UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 2)

(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, 2006

                                 or

[ ]

       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              (I.R.S. Employer
or organization)                                           Identification No.)



21 Changshe Road, Changge City, Henan Province, The 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 ___

    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 ___    Accelerated filer ___   Non-accelerated filer _X_

    Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).  YES ___  NO _X_

    As of  September  13, 2006,  11,752,568  shares of the  registrant's  common
stock, and 6,900,000 shares of the registrant's  Series A preferred stock,  each
such share  convertible  into one share of the registrant's  common stock,  were
outstanding.

<PAGE>


                                EXPLANATORY NOTE

        In this Amendment No. 2 to the Quarterly Report on Form 10-Q, we will
refer to Zhongpin Inc., a Delaware corporation, as "our company," "we," "us,"
and "our."

        We are filing this Amendment No. 2 to our Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 2006 to correct the following items:

           o    Part I, Item 1. Unaudited Financial Statements and Notes to
                Consolidated Financial Statements and Part I, Item II.
                Management's Discussion and Analysis of Financial Condition and
                Results of Operations to reflect the additional expense recorded
                in connection with the accrual of a liability that may be
                payable to the holders of our Series A convertible preferred
                stock and related purchase warrants because of our failure to
                register in a timely manner for resale under the Securities Act
                of 1933, as amended, the shares of our common stock issuable
                upon the conversion or exercise of such securities.

        Pursuant to Rule 12b-15 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), this Amendment No. 2 presents new
certifications pursuant to Rule 13a-14(a)/15d-14(a) and Rules
13a-14(b)/15d-14(b) under the Exchange Act. Except as described above, no
substantive change has been made to the Quarterly Report as originally filed.
This Amendment No. 2 does not reflect events occurring after the filing of the
Quarterly Report as originally filed or modify or update those disclosures
affected by subsequent events.

<PAGE>


                                  ZHONGPIN INC.

                                    FORM 10-Q

                                      INDEX

PART I   FINANCIAL INFORMATION                                              PAGE
------   ---------------------                                              ----

         Item 1.  Unaudited Financial Statements:

                  Consolidated Balance Sheets as of June 30, 2006
                     (unaudited) and December 31, 2005 ......................  2

                  Consolidated Statements of Operations
                     and Comprehensive Income (unaudited) for the three
                     and six months ended June 30, 2006 and 2005 ...........   3

                  Consolidated Statement of Changes in Stockholders'
                     Equity (unaudited) for the six months ended
                     June 30, 2006 .........................................   4

                  Consolidated Statements of Cash Flows (unaudited) for
                     the six months ended June 30, 2006 and 2005 ...........   5

                  Notes to Consolidated Financial Statements (unaudited) ...   6

         Item 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations ...................  22

PART II  OTHER INFORMATION

         Item 6.  Exhibits..................................................  37

SIGNATURES..................................................................  38


                                       i
<PAGE>


                                  ZHONGPIN INC.

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

        The accompanying unaudited consolidated balance sheets, statements of
operations and comprehensive income, of changes in stockholders' equity, and of
cash flows and related notes thereto, have been prepared in accordance with
generally accepted accounting principles ("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, as
amended, for the transition period from June 30, 2005 to December 31, 2005.

        The results of operations for the three- and six-month periods ended
June 30, 2006 are not necessarily indicative of the results to be expected for
the entire fiscal year or any other period.

<PAGE>


                                  ZHONGPIN INC.
                           CONSOLIDATED BALANCE SHEETS
                            (AMOUNTS IN U.S. DOLLARS)

                                               JUNE 30, 2006   DECEMBER 31, 2005
                                               -------------   -----------------
                 ASSETS                         (Unaudited)
                                                 (Restated)
Current assets
  Cash and cash equivalents                    $  14,519,039   $      10,142,394
  Accounts receivable and other receivables       14,733,543          10,002,918
  Purchase deposits                                   88,873             220,836
  Prepaid expenses and deferred charges              140,985              99,009
  Inventories                                      6,352,818           2,347,312
  Tax refund receivables                             794,618             644,232
                                               -------------   -----------------
Total current assets                              36,629,876          23,456,701

Property, plant and equipment (net)               22,638,938          10,212,848
Related party receivables                            270,148             267,658
Other receivables                                         --             632,063
Construction contracts                             8,814,597          16,931,178
Intangible assets                                  5,476,867           1,753,124
                                               -------------   -----------------

Total assets                                   $  73,830,426   $      53,253,572
                                               =============   =================

          LIABILITIES AND EQUITY

Current liabilities
  Bank overdraft                               $          --   $         619,579
  Accounts payable and other payables             10,916,854          10,278,464
  Accrued liabilities                                968,793             759,420
  Short term loans payable                        12,944,619          18,995,853
  Taxes payable                                      943,674           2,055,925
  Deposits from clients                              250,331             769,398
  Research and development grants payable          1,339,887           2,436,804
  Long term loans payable-current portion            145,671             145,671
                                               -------------   -----------------
Total current liabilities                         27,509,829          36,061,114

Long term loans payable                            2,107,165           2,264,448
                                               -------------   -----------------

Total liabilities                                 29,616,994          38,325,562

Minority interest                                    431,037             411,742

Equity

  Preferred stock: par value $0.001;
  10,000,000 authorized; 6,900,000 shares
  issued and outstanding                               6,900                  --

  Common stock: par value $0.001;
  25,000,000 authorized; 11,752,578 shares
  issued and outstanding                              11,753              11,753
  Additional paid in capital                      25,209,926           2,102,933
  Retained earnings                               17,984,977          12,097,834
  Accumulated other comprehensive income             568,839             303,748
                                               -------------   -----------------
Total equity                                      43,782,395          14,516,268
                                               -------------   -----------------

Total liabilities and equity                   $  73,830,426   $      53,253,572
                                               =============   =================


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

                                       2
<PAGE>


                                  ZHONGPIN INC.
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                      (AMOUNTS IN U.S. DOLLARS) (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Three Months Ended                   Six Months Ended
                                                         June 30,                            June 30,
                                             --------------------------------    --------------------------------
                                                  2006              2005              2006              2005
                                             --------------    --------------    --------------    --------------
                                               (Restated)                          (Restated)
<S>                                          <C>               <C>               <C>               <C>
Revenues
  Sales revenues                                 31,777,348        18,591,118        62,270,855        32,996,247
  Cost of  sales                                 27,052,820        15,574,225        52,966,975        27,383,004
                                             --------------    --------------    --------------    --------------
    Gross profit                                  4,724,528         3,016,893         9,303,880         5,613,243

Operating expenses
  General and administrative expenses             1,579,624           276,520         2,478,648           500,169
  Operating expenses                                716,090           327,304         1,520,236           692,663
                                             --------------    --------------    --------------    --------------
    Total operating expenses                      2,295,714           603,824         3,998,884         1,192,832
                                             --------------    --------------    --------------    --------------

Income from operations                            2,424,814         2,413,069         5,304,996         4,420,411

Other  income  (expense)
  Interest income                                   149,648            40,364           245,338            89,269
  Other  income (expenses)                           23,844           (17,978)           36,236            (3,304)
  Allowances income                               1,113,661             5,435         1,226,845            44,082
  Exchange gain                                       4,319           (31,103)           18,028           (42,276)
  Interest expense                                 (227,587)         (458,908)         (607,815)         (808,658)
                                             --------------    --------------    --------------    --------------
    Total other income (expense)                  1,063,885          (462,190)          918,632          (720,887)
                                             --------------    --------------    --------------    --------------

Net income before taxes                           3,492,669         1,950,879         6,223,628         3,699,524
Provision for income taxes                          171,945           122,789           317,190           122,789
                                             --------------    --------------    --------------    --------------

Net income after taxes                            3,320,754         1,828,090         5,906,438         3,576,735
Minority interest                                     8,575             6,801            19,295            19,055
                                             --------------    --------------    --------------    --------------

Net income                                   $    3,312,179    $    1,821,289    $    5,887,143    $    3,557,680
                                             ==============    ==============    ==============    ==============

Foreign currency translation adjustment             123,941                --           265,091                --
                                             --------------    --------------    --------------    --------------
Comprehensive income                         $    3,436,120    $    1,821,289    $    6,152,234    $    3,557,680
                                             ==============    ==============    ==============    ==============

Basic earnings per common share              $         0.18    $         0.15    $         0.34    $         0.30
Diluted earnings per common share            $         0.14    $         0.15    $         0.28    $         0.30
Basic weighted average shares outstanding        11,752,578        11,752,578        11,752,578        11,752,578
Diluted weighted average shares outstanding      23,137,578        11,752,578        21,248,411        11,752,578
</TABLE>


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

                                       3
<PAGE>


                                  ZHONGPIN INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      (AMOUNTS IN U.S. DOLLARS) (UNAUDITED)
                                   (Restated)
<TABLE>
<CAPTION>
                                                                                                           Accumulated
                                                                                Additional                    Other
                                Preferred Stock           Common Stock           Paid In       Retained   Comprehensive
                               Shares    Par Value     Shares      Par Value     Capital       Earnings       Income       Total
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
<S>                          <C>         <C>        <C>           <C>          <C>           <C>           <C>          <C>
Balance at January 1, 2003           --  $      --             1  $1,816,425   $   182,319   $ 1,935,634   $        --  $ 3,934,378
Net income for the year                         --                        --            --     1,536,272                  1,536,272
Dividends paid                       --         --            --          --            --       (56,392)           --      (56,392)
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
Balance December 31, 2003            --         --             1   1,816,425       182,319     3,415,514            --    5,414,258

Net income for the year              --         --            --          --            --     2,768,473            --    2,768,473
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
Balance December 31, 2004            --         --             1   1,816,425       182,319     6,183,987            --    8,182,731

Merger on May 20                     --         --            --     115,942            --            --            --      115,942
Recapitalization on Sept. 15         --         --         9,999  (1,922,367)    1,922,367            --            --           --
Net income for the year                                                                        5,913,847            --    5,913,847
Foreign currency translation
  adjustment                         --         --            --          --            --            --       303,748      303,748
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
Balance December 31, 2005            --         --        10,000      10,000     2,104,686    12,097,834       303,748   14,516,268

Items applied retroactively:         --
Recapitalization on
  January 30, 2006                   --         --   415,432,354     405,442      (405,442)           --            --           --
Reverse stock split on
  February 16, 2006
  (1:35.349)                         --         --  (403,689,776)   (403,689)      403,689            --            --           --
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
Restated December 31, 2005           --         --    11,752,578      11,753     2,102,933    12,097,834       303,748   14,516,268

Increase in Preferred Stock   6,900,000      6,900            --          --            --            --            --        6,900
Warrant expense                                                                      3,190                                    3,190
Net income for the period            --         --            --          --            --     5,887,143            --    5,887,143
Increase in additional paid
  in capital                         --         --            --          --    23,103,803                          --   23,103,803
Foreign currency translation
  adjustment                         --         --            --          --            --            --       265,091      265,091
                             ----------  ---------  ------------  ----------   -----------   -----------   -----------  -----------
Balance June 30, 2006         6,900,000  $   6,900    11,752,578  $   11,753   $25,209,926   $17,984,977   $   568,839  $43,782,395
                             ==========  =========  ============  ==========   ===========   ===========   ===========  ===========
</TABLE>


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

                                       4
<PAGE>


                                  ZHONGPIN INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (AMOUNTS IN U.S. DOLLARS) (UNAUDITED)

                                                     SIX MONTHS ENDED JUNE 30,
                                                    ---------------------------
                                                        2006           2005
                                                    ------------   ------------
                                                     (Restated)
Cash flows from operating activities:
  Net income                                        $  5,887,143   $  3,557,680
  Adjustments to reconcile net income to
   net cash provided by (used in) operations:
    Minority interest                                     19,295        214,854
    Depreciation                                         361,958        290,522
    Amortization                                          51,605         10,923
    Exchange gain                                        (18,027)            --
    Provision for allowance for bad debt                     (76)            --
    Warrants issued for services                           3,190             --
    Changes in operating assets and liabilities:
      Accounts receivable and other receivables       (4,101,052)    (4,122,488)
      Purchase deposits                                  131,963          1,580
      Prepaid expense and deferred charges               (41,976)      (128,046)
      Inventories                                     (4,005,506)    (1,059,548)
      Tax refunds receivable                            (150,386)        (1,786)
      Accounts payable and accrued liabilities          (249,154)      (291,419)
      Taxes payable                                   (1,112,251)       (46,193)
      Deposits from clients                             (519,067)       139,634
                                                    ------------   ------------
  Net cash used in operating activities               (3,742,341)    (1,434,287)

Cash flows from investing activities:
  Construction in progress                                    --       (250,349)
  Additions to fixed assets                           (4,669,791)      (378,489)
  Additions to intangible  assets                     (3,775,109)            --
                                                    ------------   ------------
    Net cash used in investing activities             (8,444,900)      (628,838)

Cash flows from financing activities:
  Repayment of Bank overdraft                           (619,579)            --
  Proceeds from short-term loans                      10,492,500     16,550,797
  Repayment of short-term loans                      (16,543,734)    (4,657,450)
  Repayment of long-term loans                          (157,283)    (1,582,575)
  Proceeds from preferred stock                       23,110,703             --
  Payments of dividends                                       --             --
                                                    ------------   ------------
    Net cash provided by financing activities         16,282,607     10,310,772

  Effect of rate changes on cash                         281,279             --
                                                    ------------   ------------
  Increase (decrease) in cash and cash equivalents     4,376,645      8,247,647
  Cash and cash equivalents, beginning of period      10,142,394      5,204,637
                                                    ------------   ------------
  Cash and cash equivalents, end of period          $ 14,519,039   $ 13,452,284
                                                    ============   ============

Supplemental disclosures of cash flow information:
  Cash paid for interest                            $    636,044   $    808,658
  Cash paid for income taxes                        $    312,672   $         --


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

                                       5
<PAGE>

                                  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 accounting
principles generally accepted in the United States of America 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. The consolidated operating results for the six months ended June
30, 2006 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2006. For further information, refer to the
financial statements and footnotes thereto included herein for the three years
ended December 31, 2005.

1.      ORGANIZATION AND NATURE OF OPERATIONS

        Zhongpin Inc. ("Zhongpin") was incorporated on February 4, 2003 as
Strong Technical Inc. in the State of Delaware for the purpose of operating a
personnel outsourcing service that provides skilled workers to industry. On
March 30, 2005, an 82.4% controlling interest in our company was acquired by
Halter Capital Corporation and all previous operations were discontinued. On
January 30, 2006, we acquired Falcon Link Investment Limited ("Falcon") in a
stock exchange by issuing 397,676,704 (11,250,000 post-split) shares of our
common stock in exchange for all of the issued and outstanding capital stock of
Falcon. The acquisition transaction was accounted for as a reverse acquisition
resulting in the recapitalization of Falcon. Accordingly, the historical
financial statements of Falcon have been retroactively restated to give effect
to the recapitalization as if it had occurred at the beginning of the first
period presented. Zhongpin and its subsidiaries are collectively referred to
herein as "our company," "we," "us" and "our."

        Falcon was incorporated in the Territory of the British Virgin Islands
("BVI") on July 21, 2005 as a holding company for the purpose of owning all of
the equity interests of Henan Zhongpin Food Co., Ltd. ("HZFC"), a People's
Republic of China ("PRC") company. Falcon acquired 100% ownership of HZFC by
paying 20,940,000 Renminibi ("RMB") ($2,528,986) to the holders of HZFC, who
where also the holders of Falcon. The transaction was accounted for as a
transfer of entities under common control, wherein HZFC was the continuing
entity. The historical financial statements of Falcon are essentially those of
HZFC and are shown as if the transfer had taken place at the beginning of the
first period presented.

        HZFC was established in the PRC on May 20, 2005 for the sole purpose of
holding the capital stock of Henan Zhongpin Food Share Company Limited ("Food
Share") and its subsidiaries. The owners of Food Share formed HZFC by investing
16,000,000 RMB ($1,932,367). HZFC acquired Food Share by paying 15,040,000 RMB
($1,816,425) to the holders of Food Share, who were also the holders of HZFC, in
exchange for 100% ownership of Food Share. The transaction was accounted for as
a transfer of entities under common control, wherein Food Share was the
continuing entity with an increase in registered capital of 960,000 RMB
($115,942). The historical financial statements of HZFC are essentially those of
Food Share shown with an increase in capital as if the transfer had taken place
at the beginning of the first period presented.

        Food Share was incorporated in the PRC. It is headquartered in Henan
Province in the PRC and its corporate office is in Changge City. Through our
subsidiaries, we are principally engaged in the production of pork, pork
products and vegetables, and the retail sales of pork, processed pork products,
vegetables and other grocery items to customers throughout the PRC and other
export countries, either directly or through its subsidiaries.

        On January 30, 2006, we consummated an agreement with the shareholders
of Falcon whereby we issued 397,676,704 (11,250,000 post-split) shares of our
common stock in exchange for all of the issued and outstanding stock of Falcon.
Immediately prior to the transaction there were 17,765,650 (502,578 post-split)
shares outstanding as compared to 415,442,354 (11,752,578 post-split) shares
outstanding immediately following the transaction. Consequently, Falcon became a
wholly-owned subsidiary of our company. The transaction was accounted for as a
reverse acquisition resulting in a recapitalization of Falcon, wherein Falcon's
historical financial statements became those of our company, retrospectively
restated to reflect the adopted capital structure of our company as if the
transaction had occurred at the beginning of the first period presented. These
financial statements have been adjusted to reflect such restatement.

                                       6
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.      ORGANIZATION AND NATURE OF OPERATIONS (continued)

        In conjunction with the acquisition of Falcon, on January 31, 2006, we
sold for $8.00 per unit 3.45 million units, each consisting of two shares of
Series A convertible preferred stock and a five-year warrant to purchase 35.349
(one post-split) common shares at a purchase price of $0.1414467 ($5.00 post
split) per share. Each preferred share is convertible into 35.349 (one
post-split) common shares. The outstanding shares of Series A convertible
preferred stock are convertible into an aggregate of 243,908,100 (6,900,000
post-split) common shares and the outstanding warrants are exercisable to
purchase an aggregate of 121,954,050 (3,450,000 post-split) common shares.

        On February 16, 2006, we amended our articles of incorporation to change
our name from Strong Technical, Inc. to Zhongpin Inc. In the same amendment, we
changed our authorized common stock to 25,000,000 shares with a par value of
$0.001 per share and our authorized preferred stock to 10,000,000 shares with a
par value of $0.001 per share.

        On February 16, 2006, we effected a 1:35.349 reverse split of our
outstanding common stock. Immediately prior to the split, 415,442,354 common
shares were outstanding as compared to 11,752,578 common shares outstanding
immediately following the split. The aggregate number of shares of common stock
issuable upon conversion of our outstanding shares of Series A convertible
preferred stock was reduced from 243,908,100 common shares to 6,900,000 common
shares, and the aggregate number of shares of our common stock issuable upon the
exercise of our outstanding warrants was reduced from 121,954,050 common shares
to 3,450,000 common shares. The purchase price of the shares issuable exercise
of our outstanding warrants was increased to $5.00 per share.

        Details of Food Share's subsidiaries are as follows:

                                DOMICILE/DATE        REGISTERED      PERCENTAGE
                     NAME      OF INCORPORATION       CAPITAL       OF OWNERSHIP

 Henan Zhongpin Industrial                         18,000,000 RMB
 Company Limited              PRC/ Jan. 17, 2002   ($2,173,913)        88.00%

 Henan Zhongpin Import and                          5,060,000 RMB
 Export Trading Company       PRC/Aug. 11, 2004    ($611,111)          88.93%

 Zhumadian Zhongpin                                 5,000,000 RMB
 Food Company Limited         PRC/June 7, 2006     ($625,344)           100%

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

        The consolidated financial statements include the accounts of Zhongpin
Inc. (formerly Strong Technical, Inc.), Falcon Link Investment Limited, Henan
Zhongpin Food Co., Ltd., Henan Zhongpin Food Share Company Limited, Henan
Zhongpin Industrial Company Limited, Henan Zhongpin Import and Export Trading
Company and Zhumadian Zhongpin Food Company Limited. All material intercompany
accounts and transactions have been eliminated in consolidation.

        The consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP"). The preparation of financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that

                                       7
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. U.S. GAAP differs from that
used in the statutory financial statements of our PRC subsidiaries, which were
prepared in accordance with the relevant accounting principles and financial
reporting regulations as established by the Ministry of Finance of the PRC.
Certain accounting principles stipulated under U.S. GAAP are not applicable in
the PRC.

        The RMB of the People's Republic of China has been determined to be our
functional currency. The balance sheets of our company and our subsidiaries were
translated at year end exchange rates. Expenses were translated at moving
average exchange rates in effect during the year. The effects of rate changes on
assets and liabilities are recorded as accumulated other comprehensive income.

FISCAL YEAR

        Our financial statements have been prepared using December 31 as the
fiscal year end.

MINORITY INTEREST IN SUBSIDIARIES

        We record minority interest expense, which reflects the minority
shareholders' portion of the earnings of Henan Zhongpin Industrial Company
Limited and Henan Zhongpin Import and Export Trading Company. During 2005, Henan
Zhongpin Industrial Company Limited increased its registered capital from
5,000,000 RMB to 18,000,000 RMB, which required the minority holders to increase
their investment by 1,560,000 RMB, effectively increasing the minority interest
shown on our balance sheet by $188,406. In June 2006, Zhumadian Zhongpin Food
Company Limited was registered with a registered capital of 5,000,000 RMB, which
is 100%-owned by Henan Zhongpin Food Share Company Limited.

RESTRICTIONS ON TRANSFER OF ASSETS OUT OF THE PRC

        Dividend payments by HZFC are limited by certain statutory regulations
in the PRC. No dividends may be paid by HZFC without first receiving prior
approval from the Foreign Currency Exchange Management Bureau. Dividend payments
are restricted to 85% of profits, after tax.

CONTROL BY PRINCIPAL STOCKHOLDERS

        Our directors and executive officers and their affiliates or related
parties own, beneficially and in the aggregate, the majority of the voting power
of the outstanding shares of our common stock. Accordingly, if our directors and
executive officers and their affiliates or related parties vote their shares
uniformly, they would have the ability to control the approval of most corporate
actions, including increasing our authorized capital stock and the dissolution
or merger of our company or the sale of our assets.

START-UP COSTS

        In accordance with the provisions of the American Institute of Certified
Public Accountants' Statement of Position (SOP) 98-5, "Reporting on the Costs of
Start-up Activities," we expense all start-up and organizational costs as they
are incurred.

                                       8
<PAGE>


                                  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 accounting
principles generally accepted in the United States of America 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 reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

SIGNIFICANT ESTIMATES

        Several areas require significant management estimates relating to
uncertainties for which it is reasonably possible there will be a material
change in the near term. The more significant areas requiring the use of
management estimates relate to the valuation of receivables, equipment and
accrued liabilities, and the useful lives for amortization and depreciation.

CASH EQUIVALENTS

        We consider all highly-liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

        Accounts receivable are stated at cost, net of allowance for doubtful
accounts. Based on our experience and current practice in the PRC, management
provides for an allowance for doubtful accounts equivalent to those accounts
that are not collected within one year plus 5% of receivables less than one year
old.

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 adopted the provisions of SFAS No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"), effective January 1, 2002. Under SFAS 142,
goodwill and indefinite lived intangible assets are not amortized, but are
reviewed annually for impairment, or more frequently, if indications of possible
impairment exist. We have performed the requisite annual transitional impairment
tests on intangible assets and determined that no impairment adjustments were
necessary.

REVENUE RECOGNITION

        We recognize revenue on the sales of our products as earned when the
customer takes delivery of the product according to previously agreed upon
pricing and delivery arrangements, and when we believe collectibility is
reasonably assured. We sell primarily perishable and frozen food products. As
such, any right of return is only for a few days and has been determined to be
insignificant by management. Accordingly, no provision has been made for
returnable goods.

                                       9
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

EARNINGS PER SHARE

        Basic earnings per common share ("EPS") are calculated by dividing net
income available to common stockholders by the weighted average number of common
shares outstanding during the period. Our Series A convertible preferred stock
is a participating security. Consequently, the two-class method of income
allocation is used in determining net income available to common stockholders.

        Diluted EPS is calculated by adjusting the weighted average outstanding
shares, assuming conversion of all potentially dilutive securities, such as
stock options and warrants.

        The numerators and denominators used in the computations of basic and
diluted EPS are presented in the following table:

<TABLE>
<CAPTION>
                                                         Three Months Ended June 30,     Six Months Ended June 30,
                                                            2006            2005           2006            2005
                                                        ------------    ------------   ------------    ------------
<S>                                                     <C>             <C>            <C>             <C>
NUMERATOR FOR BASIC AND DILUTED EPS
  Net income (numerator for Diluted EPS)                $  3,312,179    $  1,821,289   $  5,887,143    $  3,557,680
  Net income allocated to preferred stock                 (1,225,248)             --     (1,934,062)             --
                                                        ------------    ------------   ------------    ------------
  Net income to common stockholders (Basic)             $  2,186,931    $  1,821,289   $  3,953,081    $  3,557,680
                                                        ============    ============   ============    ============

DENOMINATORS FOR BASIC AND DILUTED EPS
  Common stock outstanding after recapitalization and
  1:35.349 reverse stock split                            11,752,578      11,752,578     11,752,578      11,752,578
                                                        ------------    ------------   ------------    ------------
DENOMINATOR FOR BASIC EPS                                 11,752,578      11,752,578     11,752,578      11,752,578
                                                        ============    ============   ============    ============
  Add: Weighted average preferred as if converted          6,900,000              --      5,750,000              --
  Add: Weighted average stock warrants outstanding         4,501,667              --      3,745,833              --
                                                        ------------    ------------   ------------    ------------
DENOMINATOR FOR DILUTED EPS                               23,154,245      11,752,578     21,248,411      11,752,578
                                                        ============    ============   ============    ============

EPS - Basic                                             $       0.18    $       0.15   $       0.34    $       0.34
                                                        ------------    ------------   ------------    ------------
EPS - Diluted                                           $       0.14    $       0.15   $       0.28    $       0.28
                                                        ------------    ------------   ------------    ------------
</TABLE>

SHIPPING AND HANDLING COSTS

        Shipping and handling amounts billed to customers in related sales
transactions are included in sales revenues. Direct shipping costs are included
in operating expenses, which were approximately $483,500 and $161,900 for the
three months ended June 30, 2006 and 2005, respectively, and $711,500 and
$350,900 for six months ended June 30, 2006 and 2005, respectively. Handling
costs are included in costs of sales, which were approximately $96,800 and
$105,000 for the three months ended June 30, 2006 and 2005, respectively, and
$276,800 and $265,000 for the six months ended June 30, 2006 and 2005,
respectively.

                                       10
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.      SUMMARY OF ACCOUNTING POLICIES (continued)

ADVERTISING COSTS

        Advertising costs are expensed as incurred. Advertising expenses were
approximately $68,700 and $26,600 for the three months ended June 30, 2006 and
2005, respectively, and $94,700 and $42,600 for the six months ended June 30,
2006 and 2005, respectively.

RESEARCH AND DEVELOPMENT COSTS

        The PRC government has made a cash grant to our company specifically to
fund research and development. We have recorded this grant as a liability titled
"Research & development grants payable" on our balance sheet. 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 $47,000 and $27,000 for the three months
ended June 30, 2006 and 2005, respectively, and $111,000 and $87,000 for the six
months ended June 30, 2006 and 2005, respectively.

PROPERTY AND EQUIPMENT

        Impairment of long-lived assets is recognized when events or changes in
circumstances indicate the carrying amount of an asset, or related groups of
assets, may not be recoverable. Under the provisions of SFAS No. 144,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," we recognize an "impairment charge" when the expected net
undiscounted future cash flows from an asset's use and eventual disposition are
less than the asset's carrying value and the asset's carrying value exceeds its
fair value. Measurement of fair value for an asset or group of assets may be
based on appraisal, market values of similar assets or estimated discounted
future cash flows resulting from the use and ultimate disposition of the asset
or assets.

        Expenditures for maintenance, repairs and betterments, which do not
materially extend the normal useful life of an asset, are charged to operations
as incurred. Upon sale or other disposition of assets, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is reflected in income.

        Depreciation and amortization are provided for financial reporting
purposes primarily on the straight-line method over the estimated useful lives,
ranging from five to 50 years.

OPERATING LEASES

        Operating leases represent those leases under which substantially all
the risks and rewards of ownership of the leased assets remain with the lessors.
Rental payments under operating leases are charged to expense on the
straight-line basis over the period of the relevant leases.

INCOME TAXES

        Income tax expense is based on reported income before income taxes.
Deferred income taxes reflect the effect of temporary differences between assets
and liabilities that are recognized for financial reporting purposes and the
amounts that are recognized for income tax purposes. In accordance with
Statement of Financial Accounting Standard ("SFAS") No. 109, "Accounting for
Income Taxes," these deferred taxes are measured by applying currently enacted
tax laws. We recorded income tax expenses of

                                       11
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.      SUMMARY OF ACCOUNTING POLICIES (continued)

$171,945 and $122,789 for the three months ended June 30, 2006 and 2005,
respectively, and $317,190 and $122,789 for the six months ended June 30, 2006
and 2005, respectively.

        We withhold and pay income taxes on our employees' wages, which fund the
Chinese government's sponsored health and retirement programs for all of our
employees. For our employees, we were obligated to make contributions to the
social insurance bureau under the laws of the PRC for pension and retirement
benefits.

3.      BUSINESS ACQUISITIONS

        Food Share formed Henan Zhongpin Import and Export Trading Company on
August 11, 2004 as a joint venture with Li Jun Wei, an individual, to facilitate
exporting of our goods. We own 88.93% of Henan Zhongpin Import and Export
Trading Company.

4.      ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

        We accrue an allowance for bad debts related to our receivables. The
receivable and allowance balances at June 30, 2006 and December 31, 2005 were as
follows:

                                         June 30, 2006   December 31, 2005
                                         -------------     ------------
        Accounts receivable              $ 15,881,901      $ 10,337,838
        Other receivables                     584,230         2,013,757
        Allowance for bad debts            (1,732,588)       (1,716,614)
                                         ------------      ------------
                                         $ 14,733,543      $ 10,634,981
                                         ============      ============

        Current                          $ 14,733,543      $ 10,002,918

        Non-current
                                                   --           632,063
                                         ------------      ------------
                                         $ 14,733,543      $ 10,634,981
                                         ============      ============


Other receivables consist primarily of cash advances to suppliers to ensure
preferential pricing and delivery. The 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 paid within one year
are classified as non-current.


5.      INVENTORIES

        Inventories at June 30, 2006 and December 31, 2005 consisted of:

                                               June 30, 2006   December 31, 2005
                                               -------------   -----------------
        Raw materials                          $     457,269     $     210,288
        Low value consumables & packaging            320,905           147,000

        Work-in-progress                             731,998           290,149
        Finished goods                             4,842,646         1,699,875
                                               -------------     -------------
        Net inventories                        $   6,352,818     $   2,347,312
                                               =============     =============

                                       12
<PAGE>

                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.      PROPERTY, PLANT AND EQUIPMENT

        Property, plant and equipment at cost at June 30, 2006 and December 31,
2005 consisted of:

                                               June 30, 2006   December 31, 2005
                                               -------------   -----------------
        Machinery and equipment                $  11,755,169     $   6,832,887
        Furniture and office equipment               350,249           253,187
        Motor vehicles                               329,043           281,371
        Buildings                                 12,801,546         5,084,728
                                               -------------     -------------
           Subtotal                               25,236,007        12,452,173
        Less: accumulated depreciation            (2,597,069)       (2,239,325)
                                               -------------     -------------
        Net property and equipment                22,638,938        10,212,848
                                               =============     =============
        Depreciation expense                   $     361,958     $     602,008

7.      INTANGIBLE ASSETS

        Intangible assets consist of prepaid land use rights. According to the
laws of the PRC, the government owns all of the land in the PRC. Companies or
individuals are authorized to possess and use the land only through land use
rights granted by the PRC government. Accordingly, we paid in advance for
certain land use rights. Prepaid land use rights are being amortized and
recorded as lease expense using the straight-line method over the use terms of
20 to 50 years. Intangible assets at June 30, 2006 and December 31, 2005
consisted of the following:

                                               June 30, 2006   December 31, 2005
                                               -------------   -----------------
        Land use rights                        $   5,617,102     $   1,840,937
        Accumulated amortization                    (140,235)          (87,813)
                                               -------------     -------------
                                               $   5,476,867     $   1,753,124
                                               =============     =============
        Amortization expense                   $      51,605     $      37,431

8.      RELATED PARTY RECEIVABLES

        Related party receivables consist of advances made by our company to the
minority interest holders of Henan Zhongpin Industrial Company Limited for their
investment in the registered capital of that entity. The advances are
non-interest bearing and have no fixed repayment terms. Consequently, they are
classified as non-current assets.

                                       13
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.      CONSTRUCTION IN PROGRESS

        Construction in progress at June 30, 2006 and December 31, 2005
consisted of:

                                Completion
                               or Estimated
        Construction Project  Completion Date   June 30, 2006  December 31, 2005
        --------------------  ---------------   -------------  -----------------
        Industrial plant       February 2006      $4,871,031      $16,931,178
        Production line for
          chilled pork         January 2007        3,725,925               --
        Land use right of
          Industrial Park
          No.4 land            December 2007         217,641               --
                                                  ----------      -----------
                                                  $8,814,597      $16,931,178
                                                  ==========      ===========

10.     LOANS PAYABLE

SHORT-TERM LOANS

        Short-term loans are due within one year. Of the $12.94 million
aggregate principal amount of short-term loans at June 30, 2006, loans in the
principal amount of $4.00 million were secured by our land and plants located in
the PRC and guaranteed by Henan Zhongpin Industry Co., Ltd. Loans in the
principal amount of $1.29 million were secured by our land and plants located in
the PRC and loans in the aggregate principal amount of $7.63 million were
guaranteed by Henan Zhongpin Industry Co., Ltd. These loans bear interest at
prevailing lending rates in the PRC ranging from 3.0% to 7.0% per annum. At June
30, 2006, there was approximately $65.71 million in available unused lines of
credit.

LONG-TERM LOANS

        Our long-term loan bears interest at the rate of 6.0% per annum.

        The balances of loans payable at June 30, 2006 and December 31, 2005
were as follows:

                                                  June 30,        December 31,
                                                    2006              2005
                                               -------------     -------------
        Short Term Loans Payable               $  12,944,619     $  18,995,853

        Long Term Loans Payable                    2,107,165         2,264,448
        Add: Current Portion                         145,671           145,671
                                               -------------     -------------
        Net Long Term Loans Payable                2,252,836         2,410,119
                                               -------------     -------------
                                               $  15,197,455     $  21,405,972
                                               =============     =============

                                  Long Term Repayment Schedule
        ----------------------------------------------------------------
        Payments due in 2006 - current portion                $   72,835
        Payments due in 2007 - 50% current portion               145,671
        Payments due in 2008                                     145,671
        Payments due in 2009                                     145,671
        Payments due in 2010                                     145,671
        Payments due thereafter                                1,597,317
                                                              ----------
                                                              $2,252,836
                                                              ==========

                                       14
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11.     COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

        From time to time, we have disputes that arise in the ordinary course of
our business. At June 30, 2006, there was no material legal proceeding to which
we were a party or to which any of our property was subject that will have a
material adverse effect on our financial condition.

REGISTRATION RIGHTS AGREEMENT

        In connection with the issuance of our Series A convertible preferred
stock and warrants on January 30, 2006, we entered into a registration rights
agreement with certain investors. The agreement requires us to effect the
registration of our common stock issuable upon the conversion of the Series A
convertible preferred stock and the exercise of the warrants. If such
registration was not effective by June 20, 2006, we were required to pay the
investors liquidated damages in an amount equal to 1-1/2% per month times the
amount paid by the investors for the purchase of our Series A convertible
preferred stock and warrants until such registration becomes effective. This
could cost us approximately $414,000 per month until such registration becomes
effective. On June 20, 2006, such registration had not become effective, and we
started to accrue a liability in the amount of $414,000 plus $138,000 (10/30
times $414,000) plus related interest payable for this contingency because a
loss is reasonably possible and a loss amount can be reasonably estimated. This
amount of penalty has not yet been paid to certain investors in accordance with
the registration rights agreement.

12.     ALLOWANCES INCOME

        "Allowances income" consists of grants from the government of the PRC
for our participation in specific programs, such as import and export, branding,
and city maintenance and construction. We received allowances income as follows:

                        Three Months Ended June 30,    Six Months Ended June 30,
                        ---------------------------    -------------------------
                              2006         2005              2006        2005
                           ----------     ------          ----------   -------
        Allowance income   $1,113,661     $5,435          $1,226,845   $44,082

        In addition to paying our company for our participation in ongoing
programs, the PRC government has made a cash grant to our company specifically
to fund research and development. We recorded this grant as a liability titled
"Research & development grants payable" on our balance sheet rather than as
revenue. As qualifying research and development costs are incurred, we reduce
the liability rather than recording an expense.

13.     FAIR VALUE OF FINANCIAL INSTRUMENTS

        Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments" ("SFAS 107") requires entities to disclose
the fair values of financial instruments except when it is not practicable to do
so. Under SFAS No. 107, it is not practicable to make this disclosure when the
costs of formulating the estimated values exceed the benefit when considering
how meaningful the information would be to financial statement users.

                                       15
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


13.     FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

        As a result of the difficulties presented in the valuation of the loans
payable to related entities/parties because of their related party nature,
estimating the fair value of these financial instruments is not considered
practical. The fair values of all other assets and liabilities do not differ
materially from their carrying amounts. None of the financial instruments held
are derivative financial instruments and none were acquired or held for trading
purposes in the first six months of 2006 or in our 2005 or 2004 fiscal years.

14.     NEW ACCOUNTING PRONOUNCEMENTS

        In February 2006, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments - an
amendment of FASB Statements No. 133 and 140." The statement permits fair value
remeasurement for any hybrid financial instrument that contains an embedded
derivative that otherwise would require bifurcation, clarifies which
interest-only strips are not subject to the requirements of Statement 133,
establishes a requirement to evaluate interests in securitized financial assets
to identify interests that are freestanding derivatives or that are hybrid
financial instruments that contain an embedded derivative requiring bifurcation,
clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives, and amends Statement 140 to eliminate the prohibition
on a qualifying special-purpose entity from holding a derivative financial
instrument that pertains to a beneficial interest other than another derivative
financial instrument. The Statement is effective for financial instruments
acquired or issued after the beginning of the first fiscal year that begins
after September 15, 2006. We expect the Statement will have no material impact
on our consolidated financial statements.

        In February 2006, the FASB issued Staff Position No. FAS 123(R)-4,
"Classification of Options and Similar Instruments Issued as Employee
Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent
Event." This position addresses the classification of options and similar
instruments issued as employee compensation that allow for cash settlement upon
the occurrence of a contingent event, amending paragraphs 32 and A229 of SFAS
No. 123 (revised 2004), "Share-Based Payment." As we have not traditionally paid
compensation through the issuance of equity securities, no impact is expected on
our consolidated financial statements.

        In October 2005, the FASB issued Staff Position No. FAS 13-1,
"Accounting for Rental Costs Incurred during a Construction Period." This
position addresses the accounting for rental costs associated with operating
leases that are incurred during a construction period. Management believes this
position has no application to our company.

        In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections ("SFAS No. 154"), which replaced Accounting Principles Board Opinion
No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in
Interim Financial Statements. SFAS No. 154 changes the requirements for the
accounting for and reporting of a change in accounting principles. It requires
retrospective application to prior periods' financial statements of changes in
accounting principles, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. This statement
is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. The impact on our operations will
depend on future accounting pronouncements or changes in accounting principles.

                                       16
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


14.     NEW ACCOUNTING PRONOUNCEMENTS (Continued)

        In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47,
"Accounting for Conditional Asset Retirement Obligations." FIN 47 clarifies that
the term "Conditional Asset Retirement Obligation" as used in FASB Statement No.
143, "Accounting for Asset Retirement Obligations," refers to a legal obligation
to perform an asset retirement activity in which the timing and/or method of
settlement are conditional on a future event that may or may not be within the
control of the entity.

        Accordingly, an entity is required to recognize a liability for the fair
value of a Conditional Asset Retirement Obligation if the fair value of the
liability can be reasonably estimated. FIN 47 is effective no later than the end
of the first fiscal year ending after December 15, 2005. Management does not
believe the adoption of FIN 47 will have a material effect on our consolidated
financial position, results of operations or cash flows.

        In November 2004, the FASB issued Statement No. 151, "Inventory Costs."
SFAS No. 151 requires that items such as idle facility expense, excessive
spoilage, double freight, and rehandling costs be recognized as current period
charges and that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production facilities. The
statement is effective for fiscal periods beginning after June 15, 2005. We
believe the application of SFAS No. 151 will have no significant impact on our
consolidated financial statements.

15.     PREFERRED STOCK

        The principal terms of our Series A convertible preferred stock are as
follows.

        DIVIDENDS. The holders of our Series A convertible preferred stock are
entitled to receive, when and as declared by our board of directors, dividends
in such amounts as may be determined by our board of directors from time to time
out of funds legally available therefor. No dividends (other than those payable
solely in common stock) will be paid to the holders of common stock until there
shall have been paid or declared and set apart during that fiscal year for the
holders of our Series A convertible preferred stock a dividend in an amount per
share that the holders would have received for the shares of common stock
issuable upon conversion of their shares of Series A convertible preferred
stock.

        PREFERENCE ON LIQUIDATION. In the event of our merger or consolidation
or the sale of all or substantially all of our assets or other liquidation of
our company, holders of our Series A convertible preferred stock shall get a
priority in payment over all other classes of stock. In such event, the Series A
convertible preferred stock would be entitled to receive the greater of (i) the
original purchase price of the Series A convertible preferred stock or (ii) the
amount the holder would get if such holder converted all of such holder's Series
A convertible preferred stock into common stock.

        VOTING. The holder of each share of Series A convertible preferred stock
(i) shall be entitled to the number of votes with respect to such share equal to
the number of shares of common stock into which such share of Series A
convertible preferred stock could be converted on the record date for the
subject vote or written consent (or, if there is no such record date, then on
the date that such vote is taken or consent is effective) and (ii) shall be
entitled to notice of any stockholders' meeting in accordance with our by-laws.

                                       17
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


15.     PREFERRED STOCK (Continued)

        APPOINT AND ELECT A DIRECTOR. So long as the number of shares of common
stock issuable upon conversion of the outstanding shares of Series A convertible
preferred stock is greater than 10% of the number of outstanding shares of
common stock (on a fully diluted basis), the holders of record of the shares of
Series A convertible preferred stock, exclusively and as a separate class, shall
be entitled to elect one of our directors.

        CONVERSION RIGHT. The holders of Series A convertible preferred stock
may convert each share of Series A convertible preferred stock into common stock
at an initial conversion price of $0.113157 ($4.00 post-split). The conversion
price will be adjusted for stock dividends, stock splits and similar events.

        AUTOMATIC CONVERSION. Each share of Series A convertible preferred stock
will automatically be converted into shares of common stock at the conversion
price at the time in effect if (i) we consummate an underwritten public offering
of our common stock giving us at least $30 million in net proceeds, (ii)(A) the
closing price of our common stock equals or exceeds $0.2828934 ($10.00
post-split) (as adjusted) for the twenty (20) consecutive-trading-day period
ending within two (2) days of the date on which we provide notice of such
conversion as hereinafter provided and (B) either a registration statement
registering for resale the shares of common stock issuable upon conversion of
the Series A convertible preferred stock has been declared effective and remains
effective and available for resale for the twenty (20)-day period, or Rule
144(k) under the Securities Act of 1933, as amended, is available for the resale
of such shares, or (iii) by consent of at least 67% of the then-outstanding
shares of Series A convertible preferred stock.

        PROTECTIVE PROVISIONS. So long as at least 1,750,000 shares of Series A
convertible preferred stock are outstanding (subject to adjustment for stock
splits, combinations and the like), the holders of a majority of the outstanding
shares of Series A convertible preferred stock shall be required (in addition to
any consent or approval otherwise required by law) for us to take certain
actions, including (1) the liquidation, dissolution or wind up of our company,
(2) the amendment, alteration or repeal of any provision of our certificate of
incorporation so as to affect the rights, preferences or privileges of the
Series A convertible preferred stock, (3) the creation of a new class of
preferred stock or any increase in the number of shares of Series A convertible
preferred stock that can be issued, or (4) the purchase or redemption, or the
payment or declaration of any dividend or the making of any distribution on, any
securities junior in priority to the Series A convertible preferred stock; or
(5) making any change in the size of our board of directors.

16.     WARRANTS

        In conjunction with the issuance of preferred stock discussed in Note
15, the Company issued warrants for the purchase of 3,450,000 shares of its
common stock.

        Also in conjunction with the issuance of preferred stock, the Company
issued warrants to purchase 345,000 units at an initial exercise price of $8.00
per unit. The units that may be acquired upon exercise of such warrants consist
of two shares of Series A convertible preferred stock and one warrant to
purchase one share of common stock at an initial exercise price per share of
$5.00. These warrants, if fully exercised and converted, would require the
issuance of 1,035,000 common shares.

                                       18
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


16.     WARRANTS (continued)

        On June 15, 2006, in conjunction with a one year consulting agreement,
the Company issued three year warrants to purchase 100,000 common shares at a
price of $6.50 per share. The warrants vest monthly over a one year period.
These warrants were accounted for using the fair value method, with the expense
being recognized ratably over the requisite service period of one year.
Consulting expense related to the warrants amounted to $3,190 for the six months
ended June 30, 2006.

        Stock warrant transactions are summarized as follows:

                                                            Warrants
                                                      6/30/2006   12/31/2005
                                                      ---------   ----------
        Outstanding - beginning of year                      --           --
        Granted                                       4,585,000           --
        Exercised                                            --           --
        Forfeited                                            --           --
                                                      ---------   ----------
        Outstanding - end of year                     4,585,000           --
                                                      =========   ==========

        The following table provides certain information with respect to the
above referenced warrants outstanding at June 30, 2006:

                                                    Weighted         Weighted
                                       Number        Average      Average Life -
                   Exercise Price   Outstanding  Exercise Price       Years
                   --------------   -----------  --------------   --------------
        Warrants   $4.00 - $6.50     4,585,000        $4.88             4.55

        The following table provides certain information with respect to stock
options exercisable at June 30, 2006:

                                                   Number       Weighted Average
                              Exercise Price     Outstanding     Exercise Price
                              --------------     -----------     --------------
        Warrants               $4.00 - $6.50      4,497,000          $4.85

        The weighted average fair value at date of grant for warrants granted
during 2006 was $0.38, and was estimated using the Black-Scholes option
valuation model with the following assumptions:

        Expected life in years                      3
        Interest rate                               4%
        Volatility                                 6.1%
        Dividend yield                              0%

17.     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.
Our pork and pork products segment markets its products domestically to our
branded stores and to food retailers, foodservice distributors, restaurant
operators and

                                       19
<PAGE>


                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17.     SEGMENT REPORTING (Continued)

noncommercial foodservice establishments, such as schools, hotel chains,
healthcare facilities, the military and other food processors, as well as to
international markets.

        Our vegetables and fruits segment is involved primarily in the
processing of fresh vegetables and fruits. We contract with more than 120 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 and strawberries.

                                SALES BY SEGMENT
                            (U.S. DOLLAR IN MILLIONS)

                            THREE MONTHS   THREE MONTHS               PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005   2006/2005   2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     $30.30         $18.09       $12.21        67%
Vegetables and Fruits .....       1.48           0.50         0.98       196%
                                ------         ------       ------
        Total .............     $31.78         $18.59       $13.19        71%
                                ======         ======       ======


                                SALES BY SEGMENT
                            (U.S. DOLLAR IN MILLIONS)

                              SIX MONTHS     SIX MONTHS               PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005   2006/2005   2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     $60.07         $32.36       $27.71        86%
Vegetables and Fruits .....       2.20           0.64         1.56       244%
                                ------         ------       ------
        Total .............     $62.27         $33.00       $29.27        89%
                                ======         ======       ======


                           OPERATING INCOME BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                       THREE     THREE                OPERATING      OPERATING
                      MONTHS    MONTHS                  MARGIN         MARGIN
                       ENDED     ENDED               THREE MONTHS   THREE MONTHS
                      JUNE 30,  JUNE 30,  CHANGE        ENDED          ENDED
                       2006      2005    2006/2005  JUNE 30, 2006  JUNE 30, 2005
                      -------   -------  ---------  -------------  -------------
Pork and
  Pork Products .....  $2.27     $2.37     ($0.10)       7.49%         13.10%
Vegetables
  and Fruits ........   0.16      0.04       0.12       10.81%          8.00%
                       -----     -----      -----
        Total .......  $2.43     $2.41      $0.02        7.65%         12.96%
                       =====     =====      =====

                                       20
<PAGE>

                                  ZHONGPIN INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17.     SEGMENT REPORTING (Continued)

                           OPERATING INCOME BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                        SIX       SIX                 OPERATING      OPERATING
                      MONTHS    MONTHS                  MARGIN         MARGIN
                       ENDED     ENDED                SIX MONTHS     SIX MONTHS
                      JUNE 30,  JUNE 30,  CHANGE        ENDED          ENDED
                       2006      2005    2006/2005  JUNE 30, 2006  JUNE 30, 2005
                      -------   -------  ---------  -------------  -------------
Pork and
  Pork Products .....  $5.08     $4.37      $0.71        8.46%         13.50%
Vegetables
  and Fruits ........   0.23      0.05       0.18       10.45%          7.81%
                       -----     -----      -----
        Total .......  $5.31     $4.42      $0.89        8.53%         13.39%
                       =====     =====      =====

18.     RESTATEMENT

        Subsequent to filing our restated financial statements for the six
months ended June 30, 2006, we reinterpreted the language relating to the
liquidated damages payable by us under an agreement that requires us to effect
the registration of our common stock issuable upon the conversion of our Series
A convertible preferred stock and the exercise of certain of our stock purchase
warrants. See Note 11. Commitments and Contingencies. As a result of such
reinterpretation, we accrued for this contingency a liability in the month of
June 2006 in the amount of $414,000 plus $138,000 (10/30 times $414,000) plus
interest in the amount of $1,380 because the loss is reasonably possible and a
loss amount can reasonably be determined. As a result, general and
administrative expenses for both the three- and six-month periods ended June 30,
2006 were increased by $553,380 and net income for both periods has been
decreased by the same amount. The change in diluted earnings per share for the
six months ended June 30, 2006 due to the restatement was $0.02 per share and
the change in basic earnings per share for the three- and six-month periods
ended June 30, 2006, and in diluted earnings per share for the three-month
period ended June 30, 2006, due to the restatement was $0.03 per share.

                                       21
<PAGE>


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, AS AMENDED, FOR THE TRANSITION PERIOD FROM JUNE
30, 2005 TO DECEMBER 31, 2005.

        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.

GENERAL

        During the period from March 31, 2005 to January 30, 2006, we did not
generate any significant revenue, and accumulated no significant assets, as we
explored various business opportunities. On January 30, 2006, in exchange for a
controlling interest in our publicly-held "shell" corporation, we acquired all
of the issued and outstanding capital stock of Falcon Link Investment Limited
("Falcon Link"). This transaction is commonly referred to as a "reverse
acquisition." For financial reporting purposes, Falcon Link was considered the
acquirer in such transaction. As a result, our historical financial statements
for all periods prior to January 30, 2006 included in this Report are those of
Falcon Link.

                                       22
<PAGE>


        We are principally engaged in the meat and food processing business in
The People's Republic of China (the "PRC"). Currently, we have five processing
plants located in Henan Province in the PRC, with a total of seven production
lines. Our current total production capacity for chilled pork and frozen pork is
345 metric tons per day, based on an 8-hour working day, or approximately
132,000 metric tons on an annual basis. We began construction of a third
fully-dedicated case-ready plant in Zhongpin Industrial Park in fiscal 2005.
This plant was put into production on February 23, 2006. On a daily
8-working-hour basis, an average of 2,000 pigs (approximately 145 metric tons)
are butchered and processed at this location. We expect to increase the meat
processing capacity at this plant by 60,000 metric tons on an annual basis. We
also have production capacity for prepared meats of 40 metric tons per 8-hour
day (or approximately 14,400 metric tons on an annual basis) and for fruits and
vegetables of 35 metric tons per 8-hour day (or approximately 12,600 metric tons
on an annual basis). We utilize state-of-the-art equipment in all of our
abattoirs and processing facilities.

        On June 7, 2006, our subsidiary, Henan Zhongpin Food Share Co. Limited,
formed a wholly-owned subsidiary, Zhumadian Zhongpin Food Limited, through which
we plan to invest approximately $14 million to construct a new production
facility in southern Henan Province that will be designed with a production
capacity for chilled or frozen pork of 200 metric tons per 8-hour working day,
or approximately 72,000 metric tons on an annual basis. We plan to put this new
plant into production in the second quarter of fiscal 2007.

        Our products are sold under the "Zhongpin" and "Shengpin" brand names.
Our customers include over 11 international or domestic fast food companies in
the PRC, over 31 export-registered processing factories and over 1,360 school
cafeterias, factory canteens, army posts and national departments. We also sell
directly to approximately 2,300 retail outlets, including supermarkets, within
the PRC.

        Since 2001, we have been one of the "leading agricultural industrial
enterprises" in the PRC and are currently ranked by the China Meat Association
as the sixth largest producer in the national meat industry. During the past
five years, our growth rate has exceeded 43% percent in terms of revenues and
60% in terms of net profits. We have established distribution networks in more
than 20 provinces and 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 catering industry in the PRC. In
addition, we export products to the European Union, Southeast Asia and Russia.

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. generally accepted accounting principles. 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.
Management believes the following are our critical accounting policies:

                                       23
<PAGE>


        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
equivalent to those accounts that are not collected within one year plus 5% of
receivables less than one year old. As of June 30, 2006, we were successful in
collecting approximately $0.5 million, or approximately 66%, of doubtful
accounts that were outstanding at December 31, 2005 for longer than one year. 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, or 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.

        GOODWILL AND OTHER INTANGIBLES. Our identifiable intangible assets are
amortized over their useful life, unless the useful life is determined to be
indefinite. The useful life of an identifiable intangible asset is based on an
analysis of several factors, including contractual, regulatory or legal
obligations, demand, competition and industry trends. Goodwill and
indefinite-lived intangible assets are not amortized, but are tested annually
for impairment.

        Our goodwill impairment test is a two-step process. First, the fair
value of each reporting unit is compared with the carrying amount of the
reporting unit, including goodwill. The estimated fair value of the reporting
unit is determined on the basis of discounted cash flow. If the carrying value
exceeds fair value of the reporting unit, then a second step must be completed
in order to determine the amount of goodwill impairment that should be recorded.
In the second step, the implied fair value of the reporting unit's goodwill is
determined by allocating the reporting unit's fair value to all of its assets
and liabilities other than goodwill in a manner similar to a purchase price
allocation. The resulting implied fair value of the goodwill that results from
the application of this second step is then compared to the carrying amount of
the goodwill and an impairment charge is recorded for the difference. Annual
impairment testing for indefinite-lived intangible assets compares the fair
value and carrying value of the intangible. The fair value of indefinite-lived
intangible assets is determined on the basis of discounted cash flows. If the
carrying value exceeds fair value, the indefinite-lived intangible asset is
considered impaired and an impairment charge is recorded for the difference.
Intangible assts that are subject to amortization are evaluated for impairment
using a process similar to that used to evaluate elements of long-lived assets.

        The assumptions used in the estimate of fair value are consistent with
historical performance and the estimates and assumptions used in determining
future profit plans for each reporting unit. We review product growth patterns,
market share information, industry trends, changes in distribution channels and
economic indicators in determining the estimates and assumptions used to develop
cash flow and profit plan assumptions.

        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 2006, we intend to continue to focus on the implementation of
our strategic plan to continue the growth we have experienced in the last four
years. As discussed above, we have completed

                                       24
<PAGE>


the construction of a new, fresh-chilled and frozen meat processing facility in
Zhongpin Industrial Park II and are expanding its capability in
temperature-controlled, physical logistic systems. On January 30, 2006, we
received gross proceeds of $27.6 million from the sale of our Series A
convertible preferred stock and warrants. We expect to continue to expand our
capital base, to scale up operations and to develop new markets, streamline
supply chain management, invest in training and human resources development and
accelerate revenue and profit growth.

        In fiscal 2006, we expect the results of the pork and pork products
segment of our business to remain strong. We currently expect our raw material
supply to be ample and we anticipate strong demand for pork products throughout
fiscal 2006. We anticipate operating income will be slightly impacted in fiscal
2006 by higher energy costs. We also believe the prepared food and vegetables
and fruits segment of our business will achieve accelerated growth. We
anticipate increasing market share in the meat and meat products segment of our
business in target markets in fiscal 2006.

                                       25
<PAGE>


        The following table sets forth, for the periods indicated, certain
statement of operations data.

                                         THREE MONTHS ENDED    SIX MONTHS ENDED
                                               JUNE 30,            JUNE 30,
                                          -----------------   -----------------
                                            2006      2005      2006      2005
                                          -------   -------   -------   -------
                                                  (U.S. dollars in thousands)
Revenues:
  Sales revenues .......................  $31,777   $18,591   $62,271   $32,996
  Cost of sales ........................   27,053    15,574    52,967    27,383
                                          -------   -------   -------   -------
      Gross profit .....................    4,724     3,017     9,304     5,613

Operating expenses:
  General and administrative
    expenses ...........................    1,580       277     2,479       500
  Operating expenses ...................      716       327     1,520       693
                                          -------   -------   -------   -------
      Total operating expenses .........    2,296       604     3,999     1,193
                                          -------   -------   -------   -------

Income from operations .................    2,429     2,413     5,305     4,420

Other income (expense):
  Interest income ......................      150        40       245        89
  Other income .........................       24       (18)       36        (3)
  Allowance income .....................    1,114         5     1,227        44
    Exchange gain (loss) ...............        4       (31)       18       (42)
    Interest expense ...................     (228)     (458)     (608)     (808)
                                          -------   -------   -------   -------
       Total other income
        (expense) ......................    1,064      (462)      918      (721)
                                          -------   -------   -------   -------

Net income before taxes ................    3,493     1,951     6,224     3,700
  Provision for income taxes ...........      172       123       317       123
                                          -------   -------   -------   -------

Net income after taxes .................    3,321     1,828     5,906     3,577
  Minority interest in gain (loss) .....        9         7        19        19
                                          -------   -------   -------   -------
Net income .............................    3,312     1,821     5,887     3,558
  Foreign currency translation
    adjustment .........................      124        --       265        --
                                          -------   -------   -------   -------
Comprehensive income ...................  $ 3,436   $ 1,821   $ 6,152   $ 3,558
                                          =======   =======   =======   =======

                                       26
<PAGE>


COMPARISON OF THREE MONTHS ENDED JUNE 30, 2006 AND JUNE 30, 2005

        REVENUE. Total revenue increased by $13.19 million, or approximately
71%, for the three months ended June 30, 2006, from $18.59 million for the three
months ended June 30, 2005 to $31.78 million for the three months ended June 30,
2006. The increase in revenues was primarily due to increased sales in our meat
and meat products segment resulting from the effects of the continued increase
in the amount of branded stores sales and increased sales to restaurants and
non-commercial customers. During the second quarter in 2006, 37 new "branded"
retail stores were opened and we expanded our marketing and sales efforts to
include six additional second-tier cities and 13 additional third-tier cities
domestically.

        During the three months ended June 30, 2006, revenues from sales to
branded stores increased to $15.6 million, which represented an increase of $6.7
million, or approximately 75%, as compared to the three months ended June 30,
2005. During the three months ended June 30, 2006, revenues from sales to food
service distributors increased to $4.8 million, which represented an increase of
$1.7 million, or approximately 55%, as compared to the three months ended June
30, 2005. During the three months ended June 30, 2006, revenues from sales to
restaurants and non-commercial customers increased to $8.8 million, which
represented an increase of $4.1 million, or approximately 87%, as compared to
the three months ended June 30, 2005. During the three months ended June 30,
2006, revenues from export sales increased to $2.5 million, which represented an
increase of $0.6 million, or approximately 32%.

        COST OF SALES. Cost of sales increased by $11.48 million, or
approximately 74%, for the three months ended June 30, 2006, from $15.57 million
for the three months ended June 30, 2005 to $27.05 million for the three months
ended June 30, 2006. As a percentage of revenue, total cost of sales increased
approximately 1% from approximately 84% for the three months ended June 30, 2005
to approximately 85% in the quarter ended June 30, 2006. The increase in cost of
sales was primarily due to an increase in the cost of raw materials.

        GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased by $1.30 million, or approximately 464%, for the three months ended
June 30, 2006, from $0.28 million for the three months ended June 30, 2005 to
$1.58 million for the three months ended June 30, 2006. As a percentage of
revenues, general and administrative expenses increased from 1.49% for the three
months ended June 30, 2005 to 4.97% for the three months ended June 30, 2006.
The increase in general and administrative expenses was the result of the
accrual of a liability in the amount of $0.55 million or approximately 1.74% of
the total revenue for the three months ended June 30, 2006, that may be payable
to the holders of our Series A convertible preferred stock and related purchase
warrants because of our failure to register in a timely manner for resale under
the Securities Act of 1933, as amended, the shares of our common stock issuable
upon the conversion or exercise of such securities. We will continue to accrue a
liability in the amount of $414,000 per month plus interest until our
registration statement relating to such shares is declared effective by the
Securities and Exchange Commission. In addition, the increase in general and
administrative expenses was primarily the result of the overall expansion of our
operations and the additional expenses we are now incurring as a publicly-traded
company that is reporting under the U.S. federal securities laws. During the
second quarter of 2006, we incurred $0.44 million of legal, accounting and
consulting fees and other expenses relating primarily to our registration under
the U.S. federal securities laws of certain outstanding shares for resale in the
public markets and our periodic reporting obligations under the U.S. federal
securities laws. In addition, during such period, our management compensation
expense increased $0.14 million as compared to the comparable 2005 period
primarily due to the addition of senior executives and technical experts to our
management team.

       OPERATING EXPENSES. Operating expenses increased by $0.39 million, or
approximately 119%, for the three months ended June 30, 2006, from $0.33 million
for the three months ended June 30, 2005 to $0.72 million for the three months
ended June 30, 2006. As a percentage of revenue, operating expenses increased
from 1.76% for the three months ended June 30, 2005 to 2.25% for the three
months ended June 30, 2006. The increase in operating expenses was primarily the
result of increased transportation expenses of $0.32 million due to the
increased price of gasoline and an increase of $0.11 million in compensation
expenses within our sales department.

        INTEREST EXPENSE. Interest expense decreased by $0.23 million, or
approximately 50%, during the three months ended June 30, 2006, from $0.46
million for the three months ended June 30, 2005 to $0.23

                                       27
<PAGE>


million for the three months ended June 30, 2006. The decrease in interest
expense was primarily a result of having adequate cash flow from the equity
private placement we consummated in the first quarter of 2006, which enabled us
to pay back and reduce our higher-interest-bearing bank loans. During the three
months ended June 30, 2006, our weighted average bank debt outstanding decreased
by approximately $9.08 million, from $24.28 million for the three months ended
June 30, 2005 to $15.20 million for the three months ended June 30, 2006. Our
overall weighted average borrowing rate decreased from 7.56% in the second
quarter of fiscal 2005 to 6.00% in the second quarter of fiscal 2006.

        INTEREST INCOME, ALLOWANCE INCOME, OTHER INCOME AND EXCHANGE GAIN
(LOSS). Interest income, allowances income, other income and exchange gain
(loss) increased by $1.30 million during the three months ended June 30, 2006,
from an expense of $4,000 for the three months ended June 30, 2005 to $1.29
million for the three months ended June 30, 2006, primarily due to an increase
of $1.11 million in allowance income and an increase of $0.12 million in
interest income during the 2006 period. The cash grant in the amount of $2.23
million we received from the Chinese central government for the construction of
a pork production line in Zhongpin Industrial Park II was recorded as a
long-term liability in the fiscal 2005 period. When the construction was partly
completed and the facility was placed into operation during the second quarter
of 2006, the liability was reduced by $1.12 million, which was recorded as
allowance income.

        INCOME TAXES. The effective tax rate in the PRC on income generated from
the sale of prepared products is 33% and there is no income tax on income
generated from the sale of raw products. The increase of $0.05 million in the
provision for income taxes for the three months ended June 30, 2006 over the
three months ended June 30, 2005 resulted from an increase of $0.15 million in
our income from the sale of prepared products for the three months ended June
30, 2006.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2006 AND JUNE 30, 2005

        REVENUE. Total revenue increased by $29.27 million, or approximately
89%, for the six months ended June 30, 2006, from $33.00 million for the six
months ended June 30, 2005 to $62.27 million for the six months ended June 30,
2006. The increase in revenues was primarily due to increased sales in our meat
and meat products segment resulting from the effects of the continued increase
in the amount of branded stores sales and increased sales to restaurants and
non-commercial customers. During the first six months of 2006, 197 new "branded"
retail stores were opened and we expanded our marketing and sales efforts to
include 15 additional second-tier cities and 63 additional third-tier cities
domestically.

        During the six months ended June 30, 2006, revenues from sales to
branded stores increased to $30.5 million, which represented an increase of
$14.7 million, or approximately 93%, as compared to the six months ended June
30, 2005. During the six months ended June 30, 2006, revenues from sales to food
service distributors increased to $9.8 million, which represented an increase of
$4.3 million, or approximately 78%, as compared to the six months ended June 30,
2005. During the six months ended June 30, 2006, revenues from sales to
restaurants and non-commercial customers increased to $16.5 million, which
represented an increase of $8.2 million, or approximately 99%, as compared to
the six months ended June 30, 2005. During the six months ended June 30, 2006,
revenues from export sales increased to $5.5 million, which represented an
increase of $2.1 million, or approximately 62%, as compared to the six months
ended June 30, 2005.

        COST OF SALES. Cost of sales increased by $25.59 million, or
approximately 93%, for the six months ended June 33, 2006, from $27.38 million
for the six months ended June 30, 2005 to $52.97 million for the six months
ended June 30, 2006. As a percentage of revenue, total cost of sales increased
approximately 2% from approximately 83% for the six months ended June 30, 2005
to approximately 85% for the six months ended June 30, 2006. The increase in
cost of sales was primarily due to an

                                       28
<PAGE>


increase in raw material costs for the six months ended June 30, 2006 as
compared to the six months ended June 30, 2005.

        GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased by $1.98 million, or approximately 396%, for the six months ended June
30, 2006, from $0.50 million for the six months ended June 30, 2005 to $2.48
million for the six months ended June 30, 2006. As a percentage of revenues,
general and administrative expenses increased from 1.52% for the six months
ended June 30, 2005 to 3.98% for the six months ended June 30, 2006. As
discussed above, the increase in general and administrative expenses resulted
from the accrual of a liability of $0.55 million, or approximately 0.89% of
total revenue for the six months ended June 30, 2006, due to our failure to
register in a timely manner the resale of the common stock underlying our
outstanding Series A convertible preferred stock and related purchase warrants.
In addition, the increase in general and administrative expenses was the result
of an increase of $0.64 million in legal and accounting fees and other expenses
relating to our private placement of equity securities, our reverse acquisition
of a controlling interest in a publicly-held "shell" company and our on-going
public reporting obligations under the U.S. Federal securities laws. In
addition, during the 2006 period, we incurred $0.52 million of additional
management compensation expense due to the addition of senior executives and
technical experts to our management team.

        OPERATING EXPENSES. Operating expenses increased by $0.83 million, or
approximately 120%, for the six months ended June 30, 2006, from $0.69 million
for the six months ended June 30, 2005 to $1.52 million for the six months ended
June 30, 2006. As a percentage of revenue, operating expenses increased from
2.10% for the six months ended June 30, 2005 to 2.44% for the six months ended
June 30, 2006. The increase in operating expenses was primarily the result of
additional compensation expenses in the amount of $0.38 million we incurred in
our sales department and additional transportation expenses in the amount of
$0.36 million we incurred due to our increased sales, the expansion of our
distribution network and the increased price of gasoline.

        INTEREST EXPENSE. Interest expense decreased by $0.20 million, or
approximately 25%, during the six months ended June 30, 2006, from $0.81 million
for the six months ended June 30, 2005 to $0.61 million for the six months ended
June 30, 2006. At June 30, 2006, total bank debt had declined by approximately
$0.79 million from the amount of bank debt that existed at December 31, 2005.
The average debt outstanding was approximately $17.47 million for the six months
ended June 30, 2006 and $22.10 million for the six months ended June 30, 2005.
Our overall weighted average borrowing rate decreased from 7.32% in the six
months ended June 30, 2005 to 6.96% in the six months ended June 30, 2006.

        INTEREST INCOME, ALLOWANCE INCOME, OTHER INCOME AND EXCHANGE GAIN
(LOSS). Interest income, allowances income, other income and exchange gain
(loss) increased by $1.44 million, or approximately 1,539%, for the six months
ended June 30, 2006, from $0.09 million for the six months ended June 30, 2005
to $1.53 million for the six months ended June 30, 2006. The increase was
primarily the result of an increase of $1.18 million in allowance income and an
increase of $0.16 million in interest income. In addition, as discussed above,
$1.12 million of the $2.23 million cash grant we received from the Chinese
central government for the construction of an additional pork production line
was recharacterized from a long-term liability to allowance income when the
production line was partially completed and placed into operation during the
second quarter of 2006.

        INCOME TAXES. The effective tax rate in the PRC on income generated from
the sale of prepared products is 33% 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 $0.19 million in the provision
for income taxes for the six months ended June 30, 2006 over the six months
ended June 30, 2005 resulted from an increase of $0.59 million in our income
from the sale of prepared products during the 2006 period.

                                       29
<PAGE>


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.

        Our vegetables and fruits segment is involved primarily in the
processing of fresh vegetables and fruits. We contract with more than 120 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 and strawberries.

        The following tables set forth our revenues, sales in metric tons,
operating income and production processed in metric tons by segment for the six
months ended June 30, 2006 and 2005 and the six months ended June 30, 2006 and
2005, and the percentage increases for each segment between fiscal periods. The
data for the six-month periods ended June 30, 2006 are not necessarily
indicative of the results to be expected for the entire year, for any other
interim period or for any future year.

                                SALES BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                            THREE MONTHS   THREE MONTHS               PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     $30.30         $18.09       $12.21        67%
Vegetables and Fruits .....       1.48           0.50         0.98       196%
                                ------         ------       ------
        Total .............     $31.78         $18.59       $13.19        71%
                                ======         ======       ======


                                SALES BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                             SIX MONTHS     SIX MONTHS                PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     $60.07         $32.36       $27.71        86%
Vegetables and Fruits .....       2.20           0.64         1.56       244%
                                ------         ------       ------
        Total .............     $62.27         $33.00       $29.27        89%
                                ======         ======       ======

                                       30
<PAGE>


                                SALES BY SEGMENT
                                (IN METRIC TONS)

                            THREE MONTHS   THREE MONTHS               PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     25,767         16,687        9,080        54%
Vegetables and Fruits .....      1,450            552          898       163%
                                ------         ------
        Total .............     27,217         17,239
                                ======         ======


                                SALES BY SEGMENT
                                (IN METRIC TONS)

                             SIX MONTHS     SIX MONTHS                PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     52,184         30,645       21,539        70%
Vegetables and Fruits .....      2,471            857        1,614       188%
                                ------         ------
        Total .............     54,655         31,502
                                ======         ======


                           OPERATING INCOME BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                       THREE     THREE                OPERATING      OPERATING
                      MONTHS    MONTHS                  MARGIN         MARGIN
                       ENDED     ENDED      NET      THREE MONTHS   THREE MONTHS
                      JUNE 30,  JUNE 30,  CHANGE        ENDED          ENDED
                       2006      2005    2006/2005  JUNE 30, 2006  JUNE 30, 2005
                      -------   -------  ---------  -------------  -------------
Pork and
   Pork Products ...   $ 2.27    $ 2.37   ($ 0.10)       7.49%         13.10%
Vegetables
   and Fruits ......     0.16      0.04      0.12       10.81%          8.00%
                       ------    ------    ------
        Total.......   $ 2.43    $ 2.41    $ 0.02        7.65%         12.96%
                       ======    ======    ======


                           OPERATING INCOME BY SEGMENT
                           (U.S. DOLLARS IN MILLIONS)

                        SIX       SIX                 OPERATING      OPERATING
                      MONTHS    MONTHS                  MARGIN         MARGIN
                       ENDED     ENDED      NET       SIX MONTHS     SIX MONTHS
                      JUNE 30,  JUNE 30,  CHANGE        ENDED          ENDED
                       2006      2005    2006/2005  JUNE 30, 2006  JUNE 30, 2005
                      -------   -------  ---------  -------------  -------------
Pork and
  Pork Products ...    $ 5.08    $ 4.37    $ 0.71        8.46%         13.50%
Vegetables
  and Fruits ......      0.23      0.05      0.18       10.45%          7.81%
                       ------    ------    ------
        Total .....    $ 5.31    $ 4.42    $ 0.89        8.53%         13.39%
                       ======    ======    ======

                                       31
<PAGE>


                         PRODUCTION PROCESSED BY SEGMENT
                                (IN METRIC TONS)

                            THREE MONTHS   THREE MONTHS               PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     27,049         16,822       10,227        61%
Vegetables and Fruits .....      1,135            485          650       134%
                                ------         ------
        Total .............     28,184         17,307
                                ======         ======


                                              PRODUCTION PROCESSED BY SEGMENT
                                                      (IN METRIC TONS)

                             SIX MONTHS     SIX MONTHS                PERCENTAGE
                                ENDED          ENDED      NET CHANGE    CHANGE
                            JUNE 30, 2006  JUNE 30, 2005  2006/2005    2006/2005
                            -------------  -------------  ----------  ----------
Pork and Pork Products ....     55,036         30,775       24,261        79%
Vegetables and Fruits .....      2,872            737        2,135       290%
                                ------         ------
        Total .............     57,908         31,512
                                ======         ======

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.

        The following table sets forth our revenues by sales channel for the
three months ended June 30, 2006 and 2005 and the six months ended June 30, 2006
and 2005.

                          SALES BY DISTRIBUTION CHANNEL
                           (U.S. DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                THREE MONTHS ENDED JUNE 30,          SIX MONTHS ENDED  JUNE 30,
                            -----------------------------------  ----------------------------------
  DISTRIBUTION CHANNEL           2006               2005              2006              2005
  --------------------      ----------------   ----------------  ---------------   ----------------
                            AMOUNT   PERCENT   AMOUNT   PERCENT  AMOUNT  PERCENT   AMOUNT   PERCENT
                            ------   -------   ------   -------  ------  -------   ------   -------
<S>                         <C>        <C>     <C>       <C>     <C>      <C>      <C>       <C>
Branded stores..........    $ 15.6      49.2%  $  8.9     48.0%  $ 30.5    48.9%   $ 15.8     48.0%
Food services
  distributors..........       4.8      15.2      3.1     16.8      9.8    15.7       5.5     16.8
Restaurants and
  non-commercial........       8.8      27.6      4.7     25.0     16.5    26.6       8.3     25.0
Export..................       2.5       8.0      1.9     10.2      5.5     8.8       3.4     10.2
                            ------     -----   ------    -----   ------   -----    ------    -----
    Total...............    $ 31.7     100.0%  $ 18.6    100.0%  $ 62.3   100.0%   $ 33.0    100.0%
                            ======     =====   ======    =====   ======   =====    ======    =====
</TABLE>

        The following table sets forth information with respect to the average
number of products offered by our company, the average 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 for each of the three years ended December 31,
2003, 2004 and 2005 and the three- and six-month periods ended June 30, 2006.

                                       32
<PAGE>


<TABLE>
<CAPTION>
                                       YEAR ENDED DECEMBER 31,       THREE MONTHS      SIX MONTHS
                                      -------------------------         ENDED            ENDED
                                      2003      2004       2005      JUNE 30, 2006   JUNE 30, 2006
                                      ----      ----       ----      ------------    -------------
<S>                                   <C>        <C>      <C>           <C>              <C>
No. of products.................      107        125        168           189              196
No. of retail stores............      712        978      2,100         2,260            2,297
Expansion of Market Coverage
  No. of Provinces..............       20         20         20            20               20
  No. of first-tier cities......       21         23         29            29               29
  No. of second-tier cities.....       32         36         44            53               59
  No. of third-tier cities......       85        109        142           192              205
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

        We financed our operations over the six months ended June 30, 2006
primarily through cash from an equity financing and borrowings under our lines
of credit with various lending banks in the PRC. In January 2006, we completed a
private placement of our Series A convertible preferred stock and common stock
purchase warrants and received net proceeds of approximately $23.11 million. At
June 30, 2006, we had cash and cash equivalents of $14.52 million, an increase
of approximately $4.38 million and $1.07 million compared to the balances of
cash and cash equivalents at December 31, 2005 and June 30, 2005, respectively.

        Net cash provided by (used in) operating activities was ($3.74) million
in the six months ended June 30, 2006. Net cash provided by operating activities
in the six months ended June 30, 2006 consisted primarily of net profit of $5.89
million due to increased revenue. Net cash used in operating activities for the
six months ended June 30, 2006 was primarily attributable to an increase of
$4.10 million in accounts receivable, which consisted of an increase of $5.54
million in accounts receivable due to increased sales and a reduction of $1.43
million in other accounts receivable, and an increase of $4.01 million in
inventory due to increased sales. During the first half of 2006, management
focused on reducing the average age of our accounts receivable and increasing
the rate at which we turn our inventory. Our average accounts receivable
turnover decreased from approximately 45 days during the six months ended June
30, 2005 to approximately 36 days during the six months ended June 30, 2006. In
addition, our average inventory turnover rate decreased from approximately 23
days during the 2005 period to approximately 14 days during the 2006 period.

        Net cash used in investing activities was $8.44 million in the six
months ended June 30, 2006. In the six months ended June 30, 2006, construction
in progress in the amount of $8.12 million for the construction of Zhongpin
Industrial Park II was completed and transferred to fixed assets. During the six
months ended June 30, 2006, we expended $4.67 million for the purchase of fixed
assets. In addition, we expended $3.78 million for an investment in land use
rights during the first six months of 2006.

        Net cash provided by financing activities was $16.28 million in the six
months ended June 30, 2006. In the six months ended June 30, 2006, cash provided
by financing activities included net proceeds from the issuance of Series A
convertible preferred stock and common stock purchase warrants of $23.11
million, and the net cash used in financing activities included the repayment of
short-term indebtedness in the aggregate amount of $6.05 million and the
repayment of bank overdrafts of $0.62 million.

        At June 30, 2006, Henan Zhongpin had short-term bank and governmental
loans in the aggregate amount of $12.94 million with an average interest rate
per annum of 6.96%, and lines of credit with aggregate credit availability of
$78.63 million, as follows:

                                       33
<PAGE>


                                  MAXIMUM
                                  CREDIT         AMOUNT     INTEREST   MATURITY
BANK                           AVAILABILITY     BORROWED      RATE       DATE
                               ------------  -------------  --------  ----------
Agriculture Bank of China ...  $ 18,722,000  $    750,413     6.70%   8/1/2006
                                                  800,440     3.00    9/29/2006
                                                1,138,126     6.70    12/11/2006
                                                  187,603     6.70    12/29/2006
                                                  500,275     6.70    12/30/2006
                                                  787,933     7.02    4/27/2007

Industrial and Commercial
  Bank of China .............     6,241,000     1,876,032     5.85%   3/30/2007

                                                1,250,688     6.14    4/30/2007
                                                1,876,032     5.85    5/24/2007

                                                       --

Bank of China ...............     7,489,000       625,344     6.70%   7/15/2006

China Construction Bank .....    11,233,000       625,344     6.42%   12/22/2006
                                                  625,344     6.42    12/23/2006
                                                  625,344     6.42    1/16/2007

Agriculture Development
  Bank of China .............    14,978,000            --

Shanghai Pudong Development
  Bank of China .............     3,744,000            --

CITIC Industrial Bank .......     6,241,000            --

Commercial Bank of China ....     6,241,000            --

Guangdong Development Bank ..     3,744,000     1,250,688     6.14%   9/16/2006

City Finance -short-term ....            --        25,013     0.00%   4/1/2007
                               ------------  ------------

               Total.........  $ 78,633,000  $ 12,944,619
                               ============  ============

Canadian Government
  Transfer Loan .............                   1,853,275        *     5/15/2043
City Finance.................                     253,890     0.00%    None

----------

* 58% of the principal amount of this loan bears interest at the rate of 6.02%
  per annum and the remaining principal amount of this loan is interest free.
  All repayments are applied first to the interest-bearing portion of this loan.

        Of our outstanding short-term indebtedness at June 30, 2006, $3.24
million aggregate principal amount of loans was secured by our land and
production facilities located in the PRC.

        We believe our existing cash and cash equivalents and our available
lines of credit, which totaled approximately $78.63 million at June 30, 2006,
will be sufficient to finance our operating requirements and anticipated capital
expenditures of approximately $13.09 million over the next 12 months.

                                       34
<PAGE>


CONTRACTUAL COMMITMENTS

        The following table summarizes our contractual obligations at June 30,
2006 and the effect those obligations are expected to have on our liquidity and
cash flow in future periods.

                             PAYMENTS DUE BY PERIOD
                           (U.S. DOLLARS IN THOUSANDS)

                                        LESS THAN                      MORE THAN
CONTRACTUAL OBLIGATIONS           TOTAL  1 YEAR   1-3 YEARS  3-5 YEARS  5 YEARS
-------------------------------  ------ --------- ---------  --------- --------
Long-Term Debt Obligations ....  $2,254   $219      $292       $292     $1,451
Capital Lease Obligations .....      --     --        --         --         --
Operating Lease Obligations ...      --     --        --         --         --
Purchase Obligations ..........      --     --        --         --         --
Other Obligations .............      --     --        --         --         --
                                 ------   ----      ----       ----     ------
        Total .................  $2,254   $219      $292       $292     $1,451
                                 ======   ====      ====       ====     ======

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        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 Chinese 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
our debt obligations are primarily short-term in nature, with fixed interest
rates.

                                       35
<PAGE>


        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

        DISCLOSURE 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 have concluded that, as of
the end of such period, our disclosure controls and procedures are effective in
recording, processing, summarizing and reporting, on a timely basis, information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act.

        INTERNAL CONTROL OVER FINANCIAL REPORTING. There 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.

                                       36
<PAGE>


                                  ZHONGPIN INC.

                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS

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

                                       37
<PAGE>


                                  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:  November 14, 2006



                                           By: /s/ Xianfu Zhu
                                              ---------------------------------

                                              Xianfu Zhu
                                              Chief Executive Officer



                                           By: /s/ Yuanmei Ma
                                              ---------------------------------

                                              Yuanmei Ma
                                              Chief Financial Officer


                                       38
<PAGE>


                                  EXHIBIT INDEX


EXHIBIT
NUMBER                               EXHIBIT TITLE
---------      -----------------------------------------------------------------

  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

                                       39