Major Shareholder:

• Mr. Tam Yun Kau - 27.07% interest

Company Subsidiaries:

• Kinetana Inc.(100%): Research and development of biopharmaceutical technologies and western herbal products
• Kinetana Hong Kong Pharmaceuticals Ltd (100%): Research and development of biopharmaceutical technologies

The Group was founded in 1987 with the incorporation of Kinetana Inc. as a consulting company. In March 1998, KGI, now a wholly owned subsidiary of the Company, was founded to engage in biopharmaceutical technology development. The core competency of the Group is pharmacokinetics and pharmacodynamics (commonly referred to in the pharmaceutical industry as ¡§PK/PD¡¨) and the Group's mission is to accelerate the discovery and development of synthetic drugs and natural products, including TCM.

The Group's principal technological innovation is its¡§simulated biological dissolution ¡§and absorption system or the ¡§SimBioDAS¡¨ technology, which was initially co-invented by Dr. Tam and Dr. Anderson.

In late 2001, after about three years of development and refinement, particularly in cell biology for the development of the Kinetana Cells and in analytical chemistry, the Group developed the SimBioDAS technology into a system which is intended for predicting the intestinal absorption of compounds in humans effectively with consistent results within an acceptable margin of error. The SimBioDAS system is currently operated manually, and is intended to be developed into an automated system.

The emerging SimBioDAS technology is an in vitro screening system through which the Group aims to help shorten the drug development timeline by facilitating early decisions on which drug candidates to be brought forward for further development, thereby reducing the cost and resources required for the pre-clinical drug development process. Technologies similar in some respects to the SimBioDAS technology are available in the market.

The Group has commenced commercialization of the SimBioDAS technology since November 2001 by offering drug screening services and ingredient absorption analyses in its laboratories in Edmonton, Alberta, Canada and in Hong Kong.

The Directors believe that the Group has the following competitive advantages:

• Strong research and development capability: The Group has a research and development team comprising 15 technical staff, of whom 8 are Ph.D scientists with the remaining being technicians or technologists who hold diplomas in laboratory or veterinary technology, or university degrees in science.
• Significant awards and recognition: The Group was named the winner of the¡§Best Biochemistry Technology Company¡¨for the year 2000 by the Hong Kong Capital Magazine, and has received numerous grants or subsidies from governmental agencies in Canada as well as in Hong Kong in support of its research and development activities.
• Parallel development: The Group's SimBioDAS technology can be utilized to develop proprietary drug products, including refining the TCM-based formulations to be developed jointly with HKUST and CUHK from health products to drugs, which are expected to contribute to its revenue profile in the long term.
• Strategic alliances: The Group expects to limit its risks involved in the drug development process and to enjoy the flexibility of an efficient organizational structure by entering into various strategic alliances.

• Reliance on a single technology that is in the early stage of commercialization and has not been independently tested, the success of which is yet to be proven;
• Limited operating history and limited experience with unproven business and revenue models and history of losses and possibility of continuous losses;
• Drug development risk;
• Research and development risks
• No assurance of achieving business objective successfully

To offer drug screening services and ingredient absorption analysis, in the Group's laboratories in Edmonton, Alberta, Canada and in Hong Kong using the SimBioDAS technology. (the Group has so far secured two business contracts, of which one had been completed and the other one is in progress.)

To develop in Canada an automated system to accommodate the demand for increased through put of in house drug screening and for licensing to third party customers. (Such development plan is currently in progress.)

To develop in Canada and introduce the Group's first Ginkgo product as a food supplement in the second or third quarter of 2002 which is expected to be in tablet or capsule form and contain a known quantity of absorbable active ingredients that are extracted from natural Ginkgo leaves.

To develop in Canada and market other single-herb products as food supplements, such as St John's Wort and Echinacea, with worldwide popularity. (This is expected to commence in approximately three months after the launch of the Group's Ginkgo product to the market.

To upgrade in Hong Kong one to three TCM-based product formulations for the Group's joint venture and strategic partners. (This is expected to commence in approximately 12 months from the Latest Practicable Date.)

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK46.0 million (based on the offer price HK$0.5 per share). The Group at present intends to apply the net proceeds as follows: