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      &lt;b&gt;NOTE C &amp;#8211; LIABILITIES&lt;/b&gt;
    &lt;/p&gt;
    &lt;p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"&gt;
      As of June 30, 2013, the balance sheet included total liabilities of $6,469,717, which consisted of current liabilities of $5,606,146
      and construction payable of $863,571. Included in the current liabilities was a short-term loan of $1,537,043
      (equivalent to RMB9.5
      million) from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC. On September 4, 2012, the Company renewed this short-term loan. The term of the renewal loan started from September 4, 2012 with a maturity date of September 2, 2013. The interest rate for the short-term loan was
      12% per annum as of June 30, 2013. This short-term loan had been secured by the Company&amp;#8217;s land use right and construction-in-progress of SD Chaoying with a book value of $3.19
      million (equivalent to RMB19.75
      million) and $4.45
      million (equivalent to RMB27.49
      million) as of June 30, 2013, respectively. For the $3.19
      million land use rights, $2.56
      million was classified under construction-in-progress for the commercial property and the remaining $0.63
      million was classified under intangible assets subject to amortization. Additionally, there is another short-term loan of $161,794
      (equivalent to RMB1.0
      million) from Mr. Fengguo Liu, an unrelated party. The short-term loan is due on January 12, 2014 with an interest rate at
      2% per month. Also included in the current liabilities was $2,235,852
      of loans from related companies, including Xi&amp;#8217;an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty &amp;amp; Cosmetics Group Co., Ltd and the stockholders who are also the Company's officers. These entities were related to the Company through common ownership and principal officers. These loans are non-interest bearing and have no set repayment terms.
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