- Quarterly Report (10-Q)

Share Name	Share Symbol	Market	Type
One Bio Corp (CE)	USOTC:ONBI	OTCMarkets	Common Stock

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal Quarter ended September 30, 2010

Commission file number 333-136643

	ONE BIO, CORP.
	(Exact Name of Registrant as Specified In Its Charter)

Florida		59-3656663
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

19950 W Country Club Drive, Suite 100, Aventura, Florida 33180
(Address of Principal Executive Offices)					(Zip Code)

	(877) 544-2288
	(Registrant’s Telephone Number, Including Area Code)

	29900 NE 30 th Avenue Suite 842 Aventura Florida 33180
	Former Name and Address

Securities registered under Section 12(b) of the Act

NONE

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d0 of the act. Yes o No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.

Yes: x

No: o

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 12-b-2 of the Exchange Act. (Check One):

Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company x

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

Yes: o

No: x

The number of shares of common stock outstanding as of November 5, 2010 was 6,158,559.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Consolidated Financial Statements

	Consolidated Balance Sheet as of September 30, 2010 and December 31, 2009

	Consolidated Statements of Operations and Accumulated Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2010 and 2009 (Unaudited)

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009 (Unaudited)

	Notes to Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Market for Common Equity and Related Stockholder Matters

Item 3.	Defaults Upon Senior Securities

Item 4.	Submission of Matters to a Vote of Security Holders

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

INTERIM FINANCIAL STATEMENTS

The interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2009.

The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position as at September 30, 2010, and the results of its operations and cash flows for the three and nine months ended September 30, 2010. The results of operations for the three and nine months ended September 30, 2010 are not necessarily indicative of the results to be expected for future quarters or the full year end December 31, 2010.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes,” “may,” “will,” “should,” “could,” “plans,” “estimates,” and similar language or negative of such terms. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we do not know whether we can achieve positive future results, levels of activity, performance, or goals. Actual events or results may differ materially. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances taking place after the date of this document.

ONE BIO, CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

ONE BIO, CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

(Expressed in United States Dollars)

September 30, 2010

CONTENTS

		Page

Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheets		1

Condensed Consolidated Statements of Operations and Comprehensive Income		2

Condensed Consolidated Statements of Cash Flows		3

Notes to the Condensed Consolidated Financial Statements		4 – 31

One Bio, Corp.
Consolidated Balance Sheets
(Stated in US dollars)

	September 30, 2010		December 31, 2009

ASSETS
Current assets
Cash and cash equivalents	$	7,735,654	$	4,928,968
Receivables - net		17,466,117		12,006,585
Inventory		5,606,405		2,976,031
Loans Receivable		2,375,918		4,223,863
Prepaid expenses		3,465,832		3,382,882

Total current assets		36,649,926		27,518,329
Property, plant and equipment, net		6,661,309		5,557,911
Land use rights		1,108,166		1,106,056
Goodwill		2,481,569		3,974,908
Intangible assets		837,139		682,058
Deposits for acquisition of intangible assets		350,846		161,151
Other Assets		20,200,065		15,633,438


TOTAL ASSETS	$	68,289,020	$	54,633,851

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES
Current liabilities
Accounts payable	$	2,280,720	$	1,699,783
Other payable and accrued liabilities		6,081,227		2,632,190
Loans payable- current portion		18,835,964		12,868,796
Deferred revenues		64,197		62,995
Deferred taxes		45,614		(29,192	)

Total current liabilities		27,307,722		17,234,572
Loans payable		1,338,282		4,215,855
Deferred taxes		115,831		101,100

TOTAL LIABILITIES		28,761,835		21,551,527

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY
Preferred stock: par value $0.001 per share Authorized: 10,000,000 shares Issued and outstanding: 10,000 and 0 shares at September 30, 2010 and December 31, 2009		10		-
Common stock: par value $0.001 per share Authorized: 100,000,000 shares Issued and outstanding: 6,158,559 and 5,834,398 shares at September 30, 2010 and December 31, 2009		6,159		5,834
Additional paid-in capital		16,252,942		16,221,004
Statutory reserve		1,778,840		1,740,016
Accumulated other comprehensive income		2,303,926		1,495,835
Retained earnings		17,032,874		9,965,874
Total shareholders’ equity of the company		37,374,751		29,428,563
Non-Controlling Interest		2,152,434		3,653,761
TOTAL EQUITY		39,527,185		33,082,324

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	68,289,020	$	54,633,851

See Notes to Consolidated Financial Statements

One Bio, Corp.
Consolidated Statements of Income and Comprehensive Income
(Stated in US dollars)

	Three Months ended September 30,						Nine Months ended September 30,
	2010			2009			2010			2009

Revenues	$	13,504,890		$	4,157,806		$	37,347,194		$	8,625,175
Cost of sales		8,484,199			2,068,381			23,287,108			3,909,654

Gross profits		5,020,691			2,089,425			14,060,086			4,715,521

Operating expenses
General and administrative expenses		1,436,565			428,220			3,695,867			923,031
Research and development expenses		73,248			126,625			186,856			199,664
Selling and marketing expenses		380,775			43,543			590,898			120,100

		1,890,588			598,388			4,473,621			1,242,795

Income from operations		3,130,103			1,491,037			9,586,465			3,472,726
Interest and financing expense		(172,689	)		(53,575	)		(546,979	)		(53,575	)
Interest income		9,316			1,693			21,935			3,365
Other income/(expense)		(231,871	)		10,105			(592,503	)		1,699

Income before income taxes		2,734,859			1,449,260			8,468,918			3,424,215
Provision for income taxes		(710,510	)		(396,033	)		(2,214,710	)		(912,406	)

Net income		2,024,349			1,053,227			6,254,208			2,511,809

Net income attributable to non-controlling interest		(112,063	)		(203,257	)		(355,363	)		(439,744	)

Net income attributable to Company	$	1,912,286		$	849,970		$	5,898,845		$	2,072,065

Earnings per share
- Basic	$	0.31		$	0.18		$	0.98		$	0.44

- Diluted	$	0.29		$	0.17		$	0.93		$	0.43

Weighted average number of shares outstanding:
- Basic		6,158,559			4,854,055			6,007,606			4,733,024

- Diluted		6,529,259			4,969,621			6,373,265			4,799,222


STATEMENT OF COMPREHENSIVE INCOME

Net Income	$	2,024,349		$	1,053,227		$	6,254,208		$	2,511,809
Other comprehensive income
Unrealized foreign currency gain (loss)		592,047			75,712			707,820			43,730

Comprehensive income		2,616,396			1,128,939			6,962,028			2,555,539
Comprehensive income attributable to noncontrolling interest		(140,347	)		(203,257	)		(396,988	)		(439,744	)

Comprehensive income attributable to the Company	$	2,476,049		$	925,682		$	6,565,040		$	2,115,795

See Notes to Consolidated Financial Statements

One Bio, Corp.
Consolidated Statements of Cash Flows
(Stated in US dollars)

	Nine Months ended September 30,
	2010			2009
Cash flows from operating activities
Net Income	$	6,254,208		$	2,072,065
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		343,983			176,715
Amortization of intangible assets		81,877			-
Amortization of land use rights		1,692,603			-
Share-based compensation		55,500			17,897
Stock option expense		36,244			-
Non controlling interest		-			439,744
Deferred taxes		89,971			(315,699	)
Changes in operating assets and liabilities:
Accounts receivable, net		(5,101,210	)		127,127
Prepaid and other current assets		(431,986	)		(1,866,664	)
Inventory		(2,526,095	)		(44,329	)
Loans receivable		1,847,945			(756,485	)
Accounts payable		640,937			-
Other payables and accrued liabilities		3,416,829			(52,062	)
Loans payable - current		745,527			-
Deferred revenue		-			45,766
Amount due to a related party		136,333			-
Amonut due to a stockholder		(151,931	)		-
Income tax payable		(387,445	)		-

Net cash flows provided by / (used in) operating activities		6,743,290			(155,925	)

Cash flows from investing activities
Payments to acquire property, plant and equipment		(1,345,338	)		(168,600	)
Proceeds on sale of equipment		76,936			-
Deposits paid for plantation base leases		(5,673,251	)		(1,614,828	)
Investment in intangible assets		(413,680	)		(458,797	)
Restricted Cash		(273,372	)		-

Net cash flows used in investing activities		(7,628,705	)		(2,242,225	)

Cash flows from financing activities
Proceeds from bridge loan		3,000,000			-
Proceeds of bank loans		3,881,698			-
Loans payable		-			1,781,532
Repayments of bank loans		(3,460,220	)		-
Issuance of preferred shares		10			-
Repurchase and cancellation of common stock		(78,256	)		-
Issuance of common stock and exercise of warrants		-			580,763
Loan from stockholders		532,500			-

Net cash flows provided by financing activities		3,875,732			2,362,295

Effect of foreign currency translation on cash and cash equivalents		(183,631	)		43,730

Net increase in cash and cash equivalents		2,806,686			7,875
Cash acquired		-			1,908,338
Cash and cash equivalents - beginning of period		4,928,968			665,568

Cash and cash equivalents - end of period	$	7,735,654		$	2,581,781

Supplemental disclosures for cash flow information:
Cash paid for interest	$	1,153,176		$	443,982
Cash paid for Income taxes	$	2,554,129		$	886,151

Supplemental disclosures of non cash activity:
Issue of stock for satifaction of deposits received in prior quarter	$	60,000		$	-
Adjustment of goodwill arising from the reduction of TFS contingent purchase price	$	1,493,339		$	-
TFS Net assets acquired	$	-		$	3,593,339
UGTI net assets acquired	$	-		$	11,443,822

See Notes to Consolidated Financial Statements

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

1.	Organization and Basis of Presentation

Description of the Business

One Bio, Corp. (formerly ONE Holdings, Corp), (formerly Contracted Services, Inc.) (“ONE” and/or the “Company”) was incorporated June 30, 2000 in the State of Florida as Contracted Services, Inc. and changed its name to ONE Holdings, Corp. on June 9, 2009 and subsequently on November 16, 2009 changed its name to ONE Bio, Corp. ONE and its subsidiaries (collectively the “Corporation” or “Company”) are utilizing green processes to produce raw chemicals and herbal extracts, natural supplements and organic products. Corporation is focused on the Asia Pacific region. The Corporation’s key products include widely recognized Solanesol, CoQ10, Resveratrol and 5-HTP, organic fertilizers, and organic bamboo health food and beverages.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ US GAAP ”).

Basis of Consolidation

On June 9, 2009 Abacus Global Investments Corp. (“Abacus”) acquired 3,750,000 shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) or 92.25% of ONE Bio Corp. (“ONE”) (formerly ONE Holdings Corp), (formerly Contracted Services Inc.) from ONE’s then majority shareholder, Belmont Partners LLC (“Belmont”). Abacus paid Belmont $262,500 in cash. Belmont also received shares of ONE common stock. On June 9, 2009, concurrent with the Abacus acquisition, ONE changed its name from Contracted Services Inc to ONE Holdings Corp. On October 26, 2009 ONE changed its name again from ONE Holdings Corp to ONE Bio Corp. and authorized a 5 for 1 reverse split in its common shares.

At the time of this acquisition, both Abacus and ONE had nominal operations although ONE was a publicly reporting entity. Abacus is in the business of acquiring and selling companies and in providing strategic management consulting services. To our knowledge, Abacus engaged in only the above described transaction in 2009. ONE (at the time known as Contracted Services Inc.) was a small lawn maintenance company. Accordingly, neither ONE nor Abacus had any significant operations or assets.

Abacus entered into the transaction to establish a public vehicle which it could utilize as the core of a business strategy to establish a global bio-engineering group to promote and develop organic products, intermediate chemical extracts and green processes.

Since both companies, ONE and Abacus, were small closely held companies both prior to and, immediately after the Abacus transaction, and because neither Company had substantial operations or assets, ONE viewed the Abacus transaction as a straight forward private transaction between its shareholder Belmont Partners and Abacus. We believe that Abacus accounted for the transaction as a purchase and we concur with that determination. Further, in accordance with the Guidance offered in ASC 805-20-55 we concluded that because, at the time, there was no distinct difference in relative size of assets or operations, and because the legal acquiree did not issue any additional shares that were not already in circulation to effect this transaction, this transaction did not meet the characteristics of a reverse acquisition. In addition, neither of the companies was merged.

The Abacus transaction had little or no impact on liquidity or operations other than the minor lawn service operations which were discontinued in anticipation of engaging in the new business strategy discussed above.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

The Abacus transaction had no impact on our capital structure

On July 22, 2009 (closing date of the reverse acquisition) ONE Bio Corp. (“ONE”) (formerly ONE Holdings Corp), (formerly Contracted Services Inc.) acquired 11,625,333 outstanding common shares and 4,155,066 of outstanding warrants together representing 78.28% of Green Planet Bio-Engineering Co., LTD (“GPB”) from GPB’s majority shareholders. The transaction was accomplished through a share exchange agreement wherein in exchange for GPB common stock and warrants, ONE issued 688,408 (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of its common shares along with a note for $980,349. The total transaction was valued at $12,336,902.

At the time of this acquisition, ONE had nominal operations whereas GPB was a fully operational enterprise whose assets and operating results far exceeded ONE’s. Both were publicly traded companies. ONE entered into the transaction as its first acquisition in implementing its business strategy to establish a global bio-engineering group to promote and develop organic products, intermediate chemical extracts and green processes.

Both companies, ONE and GPB were public. However, ONE’s operations and assets were nominal whereas GPB operations and assets were substantial. Because GPB’s operations and assets were distinctly different in relative size, ONE viewed the GPB transaction as a reverse acquisition in accordance with the guidance offered in ASC 805-10-55-13. Accordingly, although ONE was the legal acquirer, because the transaction met the characteristics of a reverse acquisition, GPB was treated as the acquirer for accounting purposes, and its reported equity was recapitalized. The companies were not merged.

ONE’s capital structure was changed to reflect the shares it issued to acquire GPB under the share exchange agreement. GPB’s capital structure was recapitalized to reflect the number of shares outstanding as ONE’s shares. Par value of common stock was adjusted to reflect ONE’s par with the offset adjusting APIC.

During the year ended December 31, 2009, ONE completed two acquisitions: (i) on September 3, 2009, ONE completed the purchase of 99.75% of Trade Finance Solutions Inc; and (ii) on September 27, 2009, ONE completed the acquisition of 100% of Supreme Discovery Group Limited (“Supreme”) through its subsidiary United Green Technology, Inc. (“UGTI”). Pursuant to this transaction, 20% of UGTI common stock was issued to the Supreme shareholders in consideration for 100% of Supreme. Also ONE acquired 5,000 shares of UGTI preferred stock which have super voting rights resulting in ONE have an 83.3% interest in UGTI. November 3, 2009, ONE increased its ownership of UGTI to 98%. ONE’s consolidated financial statements incorporate the results of these acquisitions, as of the acquisition date. See “Note 8 - Acquisitions” for the unaudited condensed pro-forma results these acquisitions for the fiscal years ended December 31, 2008 and 2007.

Included in the Company’s consolidated financial statements are the operational results and financial position of Sanming and JLF. These companies are deemed to be variable interest entities (“VIE”) and were effectively acquired on July 22, 2009, and September 27, 2009, respectively. As variable interest entities, the Company includes their operating results in its consolidated financial results based on the execution of certain contractual relationships which grants to the Company operational control. The Company has operational control which obligates the Company to absorb the risk or loss and enables the Company to receive the majority of the VIE residual returns.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

To comply with PRC laws and regulations that restrict foreign ownership of companies, the Company operates its China businesses (Sanming and JLF) through Fujian Green Planet and Fujian United wholly foreign owned enterprises (“WFOE”), which are wholly owned subsidiaries of Green Planet and UGTI. The WFOE’s have entered into certain irrevocable agreements with Sanming and JLF through which operational and financial control of these businesses reside in the WFOE. The following are the transactional agreements:

Entrusted Management Agreement

Shareholders Voting Proxy Agreement

Exclusive Purchase Option Agreement

Share Pledge Agreement

As a result of these agreements, the Company is considered the primary beneficiary of Sanming and JLF both financially and operationally and accordingly their results are consolidated in the Company’s financial statements.

ONE’s consolidated financial statements include the accounts of all of its majority owned subsidiaries and the accounts of it’s VIE’s, of which ONE is the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. The functional currency of ONE’s foreign subsidiaries is in the United States Dollar, Canadian Dollar and Chinese Yuan. Certain prior year balances have been reclassified to conform to current year presentation.

2.	Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits with banks, money market accounts, and other short-term investments with original maturities of 90 days or less. Balances of cash and cash equivalents in financial institutions may at times exceed the government-insured limits.

Restricted Cash

In accordance with ASC Topic 305 formerly Accounting Review Board (“ARB”) No. 43, Chapter 3A “Current Assets and Current Liabilities”, cash which is restricted as to withdrawal is considered a non-current asset.

Receivables

Accounts receivable are recognized and carried at original invoiced amount less an allowance for uncollectible accounts, as needed.

When evaluating the adequacy of its allowance for doubtful accounts, the Company reviews the collectability of accounts receivable, historical write-offs, and changes in sales policies, customer credibility and general economic tendency.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

Loans and Receivables

These assets are non-derivatives financial assets resulting from cash advances by the lender to a borrower under financing facility agreements that mature on a specific date or dates, usually less than one year or on demand. Each cash advance is typically secured by the assignment of proceeds of the borrower’s accounts receivables which usually collect within 90 day cycles from the date of the advance. These assets are initially recognized at their acquired cost adjusted for any write-offs, the allowance for loan losses, any deferred fees or costs on originated loans, less any provision for impairment. Due to the short term nature of the individual advances, their carrying value approximates fair value. Management believes there is no impairment nor were there any write-offs or allowances for loan losses recorded as of September 30, 2010.

Concentration of Credit

The Company extends credit to its customers for which no credit insurance is available. To date the Corporation has not incurred any significant loss due to this activity; however, if such occurrence was to occur, the loss may have an adverse effect on the financial position of the Company.

Capital Leases

The Company’s policy is to record leases, which transfer substantially all benefits and risks incidental to ownership of property, as acquisitions of property and equipment and to record the incurrence of corresponding obligations as liabilities. Obligations under capital leases are reduced by rental payments net of imputed interest.

Inventory

Inventories are stated at the lower of cost and current market value. Costs include the cost of purchase and processing, and other costs. Inventories are stated at cost upon acquisition. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories.

Net realizable value is the estimated selling price in the normal course of business less the estimated costs to completion and the estimated expenses and related taxes to make the sale.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs, which are not considered improvements and do not extend the useful life of the asset, are expensed as incurred; additions, renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in the statement of operations in cost of blended products.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

Depreciation is provided to recognize the cost of the asset in the results of operations. The Company calculates depreciation using the straight-line method with estimated useful life as follows:

	Building and structural components	20 years
	Computer equipment and software	5 years
	Leasehold improvements	7 years
	Machinery and equipment	10 years
	Office equipment and furniture	5 years
	Technology	5 - 10 years
	Vehicles	5 years

Land Use Rights

Land use rights represent the purchased rights to use land granted PRC land authorities. Depending on the PRC land authority, the land use rights can be conveyed in the form of a prepaid lease or a use agreement. Land use rights are stated at cost less accumulated amortization. Amortization is provided using the straight line method over the terms of the agreement which range over a term of 30 to 50 years obtained from the relevant PRC land authorities.

Intangible Assets

Intangible assets consist mainly of proprietary technology and software. The intangible assets are amortized using straight-line method over the life of the assets.

Impairment of Long-lived Assets

In accordance with ASC Topic 360 Formerly Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, certain assets such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets are tested for impairment annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no events or changes in circumstances that necessitated a review of impairment of long lived assets as of September 30, 2010 as well as September 30, 2009, respectively.

Revenue Recognition

The Company recognizes revenues in accordance with the guidance in the Securities and Exchange Commission (“SEC”) ASC Topic 605 Formerly Staff Accounting Bulletin (“SAB”) No. 104. Revenue is recognized when persuasive evidence of an arrangement exists, when the selling price is fixed or determinable, when delivery occurs and when collection is probable. The Company recognizes sales revenue when goods are shipped or ownership has transferred.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

Employee Future Benefits

Pursuant to the relevant laws and regulations in the PRC, the Company participates in various defined contribution retirement plans organized by the respective divisions in municipal and provincial governments for its employees. The Company is required to make contributions to the retirement plans in accordance with the contribution rates and basis as defined by the municipal and provincial governments. The contributions are charged to the respective assets or the income statement on an accrual basis. When employees retire, the respective divisions are responsible for paying their basic retirement benefits. The Company does not have any other obligations in this respect.

Income Taxes

The Company accounts for income taxes in accordance with ASC topic 740 formerly Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”. Under ASC 740, deferred tax assets and liabilities are determined based on temporary differences between accounting and tax bases of assets and liabilities and net operating loss and credit carry forwards, using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. A provision for income tax expense is recognized for income taxes payable for the current period, plus the net changes in deferred tax amounts. Any interest and penalties are expensed in the year that the Notice of Assessment is received.

The Company’s practice is to recognize interest and/or penalties to income tax matters in income tax expense.

Use of Estimates

The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses for the periods reported. Actual results could differ from those estimates. Significant items that require estimates are goodwill, deferred tax assets, stock-based compensation, deferred tax liabilities and the depreciation, and amortization of the Corporation’s assets.

Costs of Raising Equity Capital

Costs of raising capital include legal, professional fees and agent fees associated with the raising of equity and debt capital.

Incremental costs incurred in respect of raising capital are charged against equity or debt proceeds raised. Costs associated with the issuance of share capital are charged to capital stock upon the raising of share capital. Costs associated with the issuance of debt are part of the carrying value of the debt and charged to operations as non-cash financing expense using the effective interest rate method.

Foreign Currency Translation

In accordance with ASC Topic 830 formerly SFAS No.52, “Foreign Currency Translation”, the financial statements of subsidiaries of the Company are measured using local currency (Canadian Dollar and Chinese Yuan) as the functional currency. Assets and liabilities have been translated at period-end exchange rates and related revenue and expenses have been translated at average exchange rates. Gains and losses resulting from the translation of subsidiaries’ financial statements are included as a separate component of shareholders’ equity accumulated in other comprehensive income.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

Fair Value of Financial Instruments

The Company estimates the fair value of its financial instruments based on current interest rates, quoted market values or the current price of financial instruments with similar terms. Unless otherwise disclosed herein, the carrying value of financial instruments, especially those with current maturities such as cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities are considered to approximate their fair values.

Fair Value Measurements

In April 2009, the Financial Accounting Standard Board (“FASB”) released ASC 820, Fair Value Measurements and Disclosures, (formerly SFAS No. 157 “ Fair Value Measurements ”) that defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosures about fair value measurements.

According to ASC 820, investment measured and reported at fair value are classified and disclosed in one of the following hierarchy:

Level 1 - Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level 1 included listed equities and listed derivatives.

Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Investments that are generally included in this category include corporate bonds and loans, less liquid and restricted equity securities and certain over-the-counter derivatives.

Level 3 - Pricing inputs are unobservable for the investment and included situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.

Stock-Based Compensation Plan

The Corporation uses the fair value-based method for measurement and cost recognition of employee share-based compensation arrangements under the provisions of ASC Topic 718 formerly FASB, SFAS 123 (Revised 2004) and Share-Based Payment (SFAS 123R), using the modified prospective transitional method.

Under the modified prospective transitional method, share-based compensation is recognized for awards granted, modified, repurchased or cancelled subsequent to the adoption of SFAS 123R. In addition, share-based compensation is recognized, subsequent to the adoption of SFAS 123R, for the remaining portion of the vesting period (if any) for outstanding awards granted prior to the date of adoption.

We measure share-based compensation costs on the grant date, based on the calculated fair value of the award. We have elected to treat awards with graded vesting as a single award when estimating fair value. Compensation cost is recognized on a straight-line basis over the employee requisite service period, which in our circumstances is the stated vesting period of the award, provided that total compensation cost recognized at least equals the pro rata value of the award that has vested. Compensation cost is initially based on the estimated number of options for which the requisite service is expected to be rendered. This estimate is adjusted in the period once actual forfeitures are known.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

Earnings Per Share

Earnings (loss) per common share are reported in accordance with ASC Topic 260 formerly SFAS No. 128, “Earnings Per Share”. ASC 260 requires dual presentation of basic earnings per share (“EPS”) and diluted EPS on the face of all statements of earnings, for all entities with complex capital structures. Diluted EPS reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of these options, warrants and convertible securities are excluded from diluted EPS if the effect of such inclusion would be anti-dilutive. Fully diluted profit/loss per common share is not provided, when the effect is anti-dilutive.

When the effect of dilution on loss per share is anti-dilutive, diluted loss per share equals the loss per share.

Comprehensive Income

The Company follows ASC Topic 220 formerly Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”. This statement establishes standards for reporting and display of comprehensive income and its components. Comprehensive income is net income plus certain items that are recorded directly to shareholders’ equity bypassing net income. Other than foreign exchange gains and losses, the Company has no other comprehensive income (loss).

Recent Changes in Accounting Standards

Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized below.

In January 2010, the FASB has published ASU 2010-01 “Equity (Topic 505)- Accounting for Distributions to Shareholders with Components of Stock and Cash—a consensus of the FASB Emerging Issues Task Force,” as codified in ASC 505. ASU No. 2010-01 clarifies the treatment of certain distributions to shareholders that have both stock and cash components. The stock portion of such distributions is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s (consolidated) financial position and results of operations.

In January 2010, the FASB has published ASU 2010-02 “Consolidation (Topic 810)- Accounting and Reporting for Decreases in Ownership of a Subsidiary—a Scope Clarification,” as codified in ASC 810, “Consolidation.” ASU No. 2010-02 applies retrospectively to April 1, 2009, our adoption date for ASC 810-10-65-1. This ASU clarifies the applicable scope of ASC 810 for a decrease in ownership in a subsidiary or an exchange of a group of assets that is a business or nonprofit activity. The ASU also requires expanded disclosures. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. . The adoption of this standard is not expected to have any impact on the Company’s consolidated financial position and results of operations.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

In January 2010, the FASB has published ASU 2010-06 “Fair Value Measurements and Disclosures (Topic 820): - Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 clarifies improve disclosure requirement related to fair value measurements and disclosures – Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosure about purchase, sales, issuances, and settlement in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

In March 2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic 815-15, Derivatives and hedging. The amendments clarify about the scope exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the embedded credit derivatives. The ASU is effective on the first day of the first fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end entity, the ASU becomes effective on July 1, 2010. Early application is permitted at the beginning of the first fiscal quarter beginning after March 5, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes” (Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30, 2010 The President signed the Health Care & Education Affordable Care Act reconciliation bill that amends its previous Act signed on March 23, 2010. FASB Codification topic 740, Income Taxes, requires the measurement of current and deferred tax liabilities and assets to be based on provisions of enacted tax law. The effects of future changes in tax laws are not anticipated.” Therefore, the different enactment dates of the Act and reconciliation measure may affect registrants with a period-end that falls between March 23, 2010 (enactment date of the Act), and March 30, 2010 (enactment date of the reconciliation measure). However, the announcement states that the SEC would not object if such registrants were to account for the enactment of both the Act and the reconciliation measure in a period ending on or after March 23, 2010, but notes that the SEC staff “does not believe that it would be appropriate for registrants to analogize to this view in any other fact patterns.” The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments in this Update should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. Earlier application is permitted. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

In April 2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR 78], Modernization of Oil and Gas Reporting and provides update as to amendments to SEC Regulation S-X, Rule 4-10. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how investments through separate accounts affect an insurer’s consolidation analysis of those investments. Under the ASU: an insurance entity should not consider any separate account interests held for the benefit of policy holders in an investment to be the insurer’s interests and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation, unless the separate account interests are held for the benefit of a related party policy holder as defined in the Variable Interest Entities Subsections of Subtopic 810-10 and those Subsections require the consideration of related parties. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-16. “Entertainment-Casinos” (Topic 924). ASU No.2010-16 addresses diversity in practice regarding whether an entity accrues liabilities for a base jackpot before it is won because they could avoid the payment. The amendments in this update clarify that an entity should not accrue jackpot liabilities (or portions thereof) before a jackpot is won if the entity can avoid paying that jackpot. Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. This guidance applies to both base and progressive jackpots. The ASU amendments are effective for fiscal years, and the interim periods within those fiscal years, beginning on or after December 15, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-17. “Revenue Recognition-Milestone Method” (Topic 605) ASU No.2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. An entity often recognizes these milestone payments as revenue in their entirety upon achieving a specific result from the research or development efforts. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. Determining whether a milestone is substantive is a matter of judgment made at the inception of the arrangement. The ASU is effective for fiscal years and interim periods within those fiscal years beginning on or after June 15, 2010. Early application is permitted. Entities can apply this guidance prospectively to milestones achieved after adoption. However, retrospective application to all prior periods is also permitted. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

In April 2010, the FASB issued Accounting Standard Update No. 2010-18. “Receivables” (Topic 310). ASU No.2010-18 provides guidance on accounting for acquired loans that have evidence of credit deterioration upon acquisition. Paragraph 310-30-15-6 allows acquired assets with common risk characteristics to be accounted for in the aggregated as a pool. Upon establishment of the pool, the pool becomes the unit of accounting. When loans are accounted for as a pool, the purchase discount is not allocated to individual loans; thus all of the loans in the pool accrete at a single pool rate (based on cash flow projections for the pool). Under subtopic 310-30, the impairment analysis also is performed on the pool as a whole as opposed to each individual loan. Paragraphs 310-40-15-4 through 15-12 establish the criteria for evaluating whether a loan modification should be classified as a troubled debt restructuring. Specifically paragraph 310-40-15-5 states that “a restructuring of a debt constitutes a troubled debt restructuring for purposes of this subtopic if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.” The ASU is effective for modification of loans accounted for within pools under subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2010, the FASB issued Accounting Standard Update No. 2010-19 “Foreign Currency”. (“ASU No. 2010-19”). ASU 2010-19, codifies the SEC staff announcement made at the March 18, 2010, EITF meeting. The ASU “provides the SEC staff’s views on certain foreign currency issues related to investments in Venezuela.” These issues relate to Venezuela’s highly inflationary status. The ASU became effective on March 18, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In July 2010, the FASB issued Accounting Standard Update No. 2010-20 (ASU No. 2010-20) “Receivables” (Topic 310). ASU No. 2010-20 provides financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This update is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The amendments in this update apply to both public and nonpublic entities with financing receivables, excluding short-term trade accounts receivable or receivables measured at fair value or lower of cost or fair value. The objective of the amendments in ASU No. 2010-20 is for an entity to provide disclosures that facilitate financial statement users’ evaluation of (1) the nature of credit risk inherent in the entity’s portfolio of financing receivables, (2) How that risk is analyzed and assessed in arriving at the allowance for credit losses and (3) The changes and reasons for those changes in the allowance for credit losses. The entity must provide disclosures about its financing receivables on a disaggregated basis. For public entities ASU No. 2010-20 is effective for interim and annual reporting periods ending on or after December 15, 2010. For nonpublic entities ASU No. 2010-20 will become effective for annual reporting periods ending on or after December 15, 2011. The Company is evaluating the impact ASU No. 2010-20 will have on the consolidated financial statements.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

2.	Summary of Significant Accounting Policies - continued

In August 2010, the FASB issued Accounting Standard Updates No. 2010-21 (ASU No. 2010-21) “Accounting for Technical Amendments to Various SEC Rules and Schedules” and No. 2010-22 (ASU No. 2010-22) “Accounting for Various Topics – Technical Corrections to SEC Paragraphs”. ASU No 2010-21 amends various SEC paragraphs pursuant to the issuance of Release no. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies. ASU No. 2010-22 amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics. Both ASU No. 2010-21 and ASU No. 2010-22 are effective upon issuance. The amendments in ASU No. 2010-21 and No. 2010-22 will not have a material impact on the Company’s consolidated financial statements.

In September 2010, the FASB issued Accounting Standard Update No. 2010-25 (ASU No. 2010-25) “Defined Contribution Pension Plans” (Topic 962). ASU No. 2010-25 clarifies how loans to participants should be classified and measured by defined contribution pension benefits. The amendments in ASU No. 2010-25 affect any defined contribution pension plan that allows participant loans. The amendments in ASU No. 2010-25 require that participant loans be classified as notes receivable from participants, which are segregated from plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest. ASU No. 2010-25 is effective for fiscal years ending after December 15, 2010 and should be applied retrospectively to all prior periods presented. Early adoption is permitted. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

3.	Supplemental Cash Flow Information

For the Periods Ended September 30,	2010		2009

Supplemental disclosure

Interest paid	$	1,153,176	$	8,174
Income taxes paid	$	2,554,129	$	599,456

Non-cash transaction

Issuance of stock for satisfaction of deposits received in prior quarter	$	60,000		-
Adjustment of goodwill arising from the reduction of TFS contingent purchase price	$	1,493,339		-

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

4.	Accounts Receivables

	September 30, 2010			December 31, 2009
Accounts receivables	$	17,477,595		$	12,017,848
Allowances for doubtful accounts		(11,478	)		(11,263	)
Accounts receivable, net	$	17,466,117		$	12,006,585

Inventory

	September 30, 2010		December 31, 2009
Raw material	$	459,008	$	140,759
Packaging material		91,232		59,954
Work in progress		4,734,563		2,610,245
Finished goods		321,602		165,073
	$	5,606,405	$	2,976,031

6.	Property, Plant and Equipment

	September 30, 2010			December 31, 2009
Building and structural components	$	3,627,923		$	3,580,686
Machinery		1,902,669			1,806,118
Office equipment and furniture		435,141			306,685
Vehicles		210,176			109,590
Leasehold Improvement		592,343			-
		6,768,252			5,803,079
Less: accumulated depreciation		(1,405,221	)		(1,130,912	)
		5,363,031			4,672,167
Construction in progress		1,298,278			885,744
	$	6,661,309		$	5,557,911

During the periods, depreciation is included in:


For the Periods Ended September 30,	2010		2009

Cost of sales	$	68,260	$	62,510
Administrative and R&D Expenses		56,233		27,027

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

7.	Intangible Assets

The following is a summary of the Corporation’s intangible assets:

	September 30, 2010			December 31, 2009
Technology	$	1,114,421		$	871,680
Software		3,240			5,304
		1,117,661			876,984
Less: accumulated amortization		(280,522	)		(194,926	)
	$	837,139		$	682,058

The estimated aggregate amortization expense for intangible assets for the five succeeding years is $397,649.

Goodwill

Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. Goodwill was recorded with the purchase of TFS in the amount of $2,481,569.

Balance December 31, 2009	$	3,974,908
Adjustment of goodwill arising from the reduction of TFS contingent purchase price		(1,493,339	)
Balance June 30, 2010	$	2,481,569

For the quarter ended September 30, 2010, the purchase price on the acquisition of TFS was further evaluated based on the criteria as set forth in the Share Purchase Agreement entered into as of August 26, 2009. The evaluation resulted in a reduction in the cash and non-cash portions of $1.3 million and the corresponding amounts were reduced from the liability accounts.

Future adjustments to prior acquisitions may be required primarily due to adjustments to plans formulated in accordance with the ASC Topic 805.

9.	Restricted Cash

One of the Company’s operating subsidiaries in the PRC has established a credit facility with a local lender denominated in RMB. The facility was partially guaranteed by the Rural Credit Cooperatives Cooperation of Jianou City. The credit facility provides that the Company deposit 50% of the total credit applied into an Escrow Account as further guaranty against default. As of September 30, 2010, the cash on deposit but restricted as to access was $665,860.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

10.	Loans Payable

The Company has entered into certain financial agreements and loans payable as follows:

Borrowings	September 30, 2010		December 31, 2009
CCB	$	1,492,961	$	1,465,008
Rural Cooperative – Secured A		-		1,860,561
Rural Cooperative – Secured B		-		732,504
Rural Cooperative – Secured C		597,184		-
Industrial & Commercial Bank		1,791,553		-
Reverse Acquisition of GPB		980,349		980,349
Acquisition of TFS		1,684,760		3,000,000
Acquisition of Supreme		2,258,400		2,438,400
Financial Services		6,315,229		6,449,880
Bridge Loan		3,000,000		-
Other		2,053,810		157,950
Total		20,174,246		17,084,652
Loans Payable, current portion		18,835,964		12,868,796

Loans Payable, less current portion	$	1,338,282	$	4,215,856

The Company has loans payable- long term portion, payable in 2011, 2012 and 2013 of $173,239, $692,956 and $472,087 respectively.

CCB - The amount represents borrowings from a financial institution and accrues interest at 6.11%. The borrowing matures on April 30, 2011.

Rural Cooperative Secured C – On June 21, 2010, the Company entered into a short term borrowing agreement with the Rural Credit Cooperative, which carries interest at the annual rate of 7.9%. The loan is secured by a guarantee company. The guarantee company charges a fee at 1.57% per annum on the loan.

Industrial & Commercial Bank – On July 7, 2010, the Company entered into a 2 year revolving loan facility agreement with Industrial and Commercial Bank of China (“ICBC”), which carries an interest rate of 85% of the rate stipulated by the People’s Bank of China. Under the terms of the loan facility, usage of the funds is limited to the purchase of certain inventory items. ICBC charged a commission fee of $33,293. The Company pledged buildings, construction in progress and land use rights with a carrying value of $2,749,484 as collateral for the revolving loan facility.

Reverse Acquisition of GPB - The amounts represent notes issued in connection with the acquisition of Green Planet Bioengineering Limited. There were two notes issued, one for $445,613 which matured on July 22, 2010 and one for $534,736 which matures on July 22, 2011.

Acquisition of TFS - The amount represents the cash consideration due in connection with the acquisition of Trade Finance Solutions, Inc. Payment is due based on the achievement of certain milestones.

Acquisition of Supreme - The amounts represent notes issued in connection with the acquisition of Supreme Discovery Group Limited. There were four notes issued. One for $180,000 which matured on May 10, 2010 (paid in full January 2010), one for $557,280 which matured on September 22, 2010, one for $1,020,000 which matures on November 10, 2010, and one for $681,120 which matured on September 22, 2011.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

Financial Services - Our Financial services business units borrows money from various individual private lenders at prevailing rates, which was 12% for instruments issued in fiscal 2010. These borrowings are collateralized by first charge on the receivables of Trade Finance and mature in one year. Interest and principal is due at maturity.

Bridge Loan – The amount represents the borrowings in connection with bridge loan with interest rate of 8% per annum and maturity date of nine months.

Other - The amounts are payable to shareholder and related parties. The amounts are interest-free, unsecured and payable on demand.

11.	Loans Receivable

These assets are non-derivatives financial assets resulting in cash advances by the lender to a borrower under financing facility agreements that mature on a specific date or dates, usually less than one year or on demand. We make cash advances under these financing facility agreements which are usually secured by the assignment of proceeds of accounts receivable which usually collect within 90 day cycles from the date of the advance. Management generally, holds the loans until maturity or payoff and values them at their outstanding principal adjusted for any write-offs, the allowance for loan losses, any deferred fees or costs on originated loans. Our loans are collateralized as follows: (a) accounts receivable financing agreements are collateralized by the assignment of the proceeds of trade receivables; (b) purchase order financing agreements are collateralized by the assignment of the assets being purchased or the proceeds of the sale once such assets are sold; further all of our financing agreements are secured by credit insurance.

Because we purchase credit insurance on all our financing transactions our credit insurance underwriter performs extensive credit evaluations, which we rely on. Accordingly, because our advances are fully secured by the proceeds of short term accounts receivables or products being delivered to our borrower’s customer’s and all of our advances are further secured by credit insurance, management does not believe that any allowance for doubtful accounts or loan impairment is required.

Our FIN business unit has been successfully engaged in such financing activities for over 4 years. During that time we have engaged in transactions with approximately 120 counterparties aggregating $21.5 million in lending.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

12.	Land Use Rights

General

Land Use Rights are generally associated with the long-term use of land underlying a building or production facility in the PRC. These rights have characteristics similar to a real estate property deed under western law in that they are:

paid for at initial acquisition

have an extended life, up to 50 years

generally relate to a building or production facility

may be pledged as collateral for debt

require no further payments by the owner unless the land usage or building configuration is modified

They differ from a real estate property deed in that:

the transfer of use rights is not permanent

and therefore they are amortized over their life.

Sanming Hujian Bio-Engineering, Co., Ltd.

In July 2004, the Company acquired land use rights to construct its main operating and production facilities for $1,122,557. The land use rights expire in 2054. The Company recognizes $22,879 in expense annually as amortization of its land use rights. As of September 30, 2010, the Company has pledged its land use rights as collateral for the revolving loan facility agreement with Industrial and Commercial Bank of China.

Jianou Lujian Foodstuff, Co.

In January 2004, the Company acquired land use rights to construct its main operating and production facilities for $138,647. The land use rights expire in 2054. The Company recognizes the expense annually in the amount of $2,826 as amortization of its land use rights. The Company has pledged its land use rights as collateral according to a loan agreement with the Jianou Sub-Branch of China Construction Bank .

13.	Other Assets

Other assets consist of the following:

	September 30,		December 31
	2010		2009
Land Lease Rights
Green Planet (CHE)	$	10,398,471	$	9,502,044
UGTI (OP)		8,957,764		5,567,031
Restricted Cash (Note 9)		665,860		388.227
Other		177,970		176,136

Total Other Assets	$	20,200,065	$	15,633,438

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

General

Other assets include items which also represent the right to use land but typically these rights have characteristics similar to real estate leases under western law in that they are:

paid for through a series of interim payments that permit continued use

may have long lives, up to 30 years, but are less than Land Use rights

generally relate to agricultural uses

Transfer of Land Use Rights to Land Lease Rights

In July 2009, Green Planet filed an application with the PRC requesting the exchange of the land use right agreement dated December 31, 2006 for the development of the 15.33 hectare of land in the Jindong Bio-industry Development Zone located in Sanming City, for a land lease agreement containing 667 hectare of agricultural land located in Sanyuan District of Sanming City. The application included a request to transfer the deposit paid in December 2006 for the land use rights be applied to the land lease agreement to be used to net-off against the rent of the land lease agreement.

The PRC government approved the application for the exchange of land use rights for the new land lease rights in July 2009. This entitled Green Planet a land lease right of 667 hectares of state owned cultivation bases from the Forestry Bureau of Sanming City. Additionally, the deposit paid on December 31, 2006 for the land use rights was approved to transfer to the land lease to be used to off-set against the rent of the land lease agreements. As a result of the PRC’s approval, we transferred $7,656,134 previous recorded land use rights to land lease rights with the Forestry Bureau of Sanming City. The effect of this transfer had no impact on the statement of operations.

Forestry Bureau of Sanming City

In July 2009 the Company entered into 2 land use agreements with the Forestry Bureau of Sanming City to use agricultural land on 2 plantations to grow essential botanical raw materials to support the Company’s operations. The agreement provides for payments every five years of $9,083,184 and will expire in 2039. As part of this agreement, the Company was required to prepay the first five year leasing period of $9,052,419 which includes an initial nonrefundable deposit of $1,845,289, which can be offset against the rental of the last year of the last leasing period. Accordingly, the Company recognized the lease expense in its reported operating expenses for the period ended, September 2010 reflecting the amortization of these land use agreements and recognized $1,673,609 of lease expense.

In April 2010, the Company entered into a land leasing agreement with Sanming Sanyuan Forestry Bureau. According to the agreement, the Company acquired the rights to a 30 year lease to the carcandra cultivation base located in Sanming Sanyuan Louyuan Hills. In return, every three years the Company will pay the Forestry Bureau $1,769,520 as rent. In addition the Company was required to make a deposit of $589,840, which will be netted off against rent of the last year of the leasing period.

The Company has the following commitments under the agreements:

Year	Commitment		Amortization
2010	$	-	$	1,673,609
2011		-		2,400,649
2012		-		2,400,649
2013		1,769,520		2,400,649
2014		9,142,520		2,400,649
Thereafter		48,278,404		59,258,276
Total		59,190,444		70,534,481

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

Yushan Town (harvest rights)

In 2007 the Company entered into 2 land leasing agreements with Jixi Village and Linkou Village, Yushan Town for exclusive harvest rights to the bamboo shoots and bamboo grown in the plantations based in the two villages, which are an essential botanical raw materials used to support the Company’s operations. The agreement provides for annual payments on an accelerated schedule which is currently at $659,254 and will expire in 2037. As part of this agreement, the Company was required to make an initial nonrefundable deposit of $8,790,050, of which it has paid as of June 30, 2010. The agreement provides that the deposit can be offset against the rental of the last 10 years of the leasing period.

The Company has the following commitments under the agreements:

			Lease
Year	Commitment		Expense
2010		-	$	331,785
2011		663,570		663,570
2012		729,927		729,927
2013		729,927		729,927
2014		729,927		729,927
Thereafter		11,244,006		20,091,606
Total		14,097,357		23,276,742

14.	Defined Contribution Plan

Pursuant to the relevant PRC regulations, the Company is required to make contributions at a rate of 29% of the average salaries for the latest fiscal year-end of Fujian Province to a defined contribution retirement plan organized by a state-sponsored social insurance plan in respect of the retirement benefits for the Company’s employees in the PRC. The only obligation of the Company with respect to retirement plan is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the statement of income and comprehensive income.

The Company contributed $89,147 and $55,922 for the nine months ended September 30, 2010 and 2009, respectively.

15.	Related Party Transactions

Amounts due to the related parties are payable to entities controlled by shareholders, officers or directors of the Corporation as are transactions with these related parties. These amounts are non-interest bearing, unsecured and not subject to specific terms of repayment unless stated otherwise.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

	Quarter ended September 30
	2010		2009

Proceeds paid to an entity whose director is a shareholder	$	17,278		2,638

Interest expense		-		-

	September 30, 2010		December 31, 2009

Demand loans with no interest and recorded within loans payable	$	532,500		157,950

Amount due to shareholder		116,794		-

Loan to subsidiaries		2,000,000		300,000

The above loans from shareholders are associated with a $3.0 million line of credit established February 2, 2010, by the Chairman of the Company and a company owned by the CEO of the Company, to provide working capital to the Company. The Chairman and CEO, respectively, partly funded the loans under the facility from third party borrowings and pledged 486,500 of their individually owned shares of the Company’s common stock as a guarantee to the third parties providing the financing.

The Company provided a $2 million loan to two subsidiaries in the amounts of $0.3 million and $1.7 million respectively, for general corporate and working capital purposes. The loans carry an interest rate of 10% per annum. As of September 1, 2010, the Company waived all future interest on the loan.

The above transactions are in the normal course of operations and have been measured at the exchange amount which is the amount of consideration established and agreed to by the related parties.

16.	Capital Stock

The Company is authorized to issue 100,000,000 common shares with a par value of $0.001. Each common share entitles the holder to one vote.

During the nine months ending September 30, 2010, the Company had the following capital transactions:

issued 10,000 shares of preferred stock as consideration for guarantee of bridge loan financing.

issued 5,160 common shares for directors’ compensation.

Issued 1,600 of common shares for services rendered.

Repurchased 3,600 common shares

Issued 260,000 shares of common stock in purchase of additional minority interest in subsidiary.

Issued 81,000 shares of common stock for dilution adjustment

Issued 16,000 shares to an investor

Issued 4,001 shares as adjustment of earlier transactions

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

17.

Warrants

The Company does not have a formal plan in place for the issuance of stock warrants. However, at times, the Company will issue warrants to non-employees or in connection with financing transactions. The exercise price, vesting period, and term of these warrants is determined by the Company’s Board of Directors at the time of issuance. A summary of warrants at September 30, 2010 and activity during the period then ended is presented below:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value

Outstanding at January 1, 2010		339,200		$	25.00			$	349,376

Issued		114,733			30.40				-

Exercised		—			—

Forfeited		(98,733	)		30.35

Outstanding at September 30, 2010		355,200		$	26.10		3.0	$	349,376

Exercisable at September 30, 2010		—		$	0.00		3.0	$	—

The following information applies to warrants outstanding and exercisable at September 30, 2010:

	Warrants Outstanding						Warrants Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price

$25.00		355,200		3	$	25.00		—	$	—
$25.06 –$30.00		98,733		5	$	30.40		—	$	—

		453,933		3	$	26.10		—	$	—

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

During the nine months ended September 30, 2010, the Company issued the following warrants:

Bridge Loan –

For the nine months ended September 30, 2010, the Company issued warrants to purchase 493,664 shares in connection with a bridge loan financing transaction. Effective June 30, 2010 the bridge loan was modified to reflect an extension of the loan maturity date, cancellation of the loan convertible option and cancellation of warrants associated with the loan.

The Company issued warrants to purchase 16,000 common shares to an individual investor. The fair value of the warrants was determined by the Black-Scholes valuation model. The warrants were subject to certain “lock-up and leak out” provisions and expire on the fifth anniversary of the issuance date.

The Company uses the Black-Scholes valuation model to determine the fair value of warrants on the date of grant. This model derives the fair value of options based on certain assumptions related to the expected stock price volatility, expected life, risk-free interest rates and dividend yield. For the period through September 30, 2010 the Company’s expected volatility is based on actual fluctuations in its share prices. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve appropriate for the term of the expected life of the options.

For the nine months ended September 30, 2010, the fair value of each warrant grant was estimated on the date of grant using the following weighted-average assumptions.

	For the nine months ended
	September 30,
	2010			2009
Expected dividend yield		0	%		0	%
Expected price volatility		17.0	%		30	%
Risk free interest rate		1.00	%		1.35	%
Expected life of options in years		5			3.9

18. Stock Based Compensation

During the nine months ended September30, 2010, we recognized total non-cash stock-based compensation of $36,244. All stock option expenses are booked to general and administrative expenses.

We issued 500,000 options on September 1, 2009 to three management personnel of the Company and recorded an expense of $16,489 for the three months ended March 31, 2010. Of these options, 20% vest six months from issue date (with $16.25 exercise price) with 40% each vesting on the first and second anniversary of the issue date ($17.50 and $18.75 exercise price, respectively). The options expire on September 1, 2014. The aggregate fair value of the options granted was $23,035 at the date of grant, which was determined using the Black-Scholes option valuation model with the following assumptions: fair value stock price of $3.36 at grant date, risk-free interest rate of 2.33%, volatility of 40%, nil expected dividends and expected life of 5 years. Additionally, we issued 34,000 options to two management personnel which vest on the completion of future milestones. The options have an exercise price of $15.00 and expire three years after achieving milestones.

As of September 30, 2010, the above options issued to various management personnel were cancelled.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

We also issued 15,000 options to five non-employee directors and 500 options to a consultant on January 12, 2010 and recorded an expense of $36,244 for the nine months ended September 30, 2010. The options vest 25% per quarter over the first year and expire on January 12, 2015, with an exercise price of $30.45. The aggregate fair value of the options granted was $43,973 at the date of grant, which was determined using the Black-Scholes option valuation model with the following assumptions: fair value stock price of $30.45 at grant date, risk-free interest rate of 2.5%, average volatility of 12%, nil expected dividends and expected life of 2 years.

The Option activity during the nine months ended September 30, 2010 is as follows:

			Number of Options

			Outstanding							Outstanding
			as of				Granted/			as of
	Exercise		January 1,				forfeited/			September 30,
Month of grant	price		2010		Exercised		cancelled			2010

September 2009	$	16.25 - $18.25		500,000				(500,000	)		-
September 2009	$	3.00		34,000				(34,000	)		-
December 2009	$	30.00		500							500
January 2010	$	30.45		-		-		15,000			15,000

				534,500		-		(519,000	)		15,500

19. Statutory Reserve

The Company’s income is distributable to its shareholders after transfer to statutory reserves as required under relevant PRC laws and regulations and the Company’s articles of association. As stipulated by the relevant laws and regulations in the PRC, the Company is required to maintain a statutory surplus reserve fund which is non-distributable. Appropriation to such reserves is made out of net profit after taxation of the statutory financial statements of the Company as a proportion of income after taxation of 10%.

The statutory surplus reserve fund can be used to make up prior year losses, if any, and can be applied in conversion into capital by means of capitalization issue. The appropriation may cease to apply if the balance of the fund has reached 50% of the relevant entity’s registered capital.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

20. Taxation

Income Tax

United States

The Company is subject to the United States of America Tax law at tax rate of 40.7%. No provision for the US federal income taxes has been made as the Company had no taxable income in this jurisdiction for the reporting periods. The Company has not provided deferred taxes on undistributed earnings of its non-U.S. subsidiaries or VIE as of September 30, 2010 as it was the Company’s current policy to reinvest these earnings in non-U.S. operations

BVI

Elevated Throne was incorporated in the BVI and, under the current laws of the BVI, is not subject to income taxes.

PRC

The PRC’s legislative body, the National People’s Congress, adopted the unified Corporate Income Tax Law on March 16, 2007. This new tax law replaces the existing separate income tax laws for domestic enterprises and foreign-invested enterprises and became effective on January 1, 2008. Under the new tax law, a unified income tax rate is set at 25% for both domestic enterprises and foreign-invested enterprises. Accordingly, Fujian Green Planet and Sanming Huajian, both of which are established in the PRC, are subject to PRC enterprise income tax at the rate of 25% on their assessable profits during the six month period ended September 30, 2010 and 2009.

The components of the provision for income taxes are:-

	September 30,		December 31,
	2010		2009

Current taxes - PRC	$	2,131,015	$	1,904,353
Deferred taxes		83,615		122,956

	$	2,214,710	$	2,027,309

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

Deferred tax liabilities as of September 30, 2010 and December 31, 2009 composed of the following:

	As of
	September, 30			December, 31
The PRC	2010			2009
Current deferred tax liabilities:

Decelerated amortization of intangible assets	$	(4,479	)	$	(4,395	)

Provision of expenses		(77,299	)		(134,673	)

Changes in capitalized rental expenses		127,392			109,876

	$	45,614		$	(29,192	)

Non-current deferred tax liabilities:

Accelerated amortization of intangible assets	$	(19,035	)	$	(18,679	)

Provision of expenses		(29,360	)		(28,802	)

Cost to be adjusted due to tax exemption		164, 226			148,581

	$	115,831		$	101,100

21. Contingencies

From time to time, the Company may be exposed to claims and legal actions in the normal course of business, some of which may be initiated by the Company. As of September 30, 2010, no material claims were outstanding.

22. Segmented Information

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Accordingly, in accordance with ASC Topic 280-10 “Segment Reporting”, the Company’s operations comprises of three reporting segments engaged in herbal and chemical extracts, organic products and financing within Canada, China and the United States.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

22. Segmented Information - continued

The following represents the segmented information based on geographical distribution as at September 30:

For the nine months ended September 30, 2010	Asia		North America(1)		Total
Sales	$	27,954,038	$	9,393,156	$	37,347,194
Cost of sales		15,494,042		7,793,066		23,287,108
Gross profit		12,459,996		1,600,090		14,060,086
Operating expenses		2,434,898		1,080,373		3,515,271
Operating profit		10,025,098		519,717		10,544,815

Corporate expenses, including amortization)						958,350
Interest/other expense						1,117,547

Income before income taxes and non-controlling interest					$	8,468,918

Assets at September 30, 2010	$	54,298,263	$	15,990,757	$	70,289,020

(1) North America segment includes $583,830 of interest income classified as Revenue and $629,364 of interest expense classified as Cost of sales.

For the nine months ended September 30, 2009	Asia		North America			Total
Sales	$	8,212,803	$	412,372		$	8,625,175
Cost of sales		3,586,130		323,524			3,909,654
Gross profit		4,626,673		88,848			4,715,521
Operating expenses		1,038,775		(31,104	)		1,007,671
Operating profit		3,587,898		119,952			3,707,850

Corporate expenses, including amortization)							235,124
Interest/other expense							48,511
Income before income taxes and non-controlling interest						$	3,424,215

Assets at September 30, 2009	$	37,370,385	$	5,212,501		$	42,582,886

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

22. Segmented Information - continued

The following represents the segmented information based on operating segments as of September 30;

For the nine months ended September 30, 2010	Chemical and Herbal Extracts (CHE)		Organic Products (OP)		Financing (1) (FIN)		Corporate		Total
Sales	$	13,332,565	$	14,621,473	$	9,393,156	$	- - -	$	37,347,194
Cost of sales		6,628,612		8,865,430		7,793,066		- - -		23,287,108
Gross profit		6,703,953		5,756,043		1,600,090		- - -		14,060,086
Operating expenses		1,867,584		567,314		1,080,373		- - -		3,515,271
Operating profit		4,836,369		5,188,729		519,717		- - -		10,544,815

Corporate expenses, including amortization)										958,350
Interest/other expense										1,117,547
Income before income taxes and non-controlling interest									$	8,468,918

Assets at September 30, 2010	$	29,154,394	$	25,143,869	$	10,170,411	$	5,820,346	$	70,289,020

(1) Financing segment includes $583,830 of interest income classified as Revenue and $629,364 of interest expense classified as Cost of sales.

For the nine months ended September 30, 2009	Chemical and Herbal Extracts (CHE)		Organic Products (OP)		Financing (FIN)			Corporate		Total
Sales	$	7,929,710	$	283,093	$	412,372		$	- - -	$	8,625,175
Cost of sales		3,419,354		166,776		323,524			- - -		3,909,654
Gross profit		4,510,356		116,317		88,848			- - -		4,715,521
Operating expenses		1,027,464		11,311		(31,104	)		- - -		1,007,671
Operating profit		3,482,892		105,006		119,952			- - -		3,707,850

Corporate expenses, including amortization)											235,124
Interest/other expense											48,511
Income before income tax and non-controlling interest											3,424,215

Assets at September 30, 2009	$	20,510,756	$	16,859,629	$	5,074,917		$	137,584	$	42,582,886

During the quarter ended September 30, 2010, the Company had no sales to any customer that exceeded 10% of total revenues.

ONE BIO CORP.

(PREVIOUSLY CONTRACTED SERVICES, INC.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

23. Bridge Loan Financing

Effective June 30, 2010, the Company modified the terms of its existing bridge loan agreement which was entered into on February 11, 2010. The modifications include the cancelation of the both the conversion feature embedded in the note and the detachable warrant, along with a two month extension in the note’s maturity date to December 10, 2010, with an option to further extend the notes maturity to January 10, 2011 (the “Amended Maturity Date”).

In exchange for these modifications, the Company agreed to issue a new warrant for the same number of shares as the old warrant (493,664 shares), upon closing an equity offering provided the offering occurs prior to the maturity date of the loan. Should an equity offering not occur prior to the maturity date of the amended maturity date, the obligation to issue the new warrant expires. In that case, the Company agrees to make a $600,000 cash payment (‘Cancellation Premium”) of which $300,000 is due upon expiration of the six-month anniversary of the latest amended maturity date and $300,000 is due upon expiration of the six-month anniversary of the latest amended maturity date.

Terms of the new warrant, should it be issued, call for a five year maturity, and specify a strike price of 65% of the offer price. The warrant will also provide for a “ratchet provision” adjusts the strike price to be equal to any lower price offered in a future equity offer during its life. The Company has calculated the fair value of the warrant and determined that it does not exceed the cancellation premium of $600,000. Accordingly, the Company has recorded a $600,000 liability.

24 Subsequent Events

NONE

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

General Overview

ONE Bio, Corp., is an award winning, innovative bio-engineering company that utilizes green process manufacturing to produce raw chemicals and herbal extracts, natural supplements and organic products. We are focused on capitalizing on the rapidly growing markets of the Asia-Pacific region. Our key products include Solanesol, widely recognized CoQ10, Resveratrol and 5-HTP, organic fertilizers, and organic bamboo health food and beverages. Our growth plan targets an aggressive acquisition driven strategy supported by organic growth of our operating units. Through ONE Bio, smaller private companies that we acquire are provided access to capital, experienced management and strategic insight. We strive to build synergies among all of our subsidiaries. We work with each subsidiary to promote organic and acquisition driven growth. We are committed to becoming a leader in bioengineering utilizing green processes, combining our experience in producing our chemical and herbal extract products with seasoned North American managerial expertise. Our operations are currently focused on the Asia-Pacific Region which currently generates approximately 75% of our revenue.

Immediately following the acquisition of a majority equity interest in the Company by Abacus Global Investments, Corp. (“Abacus”) on June 4, 2009, the Company changed its business purpose, direction and strategy as outlined above.

We are headquartered in Aventura, Florida; however, our primary contractually controlled operating enterprises, Sanming and JLF are based in Sanming City and Jianou City, respectively, in the Fujian province of China.

Historic Overview

Company was incorporated under the laws of the State of Florida on June 30, 2000 under the name of Contracted Services, Inc.

On May 29, 2009 Belmont Partners, LLC (“Belmont”) acquired three million seven hundred fifty thousand (3,750,000) shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of the Company’s common stock. The transaction closed on June 2, 2009, resulting in Belmont’s control of approximately 92.25% of the Company’s outstanding capital stock.

On June 4, 2009, Abacus Global Investments, Corp. (“Abacus”) acquired all three million seven hundred fifty thousand (3,750,000) shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of the Company’s common stock (representing 92.25% of the Company’s issued and outstanding stock) which was owned by Belmont. The transaction closed on June 9, 2009, resulting in Abacus controlling 92.25% of the Company’s outstanding capital stock. Additionally, on June 9, 2009 Marius Silvasan was appointed as a director and as the interim President of the Company.

On June 9, 2009, the Company changed to ONE HOLDINGS, CORP. (“ONE”). The Company also changed its registered address on the same day.

Upon Abacus’ acquisition of majority control of the Company and following the name change to ONE, Abacus changed the Company’s business focus to its current strategy.

On July 22, 2009, the ONE acquired from certain shareholders (“GP Shareholders”) of Green Planet Bioengineering Co., Ltd., a Delaware corporation (“Green Planet”) 80% of the issued and outstanding shares of common stock of Green Planet. The Company also acquired 5,101 shares of Green Planet preferred stock which provides the Company the right to vote 1,000 votes on all matters submitted for a shareholder vote. The preferred stock is convertible into 1,000 shares of Green Planet common stock. The Company acquired the Green Planet preferred stock in consideration for the issuance by the Company to Green Planet of 200,962 shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of the Company’s common stock. As part of this transaction, Green Planet and the GP Shareholders deposited into an Escrow account thirty-five percent (35%) of the Company’s shares issued to Green Planet and the GP Shareholders, in the event Green Planet failed to meet certain EBITDA based performance measures through 2010. To date Green Planet has met its performance measures. Green Planet and the GP Shareholders are also subject to a lockup and leak out period and has one piggy-back registration right as further defined in the Green Planet Preferred and Common Stock Purchase Agreements. As a result of the Green Planet transactions, the Company has become the majority shareholder of Green Planet and based upon the number of shares outstanding and assuming conversion or the Green Planet preferred stock into common stock, the Company owns approximately 83% of Green Planet’s shares. Green Planet in turn owns 100% of FuJian Green Planet Bioengineering Co., Ltd., a wholly foreign-owned enterprise (“WFOE”), that through a series of contractual arrangements has effective control of the business and operations of and has an irrevocable option to purchase the equity and/or assets of Sanming Huajian Bio-Engineering Co., Ltd. (a PRC company), the primary operating company in the Chemical and Herbal Extracts (“CHE”) division. Consequently, the Company effectively controls the business and operations of Green Planet, FuJian Green Planet Bioengineering Co., Ltd. and Sanming Huajian Bio-Engineering Co., Ltd.

On September 3, 2009, ONE acquired from the shareholders of Trade Finance Solutions (“collectively referred to as “TFS Shareholders”) 3,990 shares representing 99.75% of the outstanding common shares of Trade Finance Solutions Inc. (“TFS”). For the TFS shares each TFS Shareholder is to receive shares of the Registrant’s common stock and cash payments as per the Share Purchase Agreement with the TFS Shareholders (“TFS SPA”). The cash component of the purchase price will be calculated on an earn-out basis based on TFS’ monthly EBIT (earnings before interest and taxes) beginning with the measuring period as defined in the TFS SPA with a purchase price not to exceed $6,000,000. In addition to the cash portion of the purchase price, the TFS Shareholders shall receive 1 share of ONE common stock (adjusted for forward or reverse splits following the closing) for every $25 in EBIT achieved during the measuring period (“TFS Stock Compensation”) subject to a maximum TFS Stock Compensation of 240,000 shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of Registrant’s common stock. The TFS Shareholders are subject to a lockup and leak out period as further defined in the TFS SPA. Upon the purchase of the TFS Common Shares from the TFS Shareholders, Registrant has become the majority shareholder of TFS. TFS provides balance sheet financing solutions for domestic and international credit-worthy customers including accounts receivable, purchase order financing, fulfillment services and factoring or invoice discounting. The TFS acquisition is strategic to the Company beyond the direct and immediate financial contribution TFS will bring to sales and net income because it will provide the Company the ability to use TFS as an internal financing arm ready, able and dedicated to fund and facilitate the growth of the Company’s core bioengineering business.

On September 1, 2009 the Company entered into a convertible note purchase agreement with its subsidiary Green Planet in the principal amount of $300,000. The note carried interest at 10% per annum and has a conversion feature that allowed the Company to convert the loan into common stock.

On September 27, 2009, the Company acquired through a variety of transactions, 83% control of Jianou Lujian Foodstuff Co., Ltd. (“JLF”), a company based in the Peoples Republic of China (“PRC”). The Registrant executed and consummated a Share Exchange Agreement (the “Supreme Agreement”) by and among (i) the Company’s 100% owned subsidiary United Green Technology Inc., a Nevada corporation, (“UGTI”), (ii) Supreme Discovery Group Limited, British Virgin Islands Company (“Supreme”) and (iv) the stockholders who owned 100% of Supreme’s common stock (the “Supreme Shareholders”). Supreme is the parent company of Fujian United Bamboo Technology Company Ltd., a wholly foreign-owned enterprise (“JLF WFOE”) organized under the laws of the PRC. The stockholders of Supreme are Tang Jinrong, Li Lifang and Tang Shuiyou, who are also the owners of JLF. JLF WFOE through a series of contractual arrangements has effective control of the business and operations of and has an irrevocable option to purchase the equity and/or assets of JLF. Consequently, the Company effectively controls the business and operations of Supreme, JLF WFOE and JLF.

Pursuant to the Supreme Agreement, at the closing, the Supreme Shareholders sold, transferred and assigned 100% of the outstanding common stock of Supreme to the Company’s wholly-owned subsidiary UGTI in exchange for (i) cash, (ii) 688,000 shares of the Company’s common stock (adjusted for the 1 for 5 stock splits of November 2009 and August 2010), and (iii) 20% of the issued and outstanding shares of common stock of UGTI. The Company thereby acquired through UGTI ownership of all of the outstanding stock of Supreme which owns 100% ownership of JLF WFOE. As part of this transaction the Supreme Shareholders deposited into an Escrow thirty-five percent (35%) of the Company’s shares issued to them and in the event UGTI’s EBITDA for fiscal year 2010 is less than UGTI’s EBITDA for fiscal 2009, the number of shares of the Company’s stock issued to Supreme Shareholders shall be proportionately reduced as provided for in the Supreme Agreement. Supreme Shareholders are also subject to a lockup and leak out period and have one piggy-back registration right as further defined in the Agreement. JLF is an award winning green-technology bioengineering company that specializes in the production of organic products and fertilizers based on bamboo. JLF holds bamboo land contracts in Fujian Province, one of China’s largest bamboo growing areas. JLF is the third largest bamboo producer in China and is the first bamboo company in China to gain food safety certification from China (HACCP), Japan (JAS) and Europe (ESFA). JLF was also the first company in China to formulate a “zero-to-zero” process starting from cultivation to distribution including the development of organic fertilizers from bamboo skins to eliminate waste.

Effective October 26, 2009, the Company amended its articles of incorporation to:

(i)

authorize a class of preferred stock consisting of (10,000,000) shares, $0.001 par value per share;

(ii)

designating 10,000 shares of the preferred stock as Series A Preferred Stock;

(iii)

reducing the number of authorized shares of common stock from 750,000,000 shares to 150,000,000 shares and changing the par value to $0.001 per share;

(iv)

changing the name of the Registrant to ONE Bio, Corp.; and

(v)

effecting a Five (5) for one (1) reverse split of the registrant’s common stock.

On November 3, 2009, the Company and UGTI cancelled and replaced the UGTI Preferred Stock Purchase Agreement and entered into a Share Purchase Agreement (the “UGTI Share Purchase Agreement”). Pursuant to the UGTI Share Purchase Agreement we agreed to purchase from UGTI and UGTI agreed to sell to us 10,000 shares of UGTI Common Stock in consideration for a cash payment of $1,200,000 which is payable $180,000 on May 10, 2010 and $1,020,000 on November 10, 2010. As a result of the foregoing UGTI transactions, the Company is now 98% shareholder of UGTI.

On November 11, 2009, the Company filed an application to list its common stock on the NASDAQ Capital Market. The Company believes it currently fulfills or will shortly meet all applicable NASDAQ Capital Market listing requirements. The Company’s listing application is subject to review and approval by NASDAQ’s Listing Qualifications Department for compliance with all NASDAQ Capital Market standards. The Company received notification on April 22, 2010, that their application had been approved to list on the NASDAQ Exchange. NASDAQ has reserved ONBI as the trading symbol for the Company’s common stock

On January 8, 2010, the Company entered into a Securities Purchase and Registration Rights Agreement with certain institutional and accredited investors pursuant to which the investors purchased $3,000,000 in aggregate principal amount of our 8% Convertible Promissory Notes. The Convertible Notes are due on October 11, 2010, and are convertible at the elections of the Investors into shares of our Common Stock at an initial Conversion Price equal to shall be the lesser of (a) $6.077 per share, or (b) 65% of the price per share offered by the Company in any publicly offered Common Stock or other equity-linked financing by the Company that is closed within nine months of the Initial Closing (each, a “New Financing”). Pursuant to the SPA, we also issued to the Investors five (5) year warrants (“Warrants”) to purchase an aggregate of 49,366 shares of our Common Stock at an initial exercise equal to the lesser of (a) $6.077 per share, or (b) 65% of the price per share offered by us in any New Financing. Effective June 30, 2010, the Company modified the terms of its existing bridge loan agreement which was entered into on February 11, 2010. The modifications include the cancelation of the both the conversion feature embedded in the note and the detachable warrant, along with a two month extension in the note’s maturity date to December 10, 2010, with an option to further extend the notes maturity to January 10, 2011 (the “Amended Maturity Date”).

In January 2010, the Company issued 10,000 shares of Series A Preferred Stock to the Chairman and CEO in the amount of 3,733 and 6,267 respectively. This action, approved by the Board, was in consideration and recognition of the agreement by the executives to pledge 6,000,000 shares of common stock in satisfaction of the share pledge condition of the Bridge Loan Financing Agreement. Holders of the Series A Preferred Stock shall be entitled to cast two thousand (2,000) votes for each share held of the Series A Preferred Stock on all matters presented to the shareholders of the Company for shareholder vote which shall vote along with holders of the Company’s common stock on such matters.

On April 14, 2010, the Company entered into a Share Purchase Agreement with Min Zhao (our director and president of our CHE business unit) (the “Selling Shareholder”) (the “Selling Shareholder SPA”), pursuant to which, among other things we acquired from the Selling Shareholder 1,632,150 shares of common stock of Green Planet owned by the Selling Shareholder in consideration for 260,000 shares (adjusted for the 1 for 5 stock splits of August 2010) of our restricted common stock. The number of shares of our common stock issuable to the Selling Shareholder is subject to adjustment as set forth in the Selling Shareholder SPA. As part of this transaction, the Selling Shareholder agreed to a lock-up and leak-out period as further defined in this agreement. At the same time, we received from a certain Green Planet shareholder 1,216,184 shares of common stock of Green Planet. As a consequence of these transactions, we now own 92.5% of the outstanding common stock of Green Planet.

Also on April 14, 2010, the Company entered into an agreement with Green Planet pursuant to which, among other things,

(i)

that certain Amended and Restated Green Planet Preferred Stock Purchase Agreement made effective as of June 17, 2009, between us and Green Planet (“Amended and Restated GP Preferred Stock Agreement”) was cancelled,

(ii)

we returned to Green Planet the 5,101shares of Green Planet preferred stock that were issued to us pursuant to the Amended and Restated GP Preferred Stock Agreement, and

(iii)

Green Planet returned to us the 200,962 shares (adjusted for the 1 for 5 stock splits of November 2009 and August 2010) of our common stock that we issued to Green Planet pursuant to the Amended and Restated GP Preferred Stock Agreement.

Additionally, on April 14, 2010, Green Planet granted to ONE an option to acquire 100% of the stock of Elevated Throne Overseas Ltd. (“Elevated throne”), Green Planet’s 100% owned BVI subsidiary. In the event we exercise this option, the closing of the transaction will be subject to the approval of Green Planet’s stockholders. As consideration for our exercise of this option, we will be required to

(i)

convert the $1,700,000 loan we made to Elevated Throne on or about January 19, 2010, into an equity investment in Elevated Throne,

(ii)

convert the $300,000 loan we made to Green Planet on or about September 1, 2009, into a $300,000 equity investment in Elevated Throne,

(iii)

cancel that certain Convertible Note Purchase Agreement between us and Green Planet dated on or about September 1, 2009, and

(iv)

cancel that certain 10% Convertible Bridge Loan Note Due September 1, 2010, in the principal amount of $300,000 from Green Planet to us.

On September 14, 2010 FINRA advised the Company that they would process the Company’s 1 for 5 reverse stock split previously disclosed in the Company’s July 27, 2010, Definitive Information Statement on Schedule 14 (c), relating to an amendment to the Company’s articles of incorporation to: (i) reduce the number of authorized shares of common stock from 150,000,000 shares to 30,000,000 shares: and (ii) effecting a 1 for 5 reverse split of the Company’s common stock.

Subsequent to the filing and effectiveness of above referenced amendment to the Company’s articles of incorporation, the Company then filed on August 30, 2010 another amendment to its Articles of Incorporation also previously disclosed in the Company’s July 27, 2010, Definitive Information Statement on Schedule 14 (c) pursuant to which the number of authorized shares of common stock was increased from 30,000,000 shares to 100,000,000.

Operational Summary

Our operations are divided into two principal complementary business units that focus on producing chemical and herbal extracts (our “CHE” business unit) and organic products utilizing green processes (our “OP” business unit). We also have an internal financing arm (our “FIN” business unit) that assists and supports the growth of our core bioengineering business units. We believe our internal financing business unit provides us an excellent opportunity beyond funding our core operations to also provide purchase order financing to third-party clients that purchase products from us. In this arrangement, our internal financing business unit can insert itself into the collection process, expediting cash flow and debt repayment for all parties ultimately driving our growth rate. We fund our internal financing business unit through the sale of debentures to institutional and high net worth investors that pay quarterly interest to investors solely from the interest and fees generated from the financing business unit’s activities. The debenture is secured by the assets of the internal financing unit with no recourse to our other assets.

Because our CHE business unit was treated for accounting purposes as being acquired effective as of January 1, 2009, while our OP business unit and our financing business unit were treated for accounting purposes as having been acquired as of September 2009, during the fiscal year ended December 31, 2009, approximately 60% of our revenue came from our CHE business unit, approximately 28% came from our OP business unit and approximately 12% came from our financing business unit. However, if the full year 2009 revenues for each of our 3 business units were used, approximately 34% of our revenues would have come from our CHE business unit, approximately 48% from our OP business unit and approximately 18% from our financing business unit.

Green Planet and our CHE operating division

Our CHE business unit operates under the umbrella of our 100% owned subsidiary Elevated Throne Overseas Ltd., a British Virgin Islands Company (“Elevated Throne”). Elevated Throne owns 100% of Fujian Green Planet Bioengineering Co., Ltd. (“Fujian GP”), which is a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the Peoples Republic of China (the “PRC”). Fujian GP has entered into a series of irrevocable agreements with (i) Sanming Huajian Bio-Engineering Co., Ltd. (“Sanming”), a PRC company based in Sanming City in the Fujian province of China, which is licensed to operate its business in the PRC and (ii) the owners of Sanming. Pursuant to those irrevocable agreements, GP (through Fujian GP) contractually controls and operates Sanming, which is the principle operating enterprise of our CHE business unit and which is located in PRC.

Sanming is a research & development company with a focus on improving human health through the development, manufacture and commercialization of bio-ecological products and over-the-counter products utilizing extractions from tobacco leaves. Sanming’s position in the bioengineering industry comes from its research & development which utilizes patented methods to create downstream products ranging from plant indigenous medicine and pharmaceutical intermediates to eco-friendly products. Since 2007, Sanming has developed a variety of natural organic products using tobacco leaves.

Our CHE business unit produces chemical and herbal extracts for use in a wide range of health and wellness products. Utilizing green technology and proprietary processes, this business unit extracts health supplements, fertilizers, and pesticides from waste tobacco. Our cost effective extraction process simultaneously extracts Solanesol and organic fertilizers from waste tobacco leaves. By extracting two products from a single extraction process, we believe we are able to generate higher margins than we would if we used a traditional single product fermentation extraction process. Additionally, we can further process the Solanesol to produce Coenzyme Q10 (“CoQ10”). Our CHE business unit also extracts from a variety of plants Resveratrol and 5-HTP, which are key components in many consumer health and wellness products.

We distribute our CHE products through established independent third party distributors which normally enter into renewable one-year distribution agreements with us. Our distributors are focused on the bio-health industry and raw chemical intermediates industry. This permits use to more accurately forecast sales and required production. In addition, feedback from our distributors provides us with good visibility on changes in consumer demand. Furthermore, we have established additional distribution channels, such as universities and hospital research centers. We are not substantially dependent on any of our distributors.

The owners of Sanming (our contractually controlled PRC operating entity) are Min Zhao, Min Yan Zhen, and Jiangle Jianlong Mineral Industry Co. At the time of the transactions between Fujian GP and Sanming, the owners of Sanming were also the owners of Fujian GP. Thereafter, we acquired Fujian GP as part of our acquisition of Green Planet. Min Zhao is a member of our Board of Directors, a shareholder and President of our China operations. Mr. Zhao continues to act as the President and a shareholder of Sanming which he now operates on our behalf as our President of China Operations pursuant to the irrevocable agreements.

UGTI and our OP operating division

Our OP business unit operates under the umbrella of our 98% owned subsidiary United Green Technology Inc., a Nevada corporation (“UGTI”), which through its wholly owned subsidiary Supreme Discovery Group Limited, a British Virgin Islands company (“Supreme Discovery”), owns 100% of Fujian United Bamboo Technology Company Ltd. (“Fujian United”), which is a WFOE organized under the laws of the PRC. Fujian United has entered into a series of irrevocable agreements with (i) Jianou Lujian Foodstuff Co. (“JLF”), a PRC company based in Jianou City, in the Fujian province of China, which is licensed to operate its business in the PRC and (ii) the owners of JLF. Pursuant to those irrevocable agreements, UGTI (through Fujian United) contractually controls and operates JLF, which is the principle operating enterprise of our OP business unit and which is located in the PRC.

JLF is an award-winning green-technology enterprise that specializes in the production of organic products and fertilizers based on bamboo. JLF was also one of the first companies in China to formulate a “zero-to-zero” process. The “zero-to-zero” process begins with bamboo cultivation in the ground, proceeds through manufacturing of end products, and ends with the production of organic fertilizers from any remaining waste. We use bamboo shoots for food, the stalks are sold for use in construction materials, and any remaining waste is used to create organic fertilizers. Virtually everything grown is used in some way, reducing the need for fertilizers, cutting energy consumption, and reducing costs. Our OP business unit concentrates on processing bamboo shoots and bamboos which it sells domestically in China and exports to other countries.

Our OP business unit manufactures a variety of consumer and commercial-use health and energy drinks, organic food products and fertilizers primarily based on bamboo. Organic food products based on bamboo are low in saturated fat, cholesterol and sodium, yet high in dietary fiber, vitamin C, potassium, zinc, and numerous other nutrients, making bamboo shoots popular for weight loss and maintaining a healthy lifestyle. Also, the Moso bamboo leaf extract, which contains soluble and insoluble fiber and antioxidants, is used to make a caffeine-free energy drink or is infused into white rice creating green bamboo rice with health benefits. Our OP business unit also uses bamboo skins to produce organic fertilizers, thereby substantially eliminating waste in the process.

Presently, our contractually controlled PRC operating entity, JLF, operates production lines to produce both 18L boiled bamboo shoot cans and boiled vegetable cans. The production capacity in 2008 reached 20,000 tons, an annual output value of RMB 120,000,000. This includes the production of 50 kinds of products, such as 18L boiled bamboo shoot cans, boiled bamboo shoot cans with vacuum packing, boiled mixed vegetables, boiled seasoned vegetables and Kamameshi (a Japanese rice dish), with a quality rating that meets national and international standards. The boiled bamboo shoots and mixed vegetables account for the majority of the products sold with approximately 80% of all products sold domestically and approximately 20% exported to other countries such as Japan, Southeast Asia, Europe and North America.

We distribute our OP products directly to large supermarket chains, hotels, hospitals and restaurants. We also distribute our products through a network of independent third party distributors who enter into renewable one year distribution agreements with us. We are not substantially dependent on any of our distributors.

In order to harvest the benefits of integrating growing and profitable Chinese operating enterprises with the management and financial techniques available to North American enterprises, we adhere to a “Yin-Yang” management strategy based on the Chinese Philosophy of “Correlative Thinking.” The core components of this approach are: constructing a strong, balanced team; addressing the needs of investors; and realizing the importance of diversity. In practical terms, our strategy is to combine the manufacturing expertise and work ethic of the Eastern world with the investment experience and management skills of the best North American companies. Our team in China works together with our North American management to grow our core business, and provide transparency with an emphasis on risk management and internal controls.

The owners of JLF are Jinrong Tang, Li Li Fang and Tang Shuiyou. Jinrong Tang is Vice President of our China Operations and a shareholder. At the time of the transactions between Fujian United and JLF, the owners of JLF were also the owners of Fujian United. Thereafter, we acquired Fujian United as part of our acquisition of Supreme Discovery. Mr. Tang continues to act as the President of JLF which he now operates on our behalf as our Vice President of China Operations pursuant to the irrevocable agreements. Jinrong Tang, Li Li Fang and Tang Shuiyou own the remaining 2% of the stock of our UGTI subsidiary.

TFS and our FIN financing division

Our internal financing business unit operates under the umbrella of our 99.75% owned subsidiary TFS, an Ontario, Canada, company. TFS was established in 2006 to provide creative financing solutions, including purchase order financing, fulfillment services and factoring or invoice discounting for credit worthy customers of eligible goods and services. TFS has branch offices in Lima, Peru and Miami, Florida.

TFS conducts a thorough review and due diligence examination of potential borrowers and the respective borrower’s customers before the particular transaction is approved. An analysis of each individual transaction also takes place through TFS’ credit approval process, in order to ensure that all parties in the transaction receive value, and that TFS will be re-paid according to the terms agreed to in the particular transaction. Security for the financing includes a first lien position on the receivables and assets of the client (UCC, PPSA), personal guaranty and credit insurance. In addition, 100% of TFS’ financing transactions are credit insured with large, multinational insurance companies. In a typical financing transaction, a letter of credit will be utilized to provide all parties with the protections on agreed to delivery, quality and timelines. TFS’ clients are primarily small and medium size businesses registered and/or located in the United States and Canada, which export their products internationally. Through TFS we also offer purchase order financing to third-party clients that purchase products from our CHE business unit and our OP business unit to assist in the collection process, and expedite cash flow and debt repayment.

Our internal financing business unit offers the following types of financing: factoring or invoice discounting, where TFS, as factor, purchases the client’s credit insured receivables (i.e., invoices) for products or services satisfactorily rendered to creditworthy customers. By selling receivables to TFS, the client can generate cash almost immediately, instead of waiting the usual 30, 60, 90 days. TFS will verify, insure and control the transaction with the ultimate payer; purchase order financing (or PO Funding) which is a mechanism put in place to provide a short-term finance option to clients who have pre-sold finished goods and a requirement to pre-pay suppliers. All these OP Funding transactions are on a “per project” basis. Typically the client has a purchase order from a credit insured customer but does not have the capital to pay their supplier upfront. TFS typically requires that the client must have “pre-sold” the goods with strong profit margins. TFS utilizes Letters of Credit to purchase the goods from the supplier and protect all parties. Once the goods are accepted by the end customer, TFS then factors the invoice and pays off the purchase order facility; and fulfillment services, most of which are provided through TFP and which involves the goods being acquired by TFP on terms negotiated with both supplier and end-client. Here TFP has established credit insurance and marine cargo insurance policies. The customer provides the purchase order and sales contract to TFP, which completes the transaction and disburses the proceeds.

Historically TFS has funded its financing transactions through the sale of debentures to institutional investors and high net worth investors, often on an individual transaction basis. The debentures pay quarterly interest to the investors solely from the interest and fees generated from the financing activities. The debenture is secured by the assets of TFS with no recourse to other assets of ONE Bio. Through ONE Bio, TFS have greater access to capital to finance its business and through its association with our other business units, access to new international markets.

Results of Operations and Financial Condition

As a result of the reverse acquisition transaction with Green Planet BioEngineering, Ltd. (“GPB”) (“CHE”), discussed elsewhere in this interim report, although legally GPB was acquired by ONE, for accounting and financial reporting purposes, GPB was considered the accounting acquirer and therefore ONE is considered to be a continuation of GPB. Our two other acquisitions that occurred in September 2009, Trade Finance Solutions (“TFS”) (‘FIN”) and United Green Technology, Inc. (“UGTI”) (“OP”) were accounted for as purchases. Accordingly, the information reported in our interim consolidated financial statements and in the following discussion and analysis of our operating results for the three and six months ended September 30, 2010 compared to the corresponding periods in 2009, include the operating results of GPB for the periods presented consolidated with the operating results of TFS and UGTI from their acquisition dates which are September 2, 2009 and September 27, 2009 respectively. As a result, the comparative numbers for September 30, 2009 include GPB’s performance year to date along with TFS and UGTI from their acquisition date. GPB, TFS and UGTI’s operating units are CHE, the Financing unit, and the OP unit, respectively.

Three Months Ended September 30, 2010 (“Q310-QTR”) versus September 30, 2009 (Q309-QTR”)

Operating Revenues

The Company generated $13.5 million of revenues from operations for Q310-QTR compared to $4.2 million for Q309-QTR, an increase of $9.3 million or 225%. The increase in revenue is primarily the result of our acquisitions and organic growth strategies.

Approximately $7.9 million of the increase in revenue is mainly due to the inclusion of revenues from the Company’s 2009 acquisition of approximately $3.2 million for the FIN business unit and $4.7 million for the OP business unit. The revenues from these acquisitions are only included from the date of their respective acquisitions both of which occurred in September 2009 and as a result, revenues for Q309-QTR are from our CHE business unit and Finance.

Approximately $1.4 million of the increase in revenues is due to the increase in sales resulting from the continued focus on driving customer value through our core product lines. In addition, the Company is positioned to take advantage of a shift in the product and customer mix combined with a broader product portfolio which has started to contribute to the increase in sales. We continue to experience an increase in demand for our product portfolio and have increased the number of customers compared to prior periods.

Cost of Sales

Cost of sales from operations for Q310-QTR was $8.5 million compared to $2.1 million for Q309-QTR, resulting in an increase of $6.4 million or 310%. The increase in cost of sales is primarily the result of the acquisition and organic growth strategies.

Approximately $5.6 million of the increase in cost of sales is due to the inclusion of costs from the Company’s 2009 acquisition of approximately $2.6 million for the FIN business unit and $2.8 million for the OP business unit. The cost of sales from these acquisitions are only included from the date of their respective acquisitions both of which occurred in September 2009 and as a result, cost of sales for September 30, 2009 is only from the CHE unit and Finance.

Approximately $0.8 million of the increase in cost is primarily related to the CHE business as a result of higher revenues and a shift in raw material product mix in its core product lines. Increases in raw material costs drove an overall decrease in gross profit as a percentage of revenues.

It is significant to note that our recent acquisitions (the FIN unit and OP unit) have higher costs of sale which result in lower margins but operate with reduced operating expenses when compared to the other operating businesses.

Gross Profit

Gross profit from operations for Q310-QTR was $5.0 million compared to $2.1 million for Q309-QTR, resulting in an increase of $2.9 million or 140%. The increase in gross profit is primarily the result of our acquisition and organic growth strategies. Gross profit for September 30, 2009 is primarily from the CHE unit and Finance.

Approximately $2.4 million of the increase in gross profit is due to the inclusion of gross profit from our recently completed acquisitions of approximately $0.6 million for the FIN business unit and $1.9 million for the OP business unit. The acquisitions were overall accretive however; these acquisitions had the effect of reducing the consolidated gross profit as a percentage of revenues. This reduction occurs because each acquired entity individually generates a lower gross profit percentage than the CHE unit. The individual gross profit percentages of CHE, OP and the Financing unit for Q310-QTR are 51%, 40% and 17%, respectively. While the recent acquisitions have lower gross margins, they also operate with lower expenses, which positively contribute to our net income.

Approximately $0.6 million of the increase in gross profit is primarily a result of the CHE unit’s operating performance. Gross profit from the CHE unit’s operations for Q310-QTR was $2.5 million compared to $1.9 million for Q309-QTR, resulting in an increase of 37%. Correspondingly, gross profit for the CHE unit’s as a percentage of revenues for Q310-QTR were 51% compared to 54% for Q309-QTR. As previously discussed, the decrease is a result of increased raw material costs and the introduction of new products that are not currently produced in economic quantities. Secondarily, we have not yet been able to pass along all of our production cost increases to our customers in the form of price increases.

Operating Expenses

Operating expenses for Q310-QTR were $1.9 million as compared to $0.6 million for Q309-QTR. This represents an increase of $1.3 million or 216%. Operating expenses for the quarter ended September 30, 2009 consist of expenses primarily from the CHE unit since the acquisitions of the Finance and OP business units were made in the month of September 2009 Operating expenses for the CHE unit amounted to $0.8 million for Q310-QTR compared to $0.4 million for Q309-QTR. Operating expenses are comprised of general and administrative expenses, research and development and sales and marketing expenses. The operating expenses for our CHE, FIN and OP business units individually amount to $0.8 million, $0.5 million and $0.3 million respectively. The main cost drivers for the company are personnel cost, travel costs, management cost, accounting and audit fees. Research and development (R&D) expenses totaled $73,248 and $0.1 million for the Q310-QTR and Q309-QTR, respectively. The decrease in R&D expenses is due to the development to broaden the product line which had higher cost in 2009 and will decrease as the products mature. The Company’s efforts to broaden and strengthen its product portfolio will continue, however, at a pace that is consistent with the economy and the increasing sales activities.

Operating Income

Operating income for Q310-QTR was $3.1 million versus $1.5 million for Q309-QTR which is an increase of $1.6 million or 110%. The CHE unit contributed $1.7 million of the increase for an organic growth of 12% over the prior year. The OP and FIN units contributed $1.6 million and $0.1 million, respectively, for the Q310-QTR. We continue to focus on the execution of our business plan and with the completed acquisitions of the CHE, FIN and OP business units, the Company is positioned for continued organic growth among all product lines and subsidiaries.

Financing and Other Income/Expenses

Financing expenses include interest expense on the Company’s various financial instruments. For Q310-QTR the Company recognized $9,316 in interest income from its various instruments. The Company’s interest and financing expenses for Q310-QTR amounted to $172,689. In addition, the Company recorded $231,871 for the period pertaining to other income and expense.

Income before Income Taxes and Non-controlling Interests

For Q310-QTR, income before income taxes and non-controlling interest was $2.7 million versus $1.4 million for Q309-QTR, which is an increase of $1.3 million or 89%. The increase is mainly due to the results of the additions of the FIN and OP units. These units contributed $0.1 million and $1.6 million, respectively for Q310-QTR. The income was reduced by expenses totaling $0.4 million in the corporate unit.

Provisions for Income Taxes

For Q310-QTR, provisions for income taxes were $0.7 million versus $0.4 million for Q309-QTR, which is an increase of $0.3 million or 79%. The increase is associated with the recent acquisitions completed in September 2009. The tax provision for Q309-QTR pertains only to the CHE unit.

Non-controlling Interest

For Q310-QTR, the non-controlling interest was $112,063 versus $203,257 for Q309-QTR. The non-controlling interest was created by ONE acquiring less than 100% interest in CHE, the Financing unit and the OP unit.

Net Income Attributable to Company

Net income for Q310-QTR was $2.0 million compared to $1.1 million for Q309-QTR, which is an increase of $0.9 million or 92%. The increase was attributable to the organic growth of the CHE unit and the acquisitions of the FIN and OP units.

Nine Months Ended September 30, 2010 (“Q310-YTD”) versus September 30, 2009 (“Q309-YTD”)

Operating Revenues

The Company generated $37.3 million of revenues for Q310-YTD as compared to $8.6 million for Q309-YTD from operations or $28.7 million or 333%. The increase in revenue is primarily the result of our acquisitions and organic growth strategies.

Approximately $23.3 million of the increase in revenue is mainly due to the inclusion of revenues from the Company’s recently completed acquisition of approximately $9.0 million for the FIN business unit and approximately $14.3 million for the OP business unit for Q310-YTD. The revenues from these acquisitions are only included from the date of their respective acquisitions both of which occurred in September of 2009 and as a result, revenues for the nine months ending September 30, 2009 are primarily from our CHE business unit as both the Finance and OP business units were acquired in September..

Approximately $5.4 million of the increase in revenues is due to the increase in sales resulting from the continued focus on driving customer value through our core product lines in the CHE unit. In addition, the Company is positioned to take advantage of a shift in the product and customer mix combined with a broader product portfolio which has not contributed significantly to the increase in sales. We continue to experience an increase in demand for our core product portfolio and have increased the number of customers compared to prior periods.

Cost of Sales

Cost of sales from operations for Q310-YTD was $23.3 million compared to $3.9 million for Q309-YTD, resulting in an increase of $19.4 million or 496%. The increase in cost of sales is primarily the result of the acquisition and organic growth strategies.

Approximately $16.2 million of the increase in cost of sales is due to the inclusion of costs from the Company’s recently completed acquisitions of approximately $7.5 million for the FIN unit and approximately $8.7 million OP unit. The cost of sales from these acquisitions are only included from the date of their respective acquisitions both of which occurred in September 2009 and as a result, cost of sales for Q309-YTD are primarily from the CHE unit.

Approximately $3.2 million of the increase in cost is primarily related to the higher revenues from the CHE unit and a shift in raw material product mix in its core product lines. Increases in raw material costs drove an overall decrease in gross profit as a percentage of revenues.

Gross Profit

Gross profit from operations for Q310-YTD was $14.1 million compared to $4.7 million for Q309-YTD, resulting in an increase of $9.4 million or 198%. The increase in gross profit is primarily the result of our acquisition and organic growth strategies. Gross profit for Q309-YTD is primarily from the CHE unit and both the Finance and OP business units were acquired in September 2009.

Approximately $7.2 million of the increase in gross profit is due to the inclusion of gross profit from our recently completed acquisitions of the FIN and OP units, which contributed gross profit of approximately $1.6 million and $5.6 million, respectively, for Q310-YTD. The acquisitions were overall accretive however; these acquisitions had the effect of reducing the consolidated gross profit as a percentage of revenues. This reduction occurs because each acquired entity individually generates a lower gross profit percentage than the CHE unit. The individual gross profit percentages of CHE, OP and the Financing unit for Q310-YTD are 50%, 39% and 17%, respectively. While the recent acquisitions have lower gross margins, they also operate with lower expenses, which positively contribute to our net income.

Approximately $2.2 million of the increase in gross profit is primarily a result of the CHE unit’s operating performance. Gross profit from the CHE unit’s operations for Q310-YTD was $6.7 million compared to $4.5 million for Q309-YTD, resulting in an increase of 49%. Correspondingly, gross profit for the CHE unit as a percentage of revenues for Q310-YTD was 50% compared to 57% for Q309-YTD. As previously discussed, the decrease is a result of increased raw material costs and the introduction of new products that are not currently produced in economic quantities. Secondarily, we have not yet been able to pass along all of our production cost increases to our customers in the form of price increases.

Operating Expenses

Operating expenses for the Q310-YTD were $4.4 million as compared to $1.2 million for Q309-YTD. This represents an increase of $3.2 million or 260%. Operating expenses for Q309-YTD consist primarily of expenses from the CHE unit since the acquisitions of the Finance and OP business units were made in September of 2009. Operating expenses for the CHE unit amounted to $1.9 million for the Q310-YTD compared to $1.0 million for Q309-YTD. Operating expenses are comprised of general and administrative expenses, research and development and sales and marketing expenses. The increase is due to our investment in selling and marketing expenses due to efforts to expand both the product line and distribution network. The operating expenses for our CHE, FIN and OP business units individually amount to $1.9 million, $1.1 million and $0.6 million, respectively. The main cost drivers for the company, besides advertising and trade show costs, are personnel cost, travel costs, management cost, accounting and audit fees. Research and development (R&D) expenses totaled $0.18 million and $0.2 million for Q310-YTD and Q309-YTD, respectively. The decrease in R&D expenses is due to the development to broaden the product line which had higher cost in 2009 and will decrease as the products mature. The Company’s efforts to broaden and strengthen its product portfolio will continue, however, at a pace that is consistent with the economy and the increasing sales activities.

Operating Income

Operating income for the Q310-YTD was $9.6 million versus $3.5 million for Q309-YTD which is an increase of $6.1 million or 176%. The CHE unit contributed $4.8 million of the increase for a 39% organic growth over the prior year. The OP and FIN units contributed $5.2 million and $0.5 million respectively, for Q310-YTD. We continue to focus on the execution of our business plan and with the completed acquisitions of the CHE, FIN and OP business units, the Company is positioned for continued organic growth among all product lines and subsidiaries.

Financing and Other Income/Expenses

Financing expenses include interest expense on the Company’s various financial instruments. For Q310-YTD the Company recognized $21,935 in interest income from its various instruments. The Company’s interest and financing expenses for Q310-YTD amounted to $0.5 million. In addition, the Company recorded $0.6 million for the period in other income and expense.

Income before Income Taxes and Non-controlling Interests

For Q310-YTD, income before income taxes and non-controlling interest was $6.2 million versus $2.5 million for Q309-YTD, which is an increase of $3.7 million or 149%. The increase is mainly due to the results of the additions of the FIN unit and OP unit. These units contributed $0.3 million and $5.1 million, respectively for Q310-YTD. The income was reduced by expenses totaling $1.6 million in the corporate unit. However, $0.4 million of these expenses consists of non-cash transactions since these pertain to stock compensation and amortization of loan fees.

Provisions for Income Taxes

For Q310-YTD, provisions for income taxes were $2.2 million versus $0.9 million for Q309-YTD, which is an increase of $1.3 million or 143%. The increase is associated with the recent acquisitions completed in September 2009. The tax provision for Q309-YTD pertains primarily to the CHE unit.

Non-controlling Interest

For Q310-YTD, the non-controlling interest was $0.35 million versus $0.44 million for Q309-YTD. The non-controlling interest was created by ONE acquiring less than 100% interest in CHE, the FIN unit, and the OP unit.

Net Income Attributable to Company

Net income for Q310-YTD was $5.9 million compared to $2.1 million for Q309-YTD, which is an increase of $3.8 million or 185%. The increase was attributable to the organic growth of the CHE unit and the acquisitions of the FIN and OP units.

Liquidity and Capital Resources

As discussed elsewhere in this document, the Company has implemented a two pronged strategy, which is:

●

to encourage and support organic expansion within the enterprises it acquires and utilize synergies and economies of scale between the entities; and

●

to identify and acquire accretive acquisition targets.

To be successful, each strategy requires adequate funding from available liquidity resources. Accordingly, ONE has determined that its organic expansion strategy is first supported through organically generated cash flow and supplemented by available borrowing capacity depending on the requirements of the anticipated expansion project. Any liquidity organically generated in excess of reinvestment needs will be channeled to the accretive acquisition strategy or retained for future expansion projects.

The Company had working capital of $9.8 million as of September 30, 2010. Our operating and capital requirements in connection with supporting our expanding operations and introducing new products have been and will continue to be significant to us. Although we are profitable, and have been profitable, for the nine months ended September 30, 2010 and 2009, our growth strategy, which is initially focused on accretive acquisitions and organically expanding our product lines will require substantial capital which we may not be able to satisfy solely through our operations.

Based on our current plans for the next 12 months, we anticipate that additional revenues earned from our expanded product line and broadened distribution channels will be the primary organic source of funds for future operating activities in 2010. However, to fund continued expansion of our product lines and extend our reach to broader markets, including international markets, and to acquire additional entities, we may rely on bank borrowing, if available as well as capital raises. The comments discussed below in “Cash Flows for the nine months ended September 30, 2010 compared to September 30, 2009” section address our organic cash resources and the relevant trends and drivers associated with those cash flows.

Financial Position

Total Assets - Our total assets increased $15.6 million or 28.7% to $70.3 million as of September 30, 2010 from $54.7 million as of December 31, 2009 primarily as a result of a net increase in current assets. (See cash flows from operating activities below for further discussion.)

An aggregate amount of $5.9 million was paid to obtain land lease rights which reflected the net increase in long lived assets.

The changes in current assets and specifically cash are more fully discussed as follows:

Cash Flows for the Nine Months Ended September 30, 2010 (“Q310-YTD”) compared to September 30, 2009 (“Q309-YTD”)

Cash Flows from Operating Activities

Operating activities provided net cash of $6.7 million (Q310-YTD) as compared to $(0.2) million (Q309-YTD). A major component of net cash provided by operations was net earnings of $6.3 million (Q310-YTD) and $2.1 million (Q309-YTD). Certain non-cash operating activities such as amortization, depreciation and share based compensation totaling $2.2 million (Q310-YTD) and $0.2 million (Q309-YTD) also contributed to net cash provided by operating activities. Of the $6.2 million in net earnings for Q310-YTD, our CHE unit generated $3.6 million and our OP unit generated $3.8 million net off against corporate expenses of $1.2 million. Our net earnings during Q310-YTD of $6.2 million represented a $4.2 million or 202% increase in our organic growth over Q309-YTD. Our acquired OP business unit was fully contributing to our operational performance for Q310-YTD.

Net cash provided by operations was also impacted by changes in our net working capital which decreased $1.7 million (Q310-YT) as compared to $2.9 million (Q309-YTD). On a consolidated basis, the more significant changes in working capital components during Q310-YTD are as follows:

●

a $5.1 million increase in accounts receivable used cash. Our continuing CHE business unit provided $0.6 million in cash from a decrease in trade receivables resulting from successful collections. Our acquired OP and FIN business units used $5.7 million in cash resulting from increased receivables associated with expanding sales;

●

a $2.5 million increase in inventory used cash. Our continuing CHE business unit used $1.5million primarily to increase inventory to meet the increase in demand. Our acquired OP business unit used $1.0 million in cash to advance new products and meet anticipated demand.

●

a $4.0 million increase in accounts payable and accrued liabilities provided cash. Our continuing CHE business unit and acquired OP business unit provided $1.2 million by securing increased credit lines from our suppliers to support increased inventory. Our acquired FIN business unit provided $2.8 million in cash by increasing the financing supplied by its vendors in order to fund their business increases.

Cash Flows used in Investing Activities

Our investing activities used $7.6 million in net cash during Q310-YTD as compared to $2.2 million in net cash used during Q309-YTD. Net cash used comprised the following significant items:

●

$5.7 million in cash was used for deposits on plantation base leases.

●

$0.6 million in cash was used to increase other assets, a portion of it restricted cash.

●

we purchased $1.3 million in additional equipment to expand our capacity in both the CHE and OP business units.

Cash Flows from Financing Activities

Our financing activities provided net cash of $3.8 million during Q310-YTD. The net cash provided comprised the following significant items:

●

$3 million in proceeds from a bridge loan executed by our corporate headquarters.

●

$3.9 million in proceeds from bank loans

●

$(3.5) million in repayments of bank loans.

●

$0.4 million in proceeds from shareholder loans.

Capital Stock and Debt Financing at September 30, 2010

Repurchase of Common Shares

During Q310-YTD the Company repurchased 16,000 shares of its common stock from its executives in accordance with the executive compensation agreement. The agreement calls for the repurchase of shares from the executives in lieu of compensation. The Company paid $80,000 or $5.00 per share.

Issuance of Common Shares for Services

During Q310-YTD the Company issued 5,160 shares of its common stock to the independent directors valued at $41,900. These shares were issued as compensation to the directors as per the director agreements. Additionally, the Company issued 1,600 shares of its common stock for consulting services. The Company paid a total of $55,500 for services in the nine ended September 30, 2010.

Foreign Currency Translation

Two of the Company’s operating entities, Sanming Huajian Bio-Engineering Co., Ltd. and Jianou Lujian Foodstuff, Co. maintain their financial records in the functional currency of the People’s Republic of China, which is the “Renminbi” (RMB), the currency of the primary economic environment in which the entities operate. Another of the Company’s operating entities, Trade Financial Solutions (“TFS”) maintain its financial records in the functional currency of Canada, the Canadian Dollar (“CAD”). For financial reporting purposes, the financial statements are prepared using the functional currency RMB or TFS, which have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.


Exchange Rates	9/30/2010		12/31/2009
Fiscal period/year end RMB: US$ exchange rate		6.70		6.83
Average period/yearly RMB: US$ exchange rate		6.78		6.83

Subsequent Event

NONE

Significant Estimates

Critical accounting polices include the areas where we have made what we consider to be particularly subjective or complex judgments in making estimates and where these estimates can significantly impact our financial results under different assumptions and conditions.

We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates, judgments and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Actual results could be different than those estimates

Recent Accounting Pronouncements

In January 2010, the FASB has published ASU 2010-01 “Equity (Topic 505)- Accounting for Distributions to Shareholders with Components of Stock and Cash—a consensus of the FASB Emerging Issues Task Force,” as codified in ASC 505,. ASU No. 2010-01 clarifies the treatment of certain distributions to shareholders that have both stock and cash components. The stock portion of such distributions is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s (consolidated) financial position and results of operations.

Off-Balance Sheet Arrangements

Our financial statements include consolidated majority owned subsidiaries and consolidated VIE’s of which we are the primary beneficiary.

We do not have any other 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.

Market Risks

The Company operates in the United States and other countries that have their own currency. This may cause the Company to experience and be exposed to different market risks such as changes in interest rates and currency deviations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable

Item 4. Controls and Procedures.

Disclosure Control and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934, or the “Exchange Act,” is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer as appropriate to allow timely decisions regarding disclosure.

The Company’s management with the participation of the Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2010. Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective and noted a material weakness (see management’s report on internal control over financial reporting), and have implemented corrective actions designed to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and regulations and accumulated and communicated to them as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate “internal control over financial reporting” as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer 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, and includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

ii.

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

iii.

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

As of September 30, 2010 and as reported in the 10-K filing, management used the framework set forth in the report entitled “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Tread way commission to evaluate the effectiveness of our internal control over financial reporting. Based on its evaluation, management concluded that at September 30, 2010 there was a material weakness and concluded that the internal control over financial reporting was not effective. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company’s material weakness in its internal control over financial reporting related to the monitoring and review of work performed in the preparation of audit and financial statements, footnotes, and financial data provided to the Company’s registered public accounting firm. Management concluded that our financial disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct. The lack of accounting staff results in a lack of segregation of duties necessary for an effective system of internal control. The material weakness identified did result in the amendment of previously reported financial statements but not any other related financial disclosure, nor does management believe that it had any effect on the accuracy of the Company’s financial statements for the current reporting period.

In order to mitigate this material weakness to the fullest extent possible, all quarterly and annual financial reports completed by the Chief Financial Officer are reviewed by the Chief Executive Officer for reasonableness and all unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weakness, it is immediately implemented.

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Market for Common Equity and Related Stockholder Matters

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

(a) Exhibits

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification pursuant to 18 U.S.C. Section 1350

32.2 Certification pursuant to 18 U.S.C. Section 1350

(b) Reports on form 8-K

The Company filed the following report on Form 8-K during the quarter for which the report is filed.

1. Form 8-K filed on August 27, 2010 announcing the filing with the Security and Exchange Commission of a request to withdraw its registration statement for a proposed secondary offering of shares of its common stock that were originally to be issuable to certain lenders upon the conversion of certain debentures and the exercise of certain warrants issued to said lenders.

2. Form 8-K filed on September 14, 2010 announcing that FINRA has advised the Company that they would process the Company’s 1 for 5 reverse stock split previously disclosed in the Company’s July 27, 2010, Definitive Information Statement on Schedule 14 (c ), relating to an amendment to the Company’s articles of incorporation to: (i) reduce the number of authorized shares of common stock from 150,000,000 shares to 30,000,000 shares: and (ii) effecting a 1 for 5 reverse split of the Company’s common stock.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 this 10th day of November, 2010.

	ONE Bio, CORP.

Date: November 10, 2010	By: /s/	Marius Silvasan
		Marius Silvasan
		Chief Executive Officer

Date: November 10, 2010	By: /s/	Cris Neely
		Cris Neely
		Chief Financial Officer

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ONBI One Bio Corp (CE)