China Biopharma 10QSB 2008 Q2 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

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

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

Commission file number: 000-50005

CHINA BIOPHARMA, INC.

(Exact name of small business issuer as specified in its charter)

Delaware		04-3703334
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

75 Shuguang Rd., Bldg. B, Hangzhou, China		310007
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: (609) 651-8588

Not Applicable

(Former name, former address and former

fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 650,450,900 shares of common stock, stated value $.0001 per share, outstanding as of August 13, 2008.

Transitional Small Business Disclosure Format (Check one): YES o NO x

CHINA BIOPHARMA, INC.

- INDEX -

		Page
PART I - FINANCIAL INFORMATION:

Item 1.	Financial Statements	1

	Consolidated Balance Sheet as of June 30, 2008 (unaudited)	1

	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2008 and 2007 (unaudited), and for the Period from September 13, 2000 (Date of Inception) to June 30, 2008 (unaudited)	2

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007 (unaudited), and for the Period from September 13, 2000 (Date of Inception) to June 30, 2008 (unaudited)	4

	Notes to Consolidated Financial Statements, June 30, 2008 and 2007	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	10

Item 3A(T) Controls and Procedures		20

PART II - OTHER INFORMATION:

Item 1.	Legal Proceedings	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Submission of Matters to a Vote of Security Holders	21

Item 5.	Other Information	21

Item 6.	Exhibits	21

Signatures		22

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

JUNE 30,

(UNAUDITED)

ASSETS

		2008			2007
CURRENT ASSETS
Cash and cash equivalents	$	391,111		$	1,317,556
Accounts receivable, net of bad debt reserve of $1,783 and $1,699		1,242,720			393,171
Inventory		11,211			344
Due from related parties		698,658			698,658
Other receivables		1,614,067			2,865,088
Deferred compensation cost		142,168			160,944
Other current assets		725,709			2,500

Total Current Assets		4,825,644			5,438,261

PROPERTY AND EQUIPMENT, NET		47,457			49,432

INTANGIBLES -GOODWILL		1,456,956			1,456,957

Total Assets	$	6,330,057		$	6,944,650

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,967,653		$	1,910,670
Loans payable		1,724,933			2,032,216
Other liabilities		1,411,663			1,322,418
Due to officers		705,088			631,488

Total Current Liabilities		5,809,337			5,896,792

COMITTMENTS AND CONTINGENCIES

MINORITY INTEREST		1,314,129			2,083,760

STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, stated value $.0001, 700,000,000
shares authorized; 451,204,945 shares issued and
outstanding		45,121			15,938
Additional paid-in capital		12,661,876			12,354,516
Deficit accumulated during the development stage		(14,187,013	)		(13,928,196	)
Accumulated other comprehensive income		686,607			521,840

Total Stockholders' Equity (Deficit)		(793,409	)		(1,035,902	)

Total Liabilities And Stockholders' Equity (Deficit)	$	6,330,057		$	6,944,650

The accompanying notes are an integral part of these consolidated financial statements.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Three Months Ended
	June 30,
	2008			2007

REVENUE	$	2,839,796		$	98,073

COST OF GOODS SOLD		2,726,941			86,434

GROSS PROFIT		112,855			11,639

OPERATING EXPENSES
Selling, general and administrative (including share-based
payment of $9,387 and $10,964, respectively)		131,099			210,301

Total Operating Expenses		131,099			210,301

LOSS FROM OPERATIONS		(18,244	)		(198,662	)

OTHER INCOME (EXPENSE)
Interest income (expense), net		(19,201	)		(53,560	)
Non operating income		10,648			12,822

Total Other Income (Expense)		(8,553	)		(40,738	)

LOSS BEFORE MINORITY INTEREST		(26,797	)		(239,400	)

MINORITY INTEREST		39,533			(27,915	)

NET LOSS		(66,330	)		(211,485	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of tax		(34,349	)		6,627

COMPREHENSIVE LOSS		($ 100,679	)		($ 204,858	)

LOSS PER COMMON SHARE, BASIC		($ 0.00	)		($ 0.00	)

LOSS PER COMMON SHARE, DILUTED		($ 0.00	)		($ 0.00	)

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC		194,668,792			92,880,094

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, DILUTED		194,668,792			92,880,094

The accompanying notes are an integral part of these consolidated financial statements.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Six Months Ended June 30,						For the Period From September 13, 2000 (Date of Inception) to June 30,
	2008			2007			2008

REVENUE	$	3,815,098		$	248,698		$	7,244,524

COST OF GOODS SOLD		3,669,918			229,448			6,124,652

GROSS PROFIT		145,180			19,250			1,119,872

OPERATING EXPENSES
Research and development		-			-			2,274,698
Selling, general and administrative (including stock-based
compensation of $18,776, $152,864 and $3,107,898
respectively)		328,740			1,126,014			11,732,538
Depreciation and amortization		12,378			21,872			434,755
Impairment of goodwill		-			-			304,094

Total Operating Expenses		341,118			1,147,886			14,746,085

LOSS FROM OPERATIONS		(195,938	)		(1,128,636	)		(13,626,213	)

OTHER INCOME (EXPENSE)
Loss from unconsolidated subsidiary		-			-			(60,134	)
Sale of net operating loss carryforwards		-			-			216,247
Gain on foreign currency		-			-			660
Interest income (expense), net		(47,700	)		(112,212	)		(218,679	)
Non operating income (expenses)		17,269			21,277			(248,019	)

Total Other Income (Expense)		(30,431	)		(90,935	)		(309,925	)

LOSS BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE		(226,369	)		(1,219,571	)		(13,936,138	)

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX		-			-			(324,167	)

LOSS BEFORE MINORITY INTEREST		(226,369	)		(1,219,571	)		(14,260,305	)

MINORITY INTEREST		32,449			(27,915	)		(73,291	)

NET LOSS		(258,818	)		(1,191,656	)		(14,187,014	)

OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		164,767			69,427			686,607

COMPREHENSIVE LOSS		($ 94,051	)		($1,122,229	)		($13,500,407	)

LOSS PER COMMON SHARE, BASIC		($ 0.00	)		($ 0.01	)

LOSS PER COMMON SHARE, DILUTED		($ 0.00	)		($ 0.01	)

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC		194,668,792			92,880,094

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, DILUTED		194,668,792			92,880,094

The accompanying notes are an integral part of these consolidated financial statements.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Six Months Ended June 30,						For the Period From September 13, 2000 (Date of Inception) to June 30,
	2008			2007			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		($ 258,818	)		($1,191,656	)		($14,187,014	)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization		12,378			21,872			580,755
Minority interest		(769,631	)		(27,915	)		(875,371	)
Impairment of goodwill		-			-			304,093
Cumulative effect of change in accounting principle		-			-			324,167
Loss on disposal of fixed assets		-			-			14,808
Loss on unconsolidated subsidiary		-			-			60,134
Provision for doubtful accounts		-			-			14,326
Loss on foreign currency translation		-			-			(3,526	)
Loss on disposal of subsidiaries, net of tax		-			-			48,142
Share based payment		29,260			267,312			184,086
Deferred compensation cost		18,776			(44,232	)		3,107,898
Bad debt expense		1,699			-			(25,556	)
Changes in assets and liabilities:
Accounts receivable		(851,248	)		363,343			(1,217,164	)
Inventory		(10,867	)		(401,397	)		(11,211	)
Due from related parties		-			110,496			(698,658	)
Other receivables		1,251,021			(989,805	)		(1,321,489	)
Advance payments		2,500			(58,331	)		2,129,530
Other current assets		(725,709	)		(66,538	)		(725,709	)
Other assets		-			(1,353	)		-
Accounts payable and accrued expenses		56,983			(690,047	)		1,967,653
Other liabilities		162,846			745,858			1,485,324
Total Adjustments		(821,992	)		(770,737	)		5,342,232

Net Cash Used By Operating Activities		(1,080,810	)		(1,962,393	)		(8,844,782	)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in unconsolidated subsidiary		-			-			(409,832	)
Purchase of property and equipment		(10,403	)		-			(288,879	)
Net Cash Used By Investing Activities		(10,403	)		-			(698,711	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from private placement of common stock		-			-			5,898,583
Repurchase of treasury stock		-			-			(432	)
Net proceeds from convertible debt		-			-			3,000,000
Net proceeds from exercise of stock options		-			4,985			5,000
Proceeds from officers’ advances		-			-			549,213
Net Cash Provided By Financing Activities		-			4,985			9,452,364

EFFECT OF FOREIGN CURRENCY CONVERSION
ON CASH		164,768			153,359			482,240

NET INCEASE (DECREASE) IN CASH		(926,445	)		(1,804,049	)		391,111

CASH AND CASH EQUIVALENTS - BEGINNING		1,317,556			2,307,799			-

CASH AND CASH EQUIVALENTS - ENDING	$	391,111		$	503,750		$	391,111

The accompanying notes are an integral part of these consolidated financial statements.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DESCRIPTION OF BUSINESS

China Biopharma, Inc. (“CBI” or “the Company”), a Delaware corporation, is a provider of pharmaceutical products with its focus mainly on the introduction and marketing of human vaccines and other pharmaceutical products. The Company distributes its products in China.

BASIS OF PRESENTATION

The Company’s Consolidated Financial Statements include the accounts of its direct wholly-owned subsidiaries and its indirect proportionate share of subsidiaries owned by the wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with GAAP applicable to interim financial information and with the requirements of Form 10-QSB and Item 310 of Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

NOTE 2 - INTERIM FINANCIAL STATEMENTS

These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2007, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements for the year ended December 31, 2007.

NOTE 3 - EARNINGS (LOSS) PER SHARE

The Company presents earnings (loss) per share on a basic and diluted basis. Basic earnings (loss) per share have been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings (loss) per share has been computed by dividing net earnings by the weighted average number of shares outstanding including the dilutive effect of equity securities. The weighted average number of shares calculated for Diluted EPS excludes the potential common stock that would be exercised under the options and warrants granted to officers, employees and consultants in April, 2007, because the inclusion of the potential shares from these options and warrants would cause an antidilutive effect by reducing the net loss per share.

	Three Months Ended June 30, 2008								Six Months Ended June 30, 2008
	Net Income (Loss)			Shares		Per Share			Net Income (Loss)			Shares		Per Share

Loss from operations		($18,244	)		194,668,792		($ -	)		($195,938	)		194,668,792		($ -	)
Basic EPS		($66,330	)		194,668,792		($ -	)		($258,818	)		194,668,792		($ -	)
Effect of dilutive securities		-			-		-			-			-		-
Diluted EPS		($66,330	)		194,668,792		($ -	)		($258,818	)		194,668,792		($ -	)

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 3 - EARNINGS (LOSS) PER SHARE (continued)

	Three Months Ended June 30, 2007								Six Months Ended June 30, 2007
	Net Income (Loss)			Shares		Per Share			Net Income (Loss)			Shares		Per Share

Loss from operations		($198,662	)		92,880,094		($ -	)		($1,128,636	)		92,880,094		($0.01	)
Basic EPS		($211,485	)		92,880,094		($ -	)		($1,191,656	)		92,880,094		($0.01	)
Effect of dilutive securities		-			-		-			-			-		-
Diluted EPS		($211,485	)		92,880,094		($ -	)		($1,191,656	)		92,880,094		($0.01	)

NOTE 4 - LOSSES DURING THE DEVELOPMENT STAGE AND MANAGEMENT PLANS

From inception through June 30, 2008, the Company had incurred development stage losses totaling $14,187,014 and net cash used in operating activities of $8,844,782. At June 30, 2008 the Company had $391,111 of cash and cash equivalents and $1,242,720 of net accounts receivable to fund short-term working capital requirements.

The Company’s ability to continue as a going concern and its future success is dependent upon its ability to raise capital in the near term to 1) satisfy its current obligations, 2) continue its business efforts, and 3) successfully deploy and market its products on a wide scale.

NOTE 5 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

					For the period from
					September 13, 2000
	June 30,				(date of inception) to June 30,
	2008		2007		2008

Interest paid	$	-	$	-	$	-
Income taxes paid	$	-	$	-	$	3,773

As indicated in Note 6, the Company issued common stock to satisfy its payment obligation in long-term debt.

NOTE 6 - STOCKHOLDERS' EQUITY

On January 24, 2006, the Company granted 2,701,000 options of which all are fully vested, to purchase shares of common stock at an excise price of $0.52 to officers, employees and consultants of the Company.

On April 7, 2006, the Company entered into a Share Exchange Agreement for the purpose of acquiring 100% of the outstanding capital stock of CBL, which has rights to invest in Tianyuan Bio-Pharmaceuticals Company, Ltd. and Zhejiang Tianyuan Biotech Co., Ltd. (“ZTBC”). The Company issued a total of 3,000,000 shares of restricted common stock in exchange for 100% of the outstanding capital of CBL.

In December 2006, the Company amended its Certificate of Incorporation to increase the number authorized shares of its common stock from 100,000,000 to 200,000,000.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 6 - STOCKHOLDERS' EQUITY (continued)

SECURED CONVERTIBLE PROMISSORY NOTES (continued)

Provided that an Event of Default has not occurred, the Company may, at its option, prepay the outstanding principal amount of the Notes, in whole or in part, at any time upon 30 days written notice to the holders by paying 120% of the principal amount to be repaid together with accrued interest plus any other sums due thereon to the date of redemption. The Notes are secured by a Security Agreement entered into by and among the Company, CQCL, CBL, and QCCN and Barbara R. Mittman, as collateral agent for the purchasers of the Notes. The obligations of the Company under the Subscription Agreement with respect to the Notes and the Notes are guaranteed by the CQCL, CBL and QCCN pursuant to a Guaranty, dated as of December 13, 2006, entered into by the CQCL, CBL and QCCN, for the benefit of the purchasers of the Notes.

In connection with the sale of the Notes, the Company also issued to the purchasers of the Notes, Class A Warrants to purchase up to an aggregate of 6,000,000 shares of common stock and Class B Warrants to purchase up to an aggregate of 6,000,000 shares of common stock (each a “Warrant” and collectively, the “Warrants”). One Class A Warrant and one Class B Warrant were issued for each two shares of common stock that would have been issuable on the closing date assuming the complete conversion of the Notes on such date. The Class A Warrants have an exercise price of $0.30 per share and the Class B Warrants have an exercise price of $0.40.

Melton Management Ltd. acted as the finder with respect to the issuance and sale of the Notes and received a warrant to purchase 2,400,000 shares of our common stock at an exercise price of $0.30 per share.

In January 2007, one employee of the Company exercised stock options to purchase 25,000 shares of the common stock of the Company at exercise price of $0.20 per share. The Company received total net proceeds of $4,985.

On April 12, 2007, the Company granted 3,199,405 options to purchase shares of common stock at an excise price of $0.14 to officers, employees and consultants of the Company. Such options have a ten-year life and are vested within 5 years.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 6 - STOCKHOLDERS' EQUITY (continued)

SECURED CONVERTIBLE PROMISSORY NOTES (continued)

In 2007, the Company issued an aggregate of 25,041,747 shares of common stock to the holders of the Secured Convertible Promissory Notes in payment of principal and accrued interest on the Notes of $1,122,609.26 at an average conversion price of $0.045 per share, which was equal to 75% of the average of the closing bid prices for the common stock for the five trading days prior to the date of conversion.

In 2007, the Company issued an aggregate of 48,791,027 shares of common stock to two investors pursuant to Section 12(c), “Favored Nations Provision,” of the Securities Purchase Agreement dated April 29, 2005, as amended, between the investors and the Company. According to this Favored Nations Provision, if at any time shares are held by such investors until three years after the Actual Effective Date, the Company shall offer, issue or agree to issue any Common Stock or securities convertible into or exercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share of Common Stock or exercise price per share of Common Stock which shall be less than the per share Purchase Price of the Shares, or less than the exercise price per Warrant Share, respectively, without the consent of each of such investors holding Shares, Warrants, or Warrant Shares, then the Company shall issue, for each such occasion, additional shares of Common Stock to each of such investors so that the average per share purchase price of the shares of Common Stock issued to the investors (of only the Shares or Warrant Shares still owned by the investors) is equal to such other lower price per share and the Warrant Exercise Price shall automatically be reduced to such other lower price per share.

This “Favored Nations Provision” was triggered by the issuance of stock in payment of the principal and interest on the Notes.

In the first half of 2008, the Company issued an aggregate of 291,866,036 shares of common stock to the holders of the Secured Convertible Promissory Notes as a result of the conversion of the principal and interest of the Notes with an approximate fair market value of $336,500 at the average conversion price of $0.0012 per share.

In June 2008, the Company amended its Certificate of Incorporation to increase the number authorized shares of its common stock from 200,000,000 to 700,000,000.

NOTE 7 - RELATED PARTY TRANSACTIONS

The Company records material related party transactions. Those charges, if any, are included in general and administrative expenses.

The Company occasionally engages in advances to and advances from related parties. The advances have no stated terms of repayment and carry no interest.

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 7 - RELATED PARTY TRANSACTIONS (continued)

Following is a summary of transactions and balances with affiliated entities and related parties for 2008 and 2007:

					For the period from
					September 13, 2000
	June 30,				(date of inception) to June 30,
	2008		2007		2008

Revenues from related parties	$	-	$	-	$	93,546

Purchases and expenses to
related parties	$	-			$	$ 214,541

Due from related parties	$	698,658	$	41,038	$	698,658

Due to officers	$	705,088	$	956,717	$	705,088

Amounts due to officers consist of advances from the Company's CEO to fund the Company's operations. It also includes compensation deferred by the Company's CEO, former CFO and other management. No written repayment agreements exist with either officer. Amounts are unsecured, non-interest bearing and due upon demand.

NOTE 8- SUBSEQUENT EVENTS

In July 2008, the Company issued an aggregate of 199,195,955 shares of common stock to the holders of the Secured Convertible Promissory Notes as conversion of the principal and interest of the Notes worth approximately $160,600 at the average conversion price of $0.0008 per share.

The Company has approved plans to amend its Certificate of Incorporation to effect a 1 for 100 reverse stock split of the Company’s Common Stock, $.0001 par value per share. An Information Statement (Schedule 14C) and an amendment thereto were filed with SEC in July 2008, in connection with the unanimous approval by written consent on July 3, 2008 of the Company’s Board of Directors of the corporate action and the subsequent adoption of such corporate action by written consent on July 3, 2008 of holders entitled to vote 233,217,324 of the aggregate shares of common stock par value $0.0001 per share (the “Common Stock”) of the Company, representing 51.7% of the aggregate shares of Common Stock of the Company entitled to vote. The approval and consent constituted at least a majority of the total number of shares of outstanding Common Stock and are sufficient under the Delaware General Corporation Law to approve the action. The Information Statement has been mailed or furnished to the stockholders of record of the Company on July 3, 2008, (the “Record Date”), and the transaction described herein shall not become effective until at least 20 days thereafter.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations or Plan of Operations.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

You should read the following discussion together with the more detailed business information and consolidated financial statements and related notes that appear elsewhere in this report and in the documents that we incorporate by reference into this report. This report may contain certain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by our use of words such as “may,” “will,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative or other variations of these words, or other comparable words or phrases. This information involves risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in Part I, Item 1 of our annual report on Form 10-KSB under the caption “Risk Factors,” which annual report was filed on March 25, 2008.

Unless the context requires otherwise, references to "we," "us," "our," "China Biopharma" and the "Company" refer to China Biopharma, Inc. and its consolidated subsidiaries.

CRITICAL ACCOUNTING POLICIES

See “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements December 31, 2007 in our annual report on Form 10-KSB filed on March 25, 2008 for our critical accounting policies. These policies include revenue recognition, determining our allowance for doubtful accounts receivable, accounting for cost of revenue, valuation of long-lived assets and research and development costs.

BUSINESS OVERVIEW

The Company is a distributor of human vaccines and other pharmaceutical products. Currently, the Company distributes the products in China. The Company has established its distribution network in China through the acquisition of its interest in its subsidiary, Hainan CITIC Bio-pharmaceutical Development Co., Ltd. (“HCBD”) and, through its joint venture with Zhejiang Tianyuan Bio-pharmaceutical Co., Ltd. (“Zhejiang Tianyuan”)

The emphasis of the Company is on the introduction and the marketing and distribution of products rather than on manufacturing. Substantially all of the operations are in China.

Over the past year the vaccine business has become more competitive. In order to improve our operating performance and cope with the changing environment, the Company has changed its business strategy and formulated a new business plan to conserve cash, lower expenses and increase profitability. Beginning in 2007 it started to distribute a few specialty drug products, such as Serrapeptase. The Company plans to take more control on the available cash in the subsidiaries and move into areas with higher market potential and higher margin specialty pharmaceutical products. Since then the operation results have significantly improved in increased sales and operating profit.

Move Away from the Low Margin Vaccine Business

The Company has planned to move away from the low margin vaccine business and focus on higher margin vaccine and specialty drugs. Due to the recent changes in vaccine sectors, more and more vaccine manufacturers have entered the low margin vaccine business such as distribution of flu vaccine, which has created severe competition among, and squeezed the profit margin of the vaccine distributors. To avoid this direct competition, the Company had started to negotiate with a few global vaccine manufacturers for carrying their higher margin products. The Company cannot assure you that it be successful in entering into an agreement.

Commence Distribution of Specialty Pharmaceutical Products

In February the Company began distributing on a trial basis certain specialty pharmaceutical products of Takeda Pharmaceutical Company, Ltd. (“Takeda”), the largest pharmaceutical company in Japan. Takeda specializes in the research and development of breakthrough drugs, and has marketing operations throughout U.S., Europe, and Asia. In Japan, Takeda has also built a strong presence in the over-the-counter (OTC) drugs market, and holds the second largest share of that domestic market.

Antiviral Products

In October 2007 the Company began working with Soonfast Pharmaceutical Science & Technology Co., Ltd. (“Soonfast”) to introduce a new antiviral medicine to the overseas market (including the United States and other overseas markets). This all-natural product has been approved in China for external use to treat human papillomavirus (“HPV”) and herpes simplex virus (“HSV”). The commercial product was released in November 2007, and the Company has started distributing this product in certain regions in China and has the right to distribute it in all overseas markets, including the United States.

Take Closer Control on Subsidiaries

The Company is working to take direct control of our subsidiaries’ operations and financial management instead of relying on its joint venture partner’s performance. The Company reached agreement with its joint venture partner to increase shareholding in the joint venture in China, Zhejiang Tianyuan Biotech Co., Ltd., and eventually to have 100% control and ownership in this joint venture. The Company plans to change its name to Zhejiang Kangchen Pharmaceutical Co., Ltd. The Company does not need to raise additional capital to complete this transaction. It is expected that this will help to preserve the available cash, increase operating stability, provide the Company with more operation flexibility, and improve its current performance. The Company has filed all necessary documents with local government and is waiting for the final approval.

Registered Capital Reduction in HCBD

On June 23, 2008, the Company finished the process to reduce the total registered capital of HCBD from Renminbi Yuan (Chinese currency) 30 million to 6 million. Through this registered capital reduction, the Company shall repatriate some fund from HCBD back to its proposed 100% controlled Zhejiang Kangchen Pharmaceutical Co., Ltd. This reduction will improve the Company’s capital structure and make available fund for future acquisitions.

Improve Current Operation Results

After almost a year of endeavoring to establish its footing into China, the Company has adjusted to this complicated market environment and business landscape. In an effort to improve its current operating results, the Company has begun taking the steps outlined above with a view to strengthen its control over the operating subsidiaries, preserve cash, apply available resources to, and refocus on, higher margin, less competitive products with greater market potential. The Company cannot assure you that it will be successful with any of these objectives.

Description of Company

In July 2002, the Company was incorporated in Delaware as Techedge, Inc. to serve as the successor to the business and assets of BSD Development Partners, LTD. (“BSD”). BSD was formed in 1997 as a Delaware limited partnership for the purpose of investing in the intellectual property of emerging and established companies. In September 2002, BSD merged with Techedge. From September 2002 until June 2004, Techedge endeavored to continue the business of BSD and sought to enhance the liquidity of the securities owned by its investors by becoming subject to the reporting requirements of the Securities Exchange Act of 1934 and by seeking to have its common stock quoted on the OTC Bulletin Board, or “OTCBB”.

On June 9, 2004, Techedge acquired all of the issued and outstanding stock of China Quantum Communication Limited, or CQCL, pursuant to a share exchange agreement, by and among Techedge, certain of its stockholders, CQCL and its stockholders (the “Share Exchange”). In connection with the Share Exchange, Techedge’s then existing directors and officers resigned as directors and officers of Techedge and were replaced by directors and officers designated by CQCL.

After the Share Exchange, Techedge refocused its business efforts on developing and providing its IP-based personal communication service, a regional mobile voice over IP (“VoIP”) service delivered on unlicensed low-power PCS frequencies through IP-enabled local transceiver and IP-centric soft-switched networks, operating on an advanced proprietary software centric multi-service global communication service platform and management system. Techedge also continued operating CQCL’s communications service business through CQCL and CQCL’s wholly-owned subsidiaries, China Quantum Communications Inc., a Delaware corporation, and Guang Tong Wang Luo Ke Ji (China) Co. Ltd. (also known as Quantum Communications (China) Co., Ltd.), a Chinese company.

On January 26, 2006, the Company announced its plans to re-position its business for bio-pharmaceutical and other high growth opportunities in China, while continuing its commercialization of its high potential mobile VoIP services.

On February 27, 2006, in conjunction with the Company’s re-positioning plans, the Company entered into an agreement to transfer ownership of its Chinese subsidiary Zheijang Guang Tong Wang Luo Co., Ltd to third parties. On January 1, 2006, the Company also entered into an agreement to transfer ownership of its U.S. subsidiary China Quantum Communications, Inc. to a former employee.

On April 7, 2006, the Company entered into a Share Exchange Agreement for the purpose of acquiring 100% of the outstanding capital stock of China BioPharma Limited (“CBL”), a Cayman Islands company, which has rights to invest in Tianyuan Bio-Pharmaceuticals Company, Ltd. and Zhejiang Tianyuan Biotech Co., Ltd. (“ZTBC”). (CBL has signed an investment agreement with Tianyuan Bio-pharmaceuticals Co., Ltd. to invest into the joint venture partner and the joint venture.) In exchange for 100% of the outstanding capital of CBL, the Company issued a total of 3,000,000 shares of restricted common stock to CBL’s stockholders.

On July 14, 2006, Techedge and China Biopharma, Inc. (“CBI”), a Delaware corporation and a wholly-owned subsidiary of Techedge, executed and delivered a Plan and Agreement of Merger whereby the parties agreed to merge CBI with and into Techedge, with Techedge being the surviving corporation. By virtue of, and effective upon the consummation of the merger, the Certificate of Incorporation of the Company was amended to change its name from “Techedge, Inc.” to “China Biopharma, Inc.”. The merger became effective on August 10, 2006.

In April 2006, ZTBC acquired 20% of the outstanding stock of HCBD from three individuals in consideration for a payment of $600,000; In August 2006, ZTBC acquired an additional 40% of the outstanding stock of HCBD from CITIC Pharmaceutical and China Biological Engineering Corporation in consideration for a payment of $1,200,000. In December 2006, ZTBC acquired another 10% of the outstanding stock of HCBD from one individual in consideration for a payment of $300,000.

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto:

RESULTS OF OPERATIONS

For the Three Months Ended June 30, 2008 and 2007

Revenue

Revenue increased by $2,741,723 to $2,839,796 for the three months ended June 30, 2008 compared to $98,073 for the three months ended June 30, 2007. All of the Company’s revenue during the three months ended June 30, 2007 was generated from the vaccine distribution business solely as a result of consolidation of the financials of HCBD for the period. Vaccine is a seasonal product that is used mainly during late the fall and early winter seasons. Over the past year the vaccine business has become more competitive in China. Later in 2007 we changed our business strategy, with a plan to move away from the vaccine business and focus on specialty drugs. All of the Company’s revenue during the three months ended June 30, 2008 was generated from other pharmaceutical products distribution business solely as a result of consolidation of the financials of HCBD for the period. Due to recent strategic and operation structure changes, the Company predicts that it would generate much higher sales revenue this year compared with 2007.

Cost of Sales and Gross Margin

Cost of sales increased by $2,640,507 to $2,726,941 for the three months ended June 30, 2008 compared to $86,434 for three months ended June 30, 2007. For the three months ended June 30, 2008, cost of sales was comprised of the purchasing of pharmaceutical products. The decrease in gross margin was due to higher purchasing costs and transportation costs in the second quarter of 2008 compared with same period last year.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses consisted primarily of labor cost and related overhead costs for sales, marketing, legal, human resources and general management. Such costs also include the expenses recognized for stock-based compensation pursuant to FAS 123(R).

SG&A expenses decreased by $79,202 to $131,099 in the three months ended June 30, 2008 from $210,301 in the three months ended June 30, 2007. The relatively high SG&A expenses in the three months ended June 30, 2007 was mainly attributed to some costs incurred during that period related to professional services including legal and other advisory services, as well as amortization of $10,964 for stock-based compensation expenses in that period compared with $9,388 recognized for this quarter.

Interest Expense

Interest expense net of interest income, was $20,000 for the three months ended June 30, 2008, compared with $54,448 for the three months ended June 30, 2007. Interest expense primarily comprised of accrued interest for the $3,000,000 Secured Convertible Promissory Notes. Interest payments were made in form of common stock of the company. Decrease in interest expense during the two contrasting periods was due to repayment of principal over the prior periods.

Income Taxes

The Company has been incurring operating losses over the years and therefore is only required to accrue and pay minimum taxes according to local tax regulations. No income tax provision has been recorded for the three months ended June 30, 2008 or 2007 as a result of the accumulated operating losses incurred.

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Comprehensive Loss

Comprehensive loss decreased by $104,179 to $100,679 for the three months ended June 30, 2008 compared to comprehensive loss of $204,858 for the three months ended June 30, 2007. The decrease in loss was primarily due to increase in sales and gross profit and decrease in SG&A for the period.

For the Six Months Ended June 30, 2008 and 2007

Revenue

Revenue increased by $3,566,400 to $3,815,098 for the six months ended June 30, 2008 compared to $248,698 for the six months ended June 30, 2007. All of the Company’s revenue during the six months ended June 30, 2007 was generated from the vaccine distribution business solely as a result of consolidation of the financials of HCBD for the period. Vaccine is a seasonal product that is used mainly during late the fall and early winter seasons. Over the past year the vaccine business has become more competitive in China. Later in 2007 we changed our business strategy, with a plan to move away from the vaccine business and focus on specialty drugs. All of the Company’s revenue during the three months ended June 30, 2008 was generated from other pharmaceutical products distribution business solely as a result of consolidation of the financials of HCBD for the period. Due to recent strategic and operation structure changes, the Company predicts that it would generate much higher sales revenue this year compared with 2007.

Cost of Sales and Gross Margin

Cost of sales increased by $3,440,470 to $3,669,918 for the six months ended June 30, 2008 compared to $229,448 for six months ended June 30, 2007. For the six months ended June 30, 2008, cost of sales was comprised of the purchasing of pharmaceutical products. The decrease in gross margin was due to higher purchasing costs and transportation costs in the first half of 2008 compared with same period last year.

Selling, General and Administrative Expenses

SG&A expenses decreased by $797,274 to $328,740 in the six months ended June 30, 2008 from $1,126,014 in the six months ended June 30, 2007. The relatively high SG&A expenses in the six months ended June 30, 2007 was mainly attributed to some costs incurred during that period related to professional services including legal and other advisory services, as well as amortization of $152,864 for stock-based compensation expenses in that period compared with $18,776 recognized for this quarter.

Interest Expense

Interest expense net of interest income, was $48,571 for the six months ended June 30, 2008, compared with $114,448 for the six months ended June 30, 2007. Interest expense primarily comprised of accrued interest for the $3,000,000 Secured Convertible Promissory Notes. Interest payments were made in form of common stock of the company. Decrease in interest expense during the two contrasting periods was due to repayment of principal over the prior periods.

Income Taxes

The Company has been incurring operating losses over the years and therefore is only required to accrue and pay minimum taxes according to local tax regulations. No income tax provision has been recorded for the six months ended June 30, 2008 or 2007 as a result of the accumulated operating losses incurred.

Comprehensive Loss

Comprehensive loss decreased by $1,028,178 to $94,051 for the six months ended June 30, 2008 compared to comprehensive loss of $1,122,229 for the six months ended June 30, 2007. The decrease in loss was primarily due to increase in sales and gross profit and decrease in SG&A for the period, and partially contributed by other comprehensive income for amount of $164,767 for the period, resulting from foreign currency translation adjustment.

LIQUIDITY AND CAPITAL RESOURCES

Working capital

As of June 30, 2008, the Company had combined cash and cash equivalents of $391,111 and working capital deficit of $983,693, as compared to cash and cash equivalents of $1,317,556 and working capital deficit of $458,531 as of December 31, 2007. Current assets of approximately $4.8 million as at June 30, 2008 also mainly included accounts receivable and other receivables totaling approximately $2.8 million. Current liabilities of approximately $5.8 million as at June 30, 2008 mainly included approximately $1.97 million of accounts payable and accrued expenses, approximately $1.7 million outstanding principal of the two-year Secured Convertible Promissory Notes due in November 2008, and approximately $2.1 million other current liabilities.

For the six months ended June 30, 2008, the Company used approximately $1,080,810 of cash for operations as compared to approximately $1,962,393 for the same period in 2007. The decrease in use of cash in operating activities was mainly attributive to the Company’s decreased loss during the six months ended June 30, 2008 as compared the same period in 2007, due to the factors discussed above, and decrease in accounts receivable between the two periods.

There was no cash flow incurred in investing activities other than $10,403 outflow for the six months ended June 30, 2008 due to purchase of fixed assets. Payment for principal and interest of the Secured Convertible Promissory Notes was made in form of common stock and thus there was no cash flow for financing activities for the period.

The management of the Company acknowledges that its existing cash and cash equivalents may not be sufficient to fund its operations over the next 12 months. Therefore, the ability of the Company to continue as a going concern will be dependent on whether the Company can generate sufficient revenue or obtain funding from alternative sources.

Capital Stock Transactions

In February 2005, the Company completed a private placement of 260,000 shares of common stock at a price of $1.00 per share, or gross proceeds of $260,000.

During the quarter ended March 31, 2005, the Company granted 402,000 fully vested, non-forfeitable warrants to purchase shares of common stock to two consultants for services in addition to cash payments. Those warrants expired without being exercised. Also during the quarter ended March 31, 2005, the Company granted 100,000 fully vested, non-forfeitable shares of common stock to a consultant for services.

In April 2005, the Company completed a private placement of 95,000 shares of common stock at a purchase price of $1.00 per share, or gross proceeds of $95,000, and, for no additional consideration, a cashless 2-year warrant to purchase an additional 95,000 shares at an exercise price of $1.50 per share. Those warrants have expired without being exercised.

In May 2005, the Company completed a private placement of 500,000 shares of common stock at a purchase price of $0.50 per share, or gross proceeds of $250,000, and for no additional consideration, a cashless 5-year warrant to purchase an additional 147,059 shares at an exercise price of $0.75 per share. A value of $71,470 of the proceeds has been allocated to the warrant.

Also in May 2005, the Company completed a private placement of 500,000 shares of common stock at a purchase price of $0.50 per share, or gross proceeds of $250,000, and for no additional consideration, a cashless 5-year warrant to purchase an additional 147,059 shares at an exercise price of $0.75 per share. A value of $68,240 of the proceeds has been allocated to the warrant.

In July 2005, the Company completed a private placement of 1,000,000 of common stock at a purchase price of $0.50 per share, or gross proceeds of $500,000 and, for no additional consideration, a cashless 5-year warrant to purchase an additional 400,000 shares at an exercise price of $0.75 per share. A value of $168,000 of the proceeds has been allocated to the warrant.

Also in July 2005, the Company entered into a service agreement pursuant to which the Company agreed to issue warrants to purchase up to an aggregate of 200,000 shares (the “Service Warrant Shares”) of the common stock in exchange for investor relations services. The Company had the right to terminate the service agreement at any time on or after October 5, 2005, upon 30 days prior written notice. The Service Warrant Shares were scheduled to vest in accordance with the following schedule and are purchasable at the following exercise prices:

·	50,000 Service Warrant Shares were immediately vested and may be purchased at an exercise price of $0.90 per share;

·	50,000 Service Warrant Shares were scheduled to vest on the 91st day following the date of the service agreement and were purchasable at an exercise price of $1.10 per share;

·	50,000 Service Warrant Shares were scheduled to vest on the 181st day following the date of the service agreement and were purchasable at an exercise price of $1.30 per share;

·	50,000 Service Warrant Shares were scheduled to vest on the 271st day following the date of the service agreement and were purchasable at an exercise price of $1.50 per share.

The warrants shall terminate on the 24-month anniversary of the effective date of a registration statement filed by the Company to register the resale of the Service Warrant Shares; provided, however, in the event that the Company elects to terminate the service agreement early as described above, the warrants will immediately terminate as to any Service Warrant Shares that are not then vested. By October 5, 2005, the Company terminated the service agreement, resulting in only 50,000 Service Warrant Shares vested with an exercise price of $0.90 per share. Those warrants have expired without being exercised.

On January 24, 2006, the Company granted 2,701,000 options, of which all are fully vested, to purchase shares of common stock at an exercise price of $0.52, to officers, employees and consultants of the Company.

On January 26, 2006, the Company announced its plans to re-position itself for bio-pharmaceutical and other high growth opportunities in China, while continuing its commercialization of its high potential mobile VoIP solutions.

In conjunction with the Company’s re-positioning plans, on February 27, 2006 the Company entered into an agreement to transfer ownership of its Chinese subsidiary Zhejiang Guang Tong Wang Luo Co., Ltd (ZJQC) to third parties. On January 1, 2006, the Company also entered into an agreement to transfer ownership of its U.S. subsidiary China Quantum Communications, Inc. to a former employee.

In December 2006, the Company amended its Certificate of Incorporation to increase the number authorized shares of its common stock from 100,000,000 to 200,000,000.

On December 13, 2006, the Company entered into a Subscription Agreement with respect to the issuance and sale of $3,000,000 aggregate principal amount of its Secured Convertible Promissory Notes due December 13, 2008. The Notes are convertible at the option of the holders at any time into shares of the Company’s common stock. Prior to the occurrence of an Event of Default (as defined in the Notes), the Notes are convertible at a per share conversion price equal to $0.25 per share. Following the occurrence of an Event of Default (as defined in the Notes), the Notes are convertible at the lesser of $0.25 per share and 75% of the average of the closing bid prices for the common stock for the five trading days prior to the date of conversion. The Notes bear interest at a rate of eight percent (8%) per annum. After an event of default the Notes bear interest at 15 % per annum. The Company’s obligation to make monthly payments, consisting of principal of and accrued interest on the Notes commenced on March 13, 2007. Prior to an event of default, the Company may, at its option pay the monthly payments in the form of either cash or shares of common stock. In the event that the Company elects to pay the monthly amount in cash, the Company shall be obligated to pay 115% of the principal amount component of the monthly amount and 100% of all other components of the monthly amount. In the event that the Company elects to pay the monthly amount in shares of common stock, the stock shall be valued at an applicable conversion rate equal to the lesser of $0.25 per share or seventy five percent (75%) of the average of the closing bid price of the common stock for the five trading days preceding the applicable repayment date. Provided that an Event of Default has not occurred, the Company may, at its option, prepay the outstanding principal amount of the Notes, in whole or in part, at any time upon 30 days written notice to the holders by paying 120% of the principal amount to be repaid, together with accrued interest thereon plus any other sums due to the date of redemption. The Notes are secured by a Security Agreement entered into by and among the Company, CQCL, CBL, and QCCN and Barbara R. Mittman, as collateral agent for the purchasers of the Notes. The obligations of the Company under the Subscription Agreement with respect to the Notes and the Notes are guaranteed by the CQCL, CBL and QCCN pursuant to a Guaranty, dated as of December 13, 2006, entered into by the CQCL, CBL and QCCN, for the benefit of the purchasers of the Notes.

In connection with the sale of the Notes, the Company also issued to the purchasers of the Notes, Class A Warrants to purchase up to an aggregate of 6,000,000 shares of common stock and Class B Warrants to purchase up to an aggregate of 6,000,000 shares of common stock. One Class A Warrant and one Class B Warrant were issued for each two shares of common stock that would have been issuable on the closing date assuming the complete conversion of the Notes on such date. The Class A Warrants have an exercise price of $0.30 per share and the Class B Warrants have an exercise price of $0.40.

This “Favored Nations Provision” was triggered by the issuance of stock in payment of the principal and interest on the Notes.

In June 2008, the Company amended its Certificate of Incorporation to increase the number authorized shares of its common stock from 200,000,000 to 700,000,000.

The Company has approved plans to amend its Certificate of Incorporation to effect a 1 for 100 reverse stock split of the Company’s Common Stock, $.0001 par value per share. An Information Statement (Schedule 14C) and an amendment thereto were filed with SEC in July 2008, in connection with the unanimous approval by written consent on July 3, 2008 of the Company’s Board of Directors of the corporate action and the subsequent adoption of such corporate action by written consent on July 3, 2008 of holders entitled to vote 233,217,324 of the aggregate shares of common stock par value $0.0001 per share (the “Common Stock”) of the Company, representing 51.7% of the aggregate shares of Common Stock of the Company entitled to vote. The approval and consent constituted at least a majority of the total number of shares of outstanding Common Stock and are sufficient under the Delaware General Corporation Law to approve the action. The Information Statement has been mailed or furnished to the stockholders of record of the Company on July 3, 2008, (the “Record Date”) , and the transaction described herein shall not become effective until at least 20 days thereafter.

Need for current financing

Our ability to continue as a going concern is dependent upon our ability to raise capital in the near term to: (1) satisfy our current obligations, and (2) continue our planned re-positioning for bio-pharmaceutical opportunities in China. We do not have sufficient capital to fund our operations at the current level unless we receive additional capital either through external independent or related party funding, revenues from sales, further expense reductions or some combination thereof.

SUBSEQUENT EVENTS

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

Item 3A(T). Controls and Procedures.

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. There was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

The Company has scheduled to hold its annual meeting of stockholders in Princeton, New Jersey on August 15, 2008. At the meeting, the following action will be voted upon:

- Election of Peter Wang, Ya Li, and Charles Xue as directors of the Company's board of directors to serve until the Company's 2009 annual meeting of stockholders or until their successors are duly elected and qualified.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit		Description
31.1		Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2008.

31.2		Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2008.

32.1		Certification of the Company’s Principal Executive Officer and Principal Financial Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: August 13, 2008	CHINA BIOPHARMA, INC.

	By:	/s/ Peter Wang
		Name: Peter Wang Title: Chairman, Chief Executive Officer


	By:	/s/ Chunhui Shu
		Name: Chunhui Shu Title: Chief Financial Officer

China Biopharma (CBPC) Inactive 10QSB2008 Q2 Quarterly report (small business)