SOURCE: Huifeng Bio-Pharmaceutical Technology, Inc.

April 02, 2007 15:50 ET

Huifeng Bio-Pharmaceutical Announces Year End and 4th Quarter Results for 2006

Revenue for 2006 Increases 26%

XI'AN, PEOPLE'S REPUBLIC OF CHINA -- (MARKET WIRE) -- April 2, 2007 -- Huifeng Bio-Pharmaceutical Technology, Inc. (OTCBB: HFGB), the leader in developing and producing plant extracts, pharmaceuticals and pharmaceutical raw materials in mainland China and internationally, today reported its fourth quarter and year 2006 results ended December 31, 2006.

For the 12 months ended December 31, 2006, revenue was up 26% to $3,076,779 compared to $2,443,060 for year-end 2005. Net income for 2006 was $131,736 compared to a loss of ($832,767) for 2005. Earnings per share for 2006 increased to $.01 versus a loss of ($.11) for 2005. Huifeng's overall profit margin increased from 6% in 2005 to 15% in 2006.

For the fourth quarter ended December 31, 2006, revenue was $679,991 compared to $64,272 for the fourth quarter ended December 31, 2005. Net income for the fourth quarter 2006 was a loss of ($18,569) versus a loss of ($983,072) for the fourth quarter 2005. Earnings per share in the fourth quarter was ($.01) compared to a loss of ($.13) in the fourth quarter 2005.

"This year was a turnaround year for our company," said Huifeng Chairman and CEO Jingan Wang. "We are pleased with the growth we achieved in 2006, improving our performance in key areas, such as sales, gross margin, and net income. In 2006, we brought to market two new product lines, Diosmin and L-Rhamnose, both of which have significant growth potential."

Mr. Wang continued, "Looking ahead to 2007 and 2008, we will concentrate on commercializing one to two new pharmaceutical raw medicines and plant extract products; increasing our market share in pharmaceutical raw medicines and plant extracts both domestically and internationally; and acquiring one or two overseas sales companies and one domestic health-care food products manufacturer. By aggressively looking for expansion opportunities, we feel this will provide us the type of growth that is directly related to earnings and shareholder value."

About Huifeng Bio-Pharmaceutical Technology, Inc.

Huifeng Bio-Pharmaceutical Technology, Inc. located in Xi'an, People's Republic of China, develops and produces plant extracts and pharmaceutical raw materials for use in pharmaceutical, nutraceutical and food production. It is the leading Chinese producer of Rutin and related plant-derived chemicals in a class called Flavonoids, with medicinal and other beneficial properties. Founded in 2000, Huifeng uses proprietary patented processes to extract Rutin more efficiently than traditional extraction techniques. The Company is diversifying its product lines through internal development, acquisition and cooperation with scientific research organizations.

Cautionary Statement Regarding Forward-Looking Information

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All readers are encouraged to review the 8-K to be filed in connection with the acquisition discussed above, which outlines risk factors including deal terms and other relevant items. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the companies, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the companies disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.


                        CONSOLIDATED BALANCE SHEETS
                      AS OF DECEMBER 31, 2006 AND 2005


                              ASSETS

                                                    2006           2005
                                              -------------  -------------
CURRENT ASSETS
   Cash and cash equivalents                  $     463,468  $      89,108
   Accounts receivable, net of allowances         1,109,095      1,136,558
   Inventories, net                                 582,525        925,781
   Notes receivable                                 448,218        433,168
   Due from stockholders                            198,282        100,071
   Other assets                                     829,308        291,811
                                                 ----------     ----------
         Total Current Assets                     3,630,896      2,976,497

PROPERTY AND EQUIPMENT, NET                       3,338,082      2,524,243

LAND USE RIGHTS, NET                                136,233        131,227

                                              -------------  -------------
TOTAL ASSETS                                  $   7,105,211  $   5,631,967
                                              =============  =============


              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                           $      52,358  $     163,872
   Other payables and accrued expenses              160,863        156,765
   Value-added tax payables                         210,302         92,281
   Income tax and other tax payables                    964            380
   Notes payable                                    307,349              -
   Due to stockholders                                    -          1,239
                                              -------------  -------------
         Total Current Liabilities                  731,836        414,537
                                              -------------  -------------

COMMITMENTS AND CONTINGENCIES                             -              -

MINORITY INTEREST                                   452,751        456,274
                                              -------------  -------------

STOCKHOLDERS' EQUITY
   Preferred stock ($0.001 par value,
    5,000,000 shares authorized,
    none issued and outstanding)                          -              -
   Common stock ($0.018 par value,
    100,000,000 shares authorized,
    18,466,169 shares issued and
    outstanding as of December 31, 2006;
    16,466,169 shares issued and
    outstanding as of December 31, 2005)            332,388        296,388
   Additional paid-in capital                     8,020,066      7,256,066
   Retained earnings (deficit)
     Unappropriated                              (2,818,054)    (2,890,139)
     Appropriated                                    82,925         23,274
     Accumulated other comprehensive income         303,299         75,567
                                              -------------  -------------
         Total Stockholders' Equity               5,920,624      4,761,156
                                              -------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $   7,105,211  $   5,631,967
                                              =============  =============



                    CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND COMPREHENSIVE INCOME (LOSS)
                FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

                                                    2006           2005
                                              -------------  -------------

NET SALES                                     $   3,076,779  $   2,443,060

COST OF SALES                                    -2,619,261     -2,327,767
                                              -------------  -------------

GROSS PROFIT                                        457,518        115,293
                                              -------------  -------------

OPERATING EXPENSES
  Selling expenses and distribution expenses        122,845        136,062
  General and administrative expenses               291,363        302,982
  Stock bonuses                                           -        560,000
  Goodwill written off                                    -          2,764
  Depreciation and amortization                      45,958         43,559
                                              -------------  -------------
     Total Operating Expenses                       460,166      1,045,367
                                              -------------  -------------

LOSS FROM OPERATIONS                                 -2,648       -930,074

OTHER INCOME (EXPENSES)
  Equity in loss of affiliate                             -           -112
  Interest income                                    58,522         39,297
  Interest expense                                   -9,528         -1,625
  Other income                                       55,956         42,270
                                              -------------  -------------
     Total Other Income                             104,950         79,830
                                              -------------  -------------

INCOME (LOSS) FROM OPERATIONS BEFORE TAXES
 AND MINORITY INTEREST                              102,302       -850,244

INCOME TAX EXPENSE                                   -1,313           -253

MINORITY INTEREST                                    30,747         17,730
                                              -------------  -------------

NET INCOME (LOSS)                                   131,736       -832,767

OTHER COMPREHENSIVE INCOME
  Foreign currency translation gain                 227,732         75,567
                                              -------------  -------------

COMPREHENSIVE INCOME (LOSS)                   $     359,468  $    -757,200
                                              =============  =============

Net income (loss) per share -
 basic and diluted                            $        0.01  $       -0.11
                                              =============  =============

Weighted average number of shares
 outstanding during the year -
 basic and diluted                               16,827,812      7,529,550
                                              =============  =============

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