UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---

FORM 10-Q



---

| | 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 000-51409

BEIJING MED-PHARM CORPORATION

(Exact name of registrant as specified in its charter)



| | Delaware(State or other jurisdiction ofincorporation or organization) |  | 20-0434726(I.R.S. EmployerIdentification No.) | 
| | --------------------------------------------------------------------- |  | --------------------------------------------- | 



| | 600 W. Germantown Pike, Suite 400Plymouth Meeting, Pennsylvania(Address of principal executive offices) |  | 19462(Zip Code) | 
| | ------------------------------------------------------------------------------------------------------- |  | --------------- | 

(610)
  940-1675

(Registrants telephone number, including area code)

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 90 days. Yes   
  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.

|Large
        accelerated filer | Accelerated
        filer | Non-accelerated
        filer
|------------------------------- | ------------------------- | -----------------------------



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

The number of shares of common stock of Beijing Med-Pharm Corporation outstanding as of August 4, 2006 was 23,154,562.






---



BEIJING
  MED-PHARM CORPORATION

INDEX



|                                                                                                                      |  | Page No.
|--------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                      |  |         
|Part I. FINANCIAL INFORMATION                                                                                         |  |         
|Item 1. Financial Statements (unaudited)                                                                              |  |         
|Condensed Consolidated Balance Sheets as of June 30, 2006 (Unaudited) and December 31, 2005                           |  | 3       
|Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2006 and 2005 |  | 4       
|Condensed Consolidated Statements of Stockholders Equity (Unaudited) for the three and six months ended June 30, 2006 |  | 5       
|Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2006 and 2005           |  | 6       
|Notes to Condensed Consolidated Financial Statements (Unaudited)                                                      |  | 7       
|Item 2. Managements Discussion and Analysis of Financial Condition and Results Of Operations                         |  | 15      
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                    |  | 24      
|Item 4. Controls and Procedures                                                                                       |  | 25      
|Part II OTHER INFORMATION                                                                                             |  |         
|Item 4. Submission of Matters to a Vote of Security Holders                                                           |  | 26      
|Item 5. Other Matters                                                                                                 |  | 27      
|Item 6. Exhibits                                                                                                      |  | 28      
|SIGNATURES                                                                                                            |  |         

2

---



Back to Index

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

BEIJING MED-PHARM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                     |  | (Unaudited)June 30,2006 |             | December 31,2005 |  
|---------------------------------------------------- |  | ----------------------- | ----------- | ---------------- | -
|                                                     |  |                         |             |                  |  
|Assets                                               |  |                         |             |                  |  
|Current Assets:                                      |  |                         |             |                  |  
|Cash and Cash Equivalents                            |  | $                       | 5,624,094   |                  | $
|Restricted Cash                                      |  |                         | 108,000     |                  |  
|Accounts Receivable                                  |  |                         | 5,447,548   |                  |  
|Inventory                                            |  |                         | 1,548,800   |                  |  
|Other Receivables                                    |  |                         | 107,070     |                  |  
|Value Added Tax Receivable                           |  |                         | 390,280     |                  |  
|Prepaid Expenses and Other Current Assets            |  |                         | 898,302     |                  |  
|                                                     |  |                         |             |                  |  
|Total Current Assets                                 |  |                         | 14,124,094  |                  |  
|Restricted Cash                                      |  |                         | 157,000     |                  |  
|Property and Equipment, Net                          |  |                         | 448,735     |                  |  
|Investments, at Cost                                 |  |                         | 120,482     |                  |  
|Intangible Assets, net of accumulated amortization   |  |                         | 854,849     |                  |  
|Goodwill                                             |  |                         | 216,415     |                  |  
|                                                     |  |                         |             |                  |  
|Total Assets                                         |  | $                       | 15,921,575  |                  | $
|                                                     |  |                         |             |                  |  
|Liabilities and Stockholders Equity                 |  |                         |             |                  |  
|Current Liabilities:                                 |  |                         |             |                  |  
|Notes Payable                                        |  | $                       | 653,684     |                  | $
|Accounts Payable                                     |  |                         | 5,679,367   |                  |  
|Accounts Payable Wanhui Group                        |  |                         | 252,554     |                  |  
|Deferred Revenue                                     |  |                         | 17,718      |                  |  
|Accrued Payroll                                      |  |                         | 459,973     |                  |  
|Accrued Professional Fees                            |  |                         | 50,500      |                  |  
|Accrued Other                                        |  |                         | 752,581     |                  |  
|Contract Allowance                                   |  |                         | 451,338     |                  |  
|                                                     |  |                         |             |                  |  
|Total Current Liabilities                            |  |                         | 8,317,715   |                  |  
|                                                     |  |                         |             |                  |  
|Notes Payable, long term                             |  |                         | 184,200     |                  |  
|Stockholders Equity:                                |  |                         |             |                  |  
|Common Stock, $.001 Par Value; 50,000,000 Shares     |  |                         | 23,153      |                  |  
|Authorized; 23,152,032 Shares Issued and Outstanding |  |                         |             |                  |  
|Additional Paid in Capital                           |  |                         | 18,425,654  |                  |  
|Common Stock Warrants                                |  |                         | 1,251,819   |                  |  
|Accumulated Deficit                                  |  |                         | (12,280,966 | )                |  
|                                                     |  |                         |             |                  |  
|Total Stockholders Equity                           |  |                         | 7,419,660   |                  |  
|                                                     |  |                         |             |                  |  
|Total Liabilities and Stockholders Equity           |  | $                       | 15,921,575  |                  | $
|                                                     |  |                         |             |                  |  

See notes to condensed consolidated financial statements.

3

---



Back to Index

BEIJING
  MED-PHARM CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)



|                                                      |  | Three months endedJune 30, |            | Six months endedJune 30, |  
|----------------------------------------------------- |  | -------------------------- | ---------- | ------------------------ | -
|                                                      |  |                            |            |                          |  
|                                                      |  | 2006                       |            | 2005                     |  
|                                                      |  |                            |            |                          |  
|Net Revenues                                          |  | $                          | 5,398,797  |                          | $
|Cost
                of Sales                         |  |                            | 5,221,754  |                          |  
|                                                      |  |                            |            |                          |  
|Gross Margin                                          |  |                            | 177,043    |                          |  
|                                                      |  |                            |            |                          |  
|Sales and Marketing Expenses                          |  |                            | 281,273    |                          |  
|General & Administration Expenses                     |  |                            | 1,538,716  |                          |  
|                                                      |  |                            |            |                          |  
|Total Operating Expenses                              |  |                            | 1,819,989  |                          |  
|                                                      |  |                            |            |                          |  
|Loss From Operations                                  |  |                            | (1,642,946 | )                        |  
|                                                      |  |                            |            |                          |  
|Other Income (Expense):                               |  |                            |            |                          |  
|Interest Income                                       |  |                            | 42,078     |                          |  
|Interest Expense                                      |  |                            | (7,202     | )                        |  
|Other
            Expense                             |  |                            | (3,415     | )                        |  
|                                                      |  |                            |            |                          |  
|Total Other Income                                    |  |                            | 31,461     |                          |  
|                                                      |  |                            |            |                          |  
|Loss Before Provision For Income Taxes                |  |                            | (1,611,485 | )                        |  
|Provision For Income Taxes                            |  |                            |           |                          |  
|                                                      |  |                            |            |                          |  
|Net Loss                                              |  | $                          | (1,611,485 | )                        | $
|                                                      |  |                            |            |                          |  
|Basic and Diluted Loss Per Share                      |  | $                          | (0.07      | )                        | $
|Basic and Diluted Weighted-average Shares Outstanding |  |                            | 22,778,328 |                          |  

See notes to condensed consolidated financial statements.

4

---



Back to Index

BEIJING MED-PHARM CORPORATION AND SUBSIDIARY

CONDENSED
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITYAND OTHER COMPREHENSIVE
      LOSS (Unaudited)



|                                                   |  |  | Common Stock |                 |   | Additional
  Paid-inCapital |  |   | Common
  StockWarrants |  |   | AccumulatedDeficit |   |   | Accumulated
OtherComprehensive
loss
  Foreign
  Currency
  Translation |   |   | Total
  Stockholders
  Equity | 
|-------------------------------------------------- |  |  | ------------ | --------------- | - | --------------------------- |  | - | ---------------------- |  | - | ------------------ | - | - | ---------------------------------------------------------------------- | - | - | ------------------------------ | 
|Number
    of Shares                               |  |  |              | $.001 Par
Value
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Balance as of December 31, 2005                    |  |  | 21,880,897   |                 | $ | 21,882                      |  | $ | 14,707,590             |  | $ | 1,812,812          |   | $ | (9,168,334                                                             | ) | $ | 24,878                         | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Stock-Based Compensation                           |  |  |             |                 |   |                            |  |   | 287,378                |  |   |                   |   |   |                                                                       |   |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Series A Warrant Exercise                          |  |  | 97,247       |                 |   | 97                          |  |   | 934,329                |  |   | (58,510            | ) |   |                                                                       |   |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Net Loss                                           |  |  |             |                 |   |                            |  |   |                       |  |   |                   |   |   | (1,537,696                                                             | ) |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Other Comprehensive Loss                           |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Foreign
          Currency Translation             |  |  |             |                 |   |                            |  |   |                       |  |   |                   |   |   |                                                                       |   |   | 10,500                         | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Total
          Comprehensive Loss                 |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Balance as of March 31, 2006 (Unaudited)           |  |  | 21,978,144   |                 | $ | 21,979                      |  | $ | 15,929,297             |  | $ | 1,754,302          |   | $ | (10,706,030                                                            | ) | $ | 35,378                         | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Stock-Based Compensation                           |  |  |             |                 |   |                            |  |   | 279,646                |  |   |                   |   |   |                                                                       |   |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Series
        A and B Warrant and Option Exercise |  |  | 1,173,888    |                 |   | 1,174                       |  |   | 2,216,711              |  |   | (502,483           | ) |   |                                                                       |   |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Net Loss                                           |  |  |             |                 |   |                            |  |   |                       |  |   |                   |   |   | (1,611,485                                                             | ) |   |                               | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Other Comprehensive Loss                           |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Foreign
          Currency Translation             |  |  |             |                 |   |                            |  |   |                       |  |   |                   |   |   |                                                                       |   |   | 1,171                          | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Total
          Comprehensive Loss                 |  |  |             |                 |   |                            |  |   |                       |  |   |                   |   |   |                                                                        |   |   |                                | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 
|Balance as of June 30, 2006 (Unaudited)            |  |  | 23,152,032   |                 | $ | 23,153                      |  | $ | 18,425,654             |  | $ | 1,251,819          |   | $ | (12,317,515                                                            | ) | $ | 36,549                         | 
|                                                   |  |  |              |                 |   |                             |  |   |                        |  |   |                    |   |   |                                                                        |   |   |                                | 

See notes to condensed consolidated financial statements.

5

---



Back to Index

BEIJING MED-PHARM CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



|For the six months ended June 30                                                  |  | 2006 |            | 2005 |  
|--------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | -
|                                                                                  |  |      |            |      |  
|Cash Flows from Operating Activities:                                             |  |      |            |      |  
|Net Loss                                                                          |  | $    | (3,149,181 | )    | $
|Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:       |  |      |            |      |  
|Depreciation                                                                      |  |      | 38,829     |      |  
|Amortization of Intangible Assets                                                 |  |      | 129,541    |      |  
|Loss on assets disposed                                                           |  |      | 3,398      |      |  
|Stock-Based Compensation                                                          |  |      | 567,024    |      |  
|(Increase) Decrease in Accounts Receivable                                        |  |      | (346,697   | )    |  
|(Increase)
            in Inventory                                               |  |      | (265,933   | )    |  
|Decrease in Other Receivables                                                     |  |      | 31,014     |      |  
|Decrease in Value Added Tax Receivable                                            |  |      | 15,349     |      |  
|Decrease (Increase) in Prepaid Expenses and Other Current Assets                  |  |      | 3,745      |      |  
|(Decrease) Increase in Accounts Payable                                           |  |      | (254,610   | )    |  
|Increase in Deferred Revenues                                                     |  |      | 166        |      |  
|(Decrease) in Accrued Payroll                                                     |  |      | (15,862    | )    |  
|(Decrease) in Accrued Professional Fees                                           |  |      | (124,150   | )    |  
|Increase in Contract Allowance                                                    |  |      | 4,233      |      |  
|Increase in Accrued Other                                                         |  |      | 96,017     |      |  
|                                                                                  |  |      |            |      |  
|Net Cash Used in Operating Activities                                             |  |      | (3,267,117 | )    |  
|                                                                                  |  |      |            |      |  
|Cash Flows from Investing Activities:                                             |  |      |            |      |  
|Acquisition of Property and Equipment                                             |  |      | (135,957   | )    |  
|Acquisition Payment to Wanhui                                                     |  |      | (412,089   | )    |  
|                                                                                  |  |      |            |      |  
|Net Cash Used in Investing Activities                                             |  |      | (548,046   | )    |  
|                                                                                  |  |      |            |      |  
|Cash Provided by Financing Activities:                                            |  |      |            |      |  
|Gross
                Proceeds from exercise of Common Stock Warrants and Options |  |      | 2,591,318  |      |  
|Net Repayments of Note Payable                                                    |  |      | (69,643    | )    |  
|                                                                                  |  |      |            |      |  
|Net Cash Provided by Financing Activities                                         |  |      | 2,521,675  |      |  
|Effect of Exchange Rate Change on Cash                                            |  |      | 11,671     |      |  
|                                                                                  |  |      |            |      |  
|Net Decrease in Cash and Equivalents                                              |  |      | (1,281,817 | )    |  
|Cash and Equivalents, Beginning                                                   |  |      | 6,905,911  |      |  
|                                                                                  |  |      |            |      |  
|Cash and Equivalents, Ending                                                      |  | $    | 5,624,094  |      | $
|                                                                                  |  |      |            |      |  
|Supplemental Disclosure of Cash Flows Information                                 |  |      |            |      |  
|Cash Paid During the Year for:                                                    |  |      |            |      |  
|Income Taxes                                                                      |  | $    | 50,290     |      | $
|Interest                                                                          |  |      | 33,768     |      |  

See notes to condensed consolidated financial statements.

6

---



Back to Index

BEIJING MED-PHARM CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements as of June 30, 2006 and for the six months ended June 30, 2006 and 2005 of Beijing Med-Pharm Corporation and Subsidiaries (collectively, the Company ) include the accounts of Beijing Med-Pharm Corporation (the Parent) and its wholly-owned subsidiaries, Beijing Med-Pharm Market Calculating Co. Ltd. (BMP China), Beijing Wanwei Pharmaceutical Co., Ltd. (Wanwei) and Beijing Med-Pharm Hong Kong Co., Ltd. (Hong Kong) should be read in conjunction with the audited consolidated financial statements and accompanying footnotes of the Company as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005, included in the Companys Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange
Commission (the SEC) on March 31, 2006. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of the Companys interim results. Certain information and footnote disclosures required for complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to applicable rules and regulations. The operating results for the interim periods are not necessarily indicative of the results to be expected for the full year.

Earnings Per Share:The Company calculates basic earnings per share based on the weighted-average number of outstanding common shares. The Company calculates diluted earnings per share based on the weighted-average number of outstanding common shares plus the effect of dilutive stock options and warrants. Common stock equivalents have been excluded from the diluted per share calculations as of March 31, 2006, as the Company has incurred a net loss during the three months then ended, and their inclusion would have been anti-dilutive.

Accounting Policy:Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards (FAS) No. 123 (Revised 2004), Share-Based Payment (FAS 123R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including stock options, employee stock purchases related to the employee stock purchase plan and restricted stock units based on estimated fair values of these awards over the requisite employee service period. FAS 123R supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), which the Company previously followed in accounting for stock-based awards. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (SAB 107) to provide guidance on FAS 123R. The Company has applied SAB 107 in its
adoption of FAS 123R.

Under FAS 123R, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized on a straight-line basis as expense over the employees requisite service period. The Company has no awards with market or performance conditions. The Company adopted the provisions of FAS 123R on January 1, 2006, the first day of the Companys fiscal year 2006, using the modified prospective application. The valuation provisions of FAS 123R apply to new awards and to awards that are outstanding on the effective date and subsequently modified or cancelled; prior periods are not revised for comparative purposes. Estimated compensation expense for awards outstanding on the effective date will be recognized over the remaining service period using the compensation cost calculated for pro forma disclosure under FASB Statement No. 123, Accounting for
Stock-Based Compensation (FAS 123).

7

---



Back to Index

In November 2005, the Financial Accounting Standard Board (FASB) issued FASB Staff Position no. FAS 123R-3, Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards (FSP 123R-3).
    FSP 123R-3 provides an elective alternative transition method that includes
    simplified methods to establish the beginning balance of the additional paid-in
    capital pool related to the tax effect of stock-based compensation and to
    determine the subsequent impact on the additional paid-in capital pool and
    the Condensed Consolidated Statement of Cash Flows for stock-based compensation
awards that are outstanding upon the adoption of FAS No. 123R.

Recent
      Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, an amendment of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. SFAS No. 155 simplifies accounting for certain hybrid instruments under SFAS No. 133 by permitting fair value remeasurement for financial instruments containing an embedded derivative that otherwise would require bifurcation. SFAS No. 155 eliminates both the previous restriction under SFAS No. 140 on passive derivative instruments that a qualifying special-purpose entity may hold and SFAS No. 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets,
which provides that beneficial interests are not subject to the provisions of SFAS No. 133. SFAS No. 155 also 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, and clarifies that concentrations of credit risk in the form of subordination are not imbedded derivatives. SFAS No. 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after the beginning of an entitys fiscal year that begins after September 15, 2006. The Company has evaluated the effect of SFAS No. 155 and determined that it does not expect a material impact from the adoption to its consolidated financial position, liquidity, or results from operations.

In July 2006, the FASB issued Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxesan Interpretation of SFAS 109 Accounting for Income Taxes. FIN 48 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. Under FIN 48, the financial statements will reflect expected future tax consequences of such positions presuming the taxing authorities full knowledge of the position and all relevant facts, but without considering time values. FIN 48 also revises disclosure requirements and introduces a prescriptive, annual, tabular roll-forward of the unrecognized tax benefits. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the effect FIN 48 will
have on its consolidated financial position, liquidity, or results of operations.

8

---



Back to Index

2. Acquisition:

In January 2004, the Company completed a reverse merger with Just Great Coffee, Inc. (JGC), a US-based corporation with no assets, liabilities or operating results for the periods presented, to gain access to the public capital markets. JGC was incorporated on May 31, 1994 in New Jersey. In connection with the reverse merger agreement, 100% of the JGC voting stock was acquired for 760,005 common stock shares, and JGC merged with and into us and we were the surviving corporation.

In February 2004, the Company acquired a 100% interest in BMP China from Abacus Investments Ltd., a majority shareholder of the Company at the time of the acquisition, in exchange for 7,807,509 shares of the Companys common stock shares. At the date of acquisition, in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS No. 141), paragraph 12, since the exchange of shares was between entities under common control, the Company recorded the assets and liabilities transferred at their historical cost at the time of their transfer. In accordance with SFAS No. 141 paragraphs D14 through D18, the financial statements and financial data for the periods presented reflect the financial results of the previously separate entities as combined.

On
    December 15, 2004, the Company entered into a share transfer and debt
    restructuring agreement with Beijing Wanhui Pharmaceutical Group (Wanhui
    Group), an 80% equity holder of Wanwei, and a share transfer agreement
    with Wen Xin, the holder of the remaining 20% equity interest in Wanwei.
    On October 18, 2005, the Company was notified by Chinas Ministry
    of Commerce that the acquisition of Wanwei had been approved. On October 25,
    2005, the Company received a business license from Beijing Municipal Administration
    for Industry and Commerce permitting the Company to operate Wanwei and consolidate
    its financial operations. On December 6, 2005, the Company completed
    its acquisition of all of the outstanding equity interests of Wanwei from
    Wanhui Group and Wen Xin. As required under the share transfer and debt restructuring
    agreement with Wanhui Group, on December 15, 2004,
the Company paid Wanhui Group RMB 2,400,000, or $290,328 as of that date, and,
    on December 6,
2005, the Company paid Wanhui Group RMB 101,030, or $12,500 as of that date,
which represented full payment of the remaining amount of the obligation, net
of our estimate tax liability that results from the debt forgiveness between
    the Wanhui Group and Wanwei (the estimated tax obligation). On
    June 29, 2006, the Company paid Wanhui Group RMB 3,290,300, or $412,100 as
    of
    that
    date,
    as
    the estimated
    tax obligation
    was
reduced by the same amount. If it is determined Wanweis actual tax liability
is lower than the estimated tax obligation, the Company has agreed to pay Wanhui
Group additional funds, equal to the reduction in the actual tax liability and,
if it is determined that Wanweis actual tax liability is higher than the
estimated tax obligation plus the adjustment in June 2006, Wanhui Group has agreed
to
return
the
difference
to
the Company. It is expected that the actual tax liability will be determined
by the end of the third quarter of 2006.

9

---



Back to Index

3.
      Stock-Based Compensation:

The Companys 2004 Stock Incentive Plan provides for grants of stock options (incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock grants and other stock-based awards to all employees (including employees who are directors and officers), non-employee directors, consultants and independent contractors of the Company and its affiliates. The Plan authorizes the issuance of up to 2,500,000 shares of the Companys common stock, subject to adjustment, and provides that no more than 400,000 shares of common stock may be awarded to any one individual in any calendar year if the value of the award is based solely on an increase in the value of shares of the Companys common stock after the date of grant of the award, subject to adjustment. The Plan also provides that no more than 100,000 shares of
common stock may be awarded to any one individual in any calendar year if the value of the award is not based solely on an increase in the value of shares of the Companys common stock after the date of grant of the award, subject to adjustment. The Plan is administered by the Companys Compensation Committee. The Compensation Committee has the authority to determine the individuals who will receive grants, the type of grant, the number of shares subject to the grant, the terms of the grant, the time the grants will be made, the duration of any exercise or restriction period, and to deal with any other matters arising under the Plan. Options granted under the Plan may be incentive stock options, which are intended to qualify with the requirements of section 422 of the Code, and nonqualified stock options, which are not intended to so qualify. The Companys board of directors may amend or terminate the Plan at any time if required under the Plan,
subject to stockholder approval. Unless terminated earlier by the board of directors or extended by the board of directors, with the approval of the Companys stockholders, no awards may be granted under the Plan after February 10, 2009.

Prior
    to January 1, 2006 the Company accounted for stock based compensation under
    SFAS No. 148, Accounting for Stock-Based Compensation  Transition
    and Disclosure, which amended SFAS No. 123, Accounting for Stock-Based
    Compensation. As permitted under this standard, compensation cost was
    recognized using the intrinsic value method described in Accounting Principles
    Board Opinion No. 25, Accounting for Stock Issued to Employees (APB
    25). Effective January 1, 2006, the Company has adopted Statement of
    Financial Accounting Standards No. 123 (Revised 2004), Share-Based
    Payment and
    applied the provisions of the Securities and Exchange Commission Staff Accounting
    Bulletin No. 107 using the modified-prospective transition method. Prior
    periods were not restated to reflect the impact of adopting the new standard.
    As a result of the adoption of FAS 123R, stock-based compensation expense
    recognized during the three and six months ended June 30, 2006 includes compensation
    expense for all share-based payments granted on or prior to, but not yet
    vested as of January 1, 2006, based on the grant date fair value estimated
    in accordance with the original provisions of FAS 123, and compensation cost
    for all share-based
    payments granted on or subsequent to January 1, 2006, based on the grant
date fair value estimated in accordance with the provisions of FAS 123R.

During
    the three and six months June 30, 2005, the Company applied the recognition
    and measurement principles of APB 25 and related interpretations in accounting
    for stock-based compensation. During the three and six months ended June
    30, 2005, the Company issued options to employees to purchase 340,000 and
    400,000 shares, respectively, of common stock at exercise prices ranging
    from $1.95 to $2.25 per share. During the three and six months ended June
    30, 2005, the Company did not record any compensation expense associated
    with such awards. Had the Company elected to recognize stock-based compensation
    expense based on the fair value at the grant dates for awards consistent
    with the method prescribed under SFAS 123R, the Company would have recorded
    compensation in the amount of $23,770 and $53,537, respectively, for the
    three and six months ended June 30, 2005. During the three and six months
    ended June 30, 2006, the Company recognized stock-based compensation expense
    of $279,646 and $567,024, respectively, related to outstanding stock options
    according to the provisions of FAS 123R, using the modified-prospective transition
method.

The following table illustrates the effect on net
  income and earnings per share if the Company had applied the fair value recognition
  of SFAS 123(R) to stock-based compensation for the three and six months ended
  June 30, 2005.



Three
          months ended
      
      Six
          months endedJune
          30, 2005Net
          lossAs
          reported
      
      $
      (1,652,637
      )
      $
      (2,560,242
      )Stock-based
          compensation expense included in reported net loss, net of related tax
          effects
      
      
      60,859
      
      
      121,720Stock-based
          compensation expense determined under fair value based method for all
          awards, net of related tax effects
      
      
      (113,104
      )
      
      (227,348
      )Pro
          forma
      
      $
      (1,704,882
      )
      $
      (2,665,870
      )Basic
          and Diluted Loss Per ShareAs
          reported
      
      $
      (0.09
      )
      $
      (0.14
      )Pro
          forma
      
      $
      (0.10
      )
      $
      (0.15
      )


Prior to the adoption of FAS 123R
  and for the three and six months ended June 30, 2006, no tax benefits from the
  exercise of stock options has been recognized as the company has a net loss
  for the six months ended June 30, 2006. Any future excess tax benefits derived
  from the exercise of stock options will be recorded prospectively and reported
  as cash flows from financing activities in accordance with FAS 123R.

The
  fair value of each option grant is estimated on the date of grant using the
  Black-Scholes option pricing model with the following assumptions:



|                        | Three months ended June 30, |   |  | Six months ended June 30, |  
|----------------------- | --------------------------- | - |  | ------------------------- | -
|                        |                             |   |  |                           |  
|                        | 2006                        |   |  | 2005                      |  
|                        |                             |   |  |                           |  
|Expected life (years)   | 5.0                         |   |  | 3.0                       |  
|Risk-free interest rate | 5.19                        | % |  | 5.00                      | %
|Expected Volatility     | 105.30                      | % |  | 90.00                     | %
|Expected Dividend yield | 0.00                        | % |  | 0.00                      | %

The Black-Scholes option valuation
    model was developed for use in estimating the fair value of traded options,
    which have no vesting restrictions and are fully transferable. In addition,
    option valuation models require the input of highly subjective assumptions
    including the expected stock volatility. Because the Companys employee
    stock options have characteristics significantly different from those of
    traded options, and because changes in subjective input assumptions can materially
    affect the fair value estimate, in managements opinion, the existing
    models do not necessarily provide a reliable single measure of the fair value
    of its employee stock options.

10

---

Back to Index
  A
      summary of the options issued by the Company for the six months ended June
      30, 2006 is as follows:
  
  Options
      
      Weighted-AverageExercisePrice per Share
      
      Weighted-
          AverageRemainingContractualTerm(in years)
      
      AggregateIntrinsicValueOutstanding
            on January 1, 2006
      
      1,395,000
      
      $
      1.61
      
      8.32
      
      
      Granted
      
      285,000
      
      $
      3.60
      
      9.80
      
      
      Exercised
      
      
      
      
      
      
      
      
      
      Forfeited/Canceled
      
      
      
      
      
      
      
      
      
      Outstanding
            on March 31, 2006
      
      1,680,000
      
      $
      1.95
      
      8.56
      
      $
      1,357,000Granted
      
      48,000
      
      $
      4.20
      
      10.00
      
      
      Exercised
      
      (20,000
      )
      $
      1.15
      
      8.50
      
      
      Forfeited/Canceled
      
      (20,000
      )
      $
      3.66
      
      9.50
      
      
      Outstanding
            on June 30, 2006
      
      1,688,000
      
      $
      2.00
      
      8.34
      
      $
      1,324,500Exercisable
            on June 30, 2006
      
      478,333
      
      $
      1.49
      
      7.96
      
      $
      732,875The weighted-average grant-date fair value of options granted
    during the six months ended June 30, 2006 was $2.75. The total intrinsic value
    of options exercised during the six months ended June 30, 2006 was $33,000.
    Intrinsic value is measured using the fair market value price of the Corporation's
    common stock less the applicable exercise price.
A summary of the status of the Corporations
        nonvested shares as of June 30, 2006 is presented below:Nonvested Shares
    
    Shares
    
    
    Weighted-Average
      Grant-Date Fair ValueNonvested at January 1, 2006
    
    1,375,000
    
    
    1.74Granted
    
    333,000
    
    
    2.75Vested
    
    (478,333
    )
    
    1.84Forfeited
    
    (20,000
    )
    
    2.04Nonvested at June 30, 2006
    
    1,209,667
    
    
    2.00The unrecognized share based compensation
      cost related to stock option expense at June 30, 2006 is $2,052,000 and
      will be recognized over a weighted average of three years. The total fair
      value of shares vested during the six months ended June 30, 2006 was 1,083,000.
  11


Back to Index

4. Common Stock

The Company has authorized 50,000,000 shares of common stock with a par value of $0.001 per share, of which 23,152,032 shares are issued and outstanding, 2,500,000 shares are reserved for issuance upon exercise of common stock options, and shares are reserved for issuance upon exercise of outstanding common stock warrants.

In January 2004, the Company issued 760,005 shares of common stock to the then existing stockholders of Just Great Coffee, Inc. in connection with the reverse merger of Just Great Coffee, Inc. with and into the Company.

In February 2004, in connection with the acquisition of BMP China, the Company issued 7,807,509 shares of common stock in exchange for 100% of the outstanding equity interest of BMP China.

In February 2004, the Company issued 157,500 shares of common stock in connection with the payment of $157,500 of the Companys fees and expenses incurred in connection with the Just Great Coffee, Inc. merger and the acquisition of BMP China.

In March 2004, the Company issued 8,695,652 shares of common stock in a private placement at a purchase price of $1.15 per share. Gross proceeds from the private placement amounted to approximately $10,000,000, less associated costs of approximately $1,200,000.

In March 2004, the Company issued warrants to purchase an aggregate of 400,000 shares of common stock as compensation for placement agent services provided in connection with the private placement completed in February and March 2004 and a warrant to purchase 173,913 shares of common stock as compensation for services provided in connection with the reverse merger and the acquisition of BMP China, in each case at an exercise price of $1.15 per share and with an expiration date of April 26, 2009. The Company has valued the warrants using the Black-Scholes option pricing model at $1,278,588, has designated it as an equity instrument and has recorded the value of the warrant as common stock. During the three months ended June 30, 2006, 12,650 of the warrants issued have been exercised. As of June 30, 2006, warrants totaling 561,263 are exercisable and outstanding.

In April 2004, the Company issued 260,250 shares of common stock as compensation for services provided in connection with the reverse merger and the acquisition of BMP China.

In October 2005, the Company issued 4,199,981 shares of common stock and 524,914 Series A and 524,914 Series B warrants in a private placement at a purchase price of $1.50 per investment unit. Gross proceeds from the private placement amounted to approximately $6,300,000, less associated costs of approximately $360,000.

In October 2005, the Company issued 94,500 Series A and 94,500 Series B warrants to purchase common stock as compensation for placement agent services provided in connection with the private placement completed in October 2005.

The
    fair value of these warrants  was estimated at $534,234 at
    the date of grant using the Black-Scholes option pricing model with the following
    weighted average assumptions for 2004: risk-free interest rate was 4.13%,
    an expected dividend yield of 0%, the volatility factor of the expected market
    price of the Companys common stock was 90%, and a weighed average expected
    life of the warrants of 3 years for each period. The assumptions for 2005:
    risk-free interest rate was 5%, an expected dividend yield of 0%, the volatility
    factor of the expected market price of the Companys common stock was
    90% and a weighted average expected life of the warrants of 1.25 years for
each period.

On
    February 21, 2006 we notified the holders of Series A Warrants that, pursuant
    to the terms of the Series A Warrants, we were exercising our rights to force
    the conversion of Series A Warrants because the trading price of our common
    stock had exceeded 200% of the exercise price of Series A Warrants for twenty
    consecutive days. On March 28, 2006, we notified the holders of Series B
    Warrants that pursuant to the terms of the Series B Warrants, we were exercising
    our
    rights to force the conversion of Series B Warrants because the trading price
    of our common stock exceeded 200% of the exercise price of Series B Warrants
    for twenty consecutive days. During the six months ended June 30, 2006, we
    received $2,554,311 from Series A and Series B Warrant exercises. We issued
    1,238,485 shares for the funds received from Series A and Series B exercises
    during the six months ended June 30, 2006.



12

---



Back to Index

5.
      Shareholders Equity

The following table shows weighted average basic shares for the respective periods:



|                                      |  | Three
        months ended June 30, |  | Six
        months ended June 30,
|------------------------------------- |  | ----------------------------------- |  | ---------------------------------
|                                      |  |                                     |  |                                  
|                                      |  | 2006                                |  | 2005                             
|                                      |  |                                     |  |                                  
|Weighted
        average basic shares |  | 22,778,328                          |  | 17,680,916                       

The following table shows potential common stock equivalents outstanding to purchase shares of common stock that were excluded in the computation of diluted loss per share. All common stock equivalents have been excluded from the diluted per share calculations in the three and six months ended June 30, 2006 and 2005 because their inclusion would have been anti-dilutive.



|                        |  | Three months ended June 30, |  | Six months ended June 30,
|----------------------- |  | --------------------------- |  | -------------------------
|                        |  |                             |  |                          
|                        |  | 2006                        |  | 2005                     
|                        |  |                             |  |                          
|Number of shares        |  | 1,555,926                   |  | 629,536                  
|Range of exercise price |  | $1.15  $4.20               |  | $1.15                    

13

---

Back to Index
  6.
        Segment Information:
  The
      Company is organized based upon the products and services it provides to
      its customers, and substantially all of its operations are located in China.
      The Company operated in one significant business segment during the years
      ended December 31, 2003 and 2004. During the years ended December 31,
      2003 and 2004, 100% of the Companys revenues were derived from marketing
      fees. The Pharmaceutical Distribution segment was started in October 2005
      with the acquisition of Wanwei.
  The
      Pharmaceutical Distribution reportable segment includes the operations
      of Wanwei. The Sales and Marketing reportable segment includes the operations
      of BMP China. Intersegment sales are recorded at cost plus an agreed upon
      intercompany profit. Both intersegment sales and profit have been eliminated
      in the consolidated results.
  The
      chief operating decision maker for the Pharmaceutical Distribution segment
      is the General Manager of Wanwei whose function is to allocate resources
      to, and assess the performance of Wanwei. This segment services both pharmaceutical
      manufacturers and healthcare providers in the pharmaceutical supply channel.
      The warehousing and distribution of pharmaceutical drugs, which are purchased
      from the same suppliers, is the primary business activity of Wanwei. Pharmaceutical
      Distribution operates in a high volume and low margin environment.
  Wanwei
      distributes brand name and generic pharmaceuticals, over-the-counter healthcare
      products, and home healthcare supplies and equipment to a variety of healthcare
      providers.
  The
      following tables present reportable segment information for the periods
      indicated (unaudited):
  
  Three
            months ended June 30,
      
      
      Six
            months ended June 30,2006
      
      
      2005
      
      
      2006
      
      
      2005Pharmaceutical Distribution
      $
      5,385,757
      
      
      
      
      $
      10,064,870
      
      
      Sales and Marketing
      
      13,040
      
      
      44,018
      
      
      56,711
      
      
      100,753Sales and Marketing intersegment
      
      225,610
      
      
      
      
      
      363,933
      
      
      Eliminations
      
      (225,610
      )
      
      
      
      
      (363,933
      )
      
      Total Revenue
      $
      5,398,797
      
      
      44,018
      
      $
      10,121,581
      
      
      100,753Pharmaceutical Distribution
      $
      (83,906
      )
      
      
      
      $
      (273,333
      )
      
      Sales and Marketing
      
      (488,373
      )
      
      (684,887
      )
      
      (880,559
      )
      
      (827,482
      )Corporate
      
      (999,146
      )
      
      (967,750
      )
      
      (1,923,128
      )
      
      (1,732,760
      )Eliminations
      
      (40,060
      )
      
      
      
      
      (72,161
      )
      
      Total Operating Loss
      $
      (1,611,485
      )
      
      (1,652,637
      )
      $
      (3,149,181
      )
      
      (2,560,242
      )Due
      to our integrated business  structure, revenue and operating costs included
      in one segment may benefit other segments, and therefore
  these segments are not designed to measure operating income or loss directly
      related to the products included in each  segment. Management will continually
      evaluate the alignment of sales and inter-segment commissions for segment
      reporting purposes,
  which may result in changes to segment allocations in future periods.
  14


Back to Index

ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto contained herein and in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 31, 2006.

Forward-Looking Statements

Certain
    of the statements contained in this Managements Discussion and Analysis
    of Financial Condition and Results of Operations (MD&A) and
    elsewhere in this report are forward-looking statements within
    the meaning of Section 27A of the Securities Act of 1933, as amended
    (the Securities Act), and Section 21E of the Securities
    Exchange Act of 1934, as amended (the Exchange Act). These statements
    are based on managements current expectations and are subject to uncertainty
    and changes in circumstances. Actual results may vary materially from the
    expectations contained in the forward-looking statements. The forward-looking
    statements herein include, among others, statements addressing managements
    views with respect to future financial and operating results, our ability
    to obtain an increased market share in the Chinese pharmaceutical  marketing
    and distribution markets, the dependence of our future success on obtaining
    additional promotional and market research agreements and licensing rights
    for China and on acquiring additional distribution companies, the significance
    of our acquisition of Wanwei, our cash and cash equivalents investments,
    our anticipated use of cash resources, our ability to fund our current level
    of operations through our cash and cash equivalents, our hiring goals for
    the next twelve months, our capital requirements and the possible impact
    on us if we are unable to satisfy these requirements, our approaches to raise
    additional funds, our expectation to continue to pursue strategic acquisitions
    in the near future, the expected impact of recent accounting pronouncement
    and our expectation that Wanweis
    actual tax liability will be determined in the third quarter of 2006. Various
    factors,
    including
    competitive pressures, success of integration, market interest rates, changes
    in customer mix, changes in pharmaceutical manufacturers pricing
and distribution policies or practices, regulatory changes, changes in the Peoples
Republic of Chinas policies, customer defaults or insolvencies, acquisition
of businesses that do not perform as we expect or that are difficult for us to
integrate or control, adverse resolution of any contract or other disputes with
customers and suppliers, or the loss of one or more key customer or supplier
relationships, could cause actual outcomes and results to differ materially from
those described in forward-looking statements. Certain additional factors that
management believes could cause actual outcomes and results to differ materially
from those described in forward-looking statements are set forth in Part I, Item
1A. Risk Factors  Risks Relating to Our Business in our Annual Report
on Form 10-K for the year ended December 31, 2005.

Overview

Beijing Med-Pharm Corporation, a Delaware corporation, is a pharmaceutical marketing and distribution company based in China. Our corporate headquarters are in suburban Philadelphia and our Chinese operations are based in Beijing. In addition, we have satellite sales offices throughout China. We were incorporated in the State of Delaware in November 2003 as a wholly-owned subsidiary of Just Great Coffee, Inc., a New Jersey corporation to develop and finance the growth of a Chinese pharmaceutical marketing and promotion company. In January 2004, Just Great Coffee, Inc. merged with and into us and we were the surviving corporation. BMP China was incorporated in China in May 1994. In December 2001, Abacus Investments Ltd. (Abacus) acquired a 100% equity interest in BMP China. In February 2004, we acquired all of the equity interests of BMP China from Abacus in exchange for our issuance to Abacus of
7,807,509 shares of our common stock, which represented approximately 90% of our common stock at the time of the exchange. As a result of this exchange, BMP China became our wholly-owned subsidiary in Beijing.

15

---



Back to Index

On
    December 15, 2004, we entered into a share transfer and debt restructuring
    agreement with Beijing Wanhui Pharmaceutical Group (Wanhui Group),
    an 80% equity holder of Beijing Wanwei Pharmaceutical Co., Ltd. and a share
    transfer agreement with Wen Xin, the holder of the remaining 20% equity interest
    in Wanwei. On October 18, 2005, we were notified by the Peoples
    Republic of China Ministry of Commerce that the acquisition of Wanwei had
    been approved. On October 25, 2005, we received a business license from Beijing
    Municipal Administration for Industry and Commerce, permitting us to operate
    Wanwei and consolidate its financial operations. On December 6, 2005, we
    completed the acquisition of all of the outstanding equity interests of Wanwei
    from Wanhui Group and Wen Xin. As required under the share transfer and debt
    restructuring agreement with Wanhui Group, on December 15, 2004, we paid
    Wanhui Group RMB 2,400,000, $290,328 as of that date. In addition, on December
    6, 2005, we paid Wanhui Group RMB 101,030, $12,500 as of that date, which
    represented full payment of the remaining amount of the obligation, net of
    our estimate tax liability that results from the debt forgiveness between
    the Wanhui Group and Wanwei (the estimated tax obligation). One
    June 29, 2006, the Company paid Wanhui Group RMB 3,290,300, or $412,100 as
    of
    that
    date,
    as
    the estimated
    tax obligation
    was
reduced by the same amount. If it is determined Wanweis actual tax liability
is lower than the estimated tax obligation, the Company has agreed to pay Wanhui
Group additional funds, equal to the reduction in the actual tax liability and,
if
it is determined
that Wanweis actual tax liability is higher than the estimated tax obligation
plus the adjustment in June 2006,
Wanhui Group has agreed to return the difference to the Company. It is expected
that the actual tax liability will be determined by the end of the third quarter
of 2006.

Since we acquired BMP China in February 2004, we have funded our operations primarily through the issuance of shares of our common stock. In March 2004, we completed a private placement of 8,695,652 shares of our common stock at a price of $1.15 per share, which yielded gross proceeds to us of approximately $10.0 million and net proceeds to us of approximately $8.8 million (the First Financing). On October 19, 2005, we completed a private placement of 4,199,981 shares of our common stock at a price of $1.50 per share, which yielded gross proceeds to us of approximately $6.3 million and net proceeds to us of approximately $5.9 million (the Second Financing). In addition, these investors also received our Series A Warrants to purchase an aggregate of 619,414 shares of our common stock at an exercise price of $1.875 per share and Series B Warrants to purchase 619,414 shares of common stock
at an exercise price of $2.25 per share. These warrants have been valued using the Black-Scholes pricing model to have an aggregate value of $534,224. On February 21, 2006, we notified the holders of Series A Warrants that, pursuant to the terms of the Series A Warrants, we were exercising our rights to force the conversion of Series A Warrants because the trading price of our common stock had exceeded 200% of the exercise price of Series A Warrants for twenty consecutive days. On March 28, 2006 we notified the holders of Series B Warrants that pursuant to the terms of the Series B Warrants, we were exercising our rights to force the conversion of Series B Warrants because the trading price of our common stock exceeded 200% of the exercise price of Series B Warrants for twenty consecutive days. During the six months ended June 30, 2006, we received $2,554,311 from Series A and Series B Warrant exercises. We issued 1,238,485 shares for the funds received from Series A and Series B
exercises during the six months ended June 30, 2006.

Our cash resources have primarily been devoted to payment of salaries and wages for our employees, professional fees, fees related to sales and promotion of our current products and our acquisition of Wanwei.

We have an operating history of approximately 11 years, dating from the formation of BMP China in 1994. We have historically been a pharmaceutical marketing and product registration company of domestic and foreign pharmaceutical products and devices for the Chinese market. Our acquisition of Wanwei will significantly expand our service offering to include pharmaceutical distribution in the Chinese Market.

16

---



Back to Index

Our current services, which we offer to foreign and domestic pharmaceutical manufacturers in China through BMP China and Wanwei include:

| |  | pre-market entry analysis;
| | - | --------------------------

| |  | clinical trial management;
| | - | --------------------------

| |  | product registration;
| | - | ---------------------

| |  | market research;
| | - | ----------------

| |  | pharmaceutical marketing to physicians, hospitals and other healthcare providers; and
| | - | -------------------------------------------------------------------------------------

| |  | pharmaceutical distribution.
| | - | ----------------------------

We
    believe that a significant opportunity exists to obtain an increased market
    share in the Chinese pharmaceutical marketing and distribution markets by
    offering a distribution chain solution that combines our market development
    services with market fulfillment services. We believe that our acquisition
    of Wanwei was an important step in the implementation of this solution.

Historically, we have generated a majority of our revenues from commissions related to sales of pharmaceutical products. Beginning with the acquisition of Wanwei in October 2005, the vast majority of our revenues consist of revenues from the distribution of pharmaceutical products in China through our wholly-owned subsidiary Wanwei.

The prices of certain medicines that Wanwei distributes or that we market and promote, including those listed in the Chinese governments Insurance Catalogue, which are reimbursable under Chinas social insurance program, are subject to control by the relevant state or provincial price administration authorities. In practice, price control with respect to these medicines sets a ceiling on their retail price. The actual price of such medicines set by manufacturers, wholesalers and retailers cannot exceed the price ceiling imposed by applicable government price control regulations. Although, as a general matter, drug prices have tended to decline over time, there has been no predictable pattern for such decreases.

Since our inception, we have generated significant losses. As of June 30, 2006, we had an accumulated deficit of approximately $12.3 million.

Our future success will depend on obtaining additional promotional and market research agreements and licensing rights for China, as well as acquiring additional distribution companies currently operating throughout China. During 2005 and 2006, we have pursued a strategy of broadening our range of promoted products and we are currently actively reviewing for license various branded pharmaceutical products and products in development from western pharmaceutical companies for marketing and distribution in China.

Critical Accounting Policies

Accounting for Stock-Based Compensation

SFAS No. 123, Accounting for Stock-Based Compensation, allows companies which have stock-based compensation arrangements with employees to adopt a new fair value basis of accounting for stock options and other equity instruments or to continue to apply the existing accounting rules under APB Opinion No. 25, Accounting for Stock Issued to Employees, but with additional financial statement disclosure.

17

---



Back to Index

In
    December 2004, the FASB issued SFAS No. 123R that amends SFAS No. 123,Accounting
    for Stock-Based Compensation, to report stock-based
    employee compensation in their financial statements. On January 1, 2006,
    we adopted SFAS No. 123R. Stock-based compensation expense recognized under
    SFAS No. 123R for the three and six months ended June 30, 2006 was $197,053
    and $399,587, respectively, which consisted of stock-based compensation expense
    related to stock options and stock grants under our
    employee incentive plans. In addition, for the three and six months ended
    June 30, 2006, the Company recognized stock-based compensation of $84,593
    and
$167,437, respectively, related to stock options issued in 2004.

During
    2004, we issued options to employees and advisors to purchase 930,000 shares
    of common stock at an exercise of $1.15 per share. During 2004, our compensation
    expense was $295,594, which represents the difference between the exercise
    price and the fair value of the common stock. Our compensation expense was
    $399,000 for the year ended December 31, 2005. Our compensation expense related
    to these shares was $82,593 and $167,437, respectively, for the three
    and six months ended June 30, 2006. During 2005, we issued options to employees
    and board members to purchase 605,000 shares of common stock at exercise
    prices ranging from $1.60 to $3.66. There was no impact to the statement
    of operations for the issuance of these options. During the three and six
    months ended June 30, 2006, we issued options to employees and board members
    to purchase 48,000 and 333,000 shares of common stock, respectively, at exercise
     prices ranging from $3.60 to $4.20. During the three and six months ended
    June 30, 2006, the Company recognized stock-based compensation expense of
    $197,053 and $399,587, respectively, related to the stock options outstanding
    during the period.

Revenue Recognition

We recognize distribution revenues and related cost of sales at the later of (a) the time of shipment or (b) when title passes to the customers, provided that there is evidence of a final arrangement, there are no uncertainties surrounding acceptance, collectibility is probable and the price is fixed. Revenues consist of gross sales less provisions for estimated customer returns, discounts, vendor payments and volume rebates. Amounts billed to a customer for shipping and handling are reported as revenue. We recognize commission revenue, net of returns, on products delivered by the distribution provider at the time of delivery, provided that there is evidence of a final arrangement, there are no uncertainties surrounding acceptance, collectibility is probable and the price is fixed. Under the terms of these agreements revenues are generally receivable from manufacturers within 45 days of delivery. We estimate
the reserve for product returns at the time revenue is recognized based on various market data, historical trends, and information from customers.

Results of Operations

Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005

Net Revenue:

Net
    revenue was approximately $5,399,000 for the three months ended June 30,
    2006, an increase of $5,355,000, as compared with approximately $44,000
    for the
    three months ended June 30, 2005. This significant increase was primarily
    due to the acquisition of Wanwei in October 2005. Wanwei generated revenues
    of $5,308,000 from distribution activities during the three months ended
June 30, 2006.

18

---



Back to Index

Marketing commissions and registration revenue was increased by $47,000 from $44,000 to $91,000 for the three months ended June 30, 2006 as compared to the three months ended June 30, 2005. This increase was the result of our licensing and initiating sales of Propess during the fourth quarter of 2005.

Cost
      of Sales:

Cost
    of sales was $5,222,000 for the three months ended June 30, 2006,
    an increase of $4,632,000, as compared with $590,000 for the three months
    ended
    June 30, 2005. This increase is primarily attributable to our acquisition
    of Wanwei in October 2005. During the three months ended June 30, 2006, Wanwei
    cost of sales was $4,955,000. Cost of sales for BMP China for the
    three months ended June 30, 2006 was $281,000, a decrease of $309,000, from
    $590,000
    for the three months ended June 30, 2005. During the three months ended June
    30, 2005, we reserved $459,000 for potential obsolescence of products. This
    decrease was partially offset by the increase in direct sales and marketing
    efforts to promote Propess during the three months ended June 30, 2006.

Sales and Marketing Expenses:

Sales and marketing expenses were $281,000 for the three months ended June 30, 2006, an increase of $270,000, as compared with $11,000 for the three months ended June 30, 2005. The increase was the result of our acquisition of Wanwei which was completed in October 2005. During the three months ended June 30, 2006, Wanweis sales and marketing expenses were $278,000.

General and Administrative Expenses:

General
    and administrative expenses were $1,539,000 for the three months ended June
    30, 2006, an increase of $428,000, as compared to $1,111,000 for the three
    months ended June 30, 2005. Our acquisition of Wanwei in October 2005 accounted
    for $220,000 of general and administrative expenses for the three months
ended June 30, 2006.

Stock-based compensation expense recognized under SFAS No. 123R for the three months ended June 30, 2006 was $197,000 which consisted of stock-based compensation expense related to stock options and stock grants under our employee incentive plans. In addition, the Company recognized additional stock-based compensation of $83,000 related to stock options issued in 2004. Our general and administrative compensation expenses increased by $26,000 for the three months ended June 30, 2006 as compared to the three months ended June 30, 2005, which was primarily the result of hiring of senior management during 2006 and 2005 salary increases and implementation of benefits during 2005. Business development and corporate consulting expenses increased by $138,000 for the three months ended June 30, 2006 as compared to 2005, as we retained a business development consultant and increased our business development related
activities. Offsetting these increases was an $40,000 reduction in legal fees and a $219,000 reduction in accounting fees as compared to the three months ended June 30, 2005, which was the result of us moving the accounting function internal to the Company and reduced reliance on legal support.

19

---



Back to Index

Interest Income and Expense:

Our interest income primarily consists of income earned on our cash and cash equivalents. During March 2004, we completed a private placement of shares of our common stock to investors with net proceeds of $8,800,000, net of issuance costs, and in October 2005, we completed a private placement of our shares of common stock to investors of $5,941,000, net of issuance costs. We received interest income of $42,000 during the three months ended June 30, 2006, a decrease of $1,000, as compared to $43,000 for the three months ended June 30, 2005. Interest expense of $7,000 is primarily for short term loans and software financing.

Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005

Net Revenue:

Net
    revenue was approximately $10,122,000 for the six months ended June 30, 2006,
    an increase of $10,021,000, as compared with approximately $101,000 for the
    six months ended June 30, 2005. This significant increase was primarily due
    to the acquisition of Wanwei in October 2005. Wanwei generated revenues of
    $9,959,000 from distribution activities during the six months ended June
    30, 2006. Marketing commissions and registration revenue increased by $63,000
    from $100,000 to $163,000 for the six months ended June 30, 2006 as compared
    to the six months ended June 30, 2005. This increase was the result of our
licensing and initiating sales of Propess during the fourth quarter of 2005.

Cost
      of Sales:

Cost
    of sales was $9,774,000 for the six months ended June 30, 2006,
    an increase of $9,075,000, as compared with $699,000 for the six months ended
    June 30, 2005. This increase is primarily attributable to our acquisition
    of Wanwei in October 2005. During the six months ended June 30, 2006, Wanwei
    cost of sales was $9,251,000. Cost of sales for BMP China for the
    six months ended June 30, 2006 was $537,000, a decrease of $162,000, from
    $699,000
    for the six months ended June 30, 2005. The decrease of cost of sales
    at BMP China was the result of a $459,000 established for potential obsolescence
    of products during the six months ending June 30, 2005. This decrease was
    partially offset by the increase in direct sales and marketing efforts to
    launch Propess
    in China during the first six
    months 2006.

Sales and Marketing Expenses:

Sales and marketing expenses were $590,000 for the six months ended June 30, 2006, an increase of $569,000, as compared with $21,000 for the six months ended June 30, 2005. The increase was the result of our acquisition of Wanwei which was completed in October 2005. During the six months ended June 30, 2006, Wanweis sales and marketing expenses were $586,000.

General and Administrative Expenses:

General
    and administrative expenses were $2,939,000 for the six months ended June
    30, 2006, an increase of $959,000, as compared to $1,980,000 for the six
    months ended June 30, 2005. Our acquisition of Wanwei in October 2005 accounted
    for $406,000 of general and administrative expenses for the six months ended
June 30, 2006.

20

---



Back to Index

Stock-based compensation expense recognized under SFAS No. 123R for the six months ended June 30, 2006 was $399,587 which consisted of stock-based compensation expense related to stock options and stock grants under our employee incentive plans. In addition, the Company recognized additional stock-based compensation of $167,000 and $200,000 related to stock options issued in 2004 for the six months ended June 30, 2006 and 2005. Our general and administrative compensation expenses increased by $83,000 for the six months ended June 30, 2006 as compared to the six months ended June 30, 2005, which was primarily the result of hiring of senior management during 2006 and 2005, salary increases and implementation of benefits during 2005. During the six months ended June 30, 2006 our insurance expense increased $40,000, as compared to the six months ended June 30, 2005, as we expanded our corporate and directors
and officers insurance coverage. Business development and corporate consultants expenses increased by $160,000 for the six months ended June 30, 2006 as compared to 2005, as we retained a business development consultant and increased our business development related activities. Corporate communications related to investor relations was initiated in 2006 and the cost related thereto was $28,000. In connection with the filing of our Annual Report on Form 10-K for the year ended December 31, 2005, our Proxy Statement for our 2006 Annual Meeting of Stockholders and a Registration Statement on Form S-1 to register shares of our common stock and warrants, we incurred a $40,000 increase in printing costs. Offsetting these increases was an $124,000 reduction in legal fees and a $294,000 reduction in accounting fees as compared to the six months ended June 30, 2005, which was the result of us moving the accounting function internal to the Company and reduced reliance on legal
support.

Interest Income and Expense:

Our interest income primarily consists of income earned on our cash and cash equivalents. During March 2004, we completed a private placement of shares of our common stock to investors with net proceeds of $8,800,000, net of issuance costs, and in October 2005, we completed a private placement of our shares of common stock to investors of $5,941,000, net of issuance costs. We received interest income of $92,000 during the six months ended June 30, 2006, an increase of $10,000, as compared to $82,000 for the six months ended June 30, 2005. Interest expense of $24,000 is primarily for short term loans and software financing.

Liquidity and Capital Resources

As of June 30, 2006, we had unrestricted cash and cash equivalents of approximately $5.6 million, which represented 35.3% of our total assets. Our cash and cash equivalents are highly liquid investments with a maturity of three months or less at the time of purchase and are primarily invested in short-term money market instruments and investments. However, we do not anticipate any losses with respect to such cash balances because the balances are invested in highly-rated securities.

Since we acquired BMP China in February 2004, we have funded our operations primarily through the issuance of shares of our common stock. In March 2004, we completed a private placement of 8,695,652 shares of our common stock at a purchase price of $1.15 per share, which yielded gross proceeds to us of approximately $10.0 million and net proceeds to us of approximately $8.8 million. On October 19, 2005, we completed a private placement of 4,199,981 shares of our common stock to a group of institutional and individual accredited investors, for gross proceeds of $6.3 million and net proceeds of approximately $5.9 million. In addition, these investors also received our Series A Warrants to purchase an aggregate of 619,414 shares of our common stock at an exercise price of $1.875 per share and Series B Warrants to purchase 619,414 shares of common stock at an exercise price of $2.25 per share.

21

---



Back to Index

On February 21, 2006 we notified the holders of Series A Warrants that, pursuant to the terms of the Series A Warrants, we were exercising our rights to force the conversion of Series A Warrants because the trading price of our common stock had exceeded 200% of the exercise price of Series A Warrants for twenty consecutive days. On March 28, 2006 we notified the holders of Series B Warrants that pursuant to the terms of the Series B Warrants, we were exercising our rights to force the conversion of Series B Warrants because the trading price of our common stock exceeded 200% of the exercise price of Series B Warrants for twenty consecutive days. During the six months ended June 30, 2006, we received $2,554,311 from Series A and Series B Warrant exercises. We issued 1,238,485 shares for the funds received from Series A and Series B exercises during the six months ended June 30, 2006.

The use of our cash flows has primarily consisted of salaries and wages for our employees, professional fees, fees related to sales and promotion of our current products and the acquisition of Wanwei.

We currently plan to use the remaining proceeds primarily to fund:

| |  | our operating expenses and general working capital;
| | - | ---------------------------------------------------

| |  | the marketing of our current and future products;
| | - | -------------------------------------------------

| |  | our pursuit of internal growth and strategic acquisitions including our proposed acquisition of Shanghai Rongheng Pharmaceutical Company Limited (Rongheng);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | our integration of Wanwei and BMP China; and
| | - | --------------------------------------------

| |  | the expenses necessary to maintain our status as an Exchange Act reporting company.
| | - | -----------------------------------------------------------------------------------

We anticipate that our June 30, 2006 balance of approximately $5.6 million in unrestricted cash and cash equivalents will be sufficient to fund our current level of operations for at least the next twelve months. Our future capital requirements will depend on many factors, including those factors are set forth in Part I, Item 1A. Risk Factors  Risks Relating to Our Business in our Annual Report on Form 10-K for the year ended December 31, 2005, as well as our ability to maintain our existing cost structure and return on sales, fund obligations for additional capital that will occur on additional product licenses and acquisitions and execution of our business and strategic plans as currently conceived.

To date, we have had negative cash flows from operations.

Net
    cash used in operating activities was $3,267,000 for the six months ended
    June 30, 2006. This amount principally reflected our net loss of $3,149,000,
    partially offset by $739,000 in non-cash charges including stock-based compensation
    expense of $567,000 and intangible amortization of $130,000. We used $857,000
    of operating cash as a result of changes in certain of our operating assets
    and liabilities during the six months ended June 30, 2006. The most significant
    changes were the increase in accounts receivables $347,000 and inventory
    of $266,000, reduction of payables
    of $255,000, and a decrease of $124,000
    for professional fees. Offsetting these changes was the decrease in other
    receivables of $31,000 and an increase in accrued other liabilities of $96,000.
    Cash used in investing activities for the purchase of equipment was $136,000
    and
    the
    payment
    to
    Wanhui was
    $412,000.
    Net cash
    provided by financing activities was $2,522,000 and consisted primarily of
    $2,591,318 proceeds from the exercise of Series A and Series B Warrants and
$70,000 in repayments of notes payable.

22

---



Back to Index

Our capital requirements are likely to increase, particularly as we pursue internal growth, add personnel, fund inventory purchases and support increased levels of accounts receivables prior to receiving collections from our customers. To support our internal growth and acquisitions, it is our expectation that we will be adding financial, marketing, product and medical managers over the next 12 months. As a result of our continuing capital needs, we will most likely require additional funds, and we may attempt to raise additional funds through public or private equity offerings, debt financings or from other sources. If we are not able to raise additional capital through fund raising activities we could be forced to curtail some of the currently anticipated expenditures in the above mentioned areas. Should we be forced to do this it could have an adverse impact on our anticipated future growth.

23

---



Back to Index

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Exchange Rate Sensitivity

We are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation because our operations are in China. This exposure arises from the translation of financial statements of our foreign subsidiary, BMP China, from RMB, the functional currency of China, into United States dollars, our functional currency of our parent entity. On July 21, 2005, China increased the value of its currency, the RMB, by 2.1% to RMB 8.11 to the dollar, and announced that its currency, the RMB will no longer be pegged to the US dollar, but will be allowed to float in a band (and, to a limited extent, increase in value) against a basket of foreign currencies. Any devaluation of the RMB could adversely affect the value of our common stock in foreign currency terms because we will receive substantially all of our revenues in RMB. Fluctuations in exchange rates also could adversely affect the value,
translated or converted into United States dollars, of our net assets, earnings and any declared dividends. In addition, a devaluation of the RMB is likely to increase the portion of our cash flow required to satisfy any foreign currency denominated obligations.

Interest Rate Sensitivity

We invest in high-quality financial instruments, primarily money market funds, federal agency notes, corporate debt securities, bank certificates of deposit, commercial paper and United States treasury notes, which we believe are subject to limited credit risk. We currently do not hedge interest rate exposure. Due to the short-term nature of our investments, we do not believe that we have any material exposure to interest rate risk arising from our investments.

24

---



Back to Index

ITEM 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance,
however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control Over Financial Reporting

No
    change in our internal control over financial reporting occurred during our
    second fiscal quarter that materially affected, or is reasonably likely
    to material affect, our internal control over financial reporting.

25

---



Back to Index

PART II  OTHER INFORMATION

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

(a) The Annual Meeting of Stockholders of the Company was held on May 12, 2006.

(b) All director nominees were elected.

(c) Certain matters voted upon at the meeting and the votes cast with respect to such matters are as follows:

Election of Directors



|Director                 |  | Votes Received |  | Votes Withheld
|------------------------ |  | -------------- |  | --------------
|                         |  |                |  |               
|David (Xiaoying) Gao     |  | 16,919,155     |  |              
|Martyn D. Greenacre      |  | 16,919,155     |  |              
|Michel Y. de Beaumont    |  | 16,919,155     |  |              
|Jack M. Ferraro          |  | 16,919,155     |  |              
|Frank J. Hollendoner     |  | 16,919,155     |  |              
|John W. Stakes III, M.D. |  | 16,919,155     |  |              

Ratification of the appointment of Grant Thornton LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2006



|Votes Cast |  |        
|---------- |  | -------
|           |  |        
|For        |  | Against
|           |  |        
|16,919,155 |  |       

26

---



Back to Index

ITEM 5. Other Information

(a)

On May 11, 2006, we entered into the Agreement with Shanghai CAS and Orient International. Together, Shanghai CAS and Orient International own approximately 90% of the equity interests of Rongheng. Rongheng was established in 1999 and distributes to more than 250 hospitals in Shanghai, including all of the Class A hospitals in Shanghai.

We previously entered into a non-binding letter of intent with Orient International and Shanghai CAS to purchase a majority interest in Rongheng. We, Orient International and Shanghai CAS are in the process of preparing definitive transactional documents relating to the proposed acquisition. Under Chinese law, a proposed sale of state-owned assets, such as the proposed sale of the equity interests of Rongheng, must be posted on a regional property exchange, in this case the Shanghai United Assets and Equity Exchange (the Shanghai Exchange), whereupon the assets are sold to the highest qualified bidder.

Under the terms of the Agreement, the Parties agreed that, if we are the winning bidder following the posting of the proposed sale on the Shanghai Exchange, the Parties will enter into definitive transactional documents regarding the proposed acquisition promptly thereafter. After the Parties execute such definitive documents, the transaction will be submitted to the Chinese government for approval.

27

---



Back to Index

ITEM 6. Exhibits



|31.1 | Certificate of the Chief Executive Officer of Beijing Med-Pharm Corporation required by Rule 13a-14(a) under the Exchange Act.
|---- | ------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                               
|31.2 | Certificate of the Chief Financial Officer of Beijing Med-Pharm Corporation required by Rule 13a-14(a) under the Exchange Act 
|     |                                                                                                                               
|32.1 | Certificate of the Chief Executive Officer of Beijing Med-Pharm Corporation required by Rule 13a-14(b) under the Exchange Act 
|     |                                                                                                                               
|32.2 | Certificate of the Chief Financial Officer of Beijing Med-Pharm Corporation required by Rule 13a-14(b) under the Exchange Act 

28

---



Back to Index

SIGNATURES

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



Beijing Med-Pharm CorporationDate: August 14, 2006
        
        
        /s/ DAVID GAODavid GaoChief Executive Officer(Principal Executive Officer)Date: August 14, 2006
        
        
        /s/ FRED M. POWELLFred M. PowellChief Financial Officer(Principal Financial and Accounting Officer)




---