**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





(Mark
      One)


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





For
                the quarterly period ended June 30,
                2008





or





o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE****SECURITIES
                EXCHANGE ACT OF 1934**





For
                the transition period from
            to





Commission
                File Number :
            333-112111





**Zhongpin
                Inc.**(Exact
                name of registrant as specified in its
                charter)





Delaware
            
            54-2100419(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)





21
                Changshe Road, Changge City, Henan Province, People’s Republic of
                China(Address
                of principal executive offices)
            
            (Zip
                Code)





011
                86 374-6216633(Registrant’s
                telephone number, including area
                code)





Not
                Applicable(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 Securities Exchange Act of 1934 during
      the
      preceding 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 ninety (90) days. YES x NO
o





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





Large
      accelerated filer o Accelerated
      filer x Non-accelerated
      filer o





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





As
      of
      August 1, 2008, 27,258,403 shares of the registrant’s common stock, and
      2,229,200 shares of the registrant’s Series A preferred stock, each such share
      convertible into one share of the registrant’s common stock, were
      outstanding.



















**ZHONGPIN
      INC.**




**FORM
      10-Q**




INDEX





**Page****Part
                I**
            **Financial
                Information**Item
                1.
            Unaudited
                Financial Statements:Consolidated
                Balance Sheets as of June 30, 2008 (unaudited) and December 31,
                2007
            2Consolidated
                Statements of Operations and Comprehensive Income (unaudited) for
                the
                three- and six-month periods ended June 30, 2008 and 2007
            3Consolidated
                Statements of Cash Flows (unaudited) for the six Months ended June
                30,
                2008 and 2007
            4Notes
                to Consolidated Financial Statements (unaudited)
            5Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            16Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            30Item
                4.
            Controls
                and Procedures
            30**Part
                II**
            **Other
                Information**Item
                1.
            Legal
                Proceedings
            32Item
                1A.
            Risk
                Factors
            32Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            32Item
                3.
            Defaults
                Upon Senior Securities
            32Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            32Item
                5.
            Other
                Information
            32Item
                6.
            Exhibits
            32**Signatures**
            
            33







**ZHONGPIN
      INC.**





**Part
      I – Financial Information**





**Item
      1.**  **Financial
      Statements**





The
      accompanying unaudited consolidated balance sheets, statements of operations
      and
      comprehensive income, and of cash flows and related notes thereto, have been
      prepared in accordance with generally accepted accounting principles in the
      United States of America (“GAAP”) for interim financial information and in
      conjunction with the rules and regulations of the Securities and Exchange
      Commission (“SEC”). Accordingly, they do not include all of the disclosures
      required by GAAP for complete financial statements. The financial statements
      reflect all adjustments consisting only of normal, recurring adjustments, which
      are, in the opinion of management, necessary for a fair presentation for the
      interim periods.





The
      accompanying financial statements should be read in conjunction with the notes
      to the aforementioned financial statements and Management’s Discussion and
      Analysis of Financial Condition and Results of Operations and the financial
      statements and notes thereto included in our Annual Report on Form 10-K for
      the
      year ended December 31, 2007.





The
      results of operations for the three- and six-month periods ended June 30, 2008
      are not necessarily indicative of the results to be expected for the entire
      fiscal year or any other period.








**ZHONGPIN
      INC.**


**CONSOLIDATED
      BALANCE SHEETS**


*(Amounts
      in U.S. dollars)*





**June 30, 2008**
            
            **December 31, 2007**(Unaudited)**ASSETS**Current
                assetsCash
                and cash equivalents
            
            $
            57,956,333
            
            $
            45,142,135Restricted
                cash
            
            
            6,269,044
            
            
            3,559,401Accounts
                receivable, net of allowance for doubtful accounts of $2,031,396
                and
                $1,341,872
            
            
            20,454,095
            
            
            18,982,312Other
                receivables
            
            
            3,983,285
            
            
            4,826,279Purchase
                deposits
            
            
            6,433,704
            
            
            6,059,782Prepaid
                expenses and deferred charges
            
            
            197,162
            
            
            1,680,679Inventories
            
            
            26,257,006
            
            
            25,922,125VAT
                recoverable
            
            
            6,307,471
            
            
            4,350,795Total
                current assets
            
            
            127,858,100
            
            
            110,523,508Property,
                plant and equipment (net)
            
            
            83,188,382
            
            
            66,429,654Construction
                in progress
            
            
            54,433,473
            
            
            16,811,740Land
                use rights
            
            
            25,001,062
            
            
            23,339,142Total
                assets
            
            $
            290,481,017
            
            $
            217,104,044**LIABILITIES
                AND EQUITY**Current
                liabilitiesAccounts
                payable
            
            $
            5,991,893
            
            $
            4,145,842Other
                payables
            
            
            10,323,818
            
            
            8,746,845Bank
                notes payable
            
            
            5,359,304
            
            
            6,160,502Accrued
                liabilities
            
            
            4,586,633
            
            
            3,014,600Short-term
                bank loans payable
            
            
            71,758,685
            
            
            47,668,592Deposits
                from customers
            
            
            7,237,128
            
            
            1,876,665Research
                and development grants payable
            
            
            450,639
            
            
            490,288Long-term
                bank loans payable-current portion
            
            
            145,671
            
            
            145,671Tax
                payable
            
            
            2,216,156
            
            
            202,676Total
                current liabilities
            
            
            108,069,927
            
            
            72,451,681Long-term
                loans payable
            
            
            11,767,354
            
            
            1,634,769Total
                liabilities
            
            
            119,837,281
            
            
            74,086,450EquityPreferred
                stock: par value $0.001; 25,000,000 authorized; 2,229,200 and 3,125,000
                shares issued and outstanding
            
            
            2,229
            
            
            3,125Common
                stock: par value $0.001; 100,000,000 authorized; 27,258,403 and 25,891,567
                shares issued and outstanding
            
            
            27,259
            
            
            25,892Additional
                paid in capital
            
            
            102,116,169
            
            
            100,070,571Retained
                earnings
            
            
            50,541,619
            
            
            34,732,049Accumulated
                other comprehensive income
            
            
            17,956,460
            
            
            8,185,957Total
                equity
            
            
            170,643,736
            
            
            143,017,594Total
                liabilities and equity
            
            $
            290,481,017
            
            $
            217,104,044


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


2





**ZHONGPIN
      INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**


*(Amount
      in U.S. dollars) (Unaudited)*





**Three Months Ended**
              **June 30,**
            
            **Six Months Ended**
              **June 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007****(Restated)**
            
            
            
            **(Restated)**RevenuesSales
                revenues
            
            $
            137,526,574
            
            $
            63,678,460
            
            $
            246,254,324
            
            $
            119,470,238Cost
                of sales
            
            
            120,422,667
            
            
            55,501,129
            
            
            214,958,874
            
            
            103,550,751Gross
                profit
            
            
            17,103,907
            
            
            8,177,331
            
            
            31,295,450
            
            
            15,919,487Operating
                expensesGeneral
                and administrative expenses
            
            
            5,440,211
            
            
            2,101,970
            
            
            9,844,872
            
            
            4,069,218Operating
                expenses
            
            
            2,331,400
            
            
            1,118,416
            
            
            4,315,633
            
            
            2,244,361Total
                operating expenses
            
            
            7,771,611
            
            
            3,220,386
            
            
            14,160,505
            
            
            6,313,579Income
                from operations
            
            
            9,332,296
            
            
            4,956,945
            
            
            17,134,945
            
            
            9,605,908Other
                income (expense)Interest
                income
            
            
            534,548
            
            
            105,020
            
            
            1,170,325
            
            
            126,924Other
                income (expenses)
            
            
            (143,457
            )
            
            137,920
            
            
            (101,322
            )
            
            136,976Government
                subsidies
            
            
            432,339
            
            
            3,449
            
            
            571,883
            
            
            3,449Interest
                expense
            
            
            (1,167,090
            )
            
            (628,530
            )
            
            (1,973,353
            )
            
            (1,071,341
            )Total
                other income (expense)
            
            
            (343,660
            )
            
            (382,141
            )
            
            (332,468
            )
            
            (803,992
            )Net
                income before taxes
            
            
            8,988,636
            
            
            4,574,804
            
            
            16,802,477
            
            
            8,801,916Provision
                for income taxes
            
            
            466,826
            
            
            395,040
            
            
            992,907
            
            
            612,393Net
                income
            
            $
            8,521,809
            
            $
            4,179,764
            
            $
            15,809,570
            
            $
            8,189,523Foreign
                currency translation adjustment
            
            $
            3,831,009
            
            $
            989,714
            
            $
            9,770,503
            
            $
            1,535,225Comprehensive
                income
            
            $
            12,352,818
            
            $
            5,169,478
            
            $
            25,580,073
            
            $
            9,724,778Basic
                earnings per common share
            
            $
            0.29
            
            $
            0.21
            
            $
            0.54
            
            $
            0.42Diluted
                earnings per common share
            
            $
            0.29
            
            $
            0.20
            
            $
            0.53
            
            $
            0.40Basic
                weighted average shares outstanding
            
            
            29,417,845
            
            
            19,629,240
            
            
            29,375,615
            
            
            19,343,476Diluted
                weighted average shares outstanding
            
            
            29,822,935
            
            
            20,633,233
            
            
            29,841,190
            
            
            20,286,545





The
      accompanying notes are an integral part of these consolidated financial
      statements.  3
 **ZHONGPIN
      INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


*(Amount
      in U.S. dollars) ( Unaudited)*





**Six Months Ended June 30,****2008**
            
            **2007**(Restated)Cash
                flows from operating activities:Net
                income
            
            $
            15,809,570
            
            $
            8,189,523Adjustments
                to reconcile net income to net cash provided by (used in)
                operations:Depreciation
            
            
            1,876,533
            
            
            782,677Amortization
            
            
            218,720
            
            
            153,243Provision
                for allowance for bad debt
            
            
            585,626
            
            
            —Warrant
                expense
            
            
            —
            
            
            19,140Non-cash
                compensation expense
            
            
            809,146
            
            
            1,125,058Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (817,864
            )
            
            (5,361,890
            )Other
                receivables
            
            
            1,122,962
            
            
            (22,706
            )Purchase
                deposits
            
            
            1,552,753
            
            
            (163,305
            )Prepaid
                expense and deferred charges
            
            
            12,649
            
            
            (312,815
            )Inventories
            
            
            1,311,277
            
            
            (438,882
            )VAT
                recoverable
            
            
            (1,627,559
            )
            
            (859,694
            )Accounts
                payable
            
            
            1,532,950
            
            
            524,504Other
                payables
            
            
            1,014,500
            
            
            4,416,410Research
                and development grants payable
            
            
            (20,684
            )
            
            (10,959
            )Accrued
                liabilities
            
            
            1,351,874
            
            
            390,580Taxes
                payable
            
            
            1,944,718
            
            
            (278,873
            )Deposits
                from clients
            
            
            5,092,966
            
            
            1,857,819Net
                cash provided by operating activities
            
            
            31,770,137
            
            
            10,009,830Cash
                flows from investing activities:Construction
                in progress
            
            
            (46,485,710
            )
            
            (17,027,530
            )Additions
                to property and equipment
            
            
            (3,077,784
            )
            
            (6,034,589
            )Additional
                to intangible assets
            
            
            (360,698
            )
            
            (5,450,162
            )Proceeds
                on disposal of fixed assets
            
            
            74,281
            
            
            —Net
                cash used in investing activities
            
            
            (49,849,911
            )
            
            (28,512,281
            )Cash
                flows from financing activities:Proceeds
                (repayment) from (of) bank notes
            
            
            (1,167,933
            )
            
            7,362,620Proceeds
                from short-term bank loans
            
            
            20,410,477
            
            
            14,917,851Proceeds
                from long-term bank loans
            
            
            9,921,759
            
            
            —Repayment
                of long-term bank loans
            
            
            (183,236
            )
            
            (69,489
            )Proceeds
                from exercised warrants
            
            
            1,236,923
            
            
            14,421,835Net
                cash provided by financing activities
            
            
            30,217,990
            
            
            36,632,817Increase
                in restricted cash
            
            
            (2,709,643
            )
            
            (4,299,555
            )Effect
                of rate changes on cash
            
            
            3,385,625
            
            
            1,535,254Increase
                in cash and cash equivalents
            
            
            12,814,198
            
            
            15,366,065Cash
                and cash equivalents, beginning of period
            
            
            45,142,135
            
            
            13,351,045Cash
                and cash equivalents, end of period
            
            $
            57,956,333
            
            $
            28,717,110Supplemental
                disclosures of cash flow information:Cash
                paid for interest
            
            $
            2,079,051
            
            $
            1,174,112Cash
                paid for income taxes
            
            $
            431,604
            
            $
            669,237




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




4


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





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 with the
      instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
      do
      not include all of the information and footnotes required by GAAP for annual
      financial statements. In the opinion of management, all adjustments (consisting
      of normal recurring accruals) considered necessary for a fair presentation
      have
      been included. Operating results for the six-month period ended June 30, 2008
      are not necessarily indicative of the results that may be expected for the
      year
      ending December 31, 2008.





1.  ORGANIZATION
      AND NATURE OF OPERATIONS




Zhongpin
      Inc. (“Zhongpin”) was established under the laws of the State of Delaware on
      February 4, 2003.  Zhongpin is a public holding company holding an equity
      interest in its subsidiaries outside the U.S. Its operating subsidiaries are
      located in China and focus on two business segments: pork and pork products,
      and
      vegetables and fruits. **** The
      pork
      and pork products segment is involved primarily in the processing of live market
      hogs into fresh, frozen and processed pork products which are sold domestically
      to branded stores, food retailers, food service distributors, restaurants,
      hotel
      chains and non-commercial food service establishments, such as schools,
      governments, healthcare facilities, the military and other food processors,
      as
      well as to certain international markets in a limited scope. The vegetables
      and
      fruits segment is involved primarily in the processing of frozen vegetables
      and
      fruits that are sold to our branded stores and food retailers. Zhongpin and
      its
      subsidiaries is collectively referred to as “our company” “we,” “us” and
“our.”





Zhongpin
      holds a 100% interest in Falcon Link Investment Limited, a company organized
      under the laws of the British Virgin Islands (“Falcon”), through which Zhongpin
      holds a 100% interest in its China-based subsidiaries, each of which was
      organized under the laws of the RPC. Our China-based subsidiaries include the
      following:





**Name**
            
            **Date Of**
              **Incorporation**
            
            **Registered**
              **Capital**
            
            **Percentage**
              **of Ownership**Henan
                Zhongpin Food Company, Ltd.
            
            
            Sep.
                15, 2005
            
            
            84,300,000
                USD
            
            
            100.00%Henan
                Zhongpin Food Share Company, Ltd.
            
            
            Jan.
                20, 2000
            
            
            626,900,000
                RMB
            
            
            100.00%($82,011,411)Henan
                Zhongpin Industrial Company Limited
            
            
            Jan.
                17, 2004
            
            
            18,000,000
                RMB
            
            
            100.00%($2,173,913)Henan
                Zhongpin Import and Export Trading Company
            
            
            Aug.
                11, 2004
            
            
            5,060,000
                RMB
              ($611,111)
            
            
            100.00%Zhumadian
                Zhongpin Food Company Limited
            
            
            June
                7, 2006
            
            
            60,000,000
                RMB
              ($8,585,399)
            
            
            100.00%Anyang
                Zhongpin Food Company Limited
            
            
            Aug.
                21, 2006
            
            
            4,800,000
                RMB
              ($606,927)
            
            
            100.00%Henan
                Zhongpin Fresh Food Logistics Company Limited
            
            
            Sept.
                14, 2006
            
            
            1,500,000
                RMB
              ($189,665)
            
            
            100.00%





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




5


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**Name**
            
            **Date Of**
              **Incorporation**
            
            **Registered**
              **Capital**
            
            **Percentage**
              **of Ownership**Deyang Zhongpin
                Food Company Limited
            
            
            Sept.
                25, 2006
            
            
            15,000,000
                RMB
              ($1,967,799)
            
            
            100.00%Henan
                Zhongpin Business Development Company Limited
            
            
            Sept.
                27, 2006
            
            
            5,000,000
                RMB
              ($632,215)
            
            
            100.00%Heilongjiang
                Zhongpin Food Company Limited
            
            
            Oct.
                17, 2006
            
            
            1,000,000
                RMB
              ($126,406)
            
            
            100.00%Luoyang
                Zhongpin Food Company Limited
            
            
            April
                26, 2007
            
            
            5,000,000
                RMB
              ($647,677)
            
            
            100.00%Yongcheng
                Zhongpin Food Company Limited
            
            
            June
                1, 2007
            
            
            5,000,000
                RMB
              ($646,836)
            
            
            100.00%Tianjin
                Zhongpin Food Company Limited
            
            
            Sept.
                14, 2007
            
            
            5,000,000
                RMB
              (
                $664,699)
            
            
            100.00%




2.  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





**PRINCIPLES
      OF CONSOLIDATION**





The
      financial statements include the accounts of Zhongpin and its wholly-owned
      subsidiaries. All significant inter-company accounts and transactions have
      been
      eliminated. All of the consolidated financial statements have been prepared
      based on generally accepted accounting principles in the United
      States.





**FOREIGN
      CURRENCY TRANSLATIONS AND TRANSACTIONS**





The
      Renminbi (“RMB”), the national currency of People’s Republic of China (“PRC”),
      is the primary currency of the economic environment in which the China-based
      entities are operating. The United States dollar (“U.S. dollar”) is the
      functional currency used by Falcon and Zhongpin to record all of their
      activities. We use the U.S. dollar for financial reporting
      purposes.





We
      translate our subsidiaries’ assets and liabilities into U.S. dollars using the
      rate of exchange prevailing as of the balance sheet date and our consolidated
      statements of operations and comprehensive income is translated at moving
      average exchange rates during the reporting period. Adjustments resulting from
      the translation of subsidiaries’ financial statements from the functional
      currency into U.S. dollars are recorded in shareholders’ equity as part of
      accumulated comprehensive income (loss) - translation adjustments. Gains or
      losses resulting from transactions in currencies other than the functional
      currency are reflected in the income statements for the reporting
      periods.





**REVENUE
      RECOGNITION**





Revenues
      generated from the sales of various meat products and vegetables and fruits
      are
      recognized when these products are delivered to costumers in accordance with
      previously agreed upon pricing and delivery arrangements; the collectibility
      of
      these sales is reasonably assured. Since the products sold by our company are
      primarily perishable and frozen food products, the right of return is only
      for a
      few days and has been determined to be insignificant by the management of our
      company.




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


6


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





2.  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Accordingly,
      no provision has been made for returnable goods. Revenues presented on our
      consolidated statements of operations and comprehensive income are net of sales
      taxes.





**CASH
      AND CASH EQUIVALENTS**





We
      consider all highly liquid investments with maturity of three months or less
      to
      be cash equivalents. We maintain our cash accounts at credit-worthy financial
      institutions and closely monitor the movements of our cash
      positions.





**RESTRICTED
      CASH**





Under
      the
      terms of the credit agreements with certain of our lenders, Henan Zhongpin
      Food
      Share Co., Ltd. (“Henan Zhongpin”) has agreed to maintain with such lenders in a
      deposit account an amount of cash that will serve as collateral for its delivery
      of bank promissory notes of such lenders as payment instruments for its
      procurement purposes. The amount of bank promissory notes of such lenders that
      can be delivered by Henan Zhongpin can be up to twice the amount of such
      deposits. As such deposits may not be withdrawn by Henan Zhongpin without
      restriction, such cash deposits are presented as “restricted cash” on our
      balance sheets.





**ACCOUNTS
      RECEIVABLE**





During
      the normal course of business, our policy is to ask larger customers to make
      deposits in reasonable and meaningful amounts on a case-by-case basis. For
      certain newly-developed customers, we may extend unsecured credit.





We
      regularly evaluate and monitor the creditworthiness of each of our customers
      in
      accordance with the prevailing practice in the meat industry and based on
      general economic conditions in the PRC. We maintain a general policy of
      providing allowance for doubtful accounts in an amount equal to the aggregate
      amount of those accounts that are not collected within one year plus an amount
      equal to 10% of the aggregate amount of accounts receivable less than one year
      old for Henan Zhongpin and an amount equal to 5% of the aggregate amount of
      accounts receivable less than one year old for our other subsidiaries. After
      all
      attempts to collect a receivable have failed, the receivable is written off
      against the allowance.





Based
      on
      the information available to management, we believe our allowance for doubtful
      accounts as of June 30, 2008 and December 31, 2007, respectively, were adequate.
      However, the actual write-off for any one period might exceed the recorded
      allowance.





The
      following table presents allowance activities for our accounts
      receivable.





June 30, 2008
            
            December 31, 2007Beginning
                balance
            
            $
            1,341,872
            
            $
            412,026Additions
                charged to expense
            
            
            689,524
            
            
            929,846Ending
                balance
            
            $
            2,031,396
            
            $
            1,341,872





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


7


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





2.  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)





**OTHER
      RECEIVABLES**





Other
      receivables consist primarily of cash deposits to suppliers other than hog
      farms
      to ensure preferential pricing and delivery. Other receivables also consist
      of
      cash advances to our employees for their potential expenses related to our
      business. These advances bear no interest and are expected to be repaid in
      cash.
      Repayment is typically required to be made in less than one year. Advances
      that
      are not expected to be repaid within one year are classified as
      non-current.





**INVENTORIES**





Inventories
      are stated at the lower of cost, determined on a weighted average basis, and
      net
      realizable value. Work-in-progress and finished goods are composed of direct
      material, direct labor and an attributable portion of manufacturing overhead.
      Net realizable value is the estimated selling price, in the ordinary course
      of
      business, less estimated costs to complete and dispose.





**LAND
      USE RIGHTS**





We
      do not
      own any of the parcels of land on which our plants are built as these parcels
      of
      land are owned by the PRC government. In the PRC, land use rights for commercial
      purposes are granted by the PRC government typically for a term of up to 50
      years, and we are required to pay a lump sum of money to the State Land and
      Resource Department of the applicable locality to acquire such rights. In
      accordance with the provision of Statement of Financial Accounting No. 142,
      “ *Goodwill
      and Other Intangible Assets* ”
(SFAS
      No. 142), we capitalize the lump sum of money paid and amortize these land
      use
      rights by using the straight line method over the term of the land use license
      granted by the applicable governmental authority.





**IMPAIRMENT
      OF LONG-LIVED ASSETS**





We
      have
      adopted the provisions of the Statement of Financial Accounting Standard No.
      144, “ *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ”
(“SFAS
      No.144”). SFAS No.144 requires that long-lived assets be reviewed for impairment
      whenever events or changes in circumstances indicate that the carrying amount
      of
      an asset may not be recoverable through the estimated undiscounted cash flows
      expected to result from the use and eventual disposition of the assets. Whenever
      any such impairment exists, an impairment loss will be recognized for the amount
      by which the carrying value exceeds the fair value. There was no impairment
      loss
      for the six months ended June 30, 2008 and 2007.





**CONSTRUCTION
      IN PROGRESS AND INTEREST CAPITALIZATION**





Along
      with the expansion of our business model, we have continued to construct new
      production facilities during the six months ended June 30, 2008. Once the
      construction projects have been put into service and all regulatory permits
      and
      approvals have been received, we expect to conclude the cost accumulation
      process. The interest costs related to these construction projects have been
      determined to be insignificant by management and we do not capitalize them
      during the construction process.





**VALUE
      ADDED TAX**





All
      China-based entities are subject to a value added tax (VAT) imposed by the
      PRC
      government on their sales of domestic products. Our VAT rates are 13% for
      chilled pork products, frozen pork products and vegetables and fruits products,
      and 17% for prepared meat products. The input VAT can be offset against the
      output VAT. The VAT payable or receivable balance presented on our balance
      sheets represents either the input VAT less than or larger than the output
      VAT.
      The debit balance represents a credit against future collection of output VAT
      instead of a receivable.




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




8





**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





2.  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)





**RESEARCH
      AND DEVELOPMENT**





The
      PRC
      government has made a cash grant to certain China-based entities specifically
      to
      fund research and development. We have recorded this grant as a liability titled
      “Research & development grants payable” and presented it on our balance
      sheets. Qualifying research and development costs reduce the liability while
      non-qualifying research and development costs are expensed as incurred. Research
      and development costs were approximately $1,284,600 and $817,000 for the six
      months ended June 30, 2008 and 2007, respectively.





**EARNINGS
      (LOSS) PER SHARE**





We
      present earnings per share in accordance with Statement of Financial Accounting
      Standards No. 128, “ *Earnings
      per Share,* ”
“SFAS
      No. 128”. SFAS No. 128 replaces the calculation of primary and
      fully-diluted earnings (loss) per share with basic and diluted earnings (loss)
      per share. Basic earnings (loss) per share includes no dilution and is computed
      by dividing income (loss) available to common shareholders by the weighted
      average number of common shares outstanding during the period. Diluted earnings
      (loss) per share reflect the potential dilution of securities that could share
      in the earnings of an entity, similar to fully-diluted earnings (loss) per
      share. **** Based
      on
      the fact that the voting rights and
      certain other characteristics of our Series A convertible preferred stock are
      the same as those of common stock, the outstanding shares of our Series A
      convertible preferred stock at each reporting period are deemed to be common
      shares outstanding. The number of outstanding shares subject to stock warrants
      and options at June 30, 2008 and 2007 was 2,054,063 shares and 1,992,438
      shares, respectively. All of such securities are included in the computation
      of
      diluted earnings per share.





**ADOPTION
      OF FIN 48**





Effective
      January 1, 2007, we adopted Financial Accounting Standards Board (“FASB”)
      Interpretation No. 48, “ *Accounting
      for Uncertainty in Income Taxes* ”
(FIN
      48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
      in an enterprise’s financial statements in accordance with SFAS No. 109,
“ *Accounting
      for Income Taxes* .”
FIN
      48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. FIN 48 also provides guidance on de-recognition of tax
      benefits, classification on the balance sheet, interest and penalties,
      accounting in interim periods, disclosure, and transition. In accordance with
      FIN 48, we performed a self-assessment and concluded that there were no
      significant uncertain tax positions requiring recognition in our financial
      statements.





**SHARE-BASED
      PAYMENT**





Effective
      January 1, 2006, we adopted Statement of Financial Accounting Standards No
      123(R), “ *Share-Based
      Payments* ”
(SFAS
      No. 123(R)). SFAS 123R amends existing accounting pronouncements for share-based
      payment transactions in which an enterprise receives employee and certain
      non-employee services in exchange for (a) equity instruments of the enterprise
      or (b) liabilities that are based on the fair value of the enterprise’s equity
      instruments or that may be settled by the issuance of such equity instruments.
      SFAS 123(R) generally requires such transactions be accounted for using a
      fair-value-based method. We accounted for stock options granted using a
      fair-value-based method in accordance with SFAS No. 123(R).




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




9





**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





2.  SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)





**USE
      OF ESTIMATES**





The
      preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ materially from those
      estimates.





**RECLASSIFICATION**





The
      presentation of certain items contained in the notes to financial statements
      for
      the prior year have been changed in conformity with the current year
      presentation of the notes to the consolidated financial statements.




3.  INVENTORIES




Inventories
      at June 30, 2008 and December 31, 2007 consisted of the following:





June 30, 2008
            
            December 31, 2007(Unaudited)Raw
                materials
            
            $
            2,124,630
            
            $
            1,242,717Work
                in progress
            
            
            3,496,908
            
            
            4,899,169Finished
                goods
            
            
            19,460,252
            
            
            18,753,016Low
                value consumables and packing materials
            
            
            1,175,216
            
            
            1,027,223Inventories
            
            $
            26,257,006
            
            $
            25,922,125




4.  PROPERTY,
      PLANT AND EQUIPMENT





A
      summary
      of property, plant and equipment at cost at June 30, 2008 and December 31,
      2007
      is as follows:




June 30, 2008
            
            December 31, 2007(Unaudited)Plants
                and buildings
            
            $
            52,406,940
            
            $
            42,711,397Machinery
                and equipment
            
            
            35,585,925
            
            
            26,964,304Office
                furniture and equipment
            
            
            1,071,803
            
            
            818,528Vehicles
            
            
            1,922,704
            
            
            1,491,544Accumulated
                depreciation
            
            
            (7,798,989
            )
            
            (5,556,119
            )$
            83,188,383
            
            $
            66,429,654





The
      depreciation and amortization expenses for the six months ended June 30, 2008
      and 2007 were $1,876,533 and $782,677, respectively.




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


10


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





5.  LAND
      USE
      RIGHTS





Our
      land
      use rights at June 30, 2008 and December 31, 2007 are summarized as
      follows:





June 30, 2008
            
            December 31, 2007(Unaudited)Land
                use rights
            
            $
            25,918,287
            
            $
            23,989,174Accumulated
                amortization
            
            
            (917,225
            )
            
            (650,032
            )$
            25,001,062
            
            $
            23,339,142





The
      amortization of land use rights for the six months ended June 30, 2008 and
      2007
      was $218,720 and $153,243, respectively.





6.  CONSTRUCTION
      IN PROGRESS





Construction
      in progress at June 30, 2008 and December 31, 2007 consisted of:





Date orEstimated DateConstruction Project
            
            Put in Service(1)
            
            June
                30, 2008
            
            December 31, 2007(Unaudited)Production
                facility for chilled and frozen pork in Zhumadian
            
            
            July
                2008
            
            $
            24,799
            
            $
            523,359Production
                facility for chilled and frozen pork in Anyang
            
            
            July
                2008
            
            
            5,121,111
            
            
            2,069,446Production
                line for prepared pork in Changge industrial plant
            
            
            December
                2008
            
            
            5,242,231
            
            
            —Production
                facility for chilled and frozen pork in Luoyang
            
            
            December
                2008
            
            
            22,022,528
            
            
            6,481,730Production
                facility for chilled and frozen pork in Yongcheng
            
            
            December
                2008
            
            
            10,306,620
            
            
            55,347Waste
                water solution system in Changge industrial plant
            
            
            December
                2008
            
            
            613,936
            
            
            8,214Supplies
                storage in Changge industrial plant
            
            
            October
                2008
            
            
            1,693,585
            
            
            —Production
                line for fruits and vegetables in Changge industrial park
            
            
            February
                2009
            
            
            5,794,187
            
            
            —The
                first phase of residential dormitory construction in Changge industrial
                park
            
            
            December
                2008
            
            
            3,144,467
            
            
            —Replacement
                and maintenance in Changge industrial park
            
            
            January
                2009
            
            
            460,474
            
            
            —Water
                supply system in Deyang
            
            
            January
                2009
            
            
            9,535
            
            
            —Cooling
                storage and logistic hub in Changge industrial park
            
            
            Completed
            
            
            —
            
            
            7,673,644Total
            
            
            
            
            $
            54,433,473
            
            $
            16,811,740


_____________





(1)
            Represents
                date all regulatory permits and approvals are received and project
                is
                placed in service. In certain cases, construction of a project may
                be
                substantially completed and the project may be operational during
                a
                testing period prior to such date.




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




11


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





7.  SHORT-TERM
      BANK LOANS




Short-term
      bank loans are due within one year. Of the $71.76 million aggregate
      principal amount of short-term bank loans at June 30, 2008, loans in the
      principal amount of $38.05 million were secured by our plants located primarily
      in Henan Province and loans in the aggregate principal amount of $33.71 million
      were guaranteed by Henan Zhongpin Industry Co., Ltd. These loans bear interest
      at prevailing lending rates in the PRC ranging from 7.10 % to 7.84% per annum.





8.  LONG-TERM
      BANK LOANS





Amounts
      outstanding under our long-term debt arrangements at June 30, 2008 and
      December 31, 2007 were as follows:





**Bank**
            
            **June 30, 2008**
            
            **December 31, 2007**(Unaudited)Canadian
                Government Transfer Loan
            
            $
            1,707,574
            
            $
            1,780,440Rabobank
                Nederland Shanghai
            
            
            5,831,699
            
            
            —CITIC
                Industrial Bank
            
            
            4,373,752
            
            
            —11,913,025
            
            
            1,780,440Current
                portion
            
            
            (145,671
            )
            
            (145,671
            )Total
            
            $
            11,767,354
            
            $
            1,634,769





In
      May
      2008, Henan Zhongpin entered into a credit agreement with Rabobank Nederland
      Shanghai Branch that provided for a one-year short-term loan RMB 20 million
      ($2.9 million) and a three-year term loan of up to RMB 80 million ($11.7
      million). Upon execution of the credit agreement, the full amount of the
      short-term loan was funded by the bank. On June 10, 2008, the first 50% of
      the
      long-term loan was funded by the bank. The remaining 50% of the long-term loan
      may be drawn down by Henan Zhongpin on or prior to September 11, 2008, subject
      to the satisfaction by Henan Zhongpin of certain conditions precedent. Amounts
      currently outstanding under the term loan bear interest at the rate of 7.56%
      per
      annum, which is the interest rate published by the People’s Bank of China on
      June 10, 2008 for loans with the same or similar terms. Any additional
      amounts drawn down under the long-term loan will bear interest at the rate
      per
      annum issued at the date of the borrowing by the People’s Bank of China for
      loans with a corresponding term as the term of such borrowing, or in the absence
      of such a rate, at a rate per annum determined by the lender. The accrued
      interest on this loan is payable on a quarterly basis. Of the outstanding
      principal under the long-term loan, 25% is payable 24 months after the first
      drawdown date (June 10, 2008), 37.5% is payable 30 months after the first
      drawdown date and the balance is payable 36 months after the first drawdown
      date.




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




12


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





8.  LONG-TERM
      BANK LOANS (continued)





Borrowings
      under the term loan agreement are guaranteed by our subsidiaries, Anyanag
      Zhongpin Food Co., Ltd. and Zhumadian Zhongpin Food Ltd., are secured by
      Zhongpin Food Share on our prepared pork production facilities located at
      Changge City, Henan Province and are subject to various financial and
      non-financial covenants, including a debt to net worth ratio, a debt to EBIDTA
      ratio, an interest coverage ratio, a required minimum tangible net worth,
      restrictions on investments in fixed assets and financial assets, on
      inter-company indebtedness and on consolidated contingent liabilities and a
      requirement that a minimum percentage of Henan Zhongpin’s consolidated EBITDA be
      generated by Henan
      Zhongpin and the guarantors. Henan Zhongpin also is prohibited from paying
      dividends in an amount in excess of 50% of its retained earnings during the
      term
      of the credit facility.





In
      April
      2008, Henan Zhongpin entered into a loan agreement with CITIC Industrial Bank
      pursuant to which Henan Zhongpin borrowed RMB 30 million ($4.4 million). All
      amounts borrowed under
      the
      loan agreement bear interest at a floating rate that was based on the prime
      rate
      published by the People’s Bank of China for the loans with the same or similar
      terms on the drawdown date (7.56% per annum on that drawdown date) and are
      payable on January 23, 2010. The accrued interest on this loan is payable
      on the 20 th of each month since the drawdown date. Borrowings under the loan agreement
      are guaranteed by a related party located in Henan Province.





In
      May
      2002, Henan Zhongpin entered into a loan agreement with China Communication
      Bank, Zhengzhou Branch, which is the intermediary bank for a 40-year term loan
      in the amount of $2,504,969 from the Canadian government. Under the terms of
      the
      loan agreement, 58% of the principal amount ($1,452,882) of this loan bears
      interest at the fixed rate of 6.02% per annum and remaining principal amount
      of
      this loan is interest free. The loan is repayable in a fixed amount of $145,671,
      which includes principal and interest, that is payable on a semi-annual basis
      through May 15, 2042. Borrowings under the loan agreement are guaranteed by
      the
      Financing Department, Henan Province.





9.  EQUITY
      TRANSACTIONS





During
      six months ended June 30, 2008, warrants to purchase an aggregate of 225,000
      shares of common stock were exercised with an exercise price per share of $5.00
      and warrants to purchase an aggregate of 45,338 shares of common stock were
      exercised with an exercise price per share of $5.50. We
      received net proceeds from these transactions in the aggregate amount of
      approximately $1.24 million, after payment of a 10% commission to the placement
      agent in accordance with the relevant retainer agreements.





During
      the six months ended June 30, 2008, warrants to purchase an aggregate of 72,187
      shares of common stock with an exercise price per share of $8.00 were exercised
      on a cashless basis. In connection with these transactions, we issued an
      aggregate of 24,256 shares of common stock and we received no cash from such
      issuances. For cash flow purposes, these transactions were non-cash
      transactions.




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


13


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





9.  EQUITY
      TRANSACTIONS (continued)





During
      the six months ended June 30, 2008, warrants to purchase 88,625 units were
      exercised on a cashless basis. Each unit is comprised of two shares of Series
      A
      preferred stock and a five-year warrant to purchase one share of common stock
      with the exercise price of $5.00 per share. At the time of exercise of the
      unit
      warrants, the holders also exercised the underlying warrants to purchase common
      stock. In connection with these transactions, we issued an aggregate of 176,443
      shares of common stock and we receive no cash proceeds from such issuances.
      For
      cash flow purpose, these transactions were non-cash transactions.





During
      the six months ended June 30, 2008, an aggregate of 895,800 shares of our Series
      A convertible preferred stock were converted into 895,800 shares of common
      stock. For cash flow purposes, these transactions were non-cash
      transactions.





10.  EARNINGS
      PER SHARE





The
      following table sets forth the computation of basic and diluted net earnings
      per
      share for the periods indicated:





Six Months Ended June 30,
            
            Three Months Ended June 30,2008
            
            2007
            
            2008
            
            2007(Unaudited)
            
            (Unaudited)
            
            (Unaudited)
            
            (Unaudited)Numerator:Net
                income (loss) attributable to common shareholders
            
            $
            15,809,570
            
            $
            8,189,523
            
            $
            8,521,809
            
            $
            4,179,764Net
                income (loss) used in computing diluted earnings per share
            
            
            15,809,570
            
            
            8,189,523
            
            
            8,521,809
            
            
            4,179,764Denominator:Weighted
                average common shares outstanding – basic
            
            
            29,375,615
            
            
            19,343,476
            
            
            29,417,845
            
            
            19,629,240Potential
                diluted shares from stock options granted
            
            
            465,575
            
            
            943,069
            
            
            405,090
            
            
            1,003,993Weighted
                average common share outstanding – diluted
            
            
            29,841,190
            
            
            20,286,545
            
            
            29,822,935
            
            
            20,633,233Basic
                earnings per share
            
            $
            0.54
            
            $
            0.42
            
            $
            0.29
            
            $
            0.21Diluted
                earnings per share
            
            $
            0.53
            
            $
            0.40
            
            $
            0.29
            
            $
            0.20





11.  SEGMENT
      REPORTING





We
      operate in two business segments: pork and pork products, and vegetables and
      fruits.





Our
      pork
      and pork products segment is involved primarily in the processing of live market
      hogs into fresh, frozen and processed pork products. This segment sells pork
      and
      pork products domestically to branded stores, food retailers, food service
      distributors, hotel chains, restaurants and non-commercial foodservice
      establishments, such as schools, governments, healthcare facilities, the
      military and other food processors, as well as to certain international markets
      in a limited scope.




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


14


**ZHONGPIN
      INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





11.  SEGMENT
      REPORTING (continued)





Our
      vegetables and fruits segment is involved primarily in the processing of frozen
      vegetables and fruits. We contract with more than 100 farms in Henan Province
      and nearby areas to produce high-quality vegetable varieties and fruits suitable
      for export purposes. The proximity of the contracted farms to our operations
      ensures freshness from harvest to processing. We contract with those farms
      to grow
      more
      than 20 categories of vegetables and fruits, including asparagus, sweet corn,
      broccoli, mushrooms, lima beans and strawberries.





**Sales by Segment**
              **(U.S. dollars in millions)**Six Months Ended June 30,
            
            Three Months Ended June 30,2008
            
            2007
            
            2008
            
            2007(Unaudited)
            
            (Unaudited)
            
            (Unaudited)
            
            (Unaudited)Pork
                and Pork Products:Chilled
                pork
            
            $
            127.00
            
            $
            61.36
            
            $
            71.91
            
            $
            32.88Frozen
                pork
            
            
            89.11
            
            
            42.49
            
            
            48.95
            
            
            22.20Prepared
                pork products
            
            
            25.19
            
            
            11.83
            
            
            13.23
            
            
            5.98Vegetables
                and Fruits
            
            
            4.95
            
            
            3.79
            
            
            3.43
            
            
            2.62$
            246.25
            
            $
            119.47
            
            $
            137.52
            
            $
            63.68Gross
                Margin:Pork
                products
            
            
            12.64
            %
            
            13.24
            %
            
            12.36
            %
            
            12.71
            %Vegetables
                and fruits
            
            
            16.16
            %
            
            15.99
            %
            
            15.40
            %
            
            15.99
            %





**As of June 30, 2008**
              **(U.S. dollars in millions)**Pork and Pork
            
            VegetablesProducts
            
            and
                Fruits
            
            TotalReceivables
            
            $
            20.04
            
            $
            0.41
            
            $
            20.45Inventory
            
            
            25.64
            
            
            0.62
            
            
            26.26Property
                and equipment
            
            
            81.52
            
            
            1.67
            
            
            83.19





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




15


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





**Disclosure
      Regarding Forward-Looking Statements**





*The
      statements contained in this Report with respect to our financial condition,
      results of operations and business that are not historical facts are
“forward-looking statements” within the meaning of the Private Securities
      Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act
      of
      1934, as amended (the “Exchange Act”). We intend such forward-looking statements
      to be covered by the safe harbor provisions for forward-looking statements
      contained in Section 21E of the Exchange Act. Forward-looking statements can
      be
      identified by the use of forward-looking terminology, such as “estimates,”
“projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the
      negative thereof or other variations thereon, or by discussions of strategy
      that
      involve risks and uncertainties. Management wishes to caution the reader of
      the
      forward-looking statements that such statements, which are contained in this
      Report, reflect our current beliefs with respect to future events and involve
      known and unknown risks, uncertainties and other factors, including, but not
      limited to, economic, competitive, regulatory, technological, key employee,
      and
      general business factors affecting our operations, markets, growth, services,
      products, licenses and other factors discussed in our other filings with the
      Securities and Exchange Commission, and that these statements are only estimates
      or predictions. No assurances can be given regarding the achievement of future
      results, as actual results may differ materially as a result of risks facing
      our
      company, and actual events may differ from the assumptions underlying the
      statements that have been made regarding anticipated events.*





*These
      forward-looking statements are subject to numerous assumptions, risks and
      uncertainties that may cause our actual results to be materially different
      from
      any future results expressed or implied by us in those statements. Some of
      these
      risks are described in “Risk Factors” in Item 1A of our Annual Report on
      Form 10-K for the year ended December 31, 2007.*




*These
      risk factors should be considered in connection with any subsequent written
      or
      oral forward-looking statements that we or persons acting on our behalf may
      issue. All written and oral forward looking statements made in connection with
      this Report that are attributable to our company or persons acting on our behalf
      are expressly qualified in their entirety by these cautionary statements. Given
      these uncertainties, we caution investors not to unduly rely on our
      forward-looking statements. We do not undertake any obligation to review or
      confirm analysts’ expectations or estimates or to release publicly any revisions
      to any forward-looking statements to reflect events or circumstances after
      the
      date of this Report or to reflect the occurrence of unanticipated events.
      Further, the information about our intentions contained in this Report is a
      statement of our intention as of the date of this Report and is based upon,
      among other things, the existing regulatory environment, industry conditions,
      market conditions and prices, the economy in general and our assumptions as
      of
      such date. We may change our intentions, at any time and without notice, based
      upon any changes in such factors, in our assumptions or
      otherwise.*





**Overview**





We
      are
      principally engaged in the meat and food processing and distribution business
      in
      the PRC. Currently, we have ten processing plants located in Henan, Heilongjiang
      and Sichuan Provinces and in Tianjin City in the PRC, with a total of 17
      production lines. Our current total production capacity for chilled pork and
      frozen pork is 1,088 metric tons per day, based on an eight-hour working
      day, or approximately 391,560 metric tons on an annual basis. We also have
      production capacity for prepared meats of 70 metric tons per eight-hour day
      (or
      approximately 25,200 metric tons on an annual basis) and for fruits and
      vegetables of 73 metric tons per eight-hour day, including the average
      production capacity of approximately eight metric tons per day supplied by
      OEM
      partners, or approximately 26,280 metric tons on an annual basis. We utilize
      state-of-the-art equipment in all of our abattoirs and processing facilities.


16





On
      June
      30, 2007, Henan Zhongpin formed a wholly-owned subsidiary, Yongcheng Zhongpin
      Food Company Limited, through which we plan to invest approximately $15 million
      to construct a new production facility in eastern Henan Province that will
      be
      designed with a production capacity for chilled or frozen pork of 222 metric
      tons per eight-hour working day, or approximately 80,000 metric tons on an
      annual basis. Approximately 75% of the production capacity will be designed
      for
      the production of chilled pork and approximately 25% will be designed for the
      production of frozen pork. We plan to put this new plant into production in
      the
      fourth quarter of fiscal 2008.





We
      also
      plan to invest approximately $13.2 million to expand the production line for
      prepared meat products at our production facilities in Changge City, Henan
      Province. The new production line will be designed with a production capacity
      of
      80 metric tons per eight-hour working day, or approximately 28,800 metric tons
      on an annual basis. We plan to put this new production line into operation
      in
      the third quarter of fiscal 2008.





In
      addition, we plan to invest a total of $11 million to expand and upgrade our
      production line for fruits and vegetables in our production facilities located
      in Changge City, Henan Province. The additional production lines are expected
      to
      cost $6 million and the remaining $5 million will be invested in a refrigerated
      storage warehouse for our fruits and vegetables, frozen pork and other frozen
      products. This new production line will be designed to expand our production
      capacity for fruits and vegetables by 83 metric tons per eight-hour day, or
      approximately 30,000 metric tons on an annual basis, and is expected to be
      put
      into operation in the fourth quarter of fiscal 2008.





We
      are
      also working on a number of smaller projects to support our expanding
      operations, including a waste water solution system for our production
      facilities in Changge City, Henan Province, which is expected to be put into
      operation in the fourth quarter of fiscal 2008 at a cost of approximately $0.7
      million, a storage facility for our production facilities in Changge City,
      which
      is expected to be completed in the third quarter of fiscal 2008 at a cost of
      approximately $1.9 million, and the first phase of a residential dormitory
      complex for our production facilities in Changge City, which is expected to
      be
      completed in the fourth quarter of fiscal 2008 at a cost of approximately $4.0
      million.





In
      June
      2008, we placed into operation our new production facility in western Henan
      Province that has a production capacity of 195 metric tons per eight-hour
      working day, or approximately 70,000 metric tons on an annual basis.
      Approximately 60% of the production capacity at that facility was designed
      for
      chilled pork and the remaining approximately 40% was designed for frozen pork.





Our
      products are sold under the “Zhongpin” brand name. At June 30, 2008, our
      customers included 17 international or domestic fast food companies in the
      PRC,
      39 export-registered processing factories and 1,625 school cafeterias, factory
      canteens, army posts and national departments. At such date, we also sold
      directly to 2,960 retail outlets, including supermarkets, within the PRC.





Since
      2001, we have been one of the “leading agricultural industrial enterprises” in
      the PRC. Over the past five fiscal years, we achieved a compound annual growth
      rate of 77% in terms of revenues and 86% in terms of net profits. We have
      established distribution networks in 24 provinces, including four cities with
      special legal status, in the North, East, South and South Midland of the PRC,
      and also have formed strategic partnerships with leading supermarket chains
      and
      the food industry in the PRC. In addition, we export products to the European
      Union, Southeast Asia, Russia and South Africa.


17





With
      the
      recent increases in pork prices in the PRC and the appreciation of the RMB
      against the U.S. dollar and other foreign currencies, we believe the dynamics
      of
      the international pork trade have changed over the past year, with exports
      of
      pork and pork products declining and imports of such products starting to
      increase. We believe we are well positioned to benefit from this change, both
      in
      the domestic market in the PRC and in the international market. In response
      to
      these changes in the marketplace, we are seeking to establish relationships
      with
      several multinational companies, as we believe there are now opportunities
      to
      import certain kinds of frozen pork and deep-processing pig
      by-products.





As
      of
      June 30, 2008, we had 3,890 employees, of whom 2,733 were operating personnel,
      806 were sales personnel, 69 were research and development personnel and 282
      were administrative personnel.





**Critical
      Accounting Policies**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based on our consolidated financial statements, which have been prepared in
      accordance with U.S. GAAP. The preparation of these financial statements
      requires us to make estimates and judgments that affect the reported amounts
      of
      assets, liabilities, revenues and expenses. We evaluate, on an on-going basis,
      our estimates for reasonableness as changes occur in our business environment.
      We base our estimates on experience, the use of independent third-party
      specialists, and various other assumptions that we believe to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.





Critical
      accounting policies are defined as those that are reflective of significant
      judgments, estimates and uncertainties, and potentially result in materially
      different results under different assumptions and conditions. We believe the
      following are our critical accounting policies:





***Revenue
      Recognition.*** ** We
      recognize revenues generated from sales of various meat products and vegetables
      and fruits when these products are delivered to customers in accordance with
      previously agreed upon pricing and delivery arrangements and the collectibility
      of these sales is reasonably assured. Since the products sold by our company
      are
      primarily perishable and frozen food products, the right of return is only
      for a
      few days and has been determined to be insignificant by the management of our
      company. Accordingly, no provision has been made for returnable goods. Revenues
      presented on our consolidated statements of income and comprehensive income
      are
      net of sales taxes.





***Accounts
      Receivable.*** **** We
      state
      accounts receivable at cost, net of allowance for doubtful accounts. Based
      on
      our past experience and current practice in the PRC, management provides for
      an
      allowance for doubtful accounts in an amount equal to the aggregate amount
      of
      those accounts that have not been collected within one year plus an amount
      equal
      to the sum of 10% of the aggregate amount of the accounts receivable of our
      wholly-owned subsidiary, Henan Zhongpin Food Share Co., Ltd., plus 5% of the
      aggregate amount of the accounts receivable less than one year old for all
      of
      our other subsidiaries. As of June 30, 2008, we were successful in collecting
      $37,200, or approximately 44%, of our doubtful accounts that were outstanding
      at
      December 31, 2007 for longer than one year, and $17.92 million, or approximately
      95%, of our doubtful accounts that were outstanding at December 31, 2007 for
      one
      year or less. It is management’s belief that the current bad debt allowance
      adequately reflects an appropriate estimate based on management’s
      judgment.





***Inventory
      Valuation*** **.** We
      value
      our pork inventories at the lower of cost, determined on a weighted average
      basis, and net realizable value (the estimated market price). When the carcasses
      are disassembled and transferred from primary processing to various
      manufacturing departments, we adjust the net realizable value for product
      specifications and further processing, which becomes the basis for calculating
      inventory values. In addition, substantially all inventory expenses, packaging
      and supplies are valued by the weighted average method.


18




***Impairment
      Of Long-Lived Assets.*** **** We
      have
      assessed the impairment of long-lived assets whenever events or changes in
      circumstances indicate that the carrying amount of an asset may not be
      recoverable through the estimated undiscounted cash flows expected to result
      from the use and eventual disposition of the assets. Whenever any such
      impairment exists, an impairment loss will be recognized for the amount by
      which
      the carrying value exceeds the fair value.





***Income
      Taxes*** **.** We
      account for income taxes in accordance with Statement of Financial Accounting
      Standard No. 109, “ *Accounting
      for Income Taxes* .”
We
      compute our provision for income taxes based on the statutory tax rates and
      tax
      planning opportunities available to us in the PRC. Significant judgment is
      required **** in
      evaluating our tax positions and determining our annual tax
      position.





**Results
      of Operations**





In
      fiscal
      2008, we intend to continue to focus on the implementation of our strategic
      plan
      to continue the growth we have experienced in the last five years. The
      construction of our new plant in western Henan Province has been completed
      on
      schedule and was placed into operation on June 29, 2008. The construction
      of our new plant in eastern Henan Province is expected to be completed on
      schedule in the forth quarter of fiscal 2008. The construction of our new
      prepared meat facility with 28,800 tons of capacity should be completed on
      schedule in the third quarter of 2008, and production at that facility should
      begin by the end of that quarter. The construction of our new fruit and
      vegetable facility with 30,000 tons of capacity is also expected to be completed
      as scheduled, and production at that facility should begin by the end of the
      fourth quarter of 2008. In fiscal 2008, we expect to continue to expand our
      distribution channel and develop new markets. Through our aggressive marketing
      campaign, we also expect to increase our brand awareness and customer loyalty.
      We also intend to further streamline our supply chain management to build a
      unified, safe and efficient cold-chain logistics system. In addition, working
      with China Agriculture University, we have established the Henan Province
      Prepared Meat Products Technology Research Center, which has been certified
      by
      the Technology Bureau of Henan Province. We expect the establishment of this
      research center to increase our research and development capability. We also
      have invested in training and human resources development so that we will be
      able to sustain a rapid and healthy growth while maintaining a satisfactory
      profit margin.





In
      the
      remaining two quarters of fiscal 2008, we expect steady growth in sales of
      our
      pork and pork products. While the supply of live hogs in the PRC has started
      to
      relax and the price of live hogs has dropped slightly, we expect to experience
      further improvement in the hog supply in the second half of fiscal 2008. Based
      on our results for the first half of fiscal 2008, we remain confident in our
      ability to reach our 2008 earnings guidance we disclosed earlier this year.
      We
      also expect to increase our market share in the meat and meat products segment
      of our target markets in fiscal 2008.





***Comparison
      of Three Months Ended June 30, 2008 and June 30, 2007***





*Revenue.* Total
      revenue increased from $63.68 million for the three months ended June 30, 2007
      to $137.53 million for the three months ended June 30, 2008, which represented
      an increase of $73.85 million, or approximately 116%. The increase in revenues
      was primarily due to increased prices for pork and pork products and increased
      sales volume of our pork and pork products. During the three months ended June
      30, 2008, we sold a total of 60,385 metric tons of pork and pork products and
      fruits and vegetables, which represented an increase of approximately 19,970
      metric tons, or 49%, from the 40,415 metric tons we sold during the three months
      ended June 30, 2007.


19


During
      the three months ended June 30, 2008, we added two additional showcase
      stores, five additional “branded” retail stores and seven additional supermarket
      counters (for a total of 116, 934 and 1,910 showcase stores, “branded” retail
      stores and supermarket counters, respectively, at June 30, 2008), compared
      to
      two, 16 and 32 additional showcase stores, “branded” retail stores and
      supermarket counters, respectively (for a total of 107, 901 and 1,855 showcase
      stores, “branded” retail stores and supermarket counters, respectively, at June
      30, 2007), during the three months ended June 30, 2007. In addition, during
      the
      three months ended June 30, 2008, we expanded our marketing and sales efforts
      to
      include two additional second-tier cities (for a total of 97 second-tier cities
      at June 30, 2008) and seven additional third-tier cities (for a total of 300
      third-tier cities at June 30, 2008), compared to the three additional
      second-tier cities (for a total of 84 second-tier cities at June 30, 2007)
      and
      nine additional third-tier cities (for a total of 255 third-tier cities at
      June 30, 2007) during the three months ended June 30, 2007.





During
      the three months ended June 30, 2008, revenues from sales to branded stores
      increased to $55.70 million, which represented an increase of $25.86 million,
      or
      approximately 87%, as compared to the three months ended June 30, 2007. During
      the three months ended June 30, 2008, revenues from sales to food service
      distributors increased to $39.74 million, which represented an increase of
      $28.27 million, or approximately 246%, as compared to the three months ended
      June 30, 2007. During the three months ended June 30, 2008, revenues from sales
      to restaurants and non-commercial customers increased to $40.70 million, which
      represented an increase of $22.40 million, or approximately 122%, as compared
      to
      the three months ended June 30, 2007. During the three months ended June 30,
      2008, revenues from export sales decreased to $1.38 million, which represented
      a
      decline of $2.72 million, or approximately 66%, as compared to the three months
      ended June 30, 2007. The decrease in export sales was primarily due to the
      reduction of our export sales efforts during the 2008 period due to the higher
      gross profit margins we could achieve during that period by selling our pork
      products domestically in the PRC. Within these four distribution channels,
      the
      percentage of growth was highest for food service distributors.





The
      following table sets forth our revenues by sales channel for the three-month
      periods ended June 30, 2008 and 2007.





**Sales by Distribution Channel**
              **(U.S. dollars in millions)****Three Months Ended**
              **June 30,**
            
            **Net Change**
            
            **Percentage**
              **Change****2008**
            
            **2007**
            
            **2008/2007**
            
            **2008/2007**Branded
                stores
            
            $
            55.70
            
            $
            29.80
            
            $
            25.90
            
            
            87
            %Food
                services distributors
            
            
            39.74
            
            
            11.47
            
            
            28.27
            
            
            246
            %Restaurants
                and non-commercial
            
            
            40.70
            
            
            18.30
            
            
            22.40
            
            
            122
            %Export
            
            
            1.38
            
            
            4.10
            
            
            (
                2.72
            )
            
            (66
            %)Total
            
            $
            137.52
            
            $
            63.70





*Cost
      of sales.* Cost of
      sales increased from $55.50 million for the three months ended June 30, 2007
      to
      $120.42 million for the three months ended June 30, 2008, which represented
      an
      increase of $64.92 million, or approximately 117%. The gross profit margin
      (total sales revenue divided by cost of sales) decreased from 12.84% for the
      three months ended June 30, 2007 to 12.44% for the three months ended June
      30,
      2008. The slight decrease in gross profit margin during the 2008 period was
      primarily due to an increase in the cost of raw materials, which was offset,
      in
      part, by an increase in the market prices for pork products.


20





*General
      and administrative expenses* .
      General
      and administrative expenses increased from $2.10 million for the three months
      ended June 30, 2007 to $5.44 million for the three months ended June 30, 2008,
      which represented an increase of $3.34 million, or approximately 159%. As a
      percentage of revenues, general and administrative expenses increased from
      3.30%
      for the three months ended June 30, 2007 to 3.96% for the three months ended
      June 30, 2008.





During
      the three months ended June 30, 2007, we incurred a non-cash compensation
      expense in the amount of $0.56 million in connection with the release from
      escrow to certain of our employees of shares of common stock that had been
      deposited into escrow by such employees in connection with our January 2006
      private placement. Under U.S. generally accepted accounting principles, the
      release of any of such escrow shares to any of our employees based on our
      fulfillment of stated performance thresholds constituted a compensatory plan
      to
      such employees, which required us to record a corresponding compensation expense
      in our financing statements. As we satisfied the performance thresholds for
      fiscal 2007, a percentage of the escrowed shares were released to employee
      stockholders in April 2008. There was no such non-cash compensation expense
      incurred in fiscal 2008.




The
      increase of general and administrative expenses during the three months ended
      June 30, 2008 was primarily the result of significant increases in advertising
      expenses, stock option expenses, training expenses, research and development
      expenses and depreciation expenses.





*Operating
      expenses.* Operating
      expenses increased from $1.12 million for the three months ended June 30, 2007
      to $2.33 million for the three months ended June 30, 2008, which represented
      an
      increase of $1.21 million, or approximately 108%. The increase in operating
      expenses was primarily the result of the increased sales of pork and pork
      products. As a percentage of revenue, operating expenses decreased from 1.76%
      for the three months ended June 30, 2007 to 1.70% for the three months ended
      June 30, 2008.





*Interest
      expense.* Interest
      expense increased from $0.63 million for the three months ended June 30,
      2007 to $1.17 million for the three months ended June 30, 2008, which
      represented an increase of $0.54 million, or approximately 86%. The increase
      in
      interest expense was primarily a result of increased short-term bank loans
      and
      long-term bank loans.





*Interest
      income, government subsidies, other income and exchange gain.* Interest
      income, government subsidies, other income and exchange gain increased from
      $0.25 million for the three months ended June 30, 2007 to $0.82 million for
      the three months ended June 30, 2008. This increase was primarily the result
      of
      an increase of $0.43 million in interest income due to our higher cash balances
      and higher interest rates, and an increase of $0.43 million in government
      subsidies due to the new subsidies we received from the government during the
      three months ended June 30, 2008 to support our information technology
      development.





*Income
      Taxes.* The
      effective tax rate in the PRC on income generated from the sale of prepared
      products is 25% and there is no income tax on income generated from the sale
      of
      raw products, including raw meat products and raw fruits and vegetable products.
      The increase of $0.07 million in the provision for income taxes for the three
      months ended June 30, 2008 over the three months ended June 30, 2007 resulted
      from an increase of $0.67 million in our net income from the sale of prepared
      products during the three months ended June 30, 2008.


21


***Comparison
      of Six Months Ended June 30, 2008 and June 30, 2007***





*Revenue.* Total
      revenue increased from $119.47 million for the six months ended June 30, 2007
      to
      $246.25 million for the six months ended June 30, 2008, which represented an
      increase of $126.78 million, or approximately 106%. The increase in revenues
      was
      primarily due to increased prices for pork and pork products, combined with
      our
      increased sales volume during the six months ended June 30, 2008. During the
      six
      months ended June 30, 2008, we sold a total of 113,315 metric tons of pork
      and
      pork products and fruits and vegetable, which represented an increase of
      approximately 26,051 metric tons, or approximately 30%, from the 87,264 metric
      tons we sold during the six months ended June 30, 2007.





During
      the six months ended June 30, 2008, we added three additional showcase stores,
      seven additional “branded” retail stores and 11 additional supermarket counters,
      compared to 11, 45 and 86 additional showcase stores, “branded” retail stores
      and supermarket counters, respectively during the six months ended June 30,
      2007. In addition, during the six months ended June 30, 2008, we expanded our
      marketing and sales efforts to include four additional second-tier cities and
      13
      additional third-tier cities, compared to the nine additional second-tier cities
      and 29 additional third-tier cities during the six months ended June 30, 2007.





During
      the six months ended June 30, 2008, revenues from sales to branded stores
      increased to $100.50 million, which represented an increase of $44.60 million,
      or approximately 80%, as compared to the six months ended June 301, 2007. During
      the six months ended June 30, 2008, revenues from sales to food service
      distributors increased to $67.36 million, which represented an increase of
      $45.36 million, or approximately 206%, as compared to the six months ended
      June
      30, 2007. During the six months ended June 30, 2008, revenues from sales to
      restaurants and non-commercial customers increased to $74.73 million, which
      represented an increase of $42.13 million, or approximately129%, as compared
      to
      the six months ended June 30, 2007. During the six months ended June 30, 2008,
      revenues from export sales decreased to $3.66 million, which represented a
      decline of $5.34 million, or approximately 59%, as compared to the six months
      ended June 30, 2007. The decrease in export sales was primarily due to the
      reduction of our export sales efforts during the 2008 period due to the higher
      gross profit margins we could achieve during that period by selling our pork
      products domestically in the PRC. Within these four distribution channels,
      the
      percentage of growth was highest for food service distributors.





The
      following table sets forth our revenues by sales channel for the six-month
      periods ended June 30, 2008 and 2007.





**Sales by Distribution Channel**
              **(U.S. dollars in millions)****Six Months Ended**
              **June 30,**
            
            **Net Change**
            
            **Percentage**
              **Change****2008**
            
            **2007**
            
            **2008/2007**
            
            **2008/2007**Branded
                stores
            
            $
            100.50
            
            $
            55.90
            
            $
            44.60
            
            
            80
            %Food
                services distributors
            
            
            67.36
            
            
            22.00
            
            
            45.36
            
            
            206
            %Restaurants
                and non-commercial
            
            
            74.73
            
            
            32.60
            
            
            42.13
            
            
            129
            %Export
            
            
            3.66
            
            
            9.00
            
            
            (5.34
            )
            
            (59
            %)Total
            
            $
            246.25
            
            $
            119.50




*Cost
      of sales.* Cost of
      sales increased from $103.55 million for the six months ended June 30, 2007
      to
      $214.96 million for the six months ended June 30, 2008, which represented an
      increase of $111.41 million, or approximately 108%. The gross profit margin
      decreased from 13.33% for the six months ended June 30, 2007 to 12.71% for
      the
      six months ended June 30, 2008. The decrease in gross profit margin during
      the
      2008 period was primarily due to an increase in the cost of raw materials,
      which
      was offset, in part, by an increase in the market prices for pork products.




22




*General
      and administrative expenses* .
      General
      and administrative expenses increased from $4.07 million for six months ended
      June 30, 2007 to $9.84 million for the six months ended June 30, 2008, which
      represented an increase of $5.77 million, or approximately 142%. As a percentage
      of revenues, general and administrative expenses increased from 3.41% for the
      six months ended June 30, 2007 to 4.00% for the six months ended June 30,
      2008.





During
      the six months ended June 30, 2007, we incurred a non-cash compensation expense
      in the amount of $1.12 million in connection with the release from escrow to
      certain of our employees of shares of common stock that had been deposited
      into
      escrow by such employees in connection with our January 2006 private placement
      as discussed above.





The
      increase of general and administrative expenses during the six months ended
      June
      30, 2008 was primarily the result of significant increases in advertising
      expenses, stock option compensation expenses, training expenses, research and
      development expenses and depreciation expenses.





*Operating
      expenses.* Operating
      expenses increased from $2.24 million for the six months ended June 30, 2007
      to
      $4.32 million for the six months ended June 30, 2008, which represented an
      increase of $2.08 million, or approximately 93%. The increase in operating
      expenses was primarily the result of the increased sales of our pork and pork
      products. As a percentage of revenue, operating expenses decreased from 1.88%
      for the six months ended June 30, 2007 to 1.75% for the six months ended June
      30, 2008.





*Interest
      expense.* Interest
      expense increased from $1.07 million for the six months ended June 30, 2007
      to
      $1.97 million for the six months ended June 30, 2008, which represented an
      increase of $0.90 million, or approximately 84%. The increase in interest
      expense was primarily a result of increased short-term bank loans and long-term
      bank loans.





*Interest
      income, government subsidies, other income and exchange gain.* Interest
      income, government subsidies, other income and exchange gain increased from
      $0.27 million for the six months ended June 30, 2007 to $1.64 million for the
      six months ended June 30, 2008. This increase was primarily the result of an
      increase of $1.04 million in interest income due to the increased cash balance
      in the bank, combine with higher interest rate.





*Income
      Taxes.* The
      effective tax rate in the PRC on income generated from the sale of prepared
      products is 25% and there is no income tax on income generated from the sale
      of
      raw products, including raw meat products and raw fruits and vegetable products.
      The increase of $0.38 million in the provision for income taxes for the six
      months ended June 30, 2008 over the six months ended June 30, 2007 resulted
      from
      an increase of $2.12 million in our net income from the sale of prepared
      products during the six months ended June 30, 2008.





***Segment
      Information***





We
      operate in two business segments: pork and pork products, and vegetables and
      fruits.




Our
      pork
      and pork products segment is involved primarily in the processing of live market
      hogs into fresh, frozen and processed pork products. Our pork and pork products
      segment markets its products domestically to our branded stores, food retailers,
      foodservice distributors, restaurant operators and noncommercial foodservice
      establishments, such as schools, hotel chains, healthcare facilities, the
      military and other food processors, as well as to international
      markets.


23





Our
      vegetables and fruits segment is involved primarily in the processing of fresh
      vegetables and fruits. We contract with more than 100 farms in Henan Province
      and nearby areas to produce high-quality vegetable varieties and fruits suitable
      for export purposes. The proximity of the contracted farms to our operations
      ensures freshness from harvest to processing. We contract to grow more than
      20
      categories of vegetables and fruits, including asparagus, sweet corn, broccoli,
      mushrooms, lima beans, strawberries and capsicum.





The
      following tables set forth our revenues, sales in metric tons and production
      processed in metric tons by segment for the three-month and six-months periods
      ended June 30, 2008 and 2007.





**Sales by Segment**
              **(****in metric tons****)****Three Months Ended June 30,**
            
            **Six Months Ended June 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**(Unaudited)
            
            (Unaudited)
            
            (Unaudited)
            
            (Unaudited)Pork and Pork
                ProductsChilled
                pork
            
            
            29,435
            
            
            20,395
            
            
            53,554
            
            
            43,743Frozen
                pork
            
            
            20,881
            
            
            14,185
            
            
            39,369
            
            
            30,988Prepared
                pork products
            
            
            5,720
            
            
            3,348
            
            
            11,389
            
            
            6,686Vegetables
                and Fruits
            
            
            4,349
            
            
            2,487
            
            
            6,629
            
            
            4,670Total
            
            
            60,385
            
            
            40,415
            
            
            110,941
            
            
            86,087





**Production by Segment**
              **(****in metric tons****)****Three Months Ended June 30,**
            
            **Six Months Ended June 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**(Unaudited)
            
            (Unaudited)
            
            (Unaudited)
            
            (Unaudited)Pork
                and Pork ProductsChilled
                pork
            
            
            29,581
            
            
            20,589
            
            
            53,798
            
            
            43,743Frozen
                pork
            
            
            22,774
            
            
            14,320
            
            
            41,159
            
            
            31,125Prepared
                pork products
            
            
            5,794
            
            
            3,588
            
            
            11,481
            
            
            6,945Vegetables
                and Fruits
            
            
            4,331
            
            
            2,334
            
            
            6,877
            
            
            5,451Total
            
            
            62,480
            
            
            40,831
            
            
            113,315
            
            
            87,264




**Additional
      Operating Data**





In
      assessing our existing operations and planning our future growth and the
      development of our business, management considers, among other factors, our
      revenue growth and growth in sales volume by market segment, as well as our
      sales by distribution channel and geographic market coverage.


24





The
      following table sets forth information with respect to the number of products
      we
      offered, the number of stores in our retail network and the number of provinces
      and cities in the PRC in which we offered and sold our products at
      December 31, 2005, 2006, 2007 and June 30, 2008.





**Year Ended December 31,**
            
            **Six Months Ended****2005**
            
            **2006**
            
            **2007**
            
            **June 30, 2008**No.
                of products
            
            
            168
            
            
            229
            
            
            270
            
            
            285No.
                of retail stores
            
            
            2,100
            
            
            2,721
            
            
            2,939
            
            
            2,960Expansion
                of Market CoverageNo.
                of Provinces
            
            
            24
            
            
            24
            
            
            24
            
            
            24No.
                of first-tier cities
            
            
            29
            
            
            29
            
            
            29
            
            
            29No.
                of second-tier cities
            
            
            44
            
            
            75
            
            
            93
            
            
            97No.
                of third-tier cities
            
            
            142
            
            
            226
            
            
            287
            
            
            300





**Liquidity
      and Capital Resources**





At
      December 31, 2007 and June 30, 2008, we had cash and cash equivalents of $45.14
      million and $57.96 million, respectively. Our debt to asset ratio (total debt
      to
      total assets), current ratio (total current assets to total current liabilities)
      and quick ratio (total current assets minus inventory and VAT recoverable,
      divided by total current liabilities) at June 30, 2008 were 41%, 119% and 88%,
      respectively.





For
      six
      months ended June 30, 2008, net cash provided by operating activities was $31.77
      million, which consisted of $34.24 million of cash provided by operating
      activities, netted by $2.47 million of cash used in operating activities.
      The cash provided by operating activities of $34.24 million consisted of
      primarily of our net profit of $15.81 million, an increase of $5.09 million
      in
      deposits from customers primarily due to the increased deposit amounts we
      required for customized orders from our customers, an increase of $1.94 million
      in our taxes payable, an aggregate amount of $1.88 million in our depreciation
      expense due to the increased facilities, an increase of $1.55 million
      in purchase deposits due to the increased customized pork products orders
      from our customers for which we required certain amount of purchase deposits,
      an
      increase of $1.53 million in accounts payable and an aggregate amount of
      approximately $6 million from the increased of other payable, accrued liability
      and the decrease of inventory, other receivable and other items. Net cash used
      in operating activities of $ 2.47 million during the six months ended June
      30,
      2008 consisted primarily of an increase of $1.63 million in our VAT recoverable
      and an increase of $0.82 million in accounts receivable due to the increased
      sales during the six months ended June 30, 2008.





Net
      cash
      used in investing activities was $49.85 million in six months ended June 30,
      2008. At June 30, 2008, our investment in facilities construction in progress
      increased by approximately $46.49 million as compared to the amount of such
      investment at December 31, 2007 due to our new production capacity expansion
      program. During the six months ended June 30, 2008, a total of $3.08 million
      was
      invested in the purchase of fixed assets.


25




Net
      cash
      provided by financing activities was $30.22 million during six months ended
      June
      30, 2008. During the six months ended June 30, 2008, cash provided by financing
      activities included net proceeds from short-term loans of $20.41 million, net
      proceeds from long-term loans of $9.92 million and the net proceeds of $1.24
      million from the exercise of certain of our outstanding stock purchase warrants.
      The net cash used in financing activities included the repayment of short-term
      bank loans in the aggregate amount of $38.84 million and the repayment of bank
      notes in amount of $1.17 million.





At
      June
      30, 2008, Henan Zhongpin had short-term bank and governmental loans in the
      aggregate amount of $71.76 million with the interest rate ranging from 6.84
      % to
      7.84% per annum.





**Bank**
            
            **Amount**
              **Borrowed******
            
            **Interest
                Rate**
            
            **Maturity
                Date**Agriculture
                Bank of China
            
            $
            2,770,043
            
            
            7.29
            %
            
            12/14/20082,915,834
            
            
            7.47
            
            
            12/28/20081,020,542
            
            
            7.47
            
            
            01/21/2009Industrial
                and Commercial Bank of China
            
            
            728,959
            
            
            6.84
            %
            
            07/22/2008Rabobank
                Nederland Shanghai
            
            
            2,915,834
            
            
            7.47
            %
            
            11/20/2008Agriculture
                Development Bank of China
            
            
            7,289,586
            
            
            7.47
            %
            
            04/27/20097,289,586
            
            
            7.47
            
            
            05/11/200910,497,004
            
            
            7.47
            
            
            05/28/20094,082,168
            
            
            7.47
            
            
            05/28/2009Shanghai
                Pudong Development Bank of China
            
            
            3,061,626
            
            
            7.47
            %
            
            03/28/20091,312,125
            
            
            7.47
            
            
            03/26/20093,790,585
            
            
            7.47
            
            
            03/25/2009Bank
                of China
            
            
            8,018,545
            
            
            7.10
            %
            
            02/21/2009China
                Merchants Bank
            
            
            4,373,752
            
            
            7.47
            %
            
            05/20/20092,915,834
            
            
            7.47
            
            
            06/27/2009Guangdong
                Development Bank
            
            
            4,373,752
            
            
            7.29
            %
            
            12/11/2008China
                Communication Bank
            
            
            4,373,752
            
            
            7.84
            %
            
            01/03/2009City
                Finance – short-term
            
            
            29,158
            
            
            
            
            
            ExtendableTotal
            
            $
            71,758,685





In
      May
      2008, Henan Zhongpin entered into a credit agreement with Rabobank Nederland
      Shanghai Branch that provided for a one-year short-term loan RMB 20 million
      ($2.9 million) and a three-year term loan of up to RMB 80 million ($11.7
      million). Upon execution of the credit agreement, the full amount of the
      short-term loan was funded by the bank. On June 10, 2008, the first 50% of
      the
      long-term loan was funded by the bank. The remaining 50% of the long-term loan
      may be drawn down by Henan Zhongpin on or prior to September 11, 2008, subject
      to the satisfaction by Henan Zhongpin of certain conditions precedent. Amounts
      currently outstanding under the long-term loan bear interest at the rate of
      7.56% per annum, which was the interest rate published by the People’s Bank of
      China on June 10, 2008 for loans with the same or similar terms. Any
      additional amounts drawn down under the long-term loan will bear interest at
      the
      rate per annum issued at the date of the borrowing by the People’s Bank of China
      for loans with a corresponding term as the term of such borrowing, or in the
      absence of such a rate, at a rate per annum determined by the lender. The
      accrued interest on this loan is payable on a quarterly basis. Of the
      outstanding principal under the long-term loan, 25% is payable 24 months after
      the first drawdown date (June 10, 2008), 37.5% is payable 30 months after the
      first drawdown date and the balance is payable 36 months after the first
      drawdown date.


26





Borrowings
      under the term loan agreement are guaranteed by our subsidiaries, Anyanag
      Zhongpin Food Co., Ltd. and Zhumadian Zhongpin Food Ltd., are secured by
      mortgages on our prepared pork production facilities located in Changge City,
      Henan Province and are subject to various financial and non-financial covenants,
      including a debt to net worth ratio, a debt to EBIDTA ratio, an interest
      coverage ratio, a required minimum tangible net worth, restrictions on
      investments in fixed assets and financial assets, on inter-company indebtedness
      and on consolidated contingent liabilities and a requirement that a minimum
      percentage of Henan Zhongpin’s consolidated EBITDA be generated by Henan
      Zhongpin and the guarantors. Henan Zhongpin also is prohibited from paying
      dividends in an amount in excess of 50% of its retained earnings during the
      term
      of the credit facility.





In
      April
      2008, Henan Zhongpin entered into a loan agreement with CITIC Industrial Bank
      pursuant to which Henan Zhongpin borrowed RMB 30 million ($4.4 million). All
      amounts borrowed under
      the
      loan agreement bear interest at a floating rate that was based on the prime
      rate
      published by the People’s Bank of China for the loans with the same or similar
      terms on the drawdown date (7.56% per annum on that drawdown date) and are
      payable on January 23, 2010. The accrued interest on this loan is payable
      on the 20 th of each
      month since the drawdown date. Borrowings under the loan agreement are
      guaranteed by a related party located in Henan Province.





In
      May
      2002, Henan Zhongpin entered into a loan agreement with China Communication
      Bank, Zhengzhou Branch, which is the intermediary bank for a 40-year term loan
      in the amount of $2,504,969 from the Canadian government. Under the terms of
      the
      loan agreement, 58% of the principal amount ($1,452,882) of this loan bears
      interest at the fixed rate of 6.02% per annum and remaining principal amount
      of
      this loan is interest free. The loan is repayable in a fixed amount of $145,671,
      which includes both principal and interest, that is payable on a semi-annual
      basis through May 15, 2042. Borrowings under the loan agreement are guaranteed
      by the Financing Department, Henan Province.





We
      believe our existing cash and cash equivalents, together with our available
      lines of credit, will be sufficient to finance our investment in new facilities,
      operating requirements and anticipated capital expenditures of approximately
      $31.13 million over the next 12 months. We intend to use such funds over the
      next 12 months to fund our capacity expansion and the construction of supporting
      facilities and to supplement our working capital requirements to enable us
      to
      strengthen our market position and accelerate our growth.





**Contractual
      Commitments**





The
      following table summarizes our contractual obligations at June 30, 2008 and
      the
      effect those obligations are expected to have on our liquidity and cash flow
      in
      future periods.


27





**Payments Due by Period**
              **(in
                thousands)****Contractual Obligations**
            
            **Total**
            
            **Less Than**
              **1 Year**
            
            **1-3 Years**
            
            **3-5 Years**
            
            **More Than**
              **5 Years**Long-term
                debt obligations
            
            $
            11,913
            
            $
            146
            
            $
            10,497
            
            $
            219
            
            $
            1,052Capital
                lease obligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Operating
                lease obligations
            
            
            432
            
            
            359
            
            
            73
            
            
            —
            
            
            —Total
            
            $
            12,345
            
            $
            505
            
            $
            10,570
            
            $
            219
            
            $
            1,052





**Inflation
      and Seasonality**





While
      demand for our products in general is relatively high before the Chinese New
      Year in January or February each year and lower thereafter, we do not believe
      our operations have been materially affected by inflation or
      seasonality.





**New
      Accounting Pronouncements**




In
          December 2007, the Financial
          Accounting Standards Board (the“FASB”) issued
          Statement of Financial Accounting Standards No. 141 (revised 2007),
“ *Business
          Combinations* ”
          (“SFAS No. 141(R)”). SFAS 141(R) changes accounting for acquisitions
          that close beginning in 2009. SFAS No. 141R broadens the guidance of SFAS
          No.
          141, extending its applicability to all transactions and other events in
          which
          one entity obtains control over one or more other businesses. It broadens
          the
          fair value measurement and recognition of assets acquired, liabilities
          assumed,
          and interests transferred as a result of business combinations. SFAS No.
          141R
          expands on required disclosures to improve the statement users’ abilities to
          evaluate the nature and financial effects of business combinations.
          SFAS No. 141R is effective for fiscal years beginning on or after
          December 15, 2008. The Company is currently assessing the impact that the
          adoption of SFAS No. 141R may have on its financial position, results of
          operations, and cash flows.
 
 In
          September 2006, the FASB issued SFAS No. 157, “ *Fair
          Value Measurements* ”
(“SFAS
          No. 157”). SFAS No. 157 clarifies the principle that fair value should
          be based on the assumptions market participants would use when pricing
          an asset
          or liability and establishes a fair value hierarchy that prioritizes the
          information used to develop those assumptions. Under SFAS No 157, fair
          value
          measurements would be separately disclosed by level within the fair value
          hierarchy. SFAS No. 157 is effective for fiscal years beginning after
          November 15, 2007 and is required to be adopted by the Company in the first
          quarter of 2008 but was amended on February 6, 2008 to defer the effective
          date one year for certain non-financial assets and liabilities. The Company
          has
          not yet determined the impact, if any, that the implementation of SFAS
          No. 157 will have on its results of operations or financial
          condition.
 
 In
          February 2007, the FASB issued SFAS No. 159, “ *The
          Fair Value Option for Financial Assets and Financial Liabilities - Including
          an
          amendment of FASB Statement No. 115* ”
(“SFAS
          No. 159”). SFAS No. 159 expands the use of fair value accounting but does not
          affect existing standards which require assets or liabilities to be carried
          at
          fair value. Under SFAS 159, a company may elect to use fair value to measure
          accounts and loans receivable, available-for-sale and held-to-maturity
          securities, equity method investments, accounts payable, guarantees and
          issued
          debt. Other eligible items include firm commitments for financial instruments
          that otherwise would not be recognized at inception and non-cash warranty
          obligations where a warrantor is permitted to pay a third party to provide
          the
          warranty goods or services. If the use of fair value is elected, any upfront
          costs and fees related to the item must be recognized in earnings and cannot
          be
          deferred, e.g., debt issue costs. The fair value election is irrevocable
          and
          generally made on an instrument-by-instrument basis, even if a company
          has
          similar instruments that it elects not to measure based on fair value.
          At the
          adoption date, unrealized gains and losses on existing items for which
          fair
          value has been elected are reported as a cumulative adjustment to beginning
          retained earnings. Subsequent to the adoption of SFAS 159, changes in fair
          value
          are recognized in earnings. SFAS 159 is effective for fiscal years beginning
          after November 15, 2007 and is required to be adopted by the Company in the
          first quarter of 2008. The Company has not applied fair value accounting
          as of
          the adoption date.
 
 In
          December 2007, the FASB issued SFAS No. 160, “ *Noncontrolling
          Interests in Consolidated Financial Statements — an amendment of ARB No.
          51* ”
(“SFAS
          No. 160”). SFAS No. 160 requires that ownership interests in subsidiaries held
          by parties other than the parent, and the amount of consolidated net income,
          be
          clearly identified, labeled, and presented in the consolidated financial
          statements. It also requires once a subsidiary is deconsolidated, any retained
          noncontrolling equity investment in the former subsidiary be initially
          measured
          at fair value. Sufficient disclosures are required to clearly identify
          and
          distinguish between the interests of the parent and the interests of the
          noncontrolling owners. It is effective for fiscal years beginning on or
          after
          December 15, 2008 and requires retroactive adoption of the presentation
          and
          disclosure requirements for existing minority interests. All other requirements
          shall be applied prospectively. The Company is currently evaluating the
          impact
          of adopting SFAS No. 160 on its consolidated financial
          statements.


28


On
        March 19, 2008, the FASB issued FASB Statement No. 161, “ *Disclosures
        about Derivative Instruments and Hedging Activities — an Amendment of FASB
        Statement 133**”*** (“Statement 161”). Statement 161 enhances required disclosures regarding
        derivatives and hedging activities, including enhanced disclosures regarding
        how: (a) an entity uses derivative instruments; (b) derivative
        instruments and related hedged items are accounted for under SFAS No.133,
        “ *Accounting
        for Derivative Instruments and Hedging Activities;* ”
and
        (c) derivative instruments and related hedged items affect an entity’s
        financial position, financial performance, and cash flows. Statement 161
        is
        effective for fiscal years and interim periods beginning after November 15,
        2008. The Company has currently not determined the potential effects on the
        consolidated financial statements, if any.
 
 In
        May 2008, the FASB issued SFAS No. 162, *“The Hierarchy of
        Generally Accepted Accounting Principles”* (“SFAS No. 162”).
        SFAS No. 162 identifies the sources of accounting principles and the
        framework for selecting the principles used in the preparation of financial
        statements of nongovernmental entities that are presented in conformity with
        generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162
        will become effective 60 days following the SEC’s approval of the Public
        Company Accounting Oversight Board amendments to AU Section 411,
“ *The
        Meaning of Present Fairly in Conformity With Generally Accepted Accounting
        Principles.* ”
The
        Company does not currently expect that the adoption of SFAS 162 will have a
        material effect on its consolidated results of operations and financial
        condition.
 
 In
        May 2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1
“ *Accounting
        for Convertible Debt instruments That May Be Settled in Cash Upon Conversion
        (Including Partial Cash Settlement)* ”
(“FSP
        APB 14-1”). FSP APB 14-1 requires the issuer of certain convertible
        debt instruments that may be settled in cash (or other assets) on conversion
        to
        separately account for the liability (debt) and equity (conversion option)
        components of the instrument in a manner that reflects the issuer’s
        non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal
        years beginning after December 15, 2008 on a retroactive basis. As the
        Company does not have convertible debt at this time and expect that the adoption
        of FSP APB 14-1 will have no effect on its consolidated results of
        operations and financial condition.







29




**Item
          3.** **Quantitative
          and Qualitative Disclosures About Market Risk**




*Disclosures
      About Market Risk.* We
      may be
      exposed to changes in financial market conditions in the normal course of
      business. Market risk generally represents the risk that losses may occur as
      a
      result of movements in interest rates and equity prices. We currently do not
      use
      financial instruments in the normal course of business that are subject to
      changes in financial market conditions.





*Currency
      Fluctuations and Foreign Currency Risk.* Substantially all of our operations are conducted in the PRC, with the exception
      of our export business and limited overseas purchases of raw materials. Most
      of
      our sales and purchases are conducted within the PRC in Renminbi, which is
      the
      official currency of the PRC. As a result, the effect of the fluctuations of
      exchange rates is considered minimal to our business operations.





Substantially
      all of our revenues and expenses are denominated in Renminbi. However, we use
      the United States dollar for financial reporting purposes. Conversion of
      Renminbi into foreign currencies is regulated by the People’s Bank of China
      through a unified floating exchange rate system. Although the PRC government
      has
      stated its intention to support the value of the Renminbi, there can be no
      assurance that such exchange rate will not again become volatile or that the
      Renminbi will not devalue significantly against the U.S. dollar. Exchange rate
      fluctuations may adversely affect the value, in U.S. dollar terms, of our net
      assets and income derived from our operations in the PRC.





*Interest
      Rate Risk.* We do
      not have significant interest rate risk as the interest we pay on substantially
      all of our debt obligations is calculated at a fixed rate in accordance with
      the
      terms of such indebtedness.




*Credit
      Risk.* We have
      not experienced significant credit risk, as most of our customers are long-term
      customers with superior payment records. Our receivables are monitored regularly
      by our credit managers.





**Item
      4.**  **Controls
      and Procedures**





Our
      management, with the participation our chief executive officer and chief
      financial officer, has evaluated the effectiveness of our disclosure controls
      and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
      the Exchange Act) as of the end of the period covered by this report. Based
      on
      such evaluation, our chief executive officer and chief financial officer were
      unable to conclude that, as of the end of such period, our disclosure controls
      and procedures were effective. As reported in our annual report on Form 10-K
      for
      the year ended December 31, 2007, we have not completed all of the
      evaluations necessary to issue guidance on the status of our internal controls,
      have identified certain control deficiencies and have not yet been able to
      complete our assessment of which, if any, control deficiencies constitute
“material weakness” as defined under Public Accounting Oversight Board Auditory
      Standard No. 5. See Item 9A. Controls and Procedures of our annual report on
      Form 10-K for the year ended December 31, 2007, which was filed on March 28,
      2008 and is incorporated by reference into this Item 4 for a more detailed
      explanation of these control deficiencies and remedial actions taken and planned
      that we expect will materially affect our disclosure controls and
      procedures.





In
      late
      April 2008, Child, Van Wagoner & Bradshaw, PLLC, our independent registered
      accounting firm at that time, advised our board of directors and the audit
      committee of our board that during its audit of our consolidated financial
      statements for the year ended December 31, 2007 the following matters were
      identified involving our internal control over financial reporting that it
      considered to be significant deficiencies under the standards established by
      the
      Public Company Accounting Oversight Board (“PCAOB”):


30





·
            the
                lack of a system of timely recording certain cash receipts and
                disbursements;





·
            the
                need to hire additional accounting personnel to prepare, supervise
                and
                review general ledger reconciliations at our subsidiaries;
                and





·
            our
                failure to have an effective method of accounting for certain non-routine
                transactions and estimates.





In
      response to the deficiencies identified, we have taken steps to strengthen
      our
      internal control over financial reporting. In particular, we have evaluated
      and
      continue to evaluate the roles and functions of the accounting personnel within
      our corporate accounting department and intend to add permanent personnel
      resources to support internal control over financing reporting. In addition,
      as
      reported in our annual report on Form 10-K for the year ended December 31,
      2007,
      we have retained Horwath International, an independent third party consulting
      firm, to assist our management team in evaluating our internal controls and
      procedures. As of the date of this report, Horwath International has identified
      the following matter involving our internal control over financial reporting
      that it considered to be a significant deficiency under the standards
      established by the PCAOB:





·
            the
                lack of a system of tracking, updating and evaluating changes in
                U.S. GAAP
                and PRC GAAP.





We
      are in
      the process of resolving the above-listed deficiencies and, as relates to the
      tracking of changes in accounting standards, have begun creating a detailed
      system of analyzing, assessing and documenting the effect of any changes in
      the
      U.S. and PRC accounting standards on our financial reporting, profit and loss,
      and internal control procedures. Management will continue to monitor the
      effectiveness of our internal controls and procedures on an ongoing basis and
      will take further action, as appropriate, to address the control deficiencies
      described herein.





The
      certifications of our chief executive officer and chief financial officer
      attached as Exhibits 31.1 and 31.2 to this report include, in paragraph 4 of
      such certifications, information concerning our disclosure controls and
      procedures and internal control over financial reporting. Such certifications
      should be read in conjunction with the information contained in this Item 4,
      including the information incorporated by reference to our annual report on
      Form
      10-K for the year ended December 31, 2007, for a more complete understanding
      of
      the matters covered by such certifications.





Except
      as
      otherwise described herein, t here
      have
      not been any changes in our internal control over financial reporting (as such
      term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during
      the fiscal quarter to which this report relates that have materially affected,
      or are reasonably likely to materially affect, our internal control over
      financial reporting.


31


**ZHONGPIN
      INC.**





**Part
      II – Other Information**





**Item
      1.**  **Legal
      Proceedings**





None.





**Item
      1A.**  **Risk
      Factors**





During
      the six months ended June 30, 2008, there were no material changes to the risk
      factors previously disclosed in our Annual Report on Form 10-K for the year
      ended December 31, 2007.


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





(a)  None.





(b)  Not
      Applicable.





(c)  None.




**Item
      3.**  **Defaults
      Upon Senior Securities**





Not
      Applicable.





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





Not
      Applicable.





**Item
      5.**  **Other
      Information**





(a)  None.





(b)  None.





**Item
      6.**  **Exhibits**





The
                exhibits required by this item are set forth on the Exhibit Index
                attached
                hereto.


32





**ZHONGPIN
      INC.**





**Signatures**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, we have duly caused
      this report to be signed on our behalf by the undersigned thereunto duly
      authorized.





Zhongpin
                Inc.(Company)Date:
                August 11, 2008By:
            /s/
                Xianfu ZhuXianfu
                ZhuChief
                Executive OfficerBy:
            /s/
                Yuanmei MaYuanmei
                MaChief
                Financial Officer


33


**Exhibit
      Index**





**Exhibit**
              **Number**
            
            **Exhibit Title**10.1*
            
            Term
                Loan Facility dated May 6, 2008 between Henan Zhongpin Food Share
                Co.,
                Ltd. and Rabobank Nederland Shanghi Branch.31.1*
            
            Certification
                of our Chief Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.31.2*
            
            Certification
                of our Chief Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.32.1*
            
            Certification
                of our Chief Executive Officer pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.32.2*
            
            Certification
                of our Chief Financial Officer pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.







*
            Filed
                herewith




34