0-			-0-			-0-			1,749			9,835
Total general and administrative		5,652			61,964			43,443			67,052			447,391

Net loss before other expense		(5,652	)		(61,964	)		(43,443	)		(67,052	)		(447,391	)

Other expense
Interest income		-0-			-0-			-0-			-0-			3,765
Interest expense		(5,956	)		(20,805	)		(49,765	)		(61,962	)		(217,156	)
Impairment of oil and gas properties		-0-			-0-			-0-			-0-			(1,672,350	)
Loss on sale of equipment		-0-			-0-			-0-			-0-			(324	)
Total other income (expense)		(11,608	)		(20,805	)		(49,765	)		(61,962	)		(1,886,065	)

Net loss	$	(11,608	)	$	(82,769	)	$	(93,208	)	$	(129,014	)	$	(2,333,456	)

Net loss per share:
Basic and diluted	$	0 .00		$	(0.01	).	$	(..01	)	$	(0 .02	)	$	0.00

Weighted average shares outstanding:
Basic and diluted (adjusted for stock splits)		8,117,593			7,051,625			7,522,961			7,051,625

See accompanying notes to financial statements.

F-2

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited)

Period from April 17, 2006 (Inception) to December 31, 2010

	Common stock					Additional paid-in capital			Share subscriptions			Deficit accumulated during the development stage			Total
	Shares			Amount
Issuance of common stock for cash @$.001		135,000,000		$	9,000	$	81,000		$	-0-		$	-		$	90,000
Net loss for the period		-			-		-			-			(81,059	)		(81,059	)
Balance, March 31, 2007		135,000,000			9,000		81,000			-0-			(81,059	)		8,941
Proceeds of share subscription										470,000						470,000
Imputed interest on shareholder loan							3,904									3,904
Net loss for the period		-			-		-			-			(128,230	)		(128,230	)
Balance, March 31, 2008		135,000,000			9,000		84,904			470,000			(209,289	)		354,615

Proceeds of share subscription										344,000						344,000
Voluntary surrender and cancellation of shares		(80,000,000	)
Par value adjustment		-			46,000		(46,000	)		-			-			-
Issuance of common stock for $ 1 per share		215,000			215		214,785			(215,000	)
Issuance of common stock for $ .50 per share		1,198,000			1,198		597,802			(599,000	)
Imputed interest on shareholder loan							80,720									80,720
Net loss for the period		-			-		-			-			(199,588	)		(199,588	)
Balance, March 31, 2009		56,413,000			56,413		932,211			-			(408,877	)		579,747
Imputed interest on shareholder loan							82,767									82,767
Net loss for the period		-			-		-			-			(1,831,371	)		(1,831,371	)
Balance, March 31, 2010		56,413,000			56,413		1,014,978			-			(2,240,248	)		(1,168,857	)
Shares issued for debt		8,352,941			8,353		1,411,647									1,420,000
Imputed interest on shareholder loan							49,765									49,765
Effect of 8:1 reverse stock split		(56,670,199	)
Issuance of common shares for $ 1.50 per share		21,850			21		32,754									32,775

Net loss for the period		-			-		-			-			(93,208	)		(93,208	)
Balance, December 31, 2010		8,117,592		$	64,787	$	2,509,144		$	-		$	(2,333,456	)	$	240,475

See accompanying notes to financial statements.

F-3

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended December 31, 2010 and 2009

Period from April 17, 2006 (Inception) to December 31, 2010

	Nine months ended December 31, 2010			Nine months ended December 31, 2009			Period from April 17, 2006 (Inception) to December 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(93,208	)	$	(129,014	)	$	(2,333,456	)
Adjustments to reconcile net loss to Cash used by operating activities:
Impairment								1,672,350
Depreciation		-0-			385			2,379

Imputed interest		49,765			61,962			217,156
Loss on sale of property and equipment		-0-			-0-			324
Change in non-cash working capital items Prepaid expenses		-0-			-0-			-0-
Accounts payable and accrued liabilities		(72,671	)		62,137			62,193
CASH FLOWS USED IN OPERATING ACTIVITIES		(116,114	)		(4,530	)		(379,054	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Oil and gas properties		-0-			-0-			(2,319,800	)
Proceeds on disposal of property and equipment		-0-			-0-			1,688
Purchase of property and equipment		-0-			-0-			(4,391	)
CASH FLOWS USED IN INVESTING ACTIVITIES		-0-			-0-			(2,322,503	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loans from (repayments to) shareholders		88,600			9,000			1,777,393
Share subscription received		-0-			-0-			470,000
Proceeds from sales of common stock		32,775			-0-			466,775
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		121,375			9,000			2,714,168

NET INCREASE (DECREASE) IN CASH		5,261			4,470			12,611
Cash, beginning of period		7,350			3,626			-0-
Cash, end of period	$	12,611		$	8,096		$	12,611

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Shares issued to settle debt	$	1,420,000		$	-
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	49,765		$	41,157
Income taxes paid	$	-		$	-

See accompanying notes to financial statements.

F-4

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Hubei Minkang Pharmaceutical Ltd. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s filing with the SEC on Form 10-K. In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2010 as reported in Form 10-K, have been omitted.

NOTE 2 – SUMMARY OF ACCOUNTING POLICIES

Nature of Business

Hubei Minkang Pharmaceutical Ltd. (“Hubei”) was incorporated as DGT Corp. in Nevada on April 17, 2006. On September 20, 2007, the Company completed a merger with subsidiary Blackrock Petroleum Corp. and changed its name from DGT Corp. to Blackrock Petroleum Corp. On June 5, 2008, the Company completed a merger with subsidiary Nexgen Petroleum Corp. and changed its name from Blackrock Petroleum Corp. to Nexgen Petroleum Corp. On October 20, 2010, the Company completed a merger with subsidiary Hubei Minkang Pharmaceutical Ltd., a Nevada corporation and as a result changed its name from Nexgen to Hubei Minkang Pharmaceutical Ltd.

Hubei is currently a development stage company which intends to acquire interests in leases for oil and gas prospects and then drill exploratory and development wells with industry participants. With the completion of the merger with Hubei, the company will be disposing of its oil and gas properties and will be producing and marketing Traditional Chinese Medicine in China as well as various other countries.

On March 10, 2008, Hubei entered into a Farmout and Participation Agreement with respect to two test wells on an oil and gas lease dated December 22, 2007. Under the Farmout Agreement, Hubei is paying 60% of all costs associated with the test wells to earn a 30% interest in the associated production spacing units. See Note 7.

F-5

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 2 – SUMMARY OF ACCOUNTING POLICIES (continued)

Oil and Gas Properties

Hubei accounts for oil and gas exploration and development costs using the successful efforts method. Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are expensed as incurred. Exploratory well costs are capitalized pending further evaluation of whether economically recoverable reserves have been found. If economically recoverable reserves are not found, explanatory well costs will be expensed as dry holes. All exploratory wells are evaluated for economic viability within one year of well completion and the related capital costs are reviewed quarterly. Exploratory well costs that discover potentially economically recoverable reserves in areas where a major capital expenditure would be required before production could begin and where the economic viability of that major capital expenditure depends upon the successful completion of further exploratory work in the area, remain capitalized as long as the additional exploratory work is underway or firmly planned.

During the year ended March 31, 2010, the Company recognized an impairment in its oil and gas properties of $1,672,350.

Property and Equipment

The Company’s capital asset has been capitalized and is being depreciated over its estimated useful life on a straight line basis over a three year period.

Cash and Cash Equivalents

For the purposes of presenting cash flows, Hubei considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents and payables. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

F-6

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 2 – SUMMARY OF ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basic loss per share

Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.

Recent Accounting Pronouncements

Hubei does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	December 31,			March 31,
	2010			2010

Computer equipment	$	2,291		$	2,291
Less: Accumulated depreciation		(2,291	)		(2,291	)
	$	-		$	-

The capital asset is being depreciated on a straight-line basis over its estimated useful life of three years. In August 2006, certain computer equipment was disposed of for proceeds of $1,688.

NOTE 4 – INCOME TAXES

For the period ended December 31, 2010, Hubei has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $2,333,000 at December 31, 2010, and will expire beginning in the year 2026.

F-7

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 4 – INCOME TAXES (continued)

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

	2010
Deferred tax asset attributable to:
Net operating loss carryover	$	793,375
Valuation allowance		(793,375	)
Net deferred tax asset	$	-

NOTE 5 – SHAREHOLDERS’ LOANS

On March 3, 2008, a shareholder loaned the Company $622,500 which is due on demand bearing no interest. On July 22, 2008, the Company authorized the repayment of $40,000 of this loan to the shareholder. On March 20, 2008, the same shareholder loaned the Company $800,000 which is due on demand bearing no interest. As of the date of this annual report, the Company has not repaid any of this loan to the shareholder.

On March 25, 2008, another shareholder of the Company loaned the Company $225,000 which is due on demand bearing no interest. On May 20, 2008, the Company authorized the repayment of $100,000 of this loan to the shareholder. This same shareholder has loaned the Company the following amounts on the following dates which are due on demand bearing no interest:

Amount of Loan		Date of Loan
$	132,840	August 28, 2008
$	1,053	February 17, 2009
$	8,000	June 15, 2009
$	20,000	January 29, 2010
$	18,000	March 26, 2010
$	50,000	June 8, 2010
$	50,000	July 8, 2010

On June 23, 2010, the Company authorized the repayment of $10,000 of this loan to the shareholder.

On March 18, 2009, our sole officer and director loaned the Company $400, which is due on demand bearing no interest. In addition, on April 30, 2009, our sole officer and director loaned the Company $1,000, which is also due on demand bearing no interest. On June 23, 2010, the Company authorized the repayment of $1,400 of this loan to the officer and director.

F-8

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 5 – SHAREHOLDERS’ LOANS (continued)

Imputed interest at 5% per annum has been recorded as an increase in additional paid in capital.

During the period ended September 30, 2010, the Company was advised by the two shareholders that they had assigned their rights, title and interest in a portion of shareholder loans totaling $ 1,020,000 and $ 400,000 respectively, to third parties who are not shareholders of the Company. In September 2010, outstanding loans of $1,420,000 were converted into 8,352,941 shares of common stock of the company at $.17 per share.

NOTE 6 – COMMON STOCK

At inception, Hubei issued 9,000,000 shares of stock for $90,000 cash.

Effective September 20, 2007, Hubei affected a fifteen (15) for one (1) forward stock split.

On September 18, 2007, Hubei received stock subscription proceeds related to a private placement of 1,000,000 shares at $.50 per share. Subsequently, $455,000 of the subscription proceeds were returned. On February 20, 2008, Hubei received stock subscriptions proceeds of $425,000 related to a private placement of shares at $ .50 per share.

During the year ended March 31, 2009 Hubei received stock subscriptions proceeds of $129,000 related to a private placement of shares at $.50 per share and $215,000 related to a private placement of shares at $1.00 per share.

In September 2010, outstanding loans of $ 1,420,000 were converted into 8,352,941 shares of common stock of the company at $.17 per share.

Effective October 20, 2010, Hubei affected a eight (8) for one (1) reverse stock split.

NOTE 7 – COMMITMENTS

F-9

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 7 – COMMITMENTS (continued)

On or about April 11, 2008, the Company entered into a letter agreement (the “Letter Agreement”) with Montello Resources (USA) Ltd., Park Place Energy Corp., and Austin Developments Corp., dated effective April 11, 2008, whereby the parties agreed to amend the March 10, 2008 Farmout Agreement as follows: (i) Article 8 (Area of Mutual Interest) of the Farmout & Royalty Procedure attached as Schedule “C” to the Farmout Agreement shall apply; (ii) the Mutual Interest Lands shall comprise all PNG rights 50% or more of which are located within the boundaries of that area of lands located within Morgan County, State of Tennessee, USA as outlined on the map attached to the Letter Agreement; (iii) the Area of Mutual Interest shall be in effect until 11:50 pm on April 10, 2010; and (iv) the participating interests of the parties hereto in the Area of Mutual Interest during the term thereof shall be Montello – 35%, Park Place – 5%, Austin – 30% and the Company – 30%.

In addition, on or about April 11, 2008, the Company entered into a Farmout and Participation Agreement (the “Farmout Agreement”), which is effective as of April 11, 2008, with Montello Resources (USA) Ltd., a subsidiary of Montello Resources Ltd., Park Place Energy Corp., an Alberta corporation, and Austin Developments Corp., an Alberta corporation, with respect to two test wells on the oil and gas lease dated March 25, 2008 between Robert and Kathy Lavender, as lessors, and Montello Resources (USA) Ltd., as lessee, located in Morgan County, Tennessee. Under the Farmout Agreement the participating interests are as follows: Montello Resources (USA) Ltd., as operator, is paying 15% of all costs associated with the test well to earn a 35% interest in the associated production spacing units; Austin Developments Corp. is paying 20% of the costs to earn a 30% interest; Park Place Energy Corp. is paying 5% of the costs to earn a 5% interest; and the Company is paying 60% of the costs to earn a 30% interest.

As of June 30, 2008, the Company has incurred $132,000 in capital expenditures on this property by participating in the drilling and completion of the Morgan Highpoint #5 test well, which has been cased and shut in.

NOTE 8 – LIQUIDITY AND GOING CONCERN

The Company has limited working capital and has not yet received revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

F-10

HUBEI MINKANG PHARMACEUTICAL LTD.

(formerly Nexgen Petroleum Corp.)

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010

NOTE 8 – LIQUIDITY AND GOING CONCERN (continued)

The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

The Company has analyzed its operations subsequent to December 31, 2010 through January 31, 2011, the date these financial statements were issued, and has determined that it does not have any other material subsequent events to disclose.

F-11

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

You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.

Overview

We are a development stage company that focuses on acquiring and exploring oil and gas properties primarily in North America. The Company currently has interests in oil and gas properties in the Morgan Highpoint Project in Tennessee. We intend to acquire interests in leases for oil and gas prospects either through farmout arrangements, participation arrangements or straight acquisition of oil and gas interests, and then drill exploratory and development wells with the help of other industry participants. We do not intend to operate any properties.

Plan of Operations

We have not yet generated or realized any revenues from our business operations. Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we are able to acquire oil and gas prospects, explore and develop such prospects and are able to produce oil and/or gas from our exploration and development. There is no assurance we will ever reach this point. Accordingly, we must raise cash from sources other than the sale of oil and/or gas. Our only other source for cash at this time is investments by others in us. We must raise cash to implement our plan and stay in business. If we require additional money and are unable to raise it, we may have to suspend or cease operations.

We intended to acquire interests in leases for oil and gas prospects either through farmout arrangements, participation arrangements or straight acquisition of oil and gas interests, and then drill exploratory and development wells with the help of other industry participants. We did not intend to operate any properties. We intended to focus our oil and gas activities in North America as well as other regions.

On the Morgan Highpoint Project, we intended to commence discussions with the other participants under the Equalization and Joint Operating Agreement in order to determine our future activities and estimated costs associated with any future activities.

However, due to the letter of intent that was executed on October 18, 2010, between us and HBMK Limited (“HBMK”), a BVI corporation, whereby HBMK and us intend to enter into and complete a Purchase Agreement (the “Definitive Agreement”), where we intend to acquire 100% of the issued and outstanding shares of capital stock of HBMK (the “HBMK Shares”) in exchange for 28,000,000 shares of our common stock, on the terms and subject to the conditions to be set out in the Definitive Agreement, we intend to change our business to that of the wholly-owned subsidiary, or soon to be wholly owned subsidiary, of HBMK Limited, Hubei Minkang Pharmaceutical Co., Ltd., a People’s Republic of China corporation, which produces and markets Traditional Chinese Medicine in China as well as markets its products to the U.S., Japan, Canada, Singapore, Malaysia, Thailand and Hong Kong among other countries.

As of the date of the filing of this periodic report, HBMK and us have not yet entered into a Definitive Agreement, however, we are still in negotiations and intend on entering into a Definitive Agreement in the near future, with respect to the acquisition of 100% of the capital stock of HBMK.

Effective October 20, 2010, we completed a merger with our wholly owned subsidiary, Hubei Minkang Pharmaceutical Ltd., a Nevada corporation. As a result, we changed our name from “Nexgen Petroleum Corp.” to “Hubei Minkang Pharmaceutical Ltd.” We changed the name of our company to better reflect the intended direction and business of our company.

In addition, effective October 20, 2010, we effected a one (1) for eight (8) reverse stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital has decreased from 1,350,000,000 shares of common stock with par value of $0.001 per share and 10,000,000 shares of preferred stock with par value of $0.001 per share to 168,750,000 shares of common stock with par value of $0.001 per share and 10,000,000 shares of preferred stock with par value of $0.001 per share, and correspondingly our issued and outstanding capital has decreased from 64,765,941 shares of common stock to 8,095,747 shares of common stock.

Our stock symbol is “HBMK” and our CUSIP number is 44352W 101.

We do not intend to hire any employees at this time.

Liquidity and Capital Resources

As of December 31, 2010, we had total current assets of $12,611 and total assets of $660,061. Our total current assets as of December 31, 2010 comprise of cash in the amount of $12,611. Our total current liabilities as of December 31, 2010 were $419,586 represented by accounts payable and accrued liabilities of $62,193 and shareholders’ loans of $357,393. As a result, on December 31, 2010, we had a working capital deficiency of $406,975.

We are a development stage corporation and have not generated any revenue to date from our activities. Despite our hope for revenues in the foreseeable future, we believe that revenues will be sparse and irregular and, if we receive any at all, will be far less than necessary to carry out our business forward without additional financing. We have cash in the amount of $12,611 as of December 31, 2010, which is not anticipated to be sufficient to meet our projected expenditures in the next twelve months. Thus, in order to meet our capital needs, we will most likely need to raise funds from other sources to remain in business. We intend to raise additional money through private placements or shareholder loans, however, there can be no assurance that we will be able to raise additional money in the future. If we need additional capital and cannot raise the necessary amount, we will either be required to suspend activities until we do raise the cash or cease activity entirely.

Results of Operations

Operating activities used $379,054 in cash for the period from inception (April 17, 2006) to December 31, 2010. Our net loss of $2,333,456 was the primary component of our negative operating cash flow. Investing activities for the period from inception (April 17, 2006) to December 31, 2010, used $4,391 for the purchase of equipment and $2,319,800 for the acquisition of oil and gas property interests, offset by proceeds received on the sale of equipment of $1,688 for a total of $2,322,503. Net cash flows provided by financing activities for the period from inception (April 17, 2006) to December 31, 2010 was $2,714,168 represented as loans from shareholders of $1,777,393, which includes the repayment of shareholders loans of $151,400, and proceeds from the sale of our stock as well as share subscriptions received of $936,775.

Three Month Period Ended December 31, 2010

Revenues: We did not generate any revenues during the three month period ended December 31, 2010.

Professional fees: Professional fees were $4,841 and $59,715 for the three months ended December 31, 2010 and 2009, respectively.

Depreciation: Depreciation expenses were Nil and $5 for the three months ended December 31, 2010 and 2009, respectively.

Bank charges: Bank charges and interest expenses were Nil and $52 for the three months ended December 31, 2010 and 2009, respectively.

Foreign exchange loss (gain): Foreign exchange loss (gain) was Nil and ($85) for the three months ended December 31, 2010 and 2009, respectively.

Filing and registration: Filing and registration expenses were $811 and $2,277 for the three months ended December 31, 2010 and 2009, respectively.

Office and miscellaneous: Office and miscellaneous expenses were Nil and Nil for the three months ended December 31, 2010 and 2009, respectively.

Interest expense: Interest expenses were $5,956 and $20,805 for the three months ended December 31, 2010 and 2009, respectively.

Net Loss: Net loss was $11,608 and $82,769 for the three months ended December 31, 2010 and 2009, respectively. This decrease in net loss of $71,161 resulted primarily from a decrease in professional fees, filing and registration fees and interest expenses during the three months ended December 31, 2010.

Nine Month Period Ended December 31, 2010

Revenues: We did not generate any revenues during the nine month period ended December 31, 2010.

Professional fees: Professional fees were $36,259 and $62,318 for the nine months ended December 31, 2010 and 2009, respectively.

Depreciation: Depreciation expenses were Nil and $385 for the nine months ended December 31, 2010 and 2009, respectively.

Bank charges: Bank charges and interest expenses were Nil and $196 for the nine months ended December 31, 2010 and 2009, respectively.

Foreign exchange loss (gain): Foreign exchange loss (gain) was Nil and ($85) for the nine months ended December 31, 2010 and 2009, respectively.

Filing and registration: Filing and registration expenses were $7,184 and $3,570 for the nine months ended December 31, 2010 and 2009, respectively.

Office and miscellaneous: Office and miscellaneous expenses were Nil and $1,749 for the nine months ended December 31, 2010 and 2009, respectively.

Interest expense: Interest expenses were $49,765 and $61,962 for the nine months ended December 31, 2010 and 2009, respectively.

Net Loss: Net loss was $93,208 and $129,014 for the nine months ended December 31, 2010 and 2009, respectively. This decrease in net loss of $35,806 resulted primarily from a decrease in professional fees and interest expenses during the nine months ended December 31, 2010.

Loan Obligations

On March 3, 2008, a shareholder loaned us $622,500 which is due on demand bearing no interest. On July 22, 2008, we authorized the repayment of $40,000 of this loan to the shareholder. On March 20, 2008, the same shareholder loaned us $800,000 which is due on demand bearing no interest.

On March 25, 2008, another shareholder loaned us $225,000 which is due on demand bearing no interest. On May 20, 2008, we authorized the repayment of $100,000 of this loan to the shareholder. This same shareholder has loaned us the following amounts on the following dates which are due on demand bearing no interest:

Amount of Loan		Date of Loan
$	132,840	August 28, 2008
$	1,053	February 17, 2009
$	8,000	June 15, 2009
$	20,000	January 29, 2010
$	18,000	March 26, 2010
$	50,000	June 8, 2010
$	50,000	July 8, 2010

On June 23, 2010, we authorized the repayment of $10,000 of this loan to the shareholder.

On March 18, 2009, our sole officer and director loaned us $400, which is due on demand bearing no interest. In addition, on April 30, 2009, our sole officer and director loaned us $1,000, which is also due on demand bearing no interest. On June 23, 2010, we authorized the repayment of $1,400 of this loan to the officer and director.

Imputed interest at 5% per annum has been recorded as an increase in additional paid in capital.

During the period ended September 30, 2010, we were advised by the two shareholders who had loaned us funds that they had assigned their rights, title and interest in a portion of shareholder loans totaling $1,020,000 and $400,000 respectively, to third parties who are not shareholders. After the assignment, the loans payable to shareholders was $357,393 and other loans payable was $1,420,000.

On September 14, 2010, the outstanding loans of $1,420,000 were converted into 8,352,941 shares of our common stock at $0.17 per share.

Off-Balance Sheet Arrangements

There are no 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.

Going Concern Statement

We have negative working capital, have not yet received revenues from sales of products or services, and have recurring losses from operations. The continuation of our company as a going concern is dependent upon our Company attaining and maintaining profitable operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended March 31, 2010, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” (as defined by §229.10(f)(1)), we are not required to provide the information required by this Item.

ITEM 4T. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Under the direction of our Chief Executive Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) there continue to be material weaknesses in the Company’s internal controls over financial reporting, that the weaknesses constitute a “deficiency” and that this deficiency could result in misstatements of the foregoing accounts and disclosures that could result in a material misstatement to the financial statements for the current period that would not be detected, and (ii) accordingly, our disclosure controls and procedures were not effective as of December 31, 2010.

Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

(1)

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

(2)

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and Directors of the company; and

(3)

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of December 31, 2010 management assessed the effectiveness of our internal control over financial reporting and concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2010.

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

we plan to create a position to segregate duties consistent with control objectives and plan to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us; and

we plan to appoint one or more outside directors to our Board of Directors who shall be appointed to the audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We anticipate that these initiatives will be at least partially, if not fully, implemented by June 30, 2011.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our fiscal quarter of the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

ITEM 1A. RISK FACTORS

As a “smaller reporting company” (as defined by §229.10(f)(1)), we are not required to provide the information required by this Item.

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

During the quarter ended December 31, 2010, we received gross proceeds of $32,775 from two individuals for the purchase of 21,850 shares of our common stock at a price of $1.50 per share. We believe that the issuance of such shares when issued will be exempt from registration under Regulation S promulgated under the Securities Act of 1933, as amended (the “Act”), and/or section 4(2) of the Act as the securities will be issued to the individuals through offshore transactions which were negotiated and consummated outside of the United States.

The funds received from the investors mentioned above have been or will be used for general corporate purposes.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

N/A.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibit List

31.1 Certificate pursuant to Rule 13a-14(a)

31.2 Certificate pursuant to Rule 13a-14(a)

32.1 Certificate pursuant to 18 U.S.C. §1350

32.2 Certificate pursuant to 18 U.S.C. §1350

SIGNATURE

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

	HUBEI MINKANG PHARMACEUTICAL LTD. (Registrant)
Date: February 11, 2011	By:	/s/ Hsien Loong Wong
	Hsien Loong Wong
	President, CEO, CFO, Secretary, Treasurer and Director (Principal Executive Officer and Principal Financial Officer)

Hubei Minkang Pharmaceutical Ltd. - FORM 10-Q - February 14, 2011

Attached files

Hubei Minkang Pharmaceutical Ltd. Reports