United
States


Securities
and Exchange Commission


Washington,
D. C. 20549





FORM
10-Q





[X]
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended March 31, 2010[  ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from _____ to
_____





Commission
File No. 0-24185





AOXING
PHARMACEUTICAL COMPANY, INC.


(Exact
Name of Registrant as Specified in its Charter)





Florida
            65-0636168(State
      or Other Jurisdiction of
            (I.R.S.
      Employer I.D. No.)incorporation
      or organization)





15 Exchange Place, Suite
500, Jersey City, NJ 07302


(Address
of Principal Executive Offices)





Issuer's
Telephone Number: (646) 367-1747





Indicate  by
check mark  whether the  Registrant  (1) has filed
all reports required to be filed by Sections 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.





YesX                  No







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







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




Large
accelerated filer ___ Accelerated filer ___ Non-accelerated filer
___ Small reporting company X





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





APPLICABLE
ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding
of each of the Registrant's classes of common stock, as of the latest
practicable date:




May 17,
2010


Common
Stock: 46,464,781





AOXING
PHARMACEUTICALCOMPANY, INC.


QUARTERLY
REPORT ON FORM 10Q


FOR
THE FISCAL QUARTER ENDED MARCH 31, 2010







TABLE
OF CONTENTS


Page
      NoPart
      I
            Financial
      InformationItem
      1.
            Financial
      Statements:Condensed
      Balance Sheet – March 31, 2010 (unaudited) and June 30,
    2009
            2Condensed
      Statements of Operations and Other ComprehensiveIncome (Loss) –
      for the Three and Nine Months Ended March 31, 2010 and 2009
      (Unaudited)
            3Consolidated
      Statements of Cash Flows – for the Nine Months Ended March 31, 2010 and
      2009 (Unaudited)
            4Notes
      to Consolidated Financial Statements (Unaudited)
            5Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results
      of Operations
            12Item
      3
            Quantitative
      and Qualitative Disclosures about Market Risk
            17Item
      4.
            Controls
      and Procedures
            17Part
      II
            Other
      InformationItem
      1.
            Legal
      Proceedings
            18Items
      1A.
            Risk
      Factors
            18Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            18Item
      3.
            Defaults
      upon Senior Securities
            18Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            18Item
      5.
            Other
      Information
            18Item
      6.
            Exhibits
            18Signatures
            18













AOXING
      PHARMACEUTICAL COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSMarch
      31,
              
              
              June
      30,2010
              
              
              2009(Unaudited)ASSETSCURRENT
      ASSETS:Cash
              
              $
              3,212,657
              
              
              $
              1,271,922Accounts
      receivable
              
              
              1,586,310
              
              
              
              1,064,381Inventory
              
              
              1,730,433
              
              
              
              712,521Deposits
      with suppliers
              
              
              950,851
              
              
              
              252,128Deferred
      tax assets
              
              
              2,715,600
              
              
              
              3,331,045Prepaid
      expenses and sundry current assets
              
              
              573,163
              
              
              
              312,101TOTAL
      CURRENT ASSETS
              
              
              10,769,014
              
              
              
              6,944,098LONG
      - TERM ASSETSProperty
      and equipment, net of accummulated depreciation
              
              
              24,934,322
              
              
              
              29,324,362Other
      intangible assets
              
              
              1,473,747
              
              
              
              1,549,497Goodwill
              
              
              18,947,063
              
              
              
              18,926,527TOTAL
      LONG-TERM ASSETS
              
              
              45,355,132
              
              
              
              49,800,386TOTAL
      ASSETS
              
              $
              56,124,146
              
              
              $
              56,744,484LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Short-Term
      borrowings
              
              $
              292,564
              
              
              $
              292,193Accounts
      payable
              
              
              3,055,294
              
              
              
              2,816,711Deposit
      payable
              
              
              -
              
              
              
              3,871,552Current
      portion of long term debt - other
              
              
              419,830
              
              
              
              144,635Current
      portion of long term debt - stockholders
              
              
              668,580
              
              
              
              4,494,629Accrued
      expenses and taxes payable and other sundry current
      liabilities
              
              
              806,337
              
              
              
              2,403,185Loan
      payable - Bank
              
              
              -
              
              
              
              6,094,428Convertible
      debentures
              
              
              1,158,074
              
              
              
              1,023,733TOTAL
      CURRENT LIABILITIES
              
              
              6,400,679
              
              
              
              21,141,066LONG-TERM
      DEBT-- STOCKHOLDERS
              
              
              4,252,030
              
              
              
              4,104,201-- OTHER
              
              
              6,974,491
              
              
              
              3,491,113WARRANT
      AND DERIVATIVE LIABILITIES
              
              
              312,930
              
              
              
              3,368,901Common
      stock, par value $0.001,100,000,000 shares authorized, 46,434,781
      and 41,413,999
                  shares issued and outstanding at March
      31,2010 and June 30, 2009, respectively
              
              
              46,435
              
              
              
              41,413Additional
      paid in capital
              
              
              49,440,384
              
              
              
              39,146,001Accumulated
      deficit
              
              
              (11,705,036
              )
              
              
              (14,791,039
              )Other
      comprehensive income
              
              
              497,377
              
              
              
              461,017TOTAL
      STOCKHOLDERS' EQUITY
              
              
              38,279,160
              
              
              
              24,857,392NONCONTROLLING
      INTEREST IN SUBSIDIARIES
              
              
              (95,144
              )
              
              
              (218,189
              )TOTAL
      EQUITY
              
              
              38,184,016
              
              
              
              24,639,203TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              56,124,146
              
              
              $
              56,744,484






2




AOXING
      PHARMACEUTICAL COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
    (LOSS)(UNAUDITED)For
      the three months ended
              
              
              For
      the nine months endedMarch
      31,
              
              
              March
      31,2010
              
              
              2009
              
              
              2010
              
              
              2009SALES
              
              $
              1,561,915
              
              
              $
              1,587,989
              
              
              $
              4,565,009
              
              
              $
              7,501,763COST
      OF SALES
              
              
              374,410
              
              
              
              1,070,086
              
              
              
              1,365,069
              
              
              
              4,339,126GROSS
      PROFIT
              
              
              1,187,506
              
              
              
              517,903
              
              
              
              3,199,941
              
              
              
              3,162,637COSTS
      AND EXPENSES:Research
      and development expense
              
              
              314,069
              
              
              
              143,197
              
              
              
              506,133
              
              
              
              483,434General
      and administrative expenses
              
              
              916,912
              
              
              
              797,954
              
              
              
              2,619,899
              
              
              
              2,787,746Selling
      expenses
              
              
              336,939
              
              
              
              169,809
              
              
              
              885,236
              
              
              
              1,293,344Depreciation
      and amortization
              
              
              110,013
              
              
              
              114,187
              
              
              
              328,703
              
              
              
              346,069TOTAL
      COSTS AND EXPENSES
              
              
              1,677,932
              
              
              
              1,225,147
              
              
              
              4,339,970
              
              
              
              4,910,593LOSS
      FROM OPERATIONS
              
              
              (490,427
              )
              
              
              (707,244
              )
              
              
              (1,140,030
              )
              
              
              (1,747,956
              )OTHER
      INCOME (EXPENSE):Interest
      expense
              
              
              (502,785
              )
              
              
              (495,489
              )
              
              
              (1,545,940
              )
              
              
              (1,400,868
              )Change
      in fair value of warrant and derivative liabilities
              
              
              574,438
              
              
              
              1,502,314
              
              
              
              3,055,971
              
              
              
              506,028Gain
      on foreign currency transactions
              
              
              (8,274
              )
              
              
              (42,481
              )
              
              
              (8,033
              )
              
              
              220,579Loss
      on sale of assets
              
              
              0
              
              
              
              (561,913
              )
              
              
              (21,415
              )
              
              
              (561,913
              )Forgiveness
      of debt
              
              
              (0
              )
              
              
              0
              
              
              
              3,579,085
              
              
              
              1,459,654TOTAL
      OTHER INCOME (EXPENSE)
              
              
              63,379
              
              
              
              402,431
              
              
              
              5,059,667
              
              
              
              223,480INCOME
      (LOSS) BEFORE INCOME TAXES
              
              
              (427,048
              )
              
              
              (304,813
              )
              
              
              3,919,637
              
              
              
              (1,524,476
              )Income
      taxes (credit)
              
              
              (595,870
              )
              
              
              0
              
              
              
              615,445
              
              
              
              (98,686
              )NET
      INCOME ( LOSS)
              
              
              168,822
              
              
              
              (304,813
              )
              
              
              3,304,192
              
              
              
              (1,623,162
              )Minority
      interest in income (loss) of  subsidiary
              
              
              (24,764
              )
              
              
              (65,605
              )
              
              
              123,044
              
              
              
              (37,084
              )INCOME
      (LOSS) ATTRIBUTABLE TO THE SHAREHOLDERS
                OF AOXING PHARMACEUTICAL CO.
              
              
              193,585
              
              
              
              (239,208
              )
              
              
              3,181,148
              
              
              
              (1,586,078
              )OTHER
      COMPREHENSIVE INCOME ( LOSS) :Foreign
      currency translation adjustment
              
              
              26,426
              
              
              
              159,152
              
              
              
              36,360
              
              
              
              (222,626
              )COMPREHENSIVE
      INCOME (LOSS)
              
              $
              220,011
              
              
              
              (80,056
              )
              
              $
              3,217,508
              
              
              
              (1,808,704
              )BASIC
      AND DILUTED EARNINGS (LOSSES) PER COMMON SHARE
              
              
              0.00
              
              
              
              (0.00
              )
              
              
              0.07
              
              
              
              (0.04
              )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING
              
              
              46,348,115
              
              
              
              41,409,778
              
              
              
              45,288,507
              
              
              
              41,130,750





3


AOXING
      PHARMACEUTICAL COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWS(UNAUDITED)For
      the nine months endedMarch
      31,2009
              
              
              2009OPERATING
      ACTIVITIES:Net
      income (loss)
              
              $
              3,181,148
              
              
              $
              (1,586,078
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
              
              
              1,741,516
              
              
              
              779,909Deferred
      tax assets
              
              
              615,445
              
              
              
              -Impairment
      loss on land and buildings
              
              
              21,486
              
              
              
              561,913.00Forgiveness
      of debt
              
              
              (3,596,523
              )
              
              
              (1,459,654
              )Non-cash
      interest expense related to debentures and warrants
              
              
              89,561
              
              
              
              170,591Stock
      issued for services
              
              
              468,557
              
              
              
              892,528Change
      in fair value of warrants and derivative liability
              
              
              (3,055,971
              )
              
              
              (506,028
              )Minority
      interest
              
              
              123,044
              
              
              
              (24,598
              )Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (528,856
              )
              
              
              244,927Inventories
              
              
              (1,017,006
              )
              
              
              148,540Prepaid
      expenses and sundry current assets
              
              
              (950,790
              )
              
              
              (451,595
              )Accounts
      payable
              
              
              91,855
              
              
              
              (310,969
              )Accrued
      expenses, taxes and sundry current liabilities
              
              
              729,641
              
              
              
              (720,564
              )NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
              
              
              (2,086,894
              )
              
              
              (2,261,078
              )INVESTING
      ACTIVITIES:Acquisition
      of property and equipment
              
              
              (2,086,122
              )
              
              
              (1,247,403
              )Cash
      received from sale of assets
              
              
              950,626
              
              
              
              -NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
              
              
              (1,135,496
              )
              
              
              (1,247,403
              )FINANCING
      ACTIVITIES:Proceeds
      from short-term borrowings
              
              
              -
              
              
              
              3,067,603Payment
      to bank loan
              
              
              (4,271,529
              )
              
              
              -Other
      borrowings
              
              
              3,753,946
              
              
              
              204,594Loans
      from related party
              
              
              698,839
              
              
              
              -Sale
      of common stock
              
              
              5,000,000
              
              
              
              -NET
      CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              5,181,255
              
              
              
              3,272,197EFFECT
      OF EXCHANGE RATE ON CASH
              
              
              (18,131
              )
              
              
              (341,334
              )INCREASE
      (DECREASE) IN CASH
              
              
              1,940,735
              
              
              
              (577,618
              )CASH
      – BEGINNING OF PERIOD
              
              
              1,271,922
              
              
              
              1,565,513CASH
      – END OF PERIOD
              
              $
              3,212,657
              
              
              
              987,895Supplemental
      disclosures of cash flow information:Non-cash
      financing activities:Conversion
      of AOB loan  and accrued interest into common
    stock
              
              
              4,830,847Conversion
      of convertible debentures into common stock
              
              
              -
              
              
              
              290,000




4


AOXING
PHARMACEUTICAL COMPANY, INC. AND SUBSIDIARIES





NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS





March 31,
2010


(Unaudited)







1            
 BASIS OF
PRESENTATION


The
accompanying unaudited consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles for interim
financial information and pursuant to the requirements for reporting on Form
10-Q. Accordingly, they do not include all the information and footnotes
required by accounting principles generally accepted in the United States of
America for annual financial statements. However, the information included in
these interim financial statements reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of management,
necessary for the fair presentation of the consolidated financial position and
the consolidated results of operations. Results shown for interim periods are
not necessarily indicative of the results to be obtained for a full year. The
consolidated balance sheet as of June 30, 2009 was derived from the audited
consolidated financial statements included in the Company’s Annual Report on
Form 10-K/A for the year ended June 30, 2009. These interim financial statements
should be read in conjunction with that report.
  For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company’s Annual Report on Form 10-K/A for the
year ended June 30, 2009 filed on March 17, 2010.





2       
      BUSINESS DESCRIPTION AND SIGNIFICANT
ACCOUNTING POLICIES




Aoxing
Pharmaceutical Co., Inc. (“the Company” or ‘Aoxing Pharma”) is a specialty
pharmaceutical company specializing in research, development, manufacturing and
distribution of a variety of narcotics and pain-management products. As of March
31, 2010, the Company had one operating subsidiary: Hebei Aoxing Pharmaceutical
Co., Inc. (“Hebei”), which is
organized under the laws of the People’s Republic of China
(“PRC”).  During the year ended June 30, 2009, Hebei integrated into
itself the business operations of Shijazhuang Lerentang Pharmaceutical Company,
Ltd. (“LRT”), which had been an operating subsidiary acquired by Hebei in May
2008.  In March 2010, the Company changed to its current name from
“China Aoxing Pharmaceutical Co., Inc.”




Since
2002, Hebei has been engaged in developing narcotics and pain management
products, building its facilities and obtaining the requisite licenses from the
Chinese Government.  Headquartered in Shijiazhuang City, the
pharmaceutical capital of China, outside of Beijing, Hebei now has China's
largest and the most advanced manufacturing facility for highly regulated
narcotic medicines, addressing a very under-served and fast-growing market in
China. Its facility is one of the few GMP facilities licensed for manufacturing
narcotics medicines. The Company is working closely with the Chinese government
and SFDA to assure the strictly regulated availability to medical professionals
throughout China of its narcotic drugs and pain medicines.


Effective
on March 19, 2010, the Company filed with the Florida Secretary of State
Articles of Amendment to its Articles of
Incorporation.    The amendments (i) changed the name of the
corporation to “Aoxing Pharmaceutical Company, Inc.”; (ii) decreased its
authorized common stock from 200,000,000 shares, $0.001 par value to 100,000,000
shares, $0.001 par value; and (iii) effected a reverse split of its common stock
in a ratio of one-for-two. The accompanying financial statement are presented
showing a retro-active presentation of the above mentioned reverse stock-split
as if it had happened as of the beginning of the earliest period
presented.





Use
of estimates in the preparation of financial statements





The
preparation of the unaudited consolidated financial statements in conformity
with generally accepted accounting principles 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 condensed consolidated
financial statements, and the reported amounts of revenue and expenses during
the reporting period. Significant estimates reflected in the consolidated
financial statements include, but are not limited to, the recoverability of the
carrying amount and estimated useful lives of long-lived assets, allowance for
accounts receivable, realizable values for inventories, valuation allowance
of deferred tax assets, purchase price allocation of its acquisitions and
share-based compensation expenses. Management makes these estimates using the
best information available at the time the estimates are made; however, actual
results when ultimately realized could differ from those
estimates.


5





Impairment
of long lived assets




Long-lived
assets are reviewed for impairment when circumstances indicate the carrying
value of an asset may not be recoverable.  For assets that are to be
held and used, impairment is recognized when the estimated undiscounted cash
flows associated with the asset or group of assets is less than their carrying
value.  If impairment exists, an adjustment is made to write the asset
down to its fair value, and a loss is recorded as the difference between the
carrying value and fair value.  Fair values are determined based on
quoted market values, discounted cash flows or internal and external appraisals,
as applicable.  Assets to be disposed of are carried at the lower of
carrying value or estimated net realizable value.




Derivative
financial instruments





The
Company’s derivative financial instruments consist of embedded derivatives
related to the convertible debentures and warrants (see Note 6 and
7).  The accounting treatment of derivative financial instruments
requires that the Company record the derivatives and related warrants at their
fair values as of the inception date of the debt agreements and at fair value as
of each subsequent balance sheet date.  Any change in fair value was
recorded as non-operating, non-cash income or expense at each balance sheet
date.  If the fair value of the derivatives was higher at the subsequent
balance sheet date, the Company recorded a non-operating, non-cash charge. 
If the fair value of the derivatives was lower at the subsequent balance sheet
date, the Company recorded non-operating, non-cash income.





For the
nine months ended March 31, 2010, the Company recognized other income of
approximately $3,055,971 as compared to other income of $1,502,314 for the nine
months ended March 31, 2009, relating to recording the changes in fair value of
warrant and derivative liabilities.  At March 31, 2010 and 2009 there
were approximately $312,930 and $3,490,056 of warrant and derivative
liabilities, as the related debt instruments were not settled.





The
Company’s derivative instruments were valued using the black-scholes option
pricing model, based on the following historic data and assumptions
on  March 31, 2010:





Estimated
      dividends
            NoneExpected
      volatility
            41.85%Risk-free
      interest rate
            0.16
      – 0.41%Expected
      term (years)
            0.08
      – 1.46




The
expected volatility was determined based on the historic quoted market price of
the common stock.  Risk free interest rate was determined based on the
quoted US treasury rate under the same expected term with each corresponding
financial instrument.


6


New
Accounting Pronouncements





In
May 2009, FASB issued new guidance establishing general standards of
accounting for disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued, or
subsequent events. An entity should apply the requirements to interim or annual
financial periods ending after June 15, 2009. Adoption of this standard
does not have a material impact on the Company’s results of operations or
financial position.




In June 2009, FASB established
Accounting Standards CodificationTM(“ASC”) as the singlesource of authoritative accounting
principles recognized by the FASB in the preparation of financial statements in
conformity with the GAAP. The Codification will supersede all then-existing
non-SEC accounting and reporting standards. All other non-grandfathered non-SEC
accounting literature not included in the Codification will become
non-authoritative. The Codification is effective for financial statements issued
for interim and annual periods ending after September 15, 2009. We adopted
the new guidance for the quarter ended September 30, 2009, which changed the way
we reference accounting standards in our disclosures. Adoption of the
Codification is not expected to have a material impact on the Company’s results
of operations or financialposition.





In August
2009, the FASB updated the accounting standards to provide additional guidance
on estimating the fair value of a liability in a hypothetical transaction where
the liability is transferred to a market participant. The standard is effective
for the first reporting period, including interim periods, beginning after
issuance. The Company does not expect the adoption to have a material effect on
its consolidated results of operations and financial condition.





3          
   INVENTORIES





Inventories
are summarized as follows:





March
      31
            
            
            June
      302010
            
            
            2009(Unaudited)Raw
      materials
            
            $
            847,542
            
            
            $
            454,374Low-value
      consumption goods
            
            
            24,539
            
            
            
            24,208Work
      in progress
            
            
            125,881
            
            
            
            24,533Finished
      goods
            
            
            732,471
            
            
            
            209,406$
            1,730,433
            
            
            $
            712,521




4             LOANS
PAYABLE – OTHER





Loans
payable – other consists of the following:





March
      31,
            
            
            June
      30,2010
            
            
            2009(Unaudited)Loans
      payable bearing interest at 10% per annum and maturing on March
      2012
            
            $
            3,010,242
            
            
            $
            3,491,113Loans
      payable bearing interest at 12% for the six month period ended March 31,
      2010, then the interest rate is 9.6% until maturing on September 30
      2012.
            
            
            3,964,249
            
            
            
            -Loans
      from unrelated third parties maturing on various dates from Jun 2010 to
      Dec 2010 and bearing interest at an average rate of 10%
            
            
            419,830
            
            
            
            144,6357,394,321
            
            
            
            3,635,748Less
      current portion
            
            
            419,830
            
            
            
            144,635$
            6,974,491
            
            
            $
            3,491,113




7




5            
LOAN FROM STOCKHOLDERS





Loan from
stockholders consists of the following:





March
      31,
            
            
            June
      30,2010
            
            
            2009(Unaudited)Short-term
      borrowing from AOB bearing interest at 8% per annum, converted to common
      stock as of August 27, 2009.
            
            
            -
            
            
            $
            4,382,418Loans
      maturing on December 31, 2011 bearing interest of 10% per
      annum
            
            $
            3,535,247
            
            
            
            4,104,201Loans
      payable bearing interest at 12% for the six month period ended March 31,
      2010, then the interest rate is 9.6% until maturing on September 30
      2012.
            
            
            716,783Loans
      maturing on various dates from September 2010 to December 2010, bearing
      interest at an average rate of 10%
            
            
            668,580
            
            
            
            112,2114,920,610
            
            
            
            8,598,830Less
      current portion
            
            
            668,580
            
            
            
            4,494,629$
            4,252,030
            
            
            $
            4,104,201




6 CONVERTIBLE
DEBENTURES




In 2006,
the Company issued 10% convertible debentures for $2,116,000 and the Series A,
B, C and D Warrants. The 10% convertible debentures were converted to common
stock by September 30, 2008.  The Series A, B, C and D Warrants are
exercisable for five years and may be redeemed by the Company if the market
price of its common stock exceeds 200% of the exercise price of the
warrants.




During
the year ended June 30, 2008, the Company sold $1,173,000 of convertible
debentures, which bear interest at 8% per annum, are payable semi-annually and
are due May 1, 2010.  Interest will accrue on the principal amount at
8% per annum and will be payable on January 1st and
July 1st
each
year.  The holder may convert the principal and accrued interest into
the Company’s common stock at a conversion price per share equal to the greater
of (a) $10.00, or (b) 75% of the average of the closing bid prices reported for
the five trading days preceding the date of
conversion.


8


Convertible
debentures outstanding as of March 31, 2010, are as follows:








Convertible
      debentures issued
            
            
            3,289,000Less
      amounts converted to common stock
            
            
            (2,116,000
            )1,173,000Less
      debt discount
            
            
            (14,926
            )Balance
      – March 31, 2010
            
            
            1,158,074




The terms
of the convertible debentures and warrants include certain features that are
considered embedded derivative financial instruments, such as a conversion
feature which provides for the conversion of the debentures into shares of the
Company’s common stock at a rate which is variable. Because the debentures are
not conventional convertible debt, the Company is required to record the
derivative financial instruments and the warrants issued in connection with the
convertible debentures at their fair values as of the issuance date of each of
the debentures.




7 
           WARRANTS





In 2006
the Company issued the Series A, B, C and D Warrants in connection with issuance
of 10% convertible debentures.  The terms of the Series A, B, C and D
Warrants require that whenever the Company issues common stock for a price less
than $2.00 per share, an equitable adjustment to the exercise price be made in
order to prevent dilution of the equity interests of the warrant
holders.  As a result of the private placement and loan conversion
transactions in August 2009, the exercise price of the Series A, B, C and D
Warrants was reduced, and accordingly, the number of shares that a
warrant-holder may purchase was increased based on the terms of the warrants,
effective on August 27, 2009. These warrants were issued in September 2006, are
exercisable for five years and may be redeemed by the Company if the market
price of its common stock exceeds 200% of the exercise price of the
warrants.





FASB ASC
815-10 requires enhanced disclosures related to derivative and hedging
activities and thereby seeks to improve the transparency of financial
reporting.  The fair value of embedded derivatives in connection with
these warrants needs to be estimated. The accounting treatment of derivative
financial instruments requires that the Company record the derivatives and
related warrants at their fair values as of the inception date of the debt
agreements and at fair value as of each subsequent balance sheet date.  The
change of exercise price along with number of shares issuable upon exercise of
these warrants would cause a change in the fair value of the
warrants.  Any change in fair value will be recorded as non-operating,
non-cash income or expense at each balance sheet date.  If the fair value
of the derivatives was higher at the subsequent balance sheet date, the Company
recorded a non-operating, non-cash charge.  If the fair value of the
derivatives was lower at the subsequent balance sheet date, the Company recorded
non-operating, non-cash income.





The
following table summarizes the information relating to the revised exercise
price and the number of shares that a warrant-holder may purchase in connection
with the sales of convertible debentures referred in Note 6
above.  The following table is illustrated based on the share account
post 1:2 reverse split which took place in March 2010:


9





Original
              Exercise
              Price
            
            
            Revised
              Exercise
              Price
            
            
            Original
              Number
      of
              Outstanding
            
            
            Revised
              Number
      of
              Outstanding
            
            
            Weighted
              Average
              Remaining
              Contractual
              Life
      (Years)March
      31,2010Series
      A
            
            $
            5.0000
            
            
            $
            3.1442
            
            
            
            529,000
            
            
            
            841,231
            
            
            
            1.46Series
      B
            
            
            7.0000
            
            
            
            4.0404
            
            
            
            529,000
            
            
            
            916,493
            
            
            
            1.46Series
      C
            
            
            9.0000
            
            
            
            4.9366
            
            
            
            529,000
            
            
            
            964,429
            
            
            
            1.46Series
      D
            
            
            11.000
            
            
            
            5.8328
            
            
            
            529,000
            
            
            
            997,634
            
            
            
            1.46Placement
      Agent
            
            
            4.0000
            
            
            
            4.0000
            
            
            
            211,600
            
            
            
            211,600
            
            
            
            1.463,931,387




8  
          SALES OF
ASSETS





On July
15, 2009, the Company completed the sale of LRT’s facility in connection with
the relocation of LRT’s operation and manufacturing function into Hebei for
$4,822,178 (approximately RMB 33 million). Proceeds of $3,871,552 were received
in June 2009 (shown as deposit payable on the June 30, 2009 balance sheet) and
$950,626 on July 2009. No gain or loss has been recorded during the nine months
ended March 31, 2010 since the company incurred an impairment charge of
$2,345,420 during the year ended June 30, 2009 reducing the carrying value to
the sales price.




9 
           SUBSEQUENT
EVENTS





Effective
on April 14, 2010, the Company’s common stock started trading on NYSE AMEX, a
subsidiary of NYSE Euronext, under the ticker "AXN,”





On April
28, 2010, Hebei Aoxing, the operating subsidiary of Aoxing Pharma, entered into
a credit facility agreement with China Citic Bank in the amount of $4,754,173
(32,500,000 RMB) with an annual floating rate of 5.841%, which was set to be 10%
higher than the interest rate of the China People Bank
rate.   The credit facility matures on April 28,
2011.





On April
29 Hebei Aoxing entered into a bank note agreement with Bank of Communications
of China in the amount of $4,388,467 (30,000,000 RMB) with an annual floating
rate of 5.841%, which was set to be 10% higher than the interest rate of the
China People Bank rate.   The note is secured by the land use
right and buildings on the land, and matures on April 22, 2011;





On May 5,
2010, Hebei Aoxing entered into a bank note agreement with China Citic Bank in
the amount of $3,657,956 (25,000,000 RMB) with an annual floating rate of
5.841%, which was set to be 10% higher than the interest rate of the China
People Bank rate.   The note is secured by the land use right and
buildings on the land, and matures on May 4, 2011.





In April
2010 Aoxing Pharma and Johnson Matthey Plc entered into an agreement to
establish a joint venture through affiliated companies focused on research,
development, manufacturing and marketing of active pharmaceutical ingredients
("API') for narcotics and neurological drugs for the China market. The joint
venture represents a significant new opportunity for both companies to expand
their business in the rapidly growing pharmaceutical market in
China.


10


Under the
terms of the agreement, Macfarlan Smith Ltd, a wholly owned subsidiary of
Johnson Matthey Plc, headquartered in the United Kingdom, will contribute
technology expertise and capital to the joint venture.  Hebei Aoxing
Pharmaceutical Group Company, Ltd (“Hebei Aoxing”), the operating subsidiary of
Aoxing Pharma, will contribute capital, fixed assets and related API
manufacturing licenses.  The joint venture company will be called
Hebei Aoxing API Pharmaceutical Company, Ltd.  Hebei Aoxing will have
a 51% stake in the Company, while Macfarlan Smith (Hong Kong) Ltd, (a wholly
owned subsidiary of Johnson Matthey Pacific Ltd), will hold 49%.  Each
company will have equal representation on a board of directors that will
oversee a management team responsible for corporate strategies and
operations.




The new
joint venture will be located on the Hebei Aoxing campus in Xinle City, 200
kilometers south west of Beijing.  The joint venture will seek GMP
approval by the China SFDA for a dedicated manufacturing facility by the end of
2010 and plans to begin manufacturing in the first quarter of 2011.





In
accordance with ASC 855, “Subsequent Events”, the Company evaluated subsequent
events through the date these financial statements were
issued.








11




ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS




PRELIMINARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS




This
quarterly report contains forward-looking statements within the meaning of the
federal securities laws. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,”
“China Aoxing believes,” “Aoxing Pharma believes,” “management believes” and
similar language. The forward-looking statements are based on the current
expectations of Aoxing Pharma and are subject to certain risks, uncertainties
and assumptions, including those set forth in our Annual Report on Form 10-K for
the fiscal year ended June 30, 2009 under Item 1A:  “Risk Factors.”
Actual results may differ materially from results anticipated in these
forward-looking statements. We base the forward-looking statements on
information currently available to us, and we assume no obligation to update
them.




Outline
of Our Business




Aoxing
Pharmaceutical Company, Inc. (the “Company” or “Aoxing Pharma”) is a Florida
incorporated specialty pharmaceutical company with its main operations in China,
specializing in research, development, manufacturing and distribution of a
variety of narcotics and pain-management products.  Its common stock
is currently trading at NYSE AMEX.  Our product line is comprised of
prescription and over-the-counter pharmaceutical products.  Our
pharmaceutical products have been approved by the Chinese State Food and Drug
Administration, or SFDA, based on demonstrated safety and efficacy. We sell our
products primarily to hospitals, clinics, pharmacies and retail in most of the
provinces of China, including rural areas and major cities.




In April
2010 Aoxing Pharma and Johnson Matthey Plc entered into an agreement to
establish a joint venture through affiliated companies focused on research,
development, manufacturing and marketing of active pharmaceutical ingredients
("API') for narcotics and neurological drugs for the China market. The joint
venture represents a significant new opportunity for both companies to expand
their business in the rapidly growing pharmaceutical market in
China.




Under the
terms of the agreement, Macfarlan Smith Ltd, a wholly owned subsidiary of
Johnson Matthey Plc, headquartered in the United Kingdom, will contribute
technology expertise and capital to the joint venture.  Hebei Aoxing
Pharmaceutical Group Company, Ltd (“Hebei Aoxing”), the operating subsidiary of
Aoxing Pharma, will contribute capital, fixed assets and related API
manufacturing licenses.  The joint venture company will be called
Hebei Aoxing API Pharmaceutical Company, Ltd.  Hebei Aoxing will have
a 51% stake in the Company, while Macfarlan Smith (Hong Kong) Ltd, (a wholly
owned subsidiary of Johnson Matthey Pacific Ltd), will hold 49%.  Each
company will have equal representation on a board of directors that will
oversee a management team responsible for corporate strategies and
operations.





The new
joint venture will be located on the Hebei Aoxing campus in Xinle City, 200
kilometers south west of Beijing.  The joint venture will seek GMP
approval by the China SFDA for a dedicated manufacturing facility by the end of
2010 and plans to begin manufacturing in the first
quarter of 2011.


12





In
February 2010, Aoxing Pharma and QRx Pharma Ltd. announced a strategic alliance
to collaborate in the development of two proprietary narcotic drugs in China and
ex-China markets: MoxDuo®IV,
an intravenous formulation, as well as MoxDuo®IR, an immediate
release capsule presently in pivotal Phase 3 studies in the United
States.  Both products are based on QRxPharma’s patented
morphine and oxycodone Dual-OpioidTMtechnology for the acute treatment of moderate to severe
pain.  Under the terms of the agreement, Aoxing Pharma will fund the
development of MoxDuo®IV
and MoxDuo®IR for
the China market in exchange for exclusive marketing rights in
China.  QRxPharma will retain ownership of both products and may use
the clinical work completed by Aoxing Pharma for product registration purposes
outside of China.  Extensive clinical studies have demonstrated
QRxPharma’s Dual-OpioidsTM provideas good or better pain relief than either morphine or oxycodone alone
with significantly fewer side effects, giving doctors and patients more options
in the treatment of moderate to severe pain from the hospital to the
home.





The Pharmaceutical Industry in
China: According to a recent ISI Emerging Markets Report, the
pharmaceutical industry in China was approximately $27.7 billion in 2005 and
China was forecast to become the world’s fifth largest pharmaceutical market by
2010. This growth is being driven by several factors, including improving
standards of living,an increase in
disposable income fueled by the growing economy, the aging population, the
increasing participation in the State Basic Medical Insurance System, as well as
the increase in government spending on public health care.





In August, 2009, the Ministry of Health
(MoH) of China released an Essential Drug List of 300 drugs to be sold at
controlled prices as part of its US$124 billion health care reform. The EDL
includes both Western and Chinese medicines, targeting common antibiotics, pain
relievers, high blood pressure, and etc.  Thirty one products of our
company are listed on the EDL.  The Company, therefore, expects sales
to MoH-related agencies to represent a significant source of revenue growth in
future periods.  The Company is working closely and negotiating with
related government agencies on the product supply and purchase in the next
several years.




Narcotics
Industry in China: Currently, the pharmaceutical market in China is highly
fragmented. We believe there are over 3,000 small enterprises currently engaged
in the development, manufacture and sale of pharmaceutical products, and we
expect significant consolidation of pharmaceutical business, products and
technologies in China in near future.  However, based on recent
statistics provided by the China SFDA, there are only 13 pharmaceutical
companies designated by the China SFDA as narcotic drug producers in
China.




Each of our pharmaceutical products has
certain medicinal functions and has demonstrated safety and efficacy in
accordance with the China SFDA requirements for the treatment of at least one or
more therapeutic indications.  Our products are produced in various
formulations, such as injection, tablets, capsules, oral solution and
powders.  Our manufacturing facility in China is GMP certified, fully
integrated with manufacturing support systems including quality assurance,
quality control and regulatory compliance. We have developed our own independent
quality control systems in accordance with SFDA regulations. Our quality
assurance team devotes significant attention to quality control for designing,
manufacturing and testing our products, and is also
responsible for ensuring that we are in compliance with all applicable national
and local regulations and standards, as well as our internal policies. Our
senior management team is also actively involved in setting quality assurance
policies and managing internal and external quality performance. These support
systems enable us to maintain high standards of quality for our products and
deliver reliable products to our customers on a timely
basis.


13




Results
of Operations




Revenues
for the three months ended March 31, 2010 were $1,561,915, comparable to the
revenues of $1,587,989 realized during the three months ended March 31,
2009.  Our product sales level remains low, due to the negative impact
of our relocation and GMP re-certification of the LRT manufacturing facility
started in the summer of 2009.   This process has delayed our
fulfillment of the purchase orders for those formulations manufactured in that
facility.   As of March 31, 2010, our new facility has
successfully passed the GMP re-certification on capsule, tablet, granule and
oral solution formulations, while we are preparing for recertification on pill
and tincture formulations.





For the
nine months ended March 31, 2010, revenues were $4,565,009 a 39% decrease from
the revenues of $7,501,763 realized during the nine months ended March 31,
2009.  The decrease in revenue was caused by the delayed GMP
re-certification discussed above.





Cost of
sales was $374,410 for three months ended March 31, 2010, which was 65% less
than the $1,070,086 in costs incurred during the three month ended March 31,
2009.   During the nine months ended March 31, 2010, our cost of sales
was $1,365,069, which was 69% less than the $4,339,126 in costs incurred during
the nine month ended March 31, 2009.   The gross margin ratio
increased from 33% in the three months ended March 31, 2010 to 76% in the three
months ended March 31, 2010, and from 42% in the nine months ended March 31,
2009 to 70% in the nine months ended March 31, 2010.  The primary
reason for the improvement in gross margin was that Zhongtongan, our leading
product for dental pain in the market, became a much more significant
contributor to our revenue for the three and nine months ended March 31, 2010,
due to the suspension of sales of our other products.  Zhongtongan has
a much higher gross margin compared to some of our other products.  In
addition, we have been engaged in ongoing efforts to improve production
efficiency during out transition period of re-certification, which contributed
to the improvement in margin.





Gross
profit was $1,187,506 during the three months ended March 31, 2010, or 129%
higher than the $517,903 gross profit realized during the three months ended
March 31, 2009, reflecting higher profit margin and the  larger
contribution of Zhongtongan product during the three months ended March 31,
2010.  For the same reason, gross profit increased during the nine
months ended March 31, 2010, to $3,199,941, a slight improvement
over  the gross profit of $3,162,637 realized during the nine months
ended March 31, 2009..





Research
and development expenses were $314,069 during the three months ended March 31,
2010, representing a 119% increase from $143,197 occurred during the three
months ended March 31, 2009.  During the nine months ended March 31,
2010, our research and development expenses were $506,133, 5% higher than
$483,434 spent for nine months ended March 31, 2009.


14


Our
R&D expenses could fluctuate from period to period, reflecting the progress
of our various development projects.





General
and administrative expenses were $916,912 in the three months ended March 31,
2010, or 15% higher than $797,954 in the three months ended March 31,
2010.  The increase of general and administrative expenses reflects
our ramp-up of operations in anticipation of growth in sales. During the three
months ended March 31, 2010, stock-based compensation for services was $195,104,
similar to $202,227 incurred during the three months ended March 31,
2009.





For the nine months ended March 31,
2010, general and administrative expenses was $2,619,899  6% less than
$2,787,746 spent during nine months ended March 31, 2009,
reflecting  ongoing general cost control measures undertaken by the
Company.





Selling
expenses in the amount of $336,939 during the three months ended March 31, 2010
were a 98% increase from the $169,809 spent on selling during the three months
ended March 31, 2009.  The increase was primarily due to the recent
expansion of our sales and marketing team and product promotion
activities.  We expect such expansion activities will continue to the
end of calendar year 2010.





For the
nine months ended March 31, 2010, selling expenses in the amount of $885,236
were a 32% decrease from the $1,293,344 spent on selling during the nine months
ended March 31, 2009.  The decrease was primarily due to the
consolidation of LRT’s selling expenses with ours during the six month period
ended December 31, 2009.  However we expect additional selling
expenses as we continue expanding our sales and marketing team in the near
future.





Our loss
from operations decreased to $490,427 during the three months ended March 31,
2009 from $707,244 during the three months ended March 31, 2009.  For
the nine months ended March 31, 2010, loss from operations decreased to
$1,140,030 from $1,747,956 during the nine months ended March 31,
2009.  The 31% and 35% decreases in the loss were primarily due to the
dominant role played by Zhongtongan in  our sales as well as ongoing
improvement of operational efficiency.





Interest
expense was $502,785 for the three months ended March 31, 2010, which was
comparable to interest expense of $495,489 for the three months ended March 31,
2009.





Primarily
due to the volatility decrease in the market price of our common stock during
the recent quarter, the fair value of our outstanding warrant and derivative
liabilities decreased by $574,438.  The decrease was recorded as other
income for the three months ended March 31, 2010.  For the same reason
we reported other  income of $1,502,314 during the three months ended
March 31, 2009. The fair value of these financial derivatives will fluctuate
along with volatility of the market price for our common stock.





The
Company realized a net loss for the three months ended March 31, 2010 of
$427,048.  However, because the Company owns only 95% of Hebei Aoxing,
5% of that company’s income was attributed to the minority
interest.  Therefore the net loss for the third quarter of fiscal 2010
attributable to the shareholders of Aoxing Pharmaceutical  was
$193,585.  In comparison, during the three
months ended March 31, 2009, the net loss attributable to the Company’s
shareholders was  $239,208 after deducting income attributable to the
5% minority interest in Hebei Aoxing.


15





During
the nine months ended March 31, 2010, net income attributable to the Company’s
shareholders was $3,181,148, as compared to a loss of $1,586,078 attributable to
the Company’s shareholders for the nine months ended March 31,
2009.





Liquidity
and Capital Resources





Our
operations during the nine months ended March 31, 2010 used $2,086,894 in cash,
as compared to $2,261,078 used for operations during the nine months ended March
31, 2009.  The use of cash exceeded the net income during the recent
period primarily due to a $528,856 increase in our accounts receivable, and the
fact that we increased our inventories by $1,017,006 in anticipation of future
sales.





Our
investing activities used  $1,135,496 in cash during the nine months
ended March 31, 2010.  We purchased additional property and equipment
in the amount of $2,086,122, although that expenditure was partially offset by
the final portion of the proceeds from the sales of LRT’s assets in the amount
of $950,626.





Our cash
flows from financing activities amounted to $5,181,255 during the nine months
ended March 31, 2010.  In August, we completed a private placement to
a total of fifteen institutional and other accredited investors of 5,263,158 of
shares of the Company’s common stock at a purchase price of $0.95 per share,
which yielded gross proceeds of $5 million.  During the nine months
ended March 31, 2010, we also  secured additional borrowings in the
amount of $3,753,946, which enabled us to retire a bank loan in the amount of
$4,271,529.  .  We continue working with additional banks in
order to further improve our capital structure.




During the nine months ended March 31,
2010, we significantly improved our working capital position. As of March 31,
2010, we had working capital of $4,368,335, as compared to a working capital
deficit of $14,196,968 at June 30, 2009.  The $18,565,303 improvement
of our working capital condition was primarily attributable to:




·
            the
      $5 million private placement in August
2009;




·
            conversion
      to common stock of $4,830,847 owed on account of a note that we issued to
      American Oriental Bioengineering,




·
            cash
      realized through the divesture of the land and building of
      LRT,




·
            forgiveness
      of debt and accrued interest amounted to $3,579,085 in connection with the
      restructuring of Bank of China loan,
and




·
            refinancing
      Bank of China loan with a new loan secured on October 1, 2009 in the
      amount of $4,680,278 maturing on September 30, 2012, which changed a
      current liability into a long-term
liability.




We expect
to continue to improve our liquidity as well as our capital structure in the
coming year.  In Apirl and May of this year, we entered into lending
relationships with both China Citic
Bank and the Bank of Communications of China, which yielded us available
long-term credit of $12,800,596 at floating interest rates that were initially
5.841%.  Those funds will enable us to make a strong re-entry into the
market as we complete the process of GMP
re-certification.


16




The
capital injection and restructuring efforts over the last nine months greatly
improved the liquidity of the Company as we continue to develop our
pharmaceutical products.  Nevertheless, we will continue to explore various
alternatives to improve our financial position and secure sources of
financing.  Among the possibilities being explored are new credit
facilities, a new equity raise, new arrangements to license intellectual
property, and a sale of selected property rights.  At the present time
we have no commitment from any source for additional funds.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition or results of
operations.





ITEM
3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
applicable.





ITEM
4.  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls
and Procedures.  Our Chief Executive Officer and Chief
Financial Officer carried out an evaluation of the effectiveness of our
disclosure controls and procedures as of March 31, 2010.  Pursuant to
Rule13a-15(e) promulgated by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, “disclosure controls and procedures” means
controls and other procedures that are designed to insure that information
required to be disclosed by Aoxing Pharmaceutical in the reports that it files
with the Securities and Exchange Commission is recorded, processed, summarized
and reported within the time limits specified in the Commission’s
rules.  “Disclosure controls and procedures” include, without
limitation, controls and procedures designed to insure that information Aoxing
Pharmaceutical is required to disclose in the reports it files with the
Commission is accumulated and communicated to our Chief Executive Officer and
Chief Financial Officer as appropriate to allow timely decisions regarding
required disclosure.  Based on their evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that Aoxing Pharmaceutical’s
system of disclosure controls and procedures was effective as of March 31, 2010
for the purposes described in this paragraph.





Changes in Internal
Controls.  There was no change in internal controls over
financial reporting (as defined in Rule 13a-15(f) promulgated under the
Securities Exchange Act or 1934) identified in connection with the evaluation
described in the preceding paragraph that occurred during Aoxing
Pharmaceutical’s third fiscal quarter that has materially affected or is
reasonably likely to materially affect China Aoxing’s internal control over
financial reporting.


17





PART
II   -   OTHER INFORMATION




Item
1.    Legal Proceedings.
  None.


Item
1A. Risk Factors.




There
have been no material changes from the risk factors included in the Annual
Report on Form 10-K for the year ended June 30, 2009.





Item
2.  Unregistered Sale of Securities and Use of
ProceedsRegistrant





(a) Unregistered sales of
equity securities





None.





(c) Purchases of
equity securities





The
Company did not repurchase any of its equity securities that were registered
under Section 12 of the Securities Exchange Act during the 3rd quarter of fiscal
2010.




Item
3.     Defaults Upon Senior Securities.
  None.
 
 Item
4.     Reserved.
 
 Item
5.     Other Information.
  None.


Item
6.    Exhibits





31.1
            Rule
      13a-14(a) Certification – CEO31.2
            Rule
      13a-14(a) Certification – CFO32
            Rule
      13a-14(b) Certification





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.





AOXING
      PHARMACEUTICAL COMPANY, INC.Date:
      May 17, 2010
            By:
      /s/ Zhenjiang
      YueZhenjiang
      Yue, Chief Executive OfficerDate:
      May 17, 2010
            By:
      /s/ Hui
      ShaoHui
      Shao, Chief  Financial
Officer











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