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Safe Harbor Statement

Safe Harbor Statement.

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Safe Harbor Statement

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  1. Safe Harbor Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the company’s ability to market existing and new products, ability to access to capital for expansion, and changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, dependence on our flagship product profits and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation was developed by the Company, is intended solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy the Company’s stock. This presentation is based upon information available to the public, as well as other information from sources which management believes to be reliable, but is not guaranteed by CHBT as being accurate nor does it purport to be complete. Opinions expressed herein are those of management as of the date of publication and are subject to change without notice. 2

  2. Equity Snapshot • Listed on the OTC Bulletin Board • Symbol: CHBT • Price (11/16/07): $9.15 • Market Cap: $156.3 mil • Shares Outstanding: 17.1 mil • Revenue (ttm): $34.8 mil • Net Income (ttm): $12.0 mil • EPS (ttm): $0.70 • P/E (ttm): 13.0 • P/S (ttm): 4.5 • P/B (ttm): 5.2 • EV/EBITDA (ttm): 7.2 Insider / Institutional Ownership: 60.2% / 35.9% Accountant: BDO McCabe Co. Ltd. Fiscal Year End: March 31 3

  3. Investment Highlights • Strong revenue and profit growth with high margins • Proprietary technology creates sustainable, decisive competitive advantages • Strong brand with significant franchise value • Rising demand for China’s probiotics driven by increasing wealth and consumption of dairy products • Entry into bulk additives market further propels growth • Attractive valuation 4

  4. Corporate Overview Revenues Net Income ($ in Millions) Mission Statement:To become the dominant supplier of naturally occurring probiotic bacteria in China 30.6 21.6 17.7 13.5 10.9 8.4 5.5 4.5 2006 2007 1H2007 1H2008 • One of the largest probiotics suppliers in China • Shining is one of the most recognized brands in Shanghai • Proprietary technology offers significant cost and product quality advantages • 266 employees • 22 retail centers in China – 18 in Shanghai and four in Changchun (9/30/2007) • Operates in retail and bulk additive spaces 5

  5. What are Probiotics? “Live microorganisms which, when administered in adequate amounts, confer a health benefit on the host” – World Health Organization • Benefits of probiotics • Improves health of G.I. tract • Stimulates immune system • Helps break down nutrients properly • Reduces creation of toxins • Reduces symptoms of lactose intolerance • Decreases prevalence of allergy in susceptible individuals • Reduces some risks associated with certain cancers • 3 basic methods of delivery • Dairy products • Dietary supplements (capsules, tablets, or powders) • Other food and beverages * Sample: Bifido Bacteria, one kind of probiotic Source: www.usprobiotics.org 6

  6. Projected Rapid Growth • Chinese Probiotic Usage and Growth (Metric Tons) Source: Domestic Probiotics Market Analysis and Forecast Report by Beijing Leadership Management Consulting Co. Limited 7

  7. Market Snapshot • Chinese affluence drives demand for health food • Demand for health food in China expected to reach $9.7B by 2010 (Source: Pacific Bridge Medical) • Demand for milk/yogurt increasing significantly • Sales of yogurt drinks rose by 25% per year in 2005 and 2006 • Chinese Bureau of Statistics forecasts tenfold increase in domestic dairy consumption, 2007-2015 • U.S. banks investing in Chinese dairy industry • Restricted use of antibiotics stimulates probiotic demand • Over-prescription of antibiotics in China • Chinese government is encouraging probiotics supplements to combat antibiotics abuse • China has limited probiotics production capacity • Current demand relies on imports from European manufacturers 8

  8. Current Key Products Product Key Components Uses L. acidophilus & B. bifidium Calms digestive system, enhances G.I. health and protects / strengthens liver function Shining Essence (63% of sales) Reduces high blood pressure, high blood sugar levels and hyperlipidemia Monascus rice and L. acidophilus Shining Signal (15% of sales) B. adolescentis & lentinusedodes Enhances the body’s immune system Shining Golden Shield (9% of sales) Vitamin C, L. Arginine, and other amino acids Facilitates brain cell development and increases alertness Shining Energy (8% of sales) 9 * As of Second Quarter ended September 30, 2007

  9. New Product Development • Additives for Yogurt • Essential to yogurt-based drinks • One of the fastest-growing food product segments in China in 2005 and 2006 • Additives for Milk Powder • Commonly added to infant formula • Improve digestion in babies 10

  10. Distribution – Current and Planned New Manufacturing Facility Retailers / Pharmacies Supermarkets Milk/Yogurt Products via Bulk Additives Company-Owned Retail Centers 11

  11. Strategies for Growth • Leverage Shining brand; introduce new and complementary products • Expand distribution network to 300 Shining brand retail centers by end of FY 2009 • Expand customer base to include bulk additive market • Establish 150 mt / year production facility to take advantage of growing demand for probiotics • Leverage our cost and quality advantage; develop export business in nutraceutical and bulk additivemarkets Shining Retail Center mt = metric tons 12

  12. Retail Expansion Strategy • 60 retail centers by March 31, 2008 • 300 retail centers by March 31, 2009 • 550 square feet / center • Initial investment about $40,000 per center • Financed through operating cash flow • Payback period < 1 year 13

  13. Bulk Additive Strategy • Launch “Shining Probiotics” for bulk additives line • Produce bulk food additives for dairy and animal feed industries • 150 mt / year production facility to be completed in 2008 CY • Products sold directly to major international and domestic dairy and food manufacturers • Revenue potential of new plant = $90 MM per year CY = Calendar Year; mt = metric tons 14

  14. New Industry-Leading Facility • The only probiotics plant currently in development in China that will be able to meet the domestic demand for bulk additives • Initial revenue opportunity at Phase I capacity = $90MM / year • Phase 1 = 150 mt / year of production capacity • Phase 2 = scalable to 300 mt / year • Production yield allows company to sell for as little as one-sixth competitors’ price while maintaining 70%+ gross margin • Projected to be online in late 2008 CY CY = Calendar Year; mt = metric tons 15

  15. Proprietary Production Process • Bacteria-Based Activation • Bacteria-Based Cultivation • Leading edge production technology • Fermentation: Very high production yield = low production cost and high margins • Superior probiotic strands: Better functionality and product quality • Micro-encapsulation: Very long shelf life • Multistage Fermentation • Bacteria Extraction • Granule Emulsification • Freeze-Drying • Micro-Encapsulation • Double-Aluminum Packaging 16

  16. Management and Director Team Mr. Song Jinan, Founder, Chairman and CEO • Founder and CEO since 1999; Masters degree in politics and economics from Harbin Industrial University Mr. Raymond Li, CFO • 20 years of finance experience in financial reporting, due diligence, M&A activity, staff management and tax issues Mr. Henry Tai, VP of Corporate Development • 20 years of experience in direct investments, corporate finance and auditing in Australia, China, Hong Kong and the United Kingdom Mr. Simon Yick, Non Executive Director • 20 years in corporate finance, direct investment and auditing Dr. Chin Ji Wei, Non Executive Director • 20 years of academic experience in horticulture; authored 50+ papers; awarded five patents, Science and Progressive Award Dr. Du Wen Min, Non Executive Director • Specialist in Study of Liver Disease; Deputy Director in charge of the Centre for Adverse Drug Reactions in Shanghai 17

  17. Strong Financial Performance * For Fiscal Years Ended March 31 18

  18. Income Statement, 2006-2007 *The earnings per share figures reflect an increase in weighted-average shares related to the share exchange transaction in March 2006. For Fiscal Years Ended March 31 19

  19. Balance Sheet March31 September 30 ($ in thousands) 2007 2006 2007 Cash and cash equivalents 26,992 19,841 35,222 Current assets 41,897 31,833 46,582 Total assets 44,580 33,427 53,057 Current ratio 2.0 1.5 2.3 Total liabilities 20,670 21,090 22,748 Stockholder’s equity 23,910 12,337 30,309 20

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