UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-QSB





(Mark
      One)[
      X]
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended March 31, 2008OR[  ]
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


Commission
file number 0-14306





NEWMARKET
CHINA, INC.


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





Nevada
              84-0928627(State
      or other jurisdiction of
              (I.R.S.
      employerincorporation
      or organization)
              identification  number)


14860
Montfort Drive, Suite 210


Dallas, TX
75254


(Address
of principal executive offices)





Issuer’s
telephone number, including area code:  (214) 722-3040








Indicate
by check mark whether the issuer (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
­_X_ No
____





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


Yes__ No
X





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:





As of May
19, 2008, there were 37,264,662 shares of the registrant’s sole class of common
shares outstanding.





Transitional
Small Business Disclosure
Format              Yes
__      No
_X_





PART
      I – FINANCIAL INFORMATION
            PageItem 1.
            Unaudited Financial
      StatementsCondensed Consolidated Balance Sheet – March 31,
      2008
            1Condensed Consolidated Statements of Operations -Three Months Ended March 31, 2008 and
      2007
            2Condensed Consolidated Statements of Cash Flows
      –Three
      Months ended March 31, 2008 and 2007
            3Notes to Condensed Consolidated Financial
      Statements
            4Item 2.
            Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
            10Item 3.
            Controls and Procedures
            11PART II – OTHER INFORMATIONItem 1.
            Legal Proceedings – Not Applicable
            12Item 2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            12Item 3.
            Defaults Upon Senior Securities – Not Applicable
            12Item 4.
            Submission of Matters to a Vote of Security
      Holders
            12Item 5.
            Other Information – Not Applicable
            13Item 6.
            Exhibits
            13SIGNATURES
            14












NewMarket China, Inc.Consolidated
      Balance SheetASSETS
              
              March
      31, 2008
              
              
              December
      31, 2007CURRENT
      ASSETSCash
      and cash equivalents
              
              $
              701,898
              
              
              $
              1,488,774Accounts
      receivable
              
              
              4,798,799
              
              
              
              3,674,523Inventory
              
              
              1,706,824
              
              
              
              1,582,734Supplier
      advancesand prepaid expenses
              
              
              1,086,311
              
              
              
              305,723Assets
      of discontinued operations
              
              
              9,377
              
              
              
              9,377Other
      current assets
              
              
              51,989
              
              
              
              49,804Total
      current assets
              
              
              8,355,198
              
              
              
              7,110,935PROPERTY
      AND EQUIPMENT, NET
              
              
              104,361
              
              
              
              95,171INTANGIBLE
      ASSETS
              
              
              3,299
              
              
              
              3,167Total
      assets
              
              $
              8,462,858
              
              
              $
              7,209,273LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
              
              $
              1,600,388
              
              
              $
              2,057,733Short-term
      borrowing
              
              
              1,293,768
              
              
              
              584,046Accrued
      expenses and other liabilities
              
              
              566,182
              
              
              
              365,468Advances
      from affiliate
              
              
              46,124
              
              
              
              334,124Liabilities
      of discontinued operations
              
              
              308,683
              
              
              
              308,683Total
      current liabilities
              
              
              3,815,145
              
              
              
              3,650,054Long-term
      debt
              
              
              285,600
              
              
              
              -Total
      liabilities
              
              
              4,100,745
              
              
              
              3,650,054Minority
      interest in subsidiaries
              
              
              1,092,855
              
              
              
              999,444STOCKHOLDERS'
      EQUITYCommon
      stock; $.001 par value; 100,000,000 shares authorized;32,514,662
      and 26,754,662 shares issued and outstanding
              
              
              32,514
              
              
              
              26,754at
      March 31, 2008 and December  31, 2007,
    respectivelyPreferred
      stock; $.001 par value; 20,000,000 shares authorized;250,000
      shares Series A and 0 shares issued and outstanding
              
              
              250
              
              
              
              250at
      March 31, 2008 and December  31, 2007,
    respectivelyAdditional
      paid-in capital
              
              
              1,733,750
              
              
              
              1,451,510Accumulated
      comprehensive income (loss)
              
              
              651,346
              
              
              
              327,087Retained
      earnings
              
              
              851,398
              
              
              
              754,174Total
      stockholders' equity
              
              
              3,269,258
              
              
              
              2,559,775Total
      liabilities and stockholders' equity
              
              $
              8,462,858
              
              
              $
              7,209,273See
      accompanying notes to consolidated financial statements.











NewMarket China, Inc.Consolidated
      Statement of OperationsThree
      Months EndedMarch
      31,2008
              
              
              2007REVENUE
              
              $
              8,515,884
              
              
              $
              7,079,794COST
      OF SALES
              
              
              8,072,658
              
              
              
              6,879,374Gross
      Margin
              
              
              443,226
              
              
              
              200,420OPERATING
      EXPENSESSelling,
      general and administrative expenses
              
              
              277,273
              
              
              
              182,871Depreciation
      and amortization
              
              
              4,446
              
              
              
              48,773Total
      expenses
              
              
              281,719
              
              
              
              231,644Income
      (loss) from operations
              
              
              161,507
              
              
              
              (31,224
              )OTHER
      INCOME (EXPENSE)Interest
      income
              
              
              -
              
              
              
              8Interest
      expense
              
              
              (8,235
              )
              
              
              (16,034
              )Other
      income
              
              
              43,987
              
              
              
              24,409Other
      expense
              
              
              (1,051
              )
              
              
              (1,791
              )Total
      other income (expense)
              
              
              34,701
              
              
              
              6,592Net
      income before income tax (credit) andminority
      interest
              
              
              196,208
              
              
              
              (24,632
              )Foreign
      income tax
              
              
              5,573
              
              
              
              7,796Minority
      interest in consolidated subsidiary
              
              
              93,411
              
              
              
              (15,890
              )Net
      income (loss)
              
              
              97,224
              
              
              
              (16,538
              )Other
      comprehensive income (loss)Gain
      (loss) on investment security
              
              
              233
              
              
              
              -Foreign
      currency translation gain (loss)
              
              
              324,026
              
              
              
              479,307Comprehensive
      income (loss)
              
              $
              421,483
              
              
              $
              462,769Income
      (loss) per weighted-average common share-basic
              
              $
              0.00
              
              
              $
              (0.00
              )Income
      (loss) per weighted-average common share-diluted
              
              0.00
              
              
              $
              (0.00
              )Number
      of weighted average common shares o/s-basic
              
              
              29,075,773
              
              
              
              26,025,485Number
      of weighted average common shares o/s-diluted
              
              
              72,689,433
              
              
              
              70,651,447See
      accompanying notes to consolidated financial statements.









NewMarket China, Inc.Consolidated
      Statement of Cash FlowsThree
      months ended March 31,2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
              
              $
              97,224
              
              
              $
              (16,538
              )Adjustments
      to  reconcile net earnings to net cashprovided
      (used) by operating activities:Minority
      interest in consolidated subsidiary
              
              
              93,411
              
              
              
              -Depreciation
              
              
              4,446
              
              
              
              48,773Loss
      on sale of property, plant & equipment
              
              
              -
              
              
              
              (15,890
              )Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
              
              
              (950,892
              )
              
              
              (1,317,590
              )(Increase)
      decrease in advances and other assets
              
              
              (751,854
              )
              
              
              (362,996
              )(Increase)
      decrease in inventory
              
              
              (57,050
              )
              
              
              (529,121
              )Increase
      (decrease) in accounts payable
              
              
              (599,409
              )
              
              
              (102,610
              )Increase
      (decrease) in accrued expenses and other payables
              
              
              181,583
              
              
              
              1,285,448Net
      cash used by operating activities
              
              
              (1,982,541
              )
              
              
              (1,010,524
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property and equipment
              
              
              -
              
              
              
              (49,293
              )Net
      cash used by investing activities
              
              
              -
              
              
              
              (49,293
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from  short-term borrowings
              
              
              670,896
              
              
              
              (58,380
              )Proceeds
      from long-term debt
              
              
              279,540
              
              
              
              -Net
      cash provided (used) by financing activities
              
              
              950,436
              
              
              
              (58,380
              )Effect
      of exchange rates on cash
              
              
              245,229
              
              
              
              406,734Net
      decrease in cash and equivalents
              
              
              (786,876
              )
              
              
              (711,463
              )CASH, beginning of
      period
              
              
              1,488,774
              
              
              
              1,168,344CASH, end of
      period
              
              $
              701,898
              
              
              $
              456,881See
      accompanying notes to consolidated financial statements.













NEWMARKET CHINA, INC. AND SUBSIDIARIES


Notes to
Condensed Consolidated Financial Statements


Three
Months ended March 31, 2008 and 2007


(Unaudited)








1.  BASIS OF
PRESENTATION, BUSINESS AND SIGNIFICANTACCOUNTING POLICIES:





PRESENTATION
OF INTERIM INFORMATION





The
accompanying consolidated financial statements include the accounts of NewMarket
China, Inc. (formerly known as Intercell International Corporation or
“Intercell”), a Nevada corporation (the “Company”), and its wholly-owned
subsidiary Brunetti DEC, LLC, (“Brunetti”) a Colorado limited liability company
and its Chinese wholly-owned foreign entity, Clipper Technology, Inc.
(“CLPTEC”).  All significant intercompany accounts and transactions
have been eliminated in consolidation.





In October
2004, the Company discontinued the operations of Brunetti and implemented steps
to liquidate the assets of Brunetti.  On March 1, 2005, Brunetti filed
a voluntary petition for relief in the United States Bankruptcy Court, District
of Colorado under Chapter 7 of Title 7 of the U.S. Bankruptcy Code (Note
3).





On March 16, 2005, the Company (the
Debtors) filed a voluntary petition for relief in the United States Bankruptcy
Court, District of Colorado under Chapter 11 of Title 11 of the U.S. Bankruptcy
Code.  Under Chapter 11, certain claims against the Debtor in
existence prior to the filing of the petitions for relief under the U.S.
Bankruptcy Code are stayed while the Debtor continues business operations as
Debtor-in-possession.  On April 5, 2006, the United States Bankruptcy
Court, District of Colorado dismissed the Chapter 11
proceedings.





USE
OF ESTIMATES





The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and reported amounts of
revenues and expenses during the reporting periods.  Actual results
could differ from those estimates.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





The fair
values of the Company’s cash and cash equivalents, accounts receivable, accounts
payable, and lines of credit approximate their carrying amounts due to the short
maturities of these instruments.





CASH
AND CASH EQUIVALENTS





The
Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash
equivalents.





INVENTORY





Inventory,
which consists primarily of finished goods, is stated at the lower of cost or
market.  Cost is determined using the weighted average
method.





OTHER
ASSETS





Available
for sale securities consist of 23,245 shares of common stock of Vyta Corp
(“Vyta”) (Note 4).  These securities are carried at fair value ($5,579
at March 31, 2008) based upon quoted market prices.  Unrealized gains
and losses are computed on the average cost basis and are reported as a separate
component of comprehensive loss, included as a separate item in stockholders’
equity (deficit).  Realized gains, realized losses, and declines in
value, judged to be other-than temporary, are included in other income
(expense).












PROPERTY
AND EQUIPMENT





Property
and equipment are stated at cost.  Depreciation is provided by use of
the accelerated method over the estimated useful lives of the related assets,
which range from five to seven years.





REVENUE
RECOGNITION





The
Company engages in the business of consulting, development, implementation,
and  maintenance  of technology  systems which
include both software and  peripherals for
computing,  communication,  and data exchanges
related  to  general  business  applications.  Revenue
is recognized at the time of product shipment, delivery, or installation,
depending on when title passes, and when all of the following have
occurred:  a firm sales agreement is in place, pricing is fixed or
determinable, and collection is reasonably assured.





FOREIGN
CURRENCY TRANSACTION AND TRANSLATION GAINS (LOSSES)





The
principal operations of the Company are located in The People's Republic of
China. The Company bills in RMB, the local currency, and if the Company payment
is denominated in a foreign currency, the Company translates the payment and
records a foreign currency transaction gain or loss in accordance with Statement
of Financial Accounting Standards (“SFAS”) 52, Foreign Currency
Translation.





DERIVATIVE
INSTRUMENTS





SFAS No.
133, Accounting for Derivative
Instruments and Hedging Activities, as amended, establishes accounting
and reporting standards requiring that every derivative instrument be recorded
in the balance sheet as either an asset or liability measured at fair value, and
that changes in fair value be recognized currently in earnings (loss) unless
specific hedge accounting criteria are met.





STOCK-BASED
COMPENSATION





Beginning
October 1, 2006, the Company adopted the provisions of and accounts for
stock-based compensation in accordance with the Financial Accounting Standards
Board's ("FASB") Statement of Financial Accounting Standards No. 123 - revised
2004 ("SFAS 123R") Share-Based Payment which replaced Statement of Financial
Accounting Standards No. 123("SFAS 123"), Accounting for Stock-Based
Compensation and supersedes APB Opinion No. 25 ("APB 25"), Accounting for Stock
Issued to Employees. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which is the vesting period. The
Company elected the modified-prospective method, under which prior periods are
not revised for comparative purposes. The valuation provisions of SFAS 123R
apply to new grants and to grants that were outstanding as of the effective date
and are subsequently modified. There were no options granted during the three
months ended March 31, 2008, and all options granted prior to the adoption of
SFAS 123R and outstanding during the periods presented were
fully-vested.


The  Company  has
a  stock  option  plans which permit the grant of
shares to
attract,  retain  and  motivate  employees,  directors  and
consultants.  Options are generally granted with an exercise price
equal to the Company's market price of its common stock on the date of the grant
and with vesting rates, as determined by the Board of Directors.  All
options outstanding at March 31, 2008 are fully-vested and
exercisable.





INCOME
(LOSS) PER SHARE





SFAS No.
128, Earnings Per
Share, requires dual presentation of basic and diluted earnings per share
(EPS) with a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation.  Basic EPS excludes dilution.  Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity.





Income
(loss) per share of common stock is computed based on the weighted average
number of common shares outstanding during the year.  Stock options
and warrants are not considered in the calculation at March 31, 2007, as the
impact of the potential common shares would be to decrease income (loss) per
share. Therefore, diluted income (loss) per share is equivalent to basic income
(loss) per share.







INCOME
TAXES





Income
taxes are accounted for by the asset and liability method.  Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards.  Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.  The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income (loss) in the
period that includes the enactment date.  A valuation allowance is
established when necessary to reduce deferred tax assets to amounts expected to
be realized.





COMPREHENSIVE
INCOME





SFAS No.
130, Reporting Comprehensive
Income, requires the reporting and display of comprehensive income and
its components.  SFAS No. 130 requires unrealized gains and losses on
the Company’s available for sale securities to be included in comprehensive
income as well as gains or losses due to foreign currency translation
adjustments.





RECENTLY
ISSUED ACCOUNTING STANDARDS




In  February  2006,  the  FASB  issued  SFAS  155,
Accounting for Certain Hybrid
Financial  Instruments,  which  amends  SFAS  133,  Accounting  for  Derivative
Instruments and Hedging Activities, and SFAS 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB Statement No. 125. SFAS 155 will be effective for the Company for all
financial instruments issued or acquired after the beginning its fiscal year
ending December 31, 2007. The Company not yet evaluated and determined the
likely effect of SFAS 155 on future financial statements.





In June
2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income
Taxes - An Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return that results in a
tax benefit. Additionally, FIN 48 provides guidance on de-recognition, income
statement classification of interest and penalties, accounting in interim
periods, disclosure, and transition. This interpretation is effective for the
Company for its fiscal year ending December 31, 2007. The Company has not yet
evaluated the effect that the application of FIN 48 may have, if any, on its
future results of operations and financial condition.





In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements.  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements.  This statement
applies under other accounting pronouncements that require or permit fair value
measurements.  SFAS No. 157 is effective for the Company for its
fiscal year beginning on January 1, 2008.  The Company is currently
assessing the impact the adoption of SFAS No. 157 will have on its consolidated
financial statements.





In
September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108 in order
to eliminate the diversity of practice surrounding how public companies quantify
financial statement misstatements.  In SAB 108, the SEC staff
established an approach that requires quantification of financial statement
misstatements based on the effects of the misstatements on each of the Company’s
financial statements and the related financial statement
disclosures.  SAB No. 108 is effective for the Company for its current
fiscal year.  The adoption of SAB No. 108 did not have an impact on
the Company’s consolidated financial statements.





In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132R” (“SFAS 158”).
This statement requires balance sheet recognition of the funded status, which is
the difference between the fair value of plan assets and the benefit obligation,
of pension and postretirement benefit plans as a net asset or liability, with an
offsetting adjustment to accumulated other comprehensive income in shareholders’
equity. In addition, the measurement date, the date at which plan assets and the
benefit obligation are measured, is required to be the company’s fiscal year
end. The Company does not believe that this accounting pronouncement will have a
material impact on its financial position or results of operations










In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement No.
115.  This standard permits an entity to measure many financial
instruments and certain other items at estimated fair value.  Most of
the provisions of SFAS No. 115 (Accounting for Certain Investments
in Debt and Equity Securities) applies to all entities that own trading
and available-for-sale securities.  The fair value option created by
SFAS No. 159 permits an entity to measure eligible items at fair value as of
specified election dates.   Among others, eligible items exclude
(1) financial instruments classified (partially or in total) as permanent or
temporary stockholders’ equity (such as a convertible debt security with a
non-contingent beneficial conversion feature) and (2) investments in
subsidiaries and interests in variable interests that must be
consolidated.  A for-profit business entity will be required to report
unrealized gains and losses on items for which the fair value option has been
elected in its statements of operations at each subsequent reposting
date.  The fair value option (a) may generally be applied instrument
by instruments, (b) is irrevocable unless a new elections date occurs, and (c)
must be applied to the entire instrument and not to only a portion of the
instrument.  SFAS No. 159 is effective as of the beginning of the
first fiscal year that begins after November 15, 2007.  The Company
has not yet evaluated the effect that the application of FIN 48 may have, if
any, on its future results of operations and financial condition.





In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51
(“SFAS 160”). SFAS 160 will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests
(NCI) and classified as a component of equity. This new consolidation method
will significantly change the account with minority interest holders.
SFAS 160 is effective for fiscal years beginning after December 15,
2008 and, as such, the Company will adopt this standard in fiscal 2008. The
Company does not believe that this recent accounting pronouncement will have a
material impact on its financial position or results of operations.





2.   REORGANIZATION:





In October
2006, Intercell executed an Agreement and Plan of Reorganization (“the
Agreement”) with NewMarket China, Inc. (“NewMarket China” or “the Company”), a
wholly-owned subsidiary of NewMarket Technology, Inc. (“NewMarket
Technology”).  The Agreement, provided for Intercell to acquire from
NewMarket Technology its subsidiary, NewMarket China through the exchange
of  all of the issued and outstanding stock of NewMarket China, one
thousand (1,000) shares held by NewMarket Technology for  two million
(2,000,000) restricted common shares of Intercell. As a result of the Agreement,
NewMarket China became a wholly-owned subsidiary of Intercell.





In a
separate agreement, NewMarket Technology agreed to purchase 250,000 shares of a
Series A Preferred Stock from Intercell for $250,000. The shares have a par
value of $0.001 per share and a purchase price of $1.00 per share and bear no
dividend.  The shares are convertible into 60% of the issued and
outstanding common stock of the Company, any time after August 31, 2006. The
shares have a voting right equal to 60% of the issued and outstanding common
stock of the Company.





As a
result of this reorganization, the Company’s stockholders’ equity (deficit) has
been adjusted to reflect the effect of this transaction.





3.  DISCONTINUED
OPERATIONS:





BRUNETTI
ACQUISITION





On October
20, 2003, the Company acquired a controlling 60% equity interest in Brunetti in
exchange for a $700,000 cash contribution to Brunetti.  On January 30,
2004, the Company acquired the remaining 40% equity interest in Brunetti in
exchange for a $300,000 cash contribution to Brunetti.










On October
11, 2004, the Company discontinued the operations of Brunetti and implemented
steps to liquidate the assets of Brunetti.  On March 1, 2005, Brunetti
filed a voluntary petition for relief in the United States Bankruptcy Court,
District of Colorado under Chapter 7 of Title 7 of the U.S. Bankruptcy
Code.





At March
31, 2008, the carrying values of Brunetti’s assets and liabilities (presented as
assets and liabilities of discontinued operations) are as follows:





Cash
            $
            9,377Total
      assets
              (all
      current)
            $
            9,377Accounts
      payable
            $
            179,473Related
      party payable
            
            25,035Line
      of credit
            
            10,735Accrued
      payroll
            
            93,440Total
      liabilities
              (all
      current)(1)
            $
            308,683





Brunetti
reported no revenues or income during the three months ended March 31,
2008.  Operations related to Brunetti resulted in a net loss during
the year ended December 31, 2007 and 2006 of $0 and $0,
respectively.  Brunetti did not incur any income taxes during these
periods.





4.  INVESTMENT IN
VYTA CORP.:





At March
31, 2008, the Company owns 23,245 shares of the common stock of Vyta
Corp.  Beginning October 21, 2003, based on factors which indicated
that the Company did not have the ability to exercise significant influence, the
Company changed its method of accounting for the Vyta Corp shares (except for
those which are subject to underlying warrants, which are carried at cost) to
the method of accounting prescribed by SFAS No. 115, Accounting for Certain Investments
in Debt and Equity Securities.  The Company has classified its
investment in these Vyta Corp shares as available for sale securities, in which
unrealized gains (losses) are computed on the average cost basis, and are
recorded in other comprehensive income (loss).  At March 31, 2008,
23,245 shares of Vyta were available for sale and had a fair market value of
$5,579.  The Company did not sell any available for sale securities
during the three months ended March 31, 2008.





5.   STOCKHOLDERS’
EQUITY:





The
following is a schedule of changes in shareholder’s equity for the three months
ended March 31, 2008:





Number
      of Shares
            
            Par
      Value of Stock
            
            Additional
              Paid-In
            
            Accum
              Comp.
            
            Retained
            
            Total
              Stockholders’Pfd
            
            Common
            
            Pfd
            
            Common
            
            Capital
            
            Income
            
            Earnings
            
            EquityBALANCE,December 31,
      2007
            250,000
            
            26,754,662
            
            $250
            
            $26,754
            
            $1,451,510
            
            $327,087
            
            $754,174
            
            $2,559,775Common
      stock issued for exchange of debt
            0
            
            5,760,000
            
            0
            
            5,760
            
            282,240
            
            0
            
            0
            
            288,000Other
      comprehensive income (loss)
            0
            
            0
            
            0
            
            0
            
            0
            
            324,259
            
            0
            
            324,259Net
      income
            0
            
            0
            
            0
            
            0
            
            0
            
            0
            
            97,224
            
            97,224ENDING BALANCE,March
      31, 2008 (Unaudited)
            250,000
            
            32,514,662
            
            $250
            
            $32,514
            
            $1,733,750
            
            $651,346
            
            $851,398
            
            $3,269,258












6.   STOCK
OPTIONS AND WARRANTS:








STOCK
OPTIONS





The
Company has established a Compensatory Stock Option Plan (the “1995 Plan” or the
“Option Plan”) and has reserved 10,000,000 shares of common stock for issuance
under the Option Plan.  Incentive stock options can be granted under
the Option Plan at prices not less than 110% of the fair market value of the
stock at the date of grant, and nonqualified options can be granted at not less
than 50% of the stock’s fair market value at the date of grant or the date the
exercise price of any such option is modified.  Vesting provisions are
determined by the board of directors.  All stock options expire 10
years from the date of grant.





The
following table summarizes information about stock options outstanding as of
March 31, 2008:




Options
      Outstanding
            
            Options
      ExercisableRange
      of
              Exercise
      Prices
            
            Number
      of
              Options
            
            Remaining
              Contractual
      Life
            
            Weighted
              Average
              Exercise
      Price
            
            Number
      of
              Options
            
            Exercise
      Price$
            0.14-0.51
            
            
            4,750,000
            
            6-7
      years
            
            $
            0.44
            
            
            4,750,000
            
            $
            0.14-0.51$
            1.00-2.00
            
            
            7,500
            
            0.2
      years
            
            $
            1.00
            
            
            7,500
            
            $
            1.004,757,500
            
            
            
            $
            0.56
            
            
            4,757,500





During the
three months ended March 31, 2008, options to purchase up to 5,000 shares of
common stock expired.





WARRANTS





At March
31, 2008, the following warrants to purchase common stock were
outstanding:





Number
      of common
              shares
      covered
              by
      warrants
            
            Exercise
      Price
            
            Expiration
      Date4,132,734
            
            
            $0.10
            
            September-
      October 2008700,000
            
            
            $
      0.25
            
            February  20094,832,734








During the
three month period ended March 31, 2008, no warrants were
exercised.











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





Safe
Harbor for Forward-Looking Statements





Certain
statements contained in this Form 10-QSB contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995 and
involve risks and uncertainties that could cause actual results to differ
materially from the results, financial or otherwise, or other expectations
described in such forward-looking statements.  Any forward-looking
statement or statements speak only as of the date on which such statements were
made, and the Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such
statements are made or reflect the occurrence of unanticipated
events.  Therefore, forward-looking statements should not be relied
upon as prediction of actual future results.





Critical accounting policies




The
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to revenue
recognition, bad debts, inventories, warranty obligations, contingencies and
income taxes. We base our estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions. A discussion of our critical accounting policies and the related
judgments and estimates affecting the preparation of our consolidated financial
statements is included in the Annual Report on our Form 10-KSB for the fiscal
year ended 2007.  There have been no material changes to our critical
accounting policies as of March 31, 2008




Results
of Operations





On March
16, 2005, the Company filed a voluntary petition for relief in the United States
Bankruptcy Court, District of Colorado under Chapter 11 of Title 11 of the U.S.
Bankruptcy Code.  On April 5, 2006, the United States Bankruptcy
Court, District of Colorado dismissed the Chapter 11 proceedings.





On October
20, 2003, the Company acquired a controlling 60% equity interest in Brunetti for
a $700,000 cash contribution to Brunetti. On January 30, 2004, the Company
acquired the remaining 40% equity interest in Brunetti for a $300,000 cash
contribution to Brunetti. In October 2004, the operations of Brunetti were
ceased and on March 1, 2005, Brunetti filed a voluntary petition for relief in
the United States Bankruptcy Court, District of Colorado under Chapter 7 of
Title 7 of the U.S. Bankruptcy Code.  At such time, the Company began
to account for the operations of Brunetti as discontinued
operations.




In October
2006, the Company executed an Agreement and Plan of Reorganization (“the
Agreement”) with NewMarket China, Inc. (“NewMarket China” or “the Company”), a
wholly-owned subsidiary of NewMarket Technology, Inc. (“NewMarket
Technology”).  The Agreement, provided for Intercell to acquire from
NewMarket Technology its subsidiary, NewMarket China through the exchange
of  all of the issued and outstanding stock of NewMarket China, one
thousand (1,000) shares held by NewMarket Technology for  two million
(2,000,000) restricted common shares of Intercell. As a result of the Agreement,
NewMarket China became a wholly-owned subsidiary of Intercell.




Three
months ended March 31, 2008 compared to three months ended March 31,
2007:





Net sales
increased 20% from $7,079,794 for the quarter ended March 31, 2007 to $8,515,884
for the quarter ended March 31, 2008. This increase was primarily due to the
expansion of the Company’s Clipper/Huali subsidiary into the Hangzhou region of
China.   Cost of sales increased 17% from $6,879,374 for the
quarter ended March 31, 2007 to $8,072,658 for the quarter ended March 31, 2008.
This increase was primarily due to the corresponding increase in overall
sales.   Cost of sales, as a percentage of sales was
approximately 95% and 97% for the three months ended March 31, 2008 and 2007,
respectively. Management plans to continue to pursue strategies to reduce the
overall cost of sales as a percentage of sales as the company grows. Management
will leverage the increased purchasing volume to improve purchasing contracts
and reduce overall cost of sales.










General
and administrative expenses during the three months ended March 31, 2008 were
$277,273, compared to $182,871 for the three months ended March 31, 2007, an
increase of 52%.  The increase is primarily attributable to the
aforementioned sales expansion in the Hangzhou region.





During the
three months ended March 31, 2008, the Company recognized net income of $97,224
after accounting for the minority interest in a consolidated subsidiary,
compared to a net loss of $16,538 during the three months ended March 31,
2007.  The increase in net income is attributable to an increase in
overall sales as well as an increase in gross margin as a percentage of
sales.  Comprehensive income for the three months ended March 31, 2008
was $421,483 compared to comprehensive income of $462,769 for three months ended
March 31, 2007.  Comprehensive income or loss includes foreign
currency translation adjustments and gains or losses on investment securities
held.





Liquidity
and Capital Resources





The
Company's cash balance at March 31, 2008 decreased $786,876 from $1,488,774 as
of December 31, 2007, to $701,898.  The decrease was the result of
cash used in operating activities of $1,982,541, offset by cash provided by
financing activities of $950,892 and the effect of exchange rates on cash of
$245,229.   Operating activities for the quarter ended March 31,
2008 exclusive of changes in operating assets and liabilities provided $195,081,
as well as an increase in accrued expenses and other liabilities of $181,583,
offset by an increase in accounts receivable and other assets of $1,759,796 and
a decrease in accounts payable of $599,409.





As of
March 31, 2008, the Company owns 23,245 shares of common stock of Vyta Corp
(“Vyta”). The Company has classified its investment in Vyta as available for
sale securities in which unrealized gains (losses) are recorded to shareholders’
equity.   At March 31, 2008, all 23,245 shares of Vyta Corp
common stock are tradable, and based upon the closing price of $0.24 per share,
the market value of the Vyta common shares at March 31, 2008, was
$5,579.





To the
extent the Company's operations are not sufficient to fund the Company's capital
requirements, the Company may enter into a revolving loan agreement with a
financial institution, attempt to raise additional capital through the sale of
additional common or preferred stock or through the issuance of debt, or sell
shares of Vyta Corp. common stock held as an investment by the
Company.





Item 3.  Controls and Procedures





As of
December 31, 2007, the Company conducted an evaluation, under the supervision
and participation of management, including the Company’s Chief Executive Officer
and Chief Financial Officer to evaluate the effectiveness of the Company’s
disclosure controls and procedures and manage the Company’s operations as of the
end of the period covered by this report, as required by Rule 13a-15(b) under
the Exchange Act.





MANAGEMENT'S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





The
management of NewMarket China, Inc. is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control
over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated
under the Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company's principal executive and principal financial
officers and effected by the company's board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures
that:





* Pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the
company;




* Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and










* Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company's assets that could have a
material effect on the financial statements.





Because of
its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Because of the inherent
limitations of internal control, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.





Management
assessed the effectiveness of the Company's internal control over financial
reporting as of March 31, 2008. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control-Integrated Framework.





Based on
its assessment, management concluded that, as of March 31, 2008, the Company's
internal control over financial reporting is effective based on those
criteria.





Changes in internal Control
over Financial Reporting





Our Chief
Executive Officer and Chief Financial Officer have indicated that there were no
significant changes in the Company’s internal controls or other factors that
could significantly affect such controls subsequent to the date of their
evaluation, and there were no such control actions with regard to significant
deficiencies and material weaknesses.





PART II – OTHER INFORMATION








Item 1.  Legal Proceedings





None





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





Set forth
below is information regarding the issuance and sale of our securities without
registration during the three month period ended March 31, 2008:





·
            In
      March, 2008, the Company issued 5,760,000 shares of common stock pursuant
      to an agreement to exchange approximately $288,000 of debt for
      equity.





Each of
the above issuances were deemed to be exempt under rule 506 of Regulation D
and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the securities. The offerings and
sales were made to a limited number of persons, all of whom were accredited
investors, business associates of our company or executive officers of our
company, and transfer was restricted by our company in accordance with the
requirements of the Securities Act of 1933. In addition to representations by
the above-referenced persons, we have made independent determinations that all
of the above-referenced persons were accredited or sophisticated investors, and
that they were capable of analyzing the merits and risks of their investment,
and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with access to
our Securities and Exchange Commission filings.


Item 3.  Defaults Upon Senior
Securities





None





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




None







Item 5.  Other Information





None





Item 6.  Exhibits




(a)
              Exhibits.  The following is a
      complete list of exhibits field as part of this Form 10-QSB.  Exhibit
      numbers correspond to the numbers in the Exhibit Table of Item 601 of
      Regulation S-B.Exhibit
      31.1 Certification of Chief Executive Officer pursuant
  toSection 302 of the
      Sarbanes-Oxley ActExhibit
      31.2 Certification of Chief Financial Officer pursuant
  toSection 302 of the
      Sarbanes-Oxley ActExhibit
      32.1 Certification of Principal Executive Officerpursuant to Section
      906 of the Sarbanes-Oxley ActExhibit
      32.2 Certification of Principal Financial Officerpursuant to Section
      906 of the Sarbanes-Oxley Act(b)
              Reports on Form 8-K.   During
      the three-month period ended March 3, 2008, the Company filed the
      following Current Reports on Form 8-K:Current
      Report on Form 8-K filed on March 6, 2008 which included disclosure under
      Item 5.02 related to the appointment of Paul K. Danner to the Company’s
      Board of Directors and the resignation of Bruce Noller from the Board of
      Directors.













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.




NEWMARKET
      CHINA, INC.(Registrant)Date:
            May 19,
      2008
            
            /s/ John
      VergesJohn
      Verges,Chief
      Executive Officer/s/ 
      Philip RauchPhilip J.
      Rauch,Chief
      Financial Officer