UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

OR

        Check whether the issuer: (1) 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 Company was required to file such reports), and (2) has been subject to such filing requirements for past 90 days.

Yes      X             No ______

        State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of August 19, 2005, there were 17,845,732 shares outstanding.

        Transitional Small Business Disclosure Format (check one):

        Yes ______         No      X        

ITEM 1 - FINANCIAL STATEMENTS

GENEX PHARMACEUTICAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2005
(Unaudited)

Tianjin Zhongjin Biology Development Co., Ltd. ("TZBD") was founded in the People's Republic of China on February 10, 2003. TZBD is located in the Tianjin Economic and Technological Development Zone in the People's Republic of China. The business license of TZBD was issued by Tianjin Industrial and Commercial Administration on February 10, 2003. The operating period of the business license is from February 10, 2003 to February 9, 2053. TZBD is primarily engaged in production and sales of Reconstituted Bone Xenograft ("RBX") in the People's Republic of China. All of the customers are hospitals in People's Republic of China. Marketing is either through distributors or through TZBD's sales offices in various cities in China.

On June 17, 2004, TZBD consummated a share purchase agreement with KS E-Media Holdings, Inc. ("KSE"), a Delaware corporation, under which TZBD shareholders sold 100% undivided interest in TZBD to KSE, in exchange for 3,658,375 shares of KSE. As a part of the agreement, KSE cancelled 2,212,500 shares of its issued and outstanding stock owned by its former president. Within ten (10) days from the Closing Date, KS E-Media effectuated a four-for-one forward split of the KS E-Media Common Shares by way of stock dividend. On June 17, 2004, KSE was renamed Genex Pharmaceutical, Inc.

KSE was incorporated in the State of Delaware on February 28, 2002. Through June 17, 2004, KSE was considered a development stage company as defined by Statement of Financial Accounting Standard ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises". KSE was a start-up stage Internet based fulfillment company based in Vancouver, BC, Canada. KSE filed a SB-2 Registration Statement with the United States Securities and Exchange Commission ("SEC") on December 23, 2002 that was declared effective May 7, 2003.

According to the terms of the share exchange agreement, control of the combined companies (the "Company") passed to the former shareholders of TZBD. This type of share exchange has been treated as a capital transaction accompanied by recapitalization of TZBD in substance, rather than a business combination, and is deemed a "reverse acquisition" for accounting purposes.

CHANGE IN REGISTRATION LOCATION:

The Company changed its registration location from Tianjin economic and technological development district to Tianjin Xiqing economic development district. The change in registration took place on March 5, 2004.

The accompanying unaudited condensed consolidated financial statements at and for the six months period ended June 30, 2005 include the accounts of TZBD and its parent company, KSE (legal acquirer), from the date of acquisition. The historical financial statements prior to the date of recapitalization include the accounts of TZBD only. All significant inter-company accounts and transactions have been eliminated in consolidation.

The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods are not necessarily indicative of the results for any future period. These statements should be read in conjunction with the Company's audited financial statements and notes thereto for the fiscal year ended December 31, 2004.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of revenues and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Accounts receivable and allowance for doubtful accounts

The Company uses the allowance method to account for uncollectible accounts receivable. The Company periodically adjusts the allowance for doubtful accounts based on management's continuing review of accounts receivable. This analysis by management is based on the composition of accounts receivable, analysis of historical bad debts, customer concentrations, customer credit worthiness, an analysis of current economic and business trends as well as changes in customer payment patterns. Terms of the sales vary from COD through a credit term up to 6 to 9 months.

The Company records a full allowance for accounts receivable that have been determined legally to be uncollectible. For accounts receivable that have been outstanding for over 180 days, the Company determines an appropriate allowance based on individual circumstances.

As of June 30, 2005, there is a general allowance of $28,551 for doubtful and long overdue accounts.

The Company accounts for income tax using Statements of Financial Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes". SFAS No. 109 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. No provision for deferred taxation has been made, as there are no temporary differences at the balance sheet date.

Foreign currency translation

Assets and liabilities in foreign currency at the balance sheet date are translated at the exchange rate prevailing at that date. Revenue and expenses are translated at the average exchange rate, which approximates the actual rate prevailing on the date of the transaction. Transaction gains and losses are reflected in the income statement. Gains and losses arising from translation of foreign currency financial statements are reflected as a component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company is the Chinese Renminbi. The unit of Renminbi is in Yuan. Translation gains and losses were insignificant for the six months periods ended June 30, 2005 and 2004.

On July 22, 2005, the PRC government revalued Renminbi and announced a change in its currency policy to allow Renminbi to float against a basket of currencies. However, it does not imply free convertibility of Renminbi to other foreign currencies. All foreign exchange transactions continue to take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rate quoted by the People's Bank of China. Approval of foreign currency payments by the Bank of China or other institutions require submitting a payment application form together with invoices, shipping documents and signed contracts.

Revenue recognition

The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. Revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are met as unearned revenue.

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Stock based compensation

In October 1995, the FASB issued FFAS No. 123, "Accounting for Stock-Based Compensation". SFAS No. 123 prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123 requires compensation expense to be recorded (i) using the new fair value method or (ii) using the existing accounting rules prescribed by Accounting Principles Board Opinion No. 25, "Accounting for stock issued to employees" (APB25) and related interpretations with proforma disclosure of what net income and earnings per share would have been had we adopted the new fair value method. Through June 30, 2005, the Company has not granted any stock options.

Recent accounting pronouncements

In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment, an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. FAS No. 123R is effective beginning in the Company's second quarter of fiscal 2006. The Company believes that the adoption of this standard will have no material impact on its financial statements.

In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of Non-monetary Assets." The Statement is an amendment of APB Opinion No. 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. The Company believes that the adoption of this standard will have no material impact on its financial statements.

3. DUE FROM / TO RELATED PARTIES

The Company advanced cash to parties related through common shareholders during the six months period ended June 30, 2005. Out of total of $1,820,528, $414,923 is interest-free, unsecured and due on demand. The remaining $1,405,605 bears an interest rate of 6% per annum and is also unsecured. Of the $1,405,605, $672,764, $256,330 and $476,511 are due for repayment on March 31, 2006, April 30, 2006 and May 31, 2006, respectively. Total interest income on the loans for the six months period ended June 30, 2005 amounted to $29,083.

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During the six months period ended June 30, 2005, the Company borrowed cash from a shareholder and certain parties related to shareholders, amounting to $32,019 and $26,989 respectively. The amounts are interest free, due on demand and unsecured.

4. MAJOR CUSTOMERS AND CONCENTRATIONS OF CREDIT RISK

The Company's two main customers are medical device resellers: the Shanghai Yicheng Medical Device Company is TZBD's largest customer and the second largest is Anhui Hefei Jialian Medical Appliance Company. The aforementioned customers have each signed a three-year letter of intent for RBX deliveries from 2004 through 2006, amounting to $1,425,000 in sales, although these agreements are not binding. The Company recognizes the importance of the medical device resellers for increasing sales and continues to establish new links with medical device companies throughout China. The Company's medical device customers represent 28% of all sales, and direct sales to hospitals and doctors account for 72% of all sales, in the first half year of 2005.

Five vendors provided 58% of the Company's raw materials for the six months period ended June 30, 2005. The future profitability of the Company will be dependent upon the Company's abilities to purchase the raw materials at favorable terms.

5. RELATED PARTY TRANSACTIONS

The Company advanced cash to parties related through common shareholders during the six months period ended June 30, 2005. Out of total of $1,820,528, $414,923 is interest-free, unsecured and due on demand. The remaining $1,405,605 bears an interest rate of 6% per annum and is also unsecured. Of the $1,405,605, $672,764, $256,330 and $476,511 are due for repayment on March 31, 2006, April 30, 2006 and May 31, 2006, respectively. Total interest income on the loans for the six months period ended June 30, 2005 amounted to $29,083.

The Company recorded rental expenses payable to related parties, related through common shareholders, amounting to $8,673 for the six months period ended June 30, 2005.

During the six months period ended June 30, 2005, the Company borrowed cash from a shareholder and certain parties related to shareholders, amounting to $32,019 and $26,989, respectively. The amounts are interest free, due on demand and unsecured.

6. STATUTORY COMMON WELFARE FUND

As stipulated by the Company Law of the People's Republic of China ("PRC"), net income after taxation can only be distributed as dividends after appropriation has been made for the following:

(i) Making up cumulative prior years' losses, if any;

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The Company established a reserve for the annual contribution of 5% of net income to the welfare fund. The amount allocated to the statutory reserve for the six months period ended June 30, 2005 amounted to $19,611.

In accordance with the Chinese Company Law, the Company has allocated 10% of its annual net income, amounting $39,223, as statutory reserve on June 30, 2005.

8. COMMITMENTS

Operating leases

The Company is renting its production facility and its administrative offices from parties related through a major shareholder. The existing leases expire on May 31, 2005. On May 10, 2005, the Company renewed the leases for another two years from June 1, 2005 to May 31, 2007 based on the current terms. As of June 30, 2005, the approximate minimum lease payments that will have to be made through the lease expiration date are as follows:

The management believes that neither RBX nor Company are subject to Good Manufacturing Practices (GMP) certification, as RBX is currently considered to be a part of a treatment with medical equipment. GMP is granted by the State Drug Administration (SDA) of China (China's equivalent to the FDA in the United States of America). GMP guidelines define standards for the pharmaceutical manufacturing process to reduce the possibility of contamination errors and it conforms to the WTO's fundamental principles concerning the medicine production administration. Management believes that the requirement of the GMP certification and license for the Company and RBX will not begin in the foreseeable future.

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10. EARNINGS PER SHARE

Basic EPS amounts are determined based on the weighted average number of shares of common stock outstanding. Diluted EPS assumes the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share.

11. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company prepares its statements of cash flows using the indirect method as defined under the Financial Accounting Standard No. 95.

The Company paid no interest and no income tax during the six months periods ended June 30, 2005 and 2004.

12. CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC and by the general state of the PRC's economy. The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

This quarterly report on Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company's future financial performance. The Company has attempted to identity forward-looking statements by terminology including "anticipates", "believes", "expects", "can", "continue", "could", estimates", "intends", "may", "plans", "potential", "predict", "should" or "will" or the negative of these terms or other comparable terminology. Although the Company believes that the expectation reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, level of activity, performance or achievements. The Company expectations are as of the date this Form 10-QSB is filed, and the Company does not intend to update any of the forward-looking statements after the date this quarterly report on Form 10-QSB is filed to confirm these statements to actual results, unless required by law.

Genex Pharmaceutical, Inc., formerly known as KS E-Media, Inc. (the "Company"), was incorporated in the State of Delaware on February 28, 2002. Prior to June 17, 2004, the Company was considered a development stage company. The Company was a start-up Internet based Fulfillment Company based in Vancouver, BC, Canada.

On June 8, 2004, the Company entered into a Share Purchase Agreement with Tianjin Zhongjin Biology Development Co., Ltd. ("TZBD"), a company formed under the laws of the People's Republic of China, and the shareholders of TZBD. Under the terms of the agreement, the Company acquired 100 percent of TZBD's shares in exchange for 3,658,375 restricted shares of the Company's common stock which were issued to the TZBD shareholders. On June 17, 2004, the stock purchase made pursuant to the Share Purchase Agreement was consummated. On June 27, 2004, the Company effectuated a three-for-one stock dividend of the Company's common stock. On June 29, 2004, the Company changed its name to the present name.

TZBD's Chairman of the Board of Directors, Mr. Fuzhi Song, has been appointed the Company's President, Chief Executive Officer and Chairman of the Board of Directors. Mr. Shuli Zhang has been appointed Chief Financial Officer and Treasurer. Ms. Sufen Ai has been appointed as the Company's Secretary. Mr. Mayur Pandya resigned as an officer and director of the Company effective June 18, 2004.

TZBD is incorporated under the laws of the People's Republic of China ("PRC") and is headquartered in Tianjin, China. TZBD engages in the business of producing and distributing Reconstituted Bone Xenograft ("RBX"), which is considered to be a medical device. This bone grafting technology accelerates bone healing. Its medical devices are distributed to 400 hospitals in 22 provinces throughout PRC. TZBD markets its technology to hospitals in PRC and targets to position itself as a comprehensive medical device provider of bone grafting products and services.

The Company generated revenues of $520,977 for the three months period ended June 30, 2005, which was a $4,773 or 0.91% decrease from $525,750 for the three months period ended June 30, 2004. The Company was able to maintain the business volume through its marketing efforts.

Gross profit increased by $85,061 from $386,750 for the three months period ended June 30, 2004 to $471,811 for the three months period ended June 30, 2005. Gross profit margin increased to 90.56% for the three months period ended June 30, 2005, from 73.56% for the three months period ended June 30, 2004. The Company only had products sales for the three months period ended June 30, 2005 whereas the Company had both products sales and raw material sales for the three months period ended June 30, 2004. During the three months period ended June 30, 2004, the Company sold raw materials of $104,549 nearly at costs which was the main cause for the low gross profit for the three months period ended June 30, 2004. The gross profit margin for products sales for the three months ended June 30, 2004 was 91.82%. The gross profit margin of products sales was slightly decreased by 1.26%, which was primarily due to commercialization of RBX and increased sales of products.

Selling expenses decreased by $15,737 or 12.10% to $114,344 for the three months period ended June 30, 2005 from $130,081 for the three months period ended June 30, 2004. This was primarily due to a decrease in communication expenses of $2,211, meeting expenses of $3,287, transportation expenses of $3,879, training expenses of $1,988 and salary expenses of $14,266, offset against the increase in advertising expenses of $8,464, travelling allowance expenses of $632 and staff welfare expenses of $771 for the three months period ended June 30, 2005.

General and administrative expenses increased by $20,054 or 19.34% to $123,743 for the three months period ended June 30, 2005 from $103,689 for the three months period ended June 30, 2004. This is primarily due to the increases in audit fees of $8,791, professional fees of $10,000 and depreciation exenses of $759 for the three months period ended June 30, 2005.

As gross profit increased significantly coupled with decreases in selling expenses and administrative expenses due to better cost control, the income from operations changed from $152,980 for the three months period ended June 30, 2004 to $233,724 for the three months period ended June 30, 2005.

There were no other expenses for the three months period ended June 30, 2005 as compared to other expenses of $1,503 for the three months period ended June 30, 2004.

Interest income for the three months period ended June 30, 2005 increased to $15,022 from $427 for the three months period ended June 30, 2004 due to the increase in cash advances to related parties during the three months period ended June 30, 2005 as compared to the three months period ended June 30, 2004.

The Company recorded a net income of $248,746 for the three months period ended June 30, 2005 as compared to a net income of $151,904 for the three months period ended June 30, 2004. This was primarily due to the significant increases in gross profit due to business expansion and increases in interest income coupled with decreases in selling expenses and administrative expenses due to better cost control.

The Company generated revenues of $948,934 for the six months period ended June 30, 2005, which was a $13,024 or 1.35% decrease from $961,958 for the six months period ended June 30, 2004. The slight decrease in revenues was mainly due to less marketing efforts contributed by the sales team of the Company during the Chinese New Year holidays.

Gross profit increased by $91,137 from $758,040 for the six months period ended June 30, 2004 to $849,177 for the six months period ended June 30, 2005. Gross profit margin increased to 89.48% for the six months period ended June 30, 2005, from 78.80% for the six months period ended June 30, 2004. This was mainly due to no sales of raw materials nearly at costs for the six months period ended June 30, 2005 whereas there was sales of raw materials of $104,549 nearly at costs for the six months period ended June 30, 2004. The gross profit margin for sales of products alone was 88.41% for the six months ended June 30, 2004. The gross profit margin for product sales was slightly improved by 1.07%, which was primarily due to commercialization of our main product, RBX, and increased sales of products.

Selling expenses decreased by $45,397 or 16.84% to $224,189 for the six months period ended June 30, 2005 from $269,586 for the six months period ended June 30, 2004. This was primarily due to a decrease in communication expenses of $5,057, meeting expenses of $18,743, training expenses of $8,337, transportation expenses of $7,461 and board and lodge expenses of $1,626 and salary expenses of $14,123, offset against the increase in advertising expenses of $10,883 for the six months period ended June 30, 2005.

General and administrative expenses decreased by $4,723 or 1.74% to $266,087 for the six months period ended June 30, 2005 from $270,810 for the six months period ended June 30, 2004. This is primarily due to the decreases in entertainment expenses of $28,746, office running expenses of $6,005, research and development expenses of $3,375, renovation and repairs expenses of $3,117 and rental expenses of $10,359, offset against the increases in audit fees of $19,153, bad debt expenses of $1,387, professional expenses of $20,000, retirement insurance expenses of $2,765, salary expenses of $2,108 and staff welfare expenses of $1,296 for the six months period ended June 30, 2005.

As gross profit increased significantly coupled with decreases in selling expenses and administrative expenses due to better cost control, the income from operations changed from $217,644 for the six months period ended June 30, 2004 to $358,901 for the six months period ended June 30, 2005.

There was other income of $3,745 for the six months period ended June 30, 2005 as compared to other expenses of $1,503 for the six months period ended June 30, 2004.

Interest income for the six months period ended June 30, 2005 increased to $29,580 from $2,454 for the six months period ended June 30, 2004 due to the increase in cash advances to related parties during the six months period ended June 30, 2005 as compared to the six months period ended June 30, 2004.

The Company recorded a net income of $392,226 for the six months period ended June 30, 2005 as compared to a net income of $218,595 for the six months period ended June 30, 2004. This was primarily due to the significant increases in gross profit due to business expansion and increases in interest income coupled with decreases in selling expenses and administrative expenses due to better cost control.

For the six months period ended June 30, 2005, our operations provided net cash of $481,954, an increase of $987,345 or 195.36% from net cash of $505,391 used for the six months period ended June 30, 2004. There was no cash used for investing activities for the six months period ended June 30, 2005 whereas we used cash of $12,463 for investing activities for the six months ended June 30, 2004. We used $649,828 for financing activities for the six months period ended June 30, 2005 whereas we provided $371,188 for financing activities for the corresponding period last year.

As of June 30, 2005, we had cash on hand of $158,121. We had a net decrease in cash and cash equivalent of $167,874 in the current period as compared to a net decrease of $146,666 in the corresponding period last year.

We had no significant capital expenditure commitment outstanding as of June 30, 2005.

Fluctuations of currency exchange rates between Renminbi and United States dollar could adversely affect our business since we conduct our business primarily in the PRC, and the sale of our products to corporations in the PRC are settled in Renminbi. The Chinese government controls its foreign reserves through restrictions on imports and conversion of Renminbi into foreign currency. Although the Renminbi to United States dollar exchange rate has been stable since January 1, 1994 and the Chinese government has stated its intention to maintain the stability of the value of Renminbi, there can be no assurance that exchange rates will remain stable. On July 22, 2005, the Chinese government revalued Renminbi and announced a change in its currency policy to allow Renminbi to float against a basket of currencies. However, it does not imply free convertibility of Renminbi to other foreign currencies. The Renminbi could appreciate against the United States dollar. Exchange rate fluctuations may adversely affect our revenue arising from the sales of products in the PRC and denominated in Renminbi and our financial performance when measured in United States dollar.

In November 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 151, Inventory Costs - an amendment of ARB No. 43, Chapter 4. This Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that "under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges". This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal". In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This Statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not believe the adoption of this Statement will have any immediate material impact on the Company.

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On December 16, 2004, the FASB published Statement of Financial Accounting Standards No. 123 (Revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS No. 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS No. 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of SFAS No. 123R are effective as of the first interim period that begins after June 15, 2005. Accordingly, the Company will implement the revised standard in the third quarter of fiscal year 2005. Currently, the Company accounts for its share-based payment transactions under the provisions of APB 25, which does not necessarily require the recognition of compensation cost in the financial statements. Management does not anticipate that the implementation of this standard will have a material impact on the Company's consolidated financial statements.

On December 16, 2004, FASB issued Statement of Financial Accounting Standards No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions ("SFAS No. 153"). This statement amends APB Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Under SFAS No. 153, if a nonmonetary exchange of similar productive assets meets a commercial-substance criterion and fair value is determinable, the transaction must be accounted for at fair value resulting in recognition of any gain or loss. SFAS No. 153 is effective for nonmonetary transactions in fiscal periods that begin after June 15, 2005. The Company does not anticipate that the implementation of this standard will have a material impact on its financial position, results of operations or cash flows.

In March 2005, the FASB issued Interpretation No. ("FIN") 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143". FIN 47 clarifies that SFAS No. 143, "Accounting for Asset Retirement Obligations," requires that an entity recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The Company does not expect the adoption of FIN 47 to have a material impact on its results of operations or financial position.

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ITEM 3 - CONTROLS AND PROCEDURES

We had no significant capital expenditure commitment outstanding as of June 30, 2005.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Within the 90 days prior to the filing of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its principal executive and financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Company's principal executive and financial officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that Company files and submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported as and when required.

There were no changes in the Company's internal controls or in other factors that could have significantly affected those controls subsequent to the date of the Company's most recent evaluation.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

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

During the six months period ended June 30, 2005, we did not issue any shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

(b) Reports on Form 8-K.

A Form 8-K was filed with the U.S. Securities and Exchange Commission on April 1, 2005, announcing our change of auditors.

SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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