CHINA VITUP HEALTH CARE HOLDINGS, INC.

In regards to the Company’s allowance for doubtful accounts, we keep one general reserve, the amount of which equals 1% of gross account receivables. We have no specific reserve, as we believe adequate provisions for doubtful accounts have been provided through our general reserve. When estimating the allowance for doubtful accounts, we take into consideration: 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. If the collection is no longer probable, the Company will write off the balance against the allowance for doubtful accounts.

In January 2011, the FASB issued an Accounting Standard Update (“ASU”) No. 2011-01, “Receivables Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, to be concurrent with the effective date of the guidance for determining what constitutes a troubled debt restructuring, as presented in proposed Accounting Standards Update, Receivables (Topic 310): Clarifications to Accounting for Troubled Debt Restructurings by Creditors. The amendments in this Update apply to all public-entity creditors that modify financing receivables within the scope of the disclosure requirements about troubled debt restructurings in Update 2010-20. Under the existing effective date in Update 2010-20, public- entity creditors would have provided disclosures about troubled debt restructurings for periods beginning on or after December 15, 2010. The amendments in this Update temporarily defer that effective date, enabling public-entity creditors to provide those disclosures after the Board clarifies the guidance for determining what constitutes a troubled debt restructuring. The deferral in this Update will result in more consistent disclosures about troubled debt restructurings. This amendment does not defer the effective date of the other disclosure requirements in Update 2010-20. In the proposed Update for determining what constitutes a troubled debt restructuring, the Board proposed that the clarifications would be effective for interim and annual periods ending after June 15, 2011. For the new disclosures about troubled debt

restructurings in Update 2010-20, those clarifications would be applied retrospectively to the beginning of the fiscal year in which the proposal is adopted. This new accounting is not expected to have a material impact on the Company’s consolidated financial position or results of the operations.

Net Cash Used in Investing Activities Net cash used in our investing activities was $207,290 for the nine months ended September 30, 2011, as compared to net cash used in investing activities of $220,861 for the nine months ended September 30, 2010, a decrease of $13,571, or 6%. This decrease was primarily due to the decrease in payment for deposit.

Net Cash Used in Financing Activities Net cash used in our financing activities was $450,943 for the nine months ended September 30, 2011, as compared to net cash used in our financing activities of $423,912 for the nine months ended December 31, 2010, an increase of $27,031, or 6%.. The increase was primarily due to the increase in payment to related parties.