UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q


(Mark
One)





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the quarterly period ended June 30, 2009





o
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT





For the
transition period from ____________ to __________




Commission
file number:000-32253




HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY, INC.


(Exact
name of registrant as specified in its charter)





Nevada
            87-0650264(State
      or Other Jurisdiction of
            (I.R.S.
      Employer ofIncorporation
      or Organization)
            Identification
      No.)




16B/F
Ruixin Bldg., No. 25 Gaoxin Road


Xi’an
710075 Shaanxi Province, China


(Address
of Principal Executive Offices Including Zip Code)




86-29-8822
4682


(Registrant
's telephone number, including area code)





N/A


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has 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





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes o No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer  o
            Accelerated
      filer  oNon-accelerated
      filer  o
            Smaller
      reporting company  x


(Do not
check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  o No  x





Number of
shares of Common Stock outstanding as of June 30, 2009, was 18,466,169 shares of
common stock, par value $0.018.








HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY, INC.





INDEX




PART I.
              
              FINANCIAL
      INFORMATION
              
              2Item
      1.
              
              Financial
      Statements
              
              2Condensed
      Consolidated Balance Sheets as of June 30, 2009 (unaudited) and December
      31, 2008 (audited)
              
              2Unaudited
      Condensed Consolidated Statements of Operations and Other Comprehensive
      Income for the Three and Six Months Ended June 30, 2009 and
      2008
              
              3Unaudited
      Condensed Consolidated Statements of Cash Flows for the Six Months Ended
      June 30, 2009 and 2008
              
              4Notes
      to Unaudited Condensed Consolidated Financial Statements as of June 30,
      2009
              
              5Item
      2.
              
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
              
              12Item
      3.
              
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              15Item
      4T.
              
              Controls
      and Procedures
              
              15PART
      II.
              
              OTHER
      INFORMATION
              
              16Item
      1.
              
              Legal
      Proceedings
              
              16Item
      1A.
              
              Risk
      Factors
              
              16Item
      2.
              
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              16Item
      3.
              
              Defaults
      Upon Senior Securities
              
              16Item
      4.
              
              Submission
      of Matters to a Vote of Security Holders
              
              16Item
      5.
              
              Other
      Information
              
              16Item
      6.
              
              Exhibits
      and Reports on Form 8-K
              
              16SIGNATURES
              
              17










SPECIAL
NOTE REGARDING FORWARD—LOOKING STATEMENTS




On one or
more occasions, we may make forward-looking statements in this Quarterly Report
on Form 10-Q regarding our assumptions, projections, expectations, targets,
intentions or beliefs about future events. Words or phrases such as
“anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,”
“will continue” or similar expressions identify forward-looking statements.
Readers are cautioned that these forward-looking statements are only predictions
and are subject to risks, uncertainties, and assumptions that are difficult to
predict, including those identified below, under “Part II—Other Information, Item 1A. Risk
Factors ” and elsewhere herein. Therefore, actual results may differ
materially and adversely from those expressed in any forward-looking statements.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
However, your attention is directed to any further disclosures made on related
subjects in our subsequent annual and periodic reports filed with the Securities
and Exchange Commission on Forms 10-K, 10-Q and 8-K and Proxy Statements on
Schedule 14A.




Unless
the context requires otherwise, references to “we,” “us,” “our,” the “Company”
and “the Company” refer specifically to Huifeng Bio-Pharmaceutical Technology,
Inc. and our subsidiaries.





1





PART
I. FINANCIAL INFORMATION


Item
1. Financial Statements




HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY, INC


AND
SUBSIDIARIES (“HFGB”)


CONDENSED
CONSOLIDATED BALANCE SHEETS





June 30, 2009
                                                              (Unaudited)
                                                            
                                                            
                                                            December 31,
                                                              2008 (Audited)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                                            
                                                            $
                                                            85,105
                                                            
                                                            
                                                            $
                                                            44,898Accounts
      receivable, net
                                                            
                                                            
                                                            2,824,882
                                                            
                                                            
                                                            
                                                            2,877,868Inventories,
      net
                                                            
                                                            
                                                            5,667,856
                                                            
                                                            
                                                            
                                                            4,740,230Other
      assets
                                                            
                                                            
                                                            564,764
                                                            
                                                            
                                                            
                                                            328,996Assets
      related to discontinued operations, held for sale
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            114,577Total
      Current Assets
                                                            
                                                            
                                                            9,142,607
                                                            
                                                            
                                                            
                                                            8,106,569PROPERTY
      AND EQUIPMENT, NET
                                                            
                                                            
                                                            5,693,441
                                                            
                                                            
                                                            
                                                            5,833,557LAND
      USE RIGHTS, NET
                                                            
                                                            
                                                            147,106
                                                            
                                                            
                                                            
                                                            148,564TOTAL
      ASSETS
                                                            
                                                            $
                                                            14,983,154
                                                            
                                                            
                                                            $
                                                            14,088,690LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
                                                            
                                                            $
                                                            448,500
                                                            
                                                            
                                                            $
                                                            520,280Other
      payables and accrued expenses
                                                            
                                                            
                                                            598,624
                                                            
                                                            
                                                            
                                                            390,598Income
      tax and other taxes payable
                                                            
                                                            
                                                            407,617
                                                            
                                                            
                                                            
                                                            538,483Notes
      payable
                                                            
                                                            
                                                            574,157
                                                            
                                                            
                                                            
                                                            281,579Convertible
      notes payable (net of unamortized discount of $161,546 and due on
      December 31, 2009)
                                                            
                                                            
                                                            1,838,454
                                                            
                                                            
                                                            
                                                            1,676,907Liabilities
      related to discontinued operations, held for sale
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            17,128Total
      Current Liabilities
                                                            
                                                            
                                                            3,867,352
                                                            
                                                            
                                                            
                                                            3,424,975COMMITMENTS
      AND CONTINGENCIES
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -EQUITYHFGB
      Stockholders’ EquityPreferred
      stock ($0.001 par value, 5,000,000 shares authorized, none issued and
      outstanding)
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            -Common
      stock ($0.018 par value, 100,000,000 shares authorized, 18,466,169 shares
      issued and outstanding as of June 30, 2009 and December 31,
      2008)
                                                            
                                                            
                                                            332,388
                                                            
                                                            
                                                            
                                                            332,388Additional
      paid-in capital
                                                            
                                                            
                                                            8,377,695
                                                            
                                                            
                                                            
                                                            8,355,863Retained
      earnings (deficit)Unappropriated
                                                            
                                                            
                                                            6,762
                                                            
                                                            
                                                            
                                                            (403,795
                                                            )Appropriated
                                                            
                                                            
                                                            504,780
                                                            
                                                            
                                                            
                                                            504,780Accumulated
      other comprehensive income
                                                            
                                                            
                                                            1,383,051
                                                            
                                                            
                                                            
                                                            1,366,800Total
      HFGB Stockholders' Equity
                                                            
                                                            
                                                            10,604,676
                                                            
                                                            
                                                            
                                                            10,156,036Non-controlling
      Interests
                                                            
                                                            
                                                            511,126
                                                            
                                                            
                                                            
                                                            507,679TOTAL
      EQUITY
                                                            
                                                            
                                                            11,115,802
                                                            
                                                            
                                                            
                                                            10,663,715TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                            
                                                            $
                                                            14,983,154
                                                            
                                                            
                                                            $
                                                            14,088,690




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


2





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY, INC


AND
SUBSIDIARIES


UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME





For the Three
                
                
                For the Three
                
                
                For the Six
                
                
                For the SixMonths Ended
                
                
                Months Ended
                
                
                Months Ended
                
                
                Months EndedJune 30, 2009
                
                
                June 30, 2008
                
                
                June 30, 2009
                
                
                June 30, 2008NET
      SALES
                
                $
                3,091,525
                
                
                $
                2,764,994
                
                
                $
                4,417,420
                
                
                $
                5,351,442COST
      OF SALES
                
                
                (1,914,020
                )
                
                
                (1,903,370
                )
                
                
                (2,965,860
                )
                
                
                (3,512,315
                )GROSS
      PROFIT
                
                
                1,177,505
                
                
                
                861,624
                
                
                
                1,451,560
                
                
                
                1,839,127OPERATING
      EXPENSESSelling
      expenses and distribution expenses
                
                
                34,571
                
                
                
                67,005
                
                
                
                86,929
                
                
                
                91,898General
      and administrative expenses
                
                
                32,707
                
                
                
                232,002
                
                
                
                441,406
                
                
                
                629,761Depreciation
      and amortization
                
                
                6,375
                
                
                
                4,967
                
                
                
                12,844
                
                
                
                9,681Total
      Operating Expenses
                
                
                73,653
                
                
                
                303,974
                
                
                
                541,179
                
                
                
                731,340INCOME
      FROM CONTINUING OPERATIONS
                
                
                1,103,852
                
                
                
                557,650
                
                
                
                910,381
                
                
                
                1,107,787OTHER
      INCOME (EXPENSE)Interest
      income
                
                
                1,128
                
                
                
                3,516
                
                
                
                1,360
                
                
                
                4,371Interest
      expense
                
                
                (147,702
                )
                
                
                (149,629
                )
                
                
                (289,805
                )
                
                
                (285,975
                )Other
      income
                
                
                51,477
                
                
                
                89,070
                
                
                
                51,477
                
                
                
                164,565Total
      Expenses, net
                
                
                (95,097
                )
                
                
                (57,043
                )
                
                
                (236,968
                )
                
                
                (117,039
                )INCOME
      FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
                
                
                1,008,755
                
                
                
                500,607
                
                
                
                673,413
                
                
                
                990,748INCOME
      TAX EXPENSE
                
                
                (139,574
                )
                
                
                (127,751
                )
                
                
                (184,571
                )
                
                
                (262,768
                )NET
      INCOME FROM CONTINUING OPERATIONS
                
                
                869,181
                
                
                
                372,856
                
                
                
                488,842
                
                
                
                727,980DISCONTINUED
      OPERATIONSLoss
      from discontinued operations, net of income taxes
                
                
                (8,574
                )
                
                
                (8,256
                )
                
                
                (16,961
                )
                
                
                (16,262
                )Loss
      from disposal of discontinued operations
                
                
                (34,446
                )
                
                
                -
                
                
                
                (34,446
                )
                
                
                -NET
      LOSS FROM DISCONTINUED OPERATIONS
                
                
                (43,020
                )
                
                
                (8,256
                )
                
                
                (51,407
                )
                
                
                (16,262
                )NET
      INCOME
                
                
                826,161
                
                
                
                364,600
                
                
                
                437,435
                
                
                
                711,718Less:
      net income attributable to non-controlling interests
                
                
                (22,967
                )
                
                
                (4,782
                )
                
                
                (26,878
                )
                
                
                (13,645
                )NET
      INCOME ATTRIBUTABLE TO HFGB COMMON STOCKHOLDERS
                
                
                803,194
                
                
                
                359,818
                
                
                
                410,557
                
                
                
                698,073OTHER
      COMPREHENSIVE INCOMETotal
      other comprehensive income
                
                
                1,319
                
                
                
                224,538
                
                
                
                16,251
                
                
                
                574,832Add
      (less): foreign currency translation (gain) loss attributable to
      non-controlling interests
                
                
                24
                
                
                
                (18,476
                )
                
                
                (1,071
                )
                
                
                (52,037
                )Foreign
      currency translation gain attributable to HFGB common
      stockholders
                
                
                1,343
                
                
                
                206,062
                
                
                
                15,180
                
                
                
                522,795COMPREHENSIVE
      INCOME ATTRIBUTABLE TO HFGB COMMON STOCKHOLDERS
                
                $
                804,537
                
                
                $
                565,880
                
                
                $
                425,737
                
                
                $
                1,220,868Income
      per share – basicContinuing
      operations
                
                $
                0.04
                
                
                $
                0.02
                
                
                $
                0.02
                
                
                $
                0.04Discontinued
      operations
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income per share - basic
                
                $
                0.04
                
                
                $
                0.02
                
                
                $
                0.02
                
                
                $
                0.04Income per share -
      dilutedContinuing
      operations
                
                $
                0.04
                
                
                $
                0.02
                
                
                $
                0.02
                
                
                $
                0.03Discontinued
      operations
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income per share - diluted
                
                $
                0.04
                
                
                $
                0.02
                
                
                $
                0.02
                
                
                $
                0.03Weighted
      average number of shares outstanding during the period -
    basic
                
                
                18,466,169
                
                
                
                18,466,169
                
                
                
                18,466,169
                
                
                
                18,466,169Weighted
      average number of shares outstanding during the period -
      diluted
                
                
                20,466,169
                
                
                
                20,466,169
                
                
                
                20,466,169
                
                
                
                20,466,169





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


3





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC.


AND
SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(UNAUDITED)




For the Six
                    Months Ended
                    June 30, 2009
                  
                  
                  For the Six
                    Months Ended
                    June 30, 2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income continuing operations
                  
                  $
                  427,518
                  
                  
                  $
                  714,335Net
      loss from discontinued operations
                  
                  
                  (16,961
                  )
                  
                  
                  (16,262
                  )Net
      income
                  
                  
                  410,557
                  
                  
                  
                  698,073Adjusted
      to reconcile net income to cash used inoperating
      activities, including discontinued operations:Allowance
      for doubtful accounts - accounts receivable
                  
                  
                  217,373
                  
                  
                  
                  21,374Depreciation
      and amortization - cost of sales
                  
                  
                  298,984
                  
                  
                  
                  210,371Depreciation
      and amortization
                  
                  
                  12,844
                  
                  
                  
                  9,681Amortization
      of discount on convertible notes
                  
                  
                  76,672
                  
                  
                  
                  76,672Amortization
      of deferred financing costs
                  
                  
                  84,875
                  
                  
                  
                  84,875Stock
      option issued to a legal counsel
                  
                  
                  21,832
                  
                  
                  
                  7,278Non-controlling
      interests
                  
                  
                  26,878
                  
                  
                  
                  13,645Loss
      from disposal of discontinued operations
                  
                  
                  34,446
                  
                  
                  
                  -Changes
      in operating assets and liabilities(Increase)
      decrease in:Accounts
      receivable
                  
                  
                  (160,422
                  )
                  
                  
                  (977,166
                  )Inventories
                  
                  
                  (921,328
                  )
                  
                  
                  (1,071,887
                  )Other
      assets
                  
                  
                  (235,370
                  )
                  
                  
                  530,052Increase
      (decrease) in:Accounts
      payable
                  
                  
                  (72,511
                  )
                  
                  
                  5,278Other
      payables and accrued expenses
                  
                  
                  213,356
                  
                  
                  
                  91,165Income
      tax and other taxes payable
                  
                  
                  (131,636
                  )
                  
                  
                  186,719Due
      to stockholders
                  
                  
                  -
                  
                  
                  
                  (290,080
                  )Net
      cash used in operating activities – continuing operations
                  
                  
                  (123,450
                  )
                  
                  
                  (403,950
                  )Net
      cash provided by operating activities – discontinued
      operations
                  
                  
                  16,753
                  
                  
                  
                  16,209Net
      cash used in operating activities
                  
                  
                  (106,697
                  )
                  
                  
                  (387,741
                  )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of short-term investment
                  
                  
                  -
                  
                  
                  
                  (28,278
                  )Purchase
      of property and equipment
                  
                  
                  (161,862
                  )
                  
                  
                  (1,172,615
                  )Net
      cash inflow on disposal of discontinued operations
                  
                  
                  15,612
                  
                  
                  
                  -Net
      cash used in investing activities – continuing operations
                  
                  
                  (146,250
                  )
                  
                  
                  (1,200,893
                  )Net
      cash provided by investing activities – discontinued
      operations
                  
                  
                  -
                  
                  
                  
                  -Net
      cash used in investing activities
                  
                  
                  (146,250
                  )
                  
                  
                  (1,200,893
                  )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from note payable
                  
                  
                  292,259
                  
                  
                  
                  260,158Net
      cash provided by financing activities – continuing
    operations
                  
                  
                  292,259
                  
                  
                  
                  260,158Net
      cash provided by financing activities – discontinued
      operations
                  
                  
                  -
                  
                  
                  
                  -Net
      cash provided by financing activities
                  
                  
                  292,259
                  
                  
                  
                  260,158EFFECT
      OF EXCHANGE RATES ON CASH
                  
                  
                  219
                  
                  
                  
                  54,075NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                  
                  
                  39,531
                  
                  
                  
                  (1,274,401
                  )CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
                  
                  
                  45,574
                  
                  
                  
                  2,219,694CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
                  
                  $
                  85,105
                  
                  
                  $
                  945,293SUPPLEMENTAL
      DISCLOSURE
      OF CASH FLOW INFORMATIONCash
      paid during the period for:Income
      taxes
                  
                  $
                  394,214
                  
                  
                  $
                  2,258Interest
      expenses
                  
                  $
                  27,146
                  
                  
                  $
                  107,762




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




4





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
1 ORGANIZATION AND BASIS OF PRESENTATION





Huifeng
Bio-Pharmaceutical Technology Inc. and all of its subsidiaries (collectively
“Huifeng Bio-Pharmaceutical”) or (the “Company”) are principally engaged in the
manufacture of plant extracts and bio-chemical products in the People’s Republic
of China (“PRC”), for sale in the PRC market, Japan and some European
countries.





Huifeng
Bio-Pharmaceutical was incorporated in Nevada on March 16, 2000 under the name
Enternet, Inc. with headquarters in Xi’an City, PRC.





Details
of the Company’s principal subsidiaries as of June 30, 2009 are described in
Note 4 – Subsidiaries.





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and pursuant to the
rules and regulations of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.





It the
opinion of management, the unaudited condensed consolidated financial statements
contain all adjustments consisting only of normal recurring accruals considered
necessary to present fairly the Company's consolidated financial position at
June 30, 2009 and December 31, 2008, the consolidated results of operations for
the three and six months ended June 30, 2009 and 2008, and consolidated cash
flows for the six months ended June 30, 2009 and 2008. The consolidated results
for the six months ended June 30, 2009 are not necessarily indicative of
the results to be expected for the entire fiscal year ending December 31, 2009.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes for the year ended December 31, 2008
appearing in the Company's annual report on Form 10-K as filed with the
Securities and Exchange Commission on March 31, 2009.


5





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
2 USE OF ESTIMATES





In
preparing financial statements to conform with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period. Actual results could differ from those
estimates.





NOTE
3 PRINCIPLES OF CONSOLIDATION





The
accompanying unaudited condensed consolidated financial statements as of June
30, 2009 include the financial statements of Huifeng Bio-Pharmaceutical and its
100% owned subsidiary Northwest, 100% owned subsidiary Huifeng Bio-Technic and
80.2% owned subsidiary Huifeng Pharmaceutical.





The
accompanying unaudited condensed consolidated financial statements as of June
30, 2008 include the financial statements of Huifeng Bio-Pharmaceutical and its
100% owned subsidiary Northwest, 100% owned subsidiary Huifeng Bio-Technic, 70%
subsidiary Huifeng Engineering and 80.2% owned subsidiary Huifeng
Pharmaceutical.





The
results of discontinued operations have been reported separately in the
unaudited condensed consolidated financial statements and the previously
reported financial statements have been reclassified.





All
significant inter-company balances and transactions have been eliminated in
consolidation.





NOTE
4 SUBSIDIARIES





Details
of the Company’s principal consolidated subsidiaries as of June 30, 2009 were as
follows:





Name
                            
                            Place of Incorporation
                            
                            Ownership interest
                              attributable to the
                              Company
                            
                            Principal activitiesNorthwest
      Bio-Technic Inc.
                            
                            British
      Virgin Islands
                            
                            100%
                            
                            Investment
      holding
                              Manufacturing and sale ofXi’an
      Huifeng Bio-Technic In.
                            
                            The
      PRC
                            
                            100%
                            
                            pharmaceutical
      raw materialsXi’an
      Huifeng Pharmaceutical Company Limited
                            
                            The
      PRC
                            
                            80.2%
                            
                            Manufacturing
      and sale of pharmaceutical raw
materials





The
Company disposed its 70% owned subsidiary – Xi’an Huifeng Biochemistry
Engineering Company Limited (“Huifeng Engineering”) in June 2009. See Note 16 –
Discontinued Operations for further details.





NOTE
5 CASH AND CASH EQUIVALENTS





For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.





NOTE
6 STOCK-BASED COMPENSATION





In
December 2004, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based
Payment”, a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”,
and superseding APB Opinion No. 25, “Accounting for Stock Issued to Employees”
and its related implementation guidance. In April 2008, the Company adopted SFAS
123R, using a modified prospective application transition method, which
establishes accounting for stock-based awards in exchange for consultancy
services. Under this application, the Company is required to record stock-based
compensation expense for all awards granted after the date of adoption and
unvested awards that were outstanding as of the date of adoption. SFAS 123R
requires that stock-based compensation cost is measured at grant date, based on
the fair value of the award, and recognized in expense over the vesting
period.





Common
stock, a stock option and warrants issued to other than employees or directors
in exchange for services are recorded on the basis of their fair value, as
required by SFAS No. 123R, which is measured as of the date required by EITF
Issue 96-18, “Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. In
accordance with EITF 96-18, the non-employee stock options or warrants are
measured at their fair value by using the Black-Scholes option pricing
model as of the earlier of the date at which a commitment for performance to
earn the equity instruments is reached (“performance commitment date”) or the
date at which performance is complete (“performance completion date”).
Accounting for non-employee stock options or warrants which involve only
performance conditions when no performance commitment date or performance
completion date has occurred as of reporting date requires measurement a the
equity instruments then-current fair value. Any subsequent changes in the market
value of the underlying common stock are reflected in the expense recorded in
the subsequent period in which that change occurs.


6





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
7 INCOME TAXES





The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
Statement 109, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.





On
January 1, 2008, the Company adopted the provisions of FASB Interpretation No.
48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 prescribes a
more-likely-than-not threshold for financial statements recognition and
measurement of a tax position taken (or expected to be taken) in a tax return.
This Interpretation also provides guidance on derecognition of income tax assets
and liabilities, classification of current and deferred income tax assets and
liabilities, accounting for interest and penalties associated with tax
positions, accounting for interest and penalties associated with tax positions,
accounting for income taxes in interim periods and income tax disclosures. The
adoption of FIN 48 has not resulted in any material impact on the Company’s
financial position or results.





Huifeng
Bio-Pharmaceutical was incorporated in the United States.





Northwest,
a wholly owned subsidiary of the Company, was incorporated in the British Virgin
Islands and, under current laws of the British Virgin Islands, is not subject to
tax on income or on capital gains.





Huifeng
Bio-Technic, a wholly-owned subsidiary of Northwest, was incorporated in the PRC
being registered as a new and high technology enterprise is entitled to an
income tax reduction. According to the document of reductions approved by the
local tax bureau, the income tax rate was reduced from 33% to 15% on a permanent
basis. Provision for income tax expenses for the three and six months ended June
30, 2009 and 2008 were $108,825, $108,797, $124,025 and $219,818
respectively.





Huifeng
Engineering 70% owned subsidiary of Huifeng Bio-Technic, was incorporated in the
PRC and subject to PRC income tax which is computed according to the relevant
laws and regulations in the PRC. No provision for income tax expenses for the
three and six months ended June 30, 2009 and 2008 as Huifeng Engineering
has incurred net operating loss and was disposed on June 28, 2009.





Huifeng
Pharmaceutical, 80.2% owned subsidiary of Huifeng Bio-Technic, was also
incorporated in the PRC and subject to PRC income tax which is computed
according to the relevant laws and regulations in the PRC. The applicable tax
rate for the six months ended June 30, 2009 and 2008 was 25%. The provision for
income tax expenses for the three and six months ended June 30, 2009 and 2008
was $30,749, $18,954, $60,547 and $42,950 respectively.





NOTE
8 INCOME PER SHARE





Basic
income per share is computed by dividing income available to common stockholders
by the weighted average number of common shares outstanding during the period.
Diluted income per share is computed similar to basic income per share except
that the denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. Included in diluted
weighted average number of shares for the three and six months ended June 30,
2009 and 2008 is the Company’s 10% secured convertible notes (the “Notes”) in a
face amount of $2,000,000 which are due in 2 years from their issuance and
convertible into 2,000,000 shares of common stock of the Company at a conversion
price of $1 per share.





Warrants
to purchase 500,000 shares of common stock at prices $1.50 per share was
outstanding as of June 30, 2009 and 2008 and a stock option to purchase 100,000
shares of common stock at price $1.50 per share was outstanding as of June 30,
2009, but were excluded from the calculation of diluted earnings per share
because the effect of these warrants and stock option was
anti-dilutive.





NOTE
9 BUSINESS SEGMENTS





The
Company operates in only one segment, thereafter segment disclosure is not
presented.




7





HUIFENG BIO-PHARMACEUTICAL TECHNOLOGY
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
10 RECENT ACCOUNTING PRONOUNCEMENTS





On
April 9, 2009, the Financial Accounting Standards Board (“FASB”) issued
FASB Staff Position (“FSP”) No. FAS 107-1 and APB 28-1, “Interim
Disclosures about Fair Value of Financial Instruments”. FAS 107-1 and APB 28-1
amend FASB Statement No. 107, “Disclosures about Fair Value of Financial
Instruments,” to require disclosures about fair value of financial instruments
for interim reporting periods of publicly traded companies as well as in annual
financial statements. FAS 107-1 and APB 28-1 also amend APB Opinion No. 28,
“Interim Financial Reporting,” to require those disclosures in summarized
financial information at interim reporting periods. FAS 107-1 and APB 28-1 will
be effective on April 1, 2009. FAS 107-1 and APB 28-1 do not require
disclosures for earlier periods presented for comparative purposes at initial
adoption. In periods after initial adoption, FAS 107-1 and APB 28-1 require
comparative disclosures only for periods ending after initial adoption. The
Company is currently evaluating whether the adoption of FAS 107-1 and APB 28-1
will have a significant effect on its consolidated financial
statements.




On
April 9, 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2,
“Recognition and Presentation of Other-Than-Temporary Impairments”. FAS 115-2
and FAS 124-2 amend the other-than-temporary impairment guidance in US GAAP
for debt securities to make the guidance more operational and to improve the
presentation and disclosure of other-than-temporary impairments on debt and
equity securities in the financial statements. FAS 115-2 and FAS 124-2 do not
amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. FAS 115-2 and FAS 124-2
will be effective on April 1, 2009. FAS 115-2 and FAS 124-2 do not require
disclosures for earlier periods presented for comparative purposes at initial
adoption. In periods after initial adoption, FAS 115-2 and FAS 124-2 require
comparative disclosures only for periods ending after initial adoption. The
Company is currently evaluating whether the adoption of FAS 115-2 and FAS
124-2 will have a significant effect on its consolidated financial position or
results of operations.





On
April 9, 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly”. FAS
157-4 provides additional guidance for estimating fair value in accordance with
FASB Statement No. 157, “Fair Value Measurements”, when the volume and
level of activity for the asset or liability have significantly decreased. FAS
157-4 also includes guidance on identifying circumstances that indicate a
transaction is not orderly. FAS 157-4 emphasizes that even if there has been a
significant decrease in the volume and level of activity for the asset or
liability and regardless of the valuation technique(s) used, the objective of a
fair value measurement remains the same. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction (that is, not a forced liquidation or distressed sale) between
market participants at the measurement date under current market conditions. FAS
157-4 will be effective on April 1, 2009 and will be applied prospectively.
FAS 157-4 does not require disclosures for earlier periods presented for
comparative purposes at initial adoption. In periods after initial adoption, FAS
157-4 requires comparative disclosures only for periods ending after initial
adoption. The Company is currently evaluating whether the adoption of FAS 157-4
will have a significant effect on its consolidated financial position or results
of operations.





In May
2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS
165 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. Specifically, SFAS 165 sets forth the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, the circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements, and the disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date. SFAS 165 is effective for the interim report and annual periods that
end after June 15, 2009. The adoption of SFAS 165 had no impact on the Financial
Statements as management already followed a similar approach prior to the
adoption of this standard.




In June
2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166
amends various provisions of SFAS No. 140 “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities—a replacement
of FASB Statement No. 125” by removing the concept of a qualifying
special-purpose entity and removes the exception from applying FIN 46(R) to
variable interest entities that are qualifying special-purpose entities; limits
the circumstances in which a transferor derecognizes a portion or component of a
financial asset; defines a participating interest; requires a transferor to
recognize and initially measure at fair value all assets obtained and
liabilities incurred as a result of a transfer accounted for as a sale; and
requires enhanced disclosure; among others. SFAS 166 will be effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. The Company does
not expect the standard to have any impact on the Company’s financial
position.




In June
2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation
No. 46(R)” (“SFAS 167”). SFAS 167 amends FASB Interpretation No. 46
(Revised December 2003) “Consolidation of Variable Interest Entities—an
interpretation of ARB No. 51” (FIN 46(R)) to require an enterprise to
perform an analysis to determine whether the enterprise’s variable interest or
interests give it a controlling financial interest in a variable interest
entity; to require ongoing reassessments of whether an enterprise is the primary
beneficiary of a variable interest entity; to eliminate the quantitative
approach previously required for determining the primary beneficiary of a
variable interest entity; to add an additional reconsideration event for
determining whether an entity is a variable interest entity when any changes in
facts and circumstances occur such that holders of the equity investment at
risk, as a group, lose the power from voting rights or similar rights of those
investments to direct the activities of the entity that most significantly
impact the entity’s economic performance; and to require enhanced disclosures
that will provide users of financial statements with more transparent
information about an enterprise’s involvement in a variable interest entity.
SFAS 167 will be effective as of the beginning of each reporting entity's first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period, and for interim and annual reporting
periods thereafter. The Company does not expect the standard to have any impact
on the Company’s financial position.




In June
2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards
Codificationand
the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB
Statement No. 162” (“SFAS 168”). SFAS 168 replaces SFAS No. 162 and
establishes the FASB Accounting Standards Codification(“Codification”)
as the source of authoritative accounting principles recognized by the FASB to
be applied by nongovernmental entities in the preparation of financial
statements in conformity with GAAP. Rules and interpretive releases of the SEC
under authority of federal securities laws are also sources of authoritative
GAAP for SEC registrants. The FASB will no longer issue new standards in the
form of Statements, FASB Staff Positions, or EITF Abstracts; instead the FASB
will issue Accounting Standards Updates. Accounting Standards Updates will not
be authoritative in their own right as they will only serve to update the
Codification. The issuance of SFAS 168 and the Codification does not change
GAAP. SFAS 168 will be effective for interim and annual periods that end after
September 15, 2009. The Company does not expect the standard to have any impact
on the Company’s financial position.


8





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
11 NOTES PAYABLE





Notes
payable as of June 30, 2009 (unaudited) and December 31, 2008 (audited)
consisted of the following:





June 30,
                            2009
                          
                          
                          December31,
                            2008Notes
      payable to a financial institution, interest rate of12.5838%
      per annum, secured by a director property andthe
      company's fixed assets, guaranteed by a third party,due
      June 2008, was extended to July 2009
                          
                          $
                          281,964
                          
                          
                          $
                          281,579Note
      payable to a bank, interest rate of 6.372% per annum,guaranteed
      by a director and a third party, due May 2010
                          
                          
                          292,193
                          
                          
                          
                          -Current
      maturities
                          
                          $
                          574,157
                          
                          
                          $
                          281,579




The
interest expenses for the three and six months ended June 30, 2009 and 2008 were
$13,755, $16,507, $22,639 and $21,524 respectively.


NOTE
12 CONVERTIBLE NOTES PAYABLE





On
December 31, 2007, the Company consummated a private placement of $2,000,000
principal amount of 10% secured convertible notes (the “Notes”) with a two-year
common stock warrants to seven accredited investors. Financing cost of $339,500
was paid out of the gross proceeds. Financing cost is amortized over the life of
the Notes to interest expense using the effective interest method. For the six
months ended June 30, 2009 and 2008, the Company amortized $42,437, $42,437,
$84,875 and $84,875 of financing costs in interest expenses respectively. The
Notes are due December 31, 2009 and are convertible into 2,000,000 shares of
common stock of the Company at a conversion price of $1.00 per
share.





The
holders of the Notes may convert the unpaid principal amount of the Notes into
common stock of the Company at any time prior to maturity, at the applicable
conversion price. After the occurrence of an Event of Default, 150% of the
principal amount then outstanding plus all interest occurred to the date of the
prepayment is payable within three days.





In
accordance with EITF 98-5, no beneficial conversion feature has been recorded on
the issuance of the Notes as the conversion price of the Notes of $1 is higher
than the fair market value per share of $0.75 at December 31,
2007.


9





HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
12 CONVERTIBLE NOTES PAYABLE (CONTINUED)





The
Company issued warrants to the note holders in the note financing, for the
purchase of up to a total 500,000 shares of common stock at an exercise price of
$1.50. The warrants are exercisable for a period that extends three years
beginning from the date that a registration statement covering the underlying
warrant shares is declared effective.





The Notes
are secured by 300,000 shares of Northwest’s share capital pursuant to a pledge
agreement, the Company’s performance of the Notes and other obligations in
connection with the financing is also secured by a pledge of 5,272,860 shares of
common stock personally held by the current Chief Executive Officer and two
other stockholders pursuant to another pledge agreement. Upon any event of
default (as defined in the Notes and pledge agreements), the investors will be
entitled to exercise their respective rights under the pledge
agreements.





As of
June 30, 2009, the Note holders have not converted the principal amount of their
notes into shares of common stock of the Company.





The
Company recorded a discount on the Notes in accordance with EITF 98-5 of
$306,686 for the fair value of the warrants issued. The fair value of warrants
was calculated using the Black-Scholes model with the following assumptions: (i)
risk-free interest rate of 3.07%; (ii) expected life (in years) of 3; (iii)
expected volatility of 172%; (iv) expected dividend yield of 0.00%; and (v)
stock market price of $0.75. The discount on Notes is amortized using effective
interest method over 2 years. For the three and six months ended June 30, 2009
and 2008, the Company recorded amortization of $38,337, $38,337, $76,672 and
$76,672 respectively as interest expenses in the statement of
operations.





The Notes
bear a 10% annual interest rate payable in arrears with a first payment due
March 1, 2008, and thereafter on each June 1, September 1 and December 1 while
the Notes are outstanding, with a final payment of interest due on the maturity
date. For the three and six months ended June 30, 2009 and 2008, $51,111,
$51,111, $101,111 and $101,667 respectively were recorded as interest
expenses.





NOTE
13 COMMITMENTS AND CONTINGENCIES





(A)
Operating lease commitments





The
Company occupies an office and warehouses from third parties under operating
leases which expires on September 30, 2009 and on July 23, 2011 at a quarterly
rental of $2,850 and at an annually rental of $4,968 respectively. Accordingly,
for the three and six months ended June 30, 2009 and 2008, the Company
recognized rental expenses for this space in the amount of $5,335, $2,939,
$8,183 and $5,796 respectively.





As of
June 30, 2009, the Company has outstanding commitments with respect to the
non-cancelable operating leases which are due as follows:





2009
                  
                  $
                  5,3342010
                  
                  
                  4,9682011
                  
                  
                  2,898$
                  13,200





(B)
Capital commitments





As of
June 30, 2009, the Company had capital commitments of $467,508 for the
construction of office building at Changwu, Shaanxi Province, PRC. As of June
30, 2009, the Company has made a deposit of $36,524.





NOTE
14 STOCKHOLDERS’ EQUITY





Stock
options





On April
28, 2008, the Company issued options to its legal counsel to purchase up to
100,000 shares of common stock at an exercise price of $1.50 per share. The
options shall be exercisable in whole or in part, according to the vest
schedule, shall be fully vested upon execution of the agreement and shall be
exercisable at any time pursuant to the terms of the Agreement until April 28,
2010. The fair value of the options was estimated on the grant date using the
Black-Scholes option pricing model as required by SFAS 123R with the following
assumptions and estimates: expected dividend 0%, volatility 189%, a risk-free
rate of 2.36% and an expected like of two years. The value of options recognized
during the three and six months ended June 30, 2009 was $10,916, $7,278, $21,832
and $7,278 respectively.


10




HUIFENG
BIO-PHARMACEUTICAL TECHNOLOGY INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS OF JUNE 30, 2009
(UNAUDITED)





NOTE
15 RELATED PARTY TRANSACTIONS





The
current Chief Executive Officer and two other stockholders pledged a total of
5,272,860 shares of common stock held by them to secure the Company’s
performance of the $2,000,000 Convertible Notes issued on December 31,
2007.





NOTE
16 DISCONTINUED OPERATIONS





On June
28, 2009, Huifeng Bio-Technic entered into an agreement with a third party to
sell its 70% interest in Huifeng Engineering for a consideration of $21,919 in
cash. The operations of Huifeng Engineering have been reclassified as
discontinued operations in the accompanying consolidated statements of
operations for the three and six months ended June 30, 2009 and 2008 and are
summarized as follows:





For the Three
                  
                  
                  For the Three
                  
                  
                  For the Six
                  
                  
                  For the SixMonths Ended
                  
                  
                  Months Ended
                  
                  
                  Months Ended
                  
                  
                  Months EndedJune 30, 2009
                  
                  
                  June 30, 2008
                  
                  
                  June 30, 2009
                  
                  
                  June 30, 2008General
      and administrative expenses
                  
                  $
                  (193
                  )
                  
                  $
                  (37
                  )
                  
                  $
                  (208
                  )
                  
                  $
                  (16,209
                  )Depreciation
                  
                  
                  (8,381
                  )
                  
                  
                  (8,221
                  )
                  
                  
                  (16,753
                  )
                  
                  
                  (55
                  )Operating
      expenses
                  
                  $
                  (8,574
                  )
                  
                  $
                  (8,258
                  )
                  
                  $
                  (16,961
                  )
                  
                  $
                  (16,264
                  )Interest
      income
                  
                  
                  -
                  
                  
                  
                  2
                  
                  
                  
                  -
                  
                  
                  
                  2Loss
      from discontinued operations
                  
                  $
                  (8,574
                  )
                  
                  $
                  (8,256
                  )
                  
                  $
                  (16,961
                  )
                  
                  $
                  (16,262
                  )





The
assets and liabilities of discontinued operations as of June 30, 2009 and
December 31, 2008 are summarized as follows:





June
      30, 2009
                
                
                December
      31, 2008(Unaudited)
                
                
                (Audited)ASSETSCash
      and cash equivalents
                
                $
                -
                
                
                $
                676Equipment,
      net
                
                
                -
                
                
                
                113,901Total
      assets related to discontinued operations
                
                $
                -
                
                
                $
                114,577LIABILITIESOther
      payables
                
                $
                -
                
                
                $
                17,128Total
      liabilities related to discontinued operations
                
                $
                -
                
                
                $
                17,128





The
detailed information on the loss on disposal of Huifeng Engineering is as
follows:





Cash
      and cash equivalents
                
                $
                6,307Fixed
      assets, net
                
                
                97,188Other
      payables
                
                
                (22,973
                )Non-controlling
      interests
                
                
                (24,157
                )Book
      value of net assets disposed
                
                
                56,365Less:
      Consideration for disposition
                
                
                (21,919
                )Loss
      on disposal of discontinued operations
                
                $
                34,446





The
detailed information on net cash inflow on disposal of discontinued operations
is as follows:





Proceeds
      from disposal
                
                $
                21,919Less:
      cash and cash equivalent disposed
                
                
                (6,307
                )Net
      cash inflow
                
                $
                15,612





NOTE
17 CONCENTRATIONS AND RISKS





During
the six months ended June 30, 2009 and 2008, 100% of the Company’s assets were
located in China and Hong Kong.





During
the six months ended June 30, 2009 and 2008, 47% and 49% of the Company's
revenues were derived from companies located in China respectively.





The
Company relied on a customer for approximately $475,027 representing in
aggregate 11% of sales for the six months ended June 30, 2009. At June 30, 2009,
accounts receivable from this customer was $33,033.


11


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




The
following discussion should be read in conjunction with the Huifend
Bio-Pharmaceutical Techonology, Inc. consolidated financial statements and
accompanying notes included elsewhere in this report. The following discussion
contains forward-looking statements that reflect the plans, estimates and
beliefs of Huifeng Bio-Pharmaceutical Technology, Inc. The actual results could
differ materially from those discussed in the forward-looking statements.
Factors that could cause or contribute to these differences include those
discussed below and elsewhere in this Report and the Annual Report
10-K, particularly in “Risk Factors” section in the Annual Report on
10-K.   All references to years relate to the calendar year ended
December 31 of the particular year.





OVERVIEW





History





On
December 20, 2004, pursuant to the Malone Agreement, Art Malone, Jr. sold
7,229,601 shares of the common stock of the Company, or 56% of the Company’s
outstanding common stock, for $300,000 (the "Sale") to Zhi Lan Wang and Jun Lin
on December 20, 2004.  Immediately thereafter, on December 20, 2004
the Company completed a Northwest Agreement, pursuant to which the Company
initially purchased 30% of the common shares of Northwest BioTechnic, Inc.
(“NBTI”) in exchange for 80,735,590 shares of the Company's common stock
("Acquisition"). The purchase price for the remaining 70% of NBTI's common
shares was $1,900,000 payable by the Company's issuance of a promissory note
("Promissory Note") on December 20, 2004. The Promissory Note was subsequently
converted into 10,465,725 (post a one for eighteen reverse split) shares of the
Company's common stock. The 80,735,590 shares of the common stock of the Company
sold represented approximately 86.3% of the total outstanding stock of the
Company.





NBTI was
incorporated in the British Virgin Islands on June 25, 2004. NBTI operates
through its wholly owned subsidiary, Huifeng Biochemistry Joint Stock Company,
which is a joint venture company established under the laws of China and is
engaged in the production and sales of plant extracts, biochemical products and
pharmaceutical raw products in the PRC. On February 22, 2006, Huifeng
Biochemistry Joint Stock Company changed its name to Xi’an Huifeng Biotechnic,
Inc. ("Huifeng").





The
exchange was treated as a reverse acquisition for accounting purposes. As such,
the financial information reflects activity subsequent to the acquisition for
the Company and its subsidiaries and financial activity of NBTI prior to the
acquisition.





Business





The
Company, through its wholly owned subsidiary NBTI, owns 100% of Huifeng which
produces and sells plant extracts, biochemical products and pharmaceutical raw
products in the PRC. Huifeng was founded on January 18, 2000. With its
proprietary technology of “Producing Rutin by Eliminating Enzyme and Mucus”
together with abundant resources of high quality pagoda rice in the Northwest
region of China as raw material, Huifeng developed and specialized itself as one
of the major technology based Rutin company in Xian city within two years after
establishment. Huifeng possesses one of the most advanced and patented
Rutin-refining technologies in China and is a major Rutin supplier for the world
market.


12





CRITICAL
ACCOUNTING POLICIES AND ESTIMATES





We have
identified one policy area as critical to the understanding of our consolidated
financial statements. The preparation of our consolidated financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of sales and expenses during the reporting periods. With
respect to net realizable value of the Company's accounts receivable and
inventories, significant estimation judgments are made and actual results could
differ materially from these estimates.





The
Company does not have any reserves against its accounts receivable or
inventories at June 30, 2009 and 2008. Management's estimation that there are no
reserves is based on the current facts that there are no significant aged
accounts receivable and the current inventory turnover is sufficient to realize
the current carrying value of the inventories. In making their judgment,
management has assumed that there will be continued demand for their products in
the future, thereby maintaining adequate turnover of the inventories.
Additionally, management has assumed that customers will continue to pay their
outstanding invoices timely, and that their customers' financial positions will
not deteriorate significantly in the future, which would result in their
inability to pay their debts to the Company. While the Company's management
currently believes that there is little likelihood that the actual results of
their current estimates will differ materially from its current estimates, if
customer demand for its products decreases significantly in the near future, or
if the financial position of its customers deteriorates in the near future, the
Company could realize significant write downs for slow moving inventories or
uncollectible accounts receivable.





We
believe the following is among the most critical accounting policies that impact
our consolidated financial statements. We suggest that our significant
accounting policies, as described in our consolidated financial statements in
the Summary of Significant Accounting Policies, be read in conjunction with this
Management's Discussion and Analysis of Financial Condition and Results of
Operations.





We
recognize revenue in accordance with Staff Accounting Bulletin ("SAB") No. 104.
All of the following criteria must exist in order for us to recognize
revenue:





1. Persuasive
      evidence of an arrangement exists;





2. Delivery
      has occurred or services have been
rendered;





3. The
      seller's price to the buyer is fixed or determinable;
  and





4. Collectibility
      is reasonably assured.





The
majority of the Company's revenue results from sales contracts with distributors
and revenue is generated upon the shipment of goods. The Company's pricing
structure is fixed and there are no rebate or discount programs. Management
conducts credit background checks for new customers as a means to reduce the
subjectivity of assuring collectibility. Based on these factors, the Company
believes that it can apply the provisions of SAB 104 with minimal
subjectivity.





THREEMONTHS ENDED JUNE 30,
2009 COMPARED
TO THREE MONTHS ENDED JUNE 30, 2008





Revenues, Cost of Revenues
and Gross Margin





Revenues
for the quarter ended June 30, 2009 were $3,091,525, an increase of $326,531, or
11.8%, from $2,764,994 for the same quarter in 2008. Our increase in sales
revenues for the second quarter of 2009 was mainly due to the increase in our
sales of pharmaceutical raw-material, which include our products of Rutin,
Troxerutin, Silymarin and Diosmin. An analysis of our results in sales of our
products is as follows:




For the quarter ended
                    June 30,
                  
                  
                  
                  Increase
      /Product
                  
                  2009
                  
                  
                  2008
                  
                  
                  
                  (Decrease)Pharmaceutical
      intermediates
                  
                  $
                  765,929
                  
                  
                  $
                  829,344
                  
                  
                  $
                  (63,415
                  )Pharmaceutical
      raw-material
                  
                  
                  1,907,060
                  
                  
                  
                  1,365,665
                  
                  
                  
                  
                  541,395Plant
      Extractive and others
                  
                  
                  418,536
                  
                  
                  
                  569,985
                  
                  
                  
                  (151,449
                  )TOTAL
                  
                  $
                  3,091,525
                  
                  
                  $
                  2,764,994
                  
                  
                  $
                  
                  326,531




Cost of
revenues for the quarter ended June 30, 2009 were $1,914,020, an increase of
$10,650, or 0.6%, from $1,903,370 for the quarter ended June 30, 2008. Compared
to the quarter ended June 30, 2008, the increase in the cost of revenues for the
second quarter of 2009 was caused by the increase in sales of our pharmaceutical
raw-material. An analysis of our results in cost of revenues of our
products is as follows:


13




For the quarter ended
                  June 30,
                
                
                Increase
      /Product
                
                2009
                
                
                2008
                
                
                (Decrease)Pharmaceutical
      intermediates
                
                $
                457,478
                
                
                $
                559,603
                
                
                $
                (102,125
                )Pharmaceutical
      raw-material
                
                
                1,323,376
                
                
                
                987,512
                
                
                
                335,864Plant
      Extractive and others
                
                
                133,166
                
                
                
                356,255
                
                
                
                (223,089
                )TOTAL
                
                $
                1,914,020
                
                
                $
                1,903,370
                
                
                $
                10,650




Gross
margin for the quarter ended June 30, 2009 was $1,177,505, an increase of
$315,881, or 36.7%, from $861,624 for the same period ended June 30, 2008 as a
result of the increase in our products sold.





Our gross
margin as a percentage of revenues for 2009 increased from 31.2% for the second
quarter of 2008 to 38% in the same quarter in 2009 because of we increased the
selling price of production raw-materials during the period.





General and Administrative
Expenses





General
and Administrative expenses totaled $32,707 for the three months ended June 30,
2009, a decrease of $199,295, or 86%, from $232,002 for the three months ended
June 30, 2008. The decrease in general and administrative expenses was mainly
due to a decrease in legal and professional fees by $88,938 and foreign currency
exchange loss by $39,299 during the period.





Selling and Distribution
Expenses





Selling
and distribution expenses totaled $34,571 for the three months ended June 30,
2009, a decrease of $32,434, or 48%, from $67,005 for the three months ended
June 30, 2008. The decrease in selling and distribution expenses was mainly due
to the increase in sea freight instead of air freight during the period as
compared to the same quarter of 2008.





SIX MONTHS ENDED JUNE 30,
2009 COMPARED TO SIX MONTHS ENDED JUNE 30, 2008





Revenues, Cost of Revenues
and Gross Margin





Revenues
for the six months ended June 30, 2009 were $4,417,420, a decrease of $934,022,
or 17.5%, from $5,351,442 for the same period in 2008. Our decrease in revenues
for the six months ended June 30, 2009 was mainly due to the decrease in our
sales of pharmaceutical intermediates and Plant Extractive and others products,
which include our products of L-Rhamnose, Quercetin and Diosmin. An analysis of
our results in sales of our products is as follows:




Six months ended
                      June 30,
                    
                    Increase
      /Product
                    
                    2009
                    
                    2008
                    
                    (Decrease)Pharmaceutical
      intermediates
                    
                    
                    $
                    897,790
                    
                    
                    $
                    1,651,168
                    
                    
                    $
                    (753,378
                    )Pharmaceutical
      raw-material
                    
                    
                    
                    2,635,525
                    
                    
                    
                    2,534,912
                    
                    
                    
                    100,613Plant
      Extractive and others
                    
                    
                    
                    884,105
                    
                    
                    
                    1,165,362
                    
                    
                    
                    (281,257
                    )TOTAL
                    
                    
                    $
                    4,417,420
                    
                    
                    $
                    5,351,442
                    
                    
                    $
                    (934,022
                    )





Cost of
revenues for the six months ended June 30, 2009 were $2,965,860, a decrease of
$546,455, or 15.6%, from $3,512,315 for the six months ended June 30, 2008.
Compared to the six months ended June 30, 2008, the decrease in the cost of
revenues for the six months ended June 30, 2009 was caused by the decrease in
our sales of pharmaceutical intermediates and Plant Extractive and others
products, which include our products of L-Rhamnose, Quercetin and Diosmin. An
analysis of our results in cost of revenues of our products is as
follows:





Six months ended
                      June 30,
                    
                    Increase
      /Product
                    
                    2009
                    
                    2008
                    
                    (Decrease)Pharmaceutical
      intermediates
                    
                    
                    $
                    549,956
                    
                    
                    $
                    1,093,231
                    
                    
                    $
                    (543,275
                    )Pharmaceutical
      raw-material
                    
                    
                    
                    1,892,526
                    
                    
                    
                    1,841,782
                    
                    
                    
                    50,744Plant
      Extractive and others
                    
                    
                    
                    523,378
                    
                    
                    
                    577,302
                    
                    
                    
                    (53,924
                    )TOTAL
                    
                    
                    $
                    2,965,860
                    
                    
                    $
                    3,512,315
                    
                    
                    $
                    (546,455
                    )




The gross
profit margin for the six months ended June 30, 2009 was $1,451,560, a decrease
of $387,567 or 21% from $1,839,127 for the six months period ended June 30, 2008
as a result of the decrease in our products sold.





Our gross
margin as a percentage of revenues for the six months ended June 30, 2009 was
slightly decreased from 34.4% to 32.9%, which compared to the same period in
2008.





General and Administrative
Expenses





General
and Administrative expenses totaled $441,406 for the six months ended June 30,
2009, an decrease of $188,355, or 30%, from $629,761 for the six months ended
June 30, 2008. The decrease in general and administrative expenses was mainly
due to a decrease in legal and professional fees of $235,671.





Selling and Distribution
Expenses





Selling
and distribution expenses totaled $86,929 for the six months ended June 30,
2009, a decrease of $4,969, or 5.4%, from $91,898 for the six months ended June
30, 2008. The decrease in selling and distribution expenses was mainly due to
the increase in sea freight instead of air freight during the six months ended
June 30, 2009 by $17,766 as compared to the same period of
2008.


14





Liquidity and Capital
Resources





Cash





Our cash
balance amounted to $85,105 at June 30, 2009.





In the
six months ended June 30, 2009, our cash used in operating activities totaled
$106,697, mainly due to increase in accounts receivable, inventories and other
assets of $160,422, $921,328 and $235,370 respectively. In the six months ended
June 30, 2009, our cash used in investing activities totaled $146,250 mainly for
the purchase of new production machinery and equipment of $161,862. Our cash
provided by financing activities in the six months ended June 30, 2009 of
$292,259 was a new bank loan from a PRC bank.





Working
Capital




Our
working capital amounted to $5,275,255 at June 30, 2009.





INFLATION




Inflation
has had a small impact on our business. It increased the purchase cost of our
raw materials resulting in an increase in our production cost.




CURRENCY
EXCHANGE FLUCTUATIONS




All of
our revenues and majority of the expenses for the six months ended June 30, 2009
were denominated primarily in Renminbi ("RMB"), the currency of China, and were
converted into US Dollars at the exchange rate of 6.84480 to 1. Since July 22,
2005, the Renminbi has strengthened against the US dollars. As a result of the
appreciation of RMB we recognized a foreign currency translation gain of $16,251
during the six months ended June 30, 2009. There could be no assurance that
RMB-to-U.S. dollar exchange rates will remain stable. A devaluation of RMB
relative to the U.S. dollar would adversely affect our business, financial
condition and results of operations. We do not engage in currency
hedging.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





Not
required




Item
4T. Controls and Procedures




(a) Evaluation of
Disclosure Controls and Procedures. Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended,
as of the end of the period covered by this Quarterly Report on Form 10-Q (the
“Evaluation Date”). The purpose of this evaluation is to determine if, as of the
Evaluation Date, our disclosure controls and procedures were operating
effectively such that the information, required to be disclosed in our
Securities and Exchange Commission (“SEC”) reports (i) was recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms, and (ii) was accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.


15





Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of the Evaluation Date, our disclosure controls and
procedures were operating effectively.




(b) Changes
in Internal Control over Financial Reporting.  There have been
no significant changes in our internal controls over financial reporting that
occurred during the six months ended June 30, 2009 that have materially
affected, or are reasonably likely to materially affect our internal controls
over financial reporting.




Limitations on the Effectiveness of
Disclosure Controls and Procedures.




Disclosure
controls and procedures and other procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act are recorded, processed, summarized and reported, within the time
period specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer as
appropriate, to allow timely decisions regarding required
disclosure.





PART II. OTHER INFORMATION




Item 1. Legal
Proceedings:





We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our Company or any of our
subsidiaries, threatened against or affecting the Company, our common stock, any
of our subsidiaries or of our Company's or our Company's subsidiaries' officers
or directors in their capacities as such, in which an adverse decision could
have a material adverse effect.





Item
1 A. Risk Factors





Not
required.





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





Not
applicable




Item 5. Other Information





None.




Item 6. Exhibits





(a) Exhibits





31.1
              Sarbanes
      Oxley Section 302 Certification31.2
              Sarbanes
      Oxley Section 302 Certification32.1
              Sarbanes
      Oxley Section 906 Certification32.2
              Sarbanes
      Oxley Section 906
Certification


16





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) 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 this 14th day of August
2009.





HUIFENG
      BIO-PHARMACEUTICAL TECHNOLOGY, INCBy:
                  /s/
      Jing’an WangJing’an
      Wang
                    Chief
      Executive Officer/s/
      Sanding TaoSanding
      TaoChief
      Financial Officer




17