China YCT International Group, Inc. (Form: 8-K, Received: 03/03/2011 14:34:43)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 8-K

_____________________

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO.: 0-53600

Date of Report: February 28, 2011

CHINA YCT INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		65-2954561
(State of other jurisdiction of		(IRS Employer
incorporation or organization		Identification No.)

c/o Shandong Spring Pharmaceutical Co., Ltd Economic Development Zone Gucheng Road Sichui County Shandong Province PR China	273200
(Address of principal executive offices)	(Zip Code)

86-537-4268278

(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

See Item 2.01 below.

Item 2.01 Completion of Acquisition or Disposition of Assets

China YCT International Group, Inc. (the “Company”) entered into an agreement (the “Agreement”) as of February 28 2011, with L.Y. Research Corporation (“LY Research”), Pursuant to the Agreement, the Company will acquire 100% of the issued and outstanding stock of L.Y.(HK) Biotech Limited, a corporation organized under the laws of Hong Kong, (“HK Biotech”). The assets of HK Biotech include HK Biotech’s US patent No. 6,475,531 B1, titled “Safe Botanical Drug for Treatment and Prevention of Influenza and Increasing Immune Function” (the “Patent”). HK Biotech is a development stage company. The closing of the transactions contemplated by the Agreement are subject to customary closing conditions

LY Research, a corporation incorporated in New Jersey, focuses on the research and development of botanical drugs. LY Research was founded by and is wholly-owned by Dr. Yaguang Liu.

The purchase price to be paid by the Company is as follows:

(1)

The Company will issue and deliver 44,255,087 shares of its common stock to LY Research or its designee, which shares constitute 60% of the issued and outstanding shares of common stock of the Company;

(2)

The Company agreed to issue and deliver 11,063968 shares of its common stock to LY Research or its designee, upon the quotation of the Company’s common stock on the OTCBB;

(3)

The Company agreed to issue and deliver 4,425,508 shares of its common stock to LY Research or its designee upon the receipt by the Company of a minimum of $20,000,000 in gross proceeds from a debt or equity financing, or a series of debt and/or equity financings, or upon the listing of its common stock on NASDAQ.

LY Research has advised the Company that the 44,255,087 shares of Common Stock are to be issued to LY Holding Limited, a Hong Kong corporation that will also be wholly-owned by Dr. Liu.

Item 5.01 Changes In Control of Registrant .

Upon the closing of the transactions contemplated by the Agreement, Dr. Yaguang Liu will became the beneficial owner of 44,255,087 shares of the Company’s common stock, which shares constitute 60% of the Company’s issued and outstanding shares of common stock. The shares will be issued to LY Research, which is wholly-owned by Dr. Liu. The consideration for the shares was the transfer of 100% of the issued and outstanding stock of HK Biotech.

The foregoing summary of the Agreement, and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, which is attached as Exhibit 10.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number		Description

10.1		Purchase Agreement, dated as of February 28 2011 by China YCT International Group, Inc. and L.Y. Research Corporation,

Forward Looking Statements

Statements in this Form 8-K pertaining to pending acquisitions or future borrowings are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform act of 1995. These forward-looking statements are based on our current expectations only and are subject to uncertainties that may cause actual results to differ materially. Factors that could affect actual results include but are not limited to our ability to successfully complete our pending acquisition of Qwest, changes in economic or industry conditions, changes in the capital markets or our access thereto, changes in our cash flows or financial position, and the other factors or risks described in our reports filed with the Securities and Exchange Commission. We cannot assure you that we will timely complete our pending Qwest acquisition or be able to utilize our new credit facility on the terms currently envisioned. You should not place undue reliance on our forward-looking statements, which speak only as of the date of this report. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	China YCT International Group, Inc.

Dated: February 28,2011	By:	/s/ Yan Tinghe
		Yan Tinghe
		Chief Executive Officer

Exhibit 10.1

PURCHASE AGREEMENT

This Agreement is made as of this 28 day of February, 2011, by and between China YCT International Group, Inc. a Delaware corporation with its principal place of business at Gucheng Road, Sishui County, Shandong Province, China 273200(”CYIG” or “Buyer”) and LY Research Corp., a New Jersey corporation, with its registered office at 22 Sunrise Bay Boulevard, Tuckerton, New Jersey ( “Seller”).

WHEREAS , Seller is interested in selling 100% of the capital stock of L. Y. (HK) Biotech Limited, its wholly-owned subsidiary (the “LYHK Shares”or “Shares”), and CYIG is interested in acquiring the LYHK Shares; and

WHEREAS , the parties desire to enter into a definitive agreement for the acquisition of said LYHK Shares.

NOW, THEREFORE , the parties agree as follows:

1. Shares. Seller shall sell the Shares, free and clear of all liens, encumbrances, claims and the like,

2. Consideration . In consideration for the purchase of the LYHK Shares, the Buyer shall issue Seller the following:

(a) at the Closing, 44,255,087 shares of Buyer's common stock;

(b) upon the quotation of the Buyer’s common stock on the OTCBB, 11,063968 shares of Buyer’s common stock; and

(c) upon the receipt by Buyer of a minimum of $20,000,000 in gross proceeds from a debt or equity financing, or a series of debt and/or equity financings, or upon the quotation of its common stock on NASDAQ, 4,425,508 shares of Buyer’s common stock.

3. Closing . At the Closing,:

(a) Seller will deliver to Buyer certificates representing 10,000 LYHK Shares registered in the name of Buyer.

(b) Buyer will deliver to Seller certificates representing 44,191,956 shares of Buyer's common stock.

(c) Buyer and Seller will each deliver to the other such other documents as the other party may reasonably request with respect to consummation of the transaction

4. Seller’s Representations Seller represents and warrants to Buyer as follows:

(i)(a) Seller is a corporation duly incorporated, validly existing, and in good standing under the laws of New Jersey.

(b) The capitalization of LYHK consists of 10,000 shares of voting common stock, par value $ 0.001 per share, of which 10,000 shares are issued and outstanding at Closing, All of the outstanding shares of LYHK's common stock have been duly authorized and validly issued, and are fully paid and non-assessable, and none of such shares is subject to any repurchase option or restriction on transfer. All of such shares have been issued in compliance with applicable securities laws. There are no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire or otherwise relating to, any shares of the capital stock or other securities of LYHK; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of LYHK; or (iii) contract under which LYHK is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities. Upon the occurrence of the events specified in 3(a), the Buyer shall own 100% of the issued an outstanding common stock of LYHK on a fully diluted basis as of the date hereof.

(c) Seller has full power and authority to enter into and perform this Agreement. The execution and performance of this Agreement by Seller will not (i) result in a material breach of or default under, any order, judgment, or decree or any agreement or other instrument to which Seller or any of the LYHK Shares may be bound or (ii) constitute a violation of any law or regulation. The execution and performance of this Agreement by Seller have been duly authorized by all necessary corporate actions of Seller and this Agreement constitutes the valid and binding obligation of Seller enforceable against it in accordance with its terms.

(d) No consent, approval or authorization of, any governmental authority is required in connection with the execution, delivery, and performance of this Agreement.

(e) (i) Seller is the owner of and has good and marketable title to the LYHK Shares free and clear of all claims, liens, and encumbrances of whatever nature. At the Closing, Buyer will obtain good and marketable title to all such LYHK Shares free and clear of all claims, liens, and encumbrances of whatever nature.

(ii) LYHK is the owner of and has good and marketable title to the intellectual and intangible property of LYHK, including the US patent No. 6,475,531 B1, titled “Safe Botanical Drug for Treatment and Prevention of Influenze and Increasing Immune Function” (“Patent”) (collectively, referred to as “Intellectual Property”).LYHK owns the Intellectual Property free and clear of all claims, liens, and encumbrances of whatever nature. At the Closing, Buyer will obtain good and marketable title to all such property free and clear of all claims, liens, and encumbrances of whatever nature and, to Seller's knowledge, no other person or entity is infringing, violating or misappropriating any of the Intellectual Property. None of the Intellectual Property owned or used by Seller infringes, violates or constitutes a misappropriation of (or in the past infringed, violated or constituted a misappropriation of) any intellectual property of any other person or entity.

Seller has not received any written complaint, claim or notice alleging any such infringement, violation or misappropriation.

(iii) LYHK has no agreements regarding the Intellectual Property with any person. LYHK is not obligated to pay any royalties or other compensation to any third party in respect of its ownership or use of the Intellectual Property.

5. Buyer’s Representations Buyer represents to Seller that:

(a) Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware.

(b) The capitalization of Buyer consists of 100,000,000 shares of voting common stock, par value $ 0.001 per share, of which 73,716,391 will be issued and outstanding at Closing, 5,000,000 preferred shares authorized and 45 shares of 12% preferred stock, par value $500, of which 45 shares will be issued and outstanding at Closing. All of the outstanding shares of Buyer's common stock have been duly authorized and validly issued, and are fully paid and non-assessable, and none of such shares is subject to any repurchase option or restriction on transfer. All of such shares have been issued in compliance with applicable securities laws. There are no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire or otherwise relating to, any shares of the capital stock or other securities of Buyer; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of Buyer; or (iii) contract under which Buyer is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities. Upon the occurrence of the events specified in 2(a), (b) and (c), respectively, the Seller shall own 60%, 75% and 85% of the issued an outstanding common stock of the Buyer on a fully diluted basis as of the date hereof. Upon the issuance of each installment of shares of common stock of the Buyerr, Seller will obtain good and marketable title to all such share of common stock free and clear of all claims, liens, and encumbrances of whatever nature

(c) Buyer has full power and authority to enter into and perform this Agreement. The execution and performance of this Agreement by Buyer will not (i) result in a material breach of or default under, any order, judgment, or decree or any agreement or other instrument to which Buyer may be bound or (ii) constitute a violation of any law or regulation. The execution and performance of this Agreement by Buyer have been duly authorized by all necessary corporate actions of Buyer and this Agreement constitutes the valid and binding obligation of Buyer enforceable against it in accordance with its terms.

(d)No consent, approval or authorization of, any governmental authority is required in connection with the execution, delivery, and performance of this Agreement.

6. Notice. Any notice to be provided hereunder shall be given by certified mail or overnight carrier to the respective parties at the addresses first set forth above.

7. Entire Agreement . This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, if any, with respect to the matters covered hereby.

8. Miscellaneous. This Agreement may not be changed, modified or amended except by writing signed by each party hereto. This Agreement shall be binding upon and inure to the benefit of the successors, affiliates and assigns of the parties. This Agreement shall be governed by the laws of the State of New York without regard to conflicts of laws. In the event of conflict, the parties consent to the jurisdiction and venue of the courts of the State of New York.

IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date first written above.

	SELLER:
	L. Y.Research Corporation

	By:	/s/ Yaguang Liu
		Dr. Yaguang Liu
	Title:	Chief Executive Officer

	BUYER:
	China YCT International Group, Inc .

	By:	/s/ Tinghe Yan
		Tinghe Yan
	Title:	Chief Executive Officer