STOCKHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2011

STOCKHOLDERS' EQUITY

NOTE 11 - STOCKHOLDERS’ EQUITY

Stock Issued to Independent Directors

On April 29, 2010 and October 4, 2010 the Company issued 14,970 shares and 27,027 shares of common stock in the form of restricted shares to Mr. Robert J. Fanella, the independent director and chairman of audit committee as compensation for his services. The shares were valued at the average closing market price of the common stock for the five trading days preceding and including the date stock was issued.

The total amount of the compensation in the form of issuing shares of common stocks to the independent directors was $25,706 and $75,522 for the years ended March 31, 2011 and 2010, respectively.

Stock Issued for Acquisition of Patent

On February 28, 2011, the Company issued 44,254,952 shares of common stocks, as a partial of total considerations to acquire a U.S. patent No. 6,475,531 B1 titled “Safe Botanical Drug for Treatment and Prevention of Influenza and Increasing Immune Function”) from L.Y. Research Corp., a New Jersey Corporation.  The shares of the common stocks were valued at the average closing market price on February 28, 2011 in the amount of $32,748,665.

Statutory Reserve

Subsidiaries incorporated in China are required to make appropriations to reserve funds, based on after-tax net income determined in accordance with generally accepted accounting principles of the People’s Republic of China (“PRC GAAP”).  Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, and any contributions are not to exceed 50% of the respective companies’ registered capital.

As of March 31, 2011, the Company appropriated $956,633 to the statutory reserve.