Lotus Pharmaceuticals, Inc. (Lotus) operates, controls and owns the pharmaceutical businesses in China of Beijing Liang Fang Pharmaceutical Co., Ltd. (Liang Fang) and Beijing En Zhe Jia Shi Pharmaceutical Co., Ltd. (En Zhe Jia), collectively Lotus East. Lotus provides business consulting and other general business operation services to Lotus East. Liang Fang is engaged in the production, trade and retailing of pharmaceuticals, focusing on the development of medicines. Liang Fang owns and operates 10 drug stores throughout Beijing, China that sell Western and traditional Chinese medications, lease medical treatment facilities to licensed physicians, and generate revenues from the leasing of retail space to third party vendors and the leasing of advertising locations at its retail stores. En Zhe Jia is a manufacturer for Liang Fang and maintains facilities for the production of medicines, Chinese medicine, as well as the research and production of other new medicines.