UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








FORM
10-Q








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





For the
quarterly period ended June 30,
2008





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





For the
transition period from _____ to _____








Commission
File No. 000-51060








UNIVERSAL
FOG, INC.


(Exact
name of registrant as specified in its charter)








Delaware
            86-0827216(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)








168
Binbei Street


Songbei
District, Harbin City


Heilongjiang
Province, People’s Republic of China


(Address
of Principal Executive Offices)








011-86-451
8989 1246


(Issuer’s
telephone number)








Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x    No
o





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 Fule 12b-2 of the Exchange Act.





Larger
accelerated filer o      Accelerated
filer o      
Non-accelerated filer o (Do not check if a
smaller reporting company)      Smaller 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 o     No
x





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of June 30, 2008: 44,694,634 shares of common stock.










UNIVERSAL FOG,
INC.





FINANCIAL
STATEMENTS





INDEX





PagePART
      I -- FINANCIAL INFORMATIONItem
      1.
            Financial
      Statements
            2Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition
            9Item
      3.
            Quantitative
      and Qualitative Disclosures about Market Risk
            11Item
      4(A).
            Controls
      and Procedures
            12Item
      4(A)T.
            Controls
      and Procedures
            12PART
      II – OTHER INFORMATIONItem
      1.
            Legal
      Proceedings
            13Item
      2.
            Changes
      in Securities
            13Item
      3.
            Defaults
      Upon Senior Securities
            13Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            13Item
      5.
            Other
      Information
            13Item
      6.
            Exhibits
      and Reports on Form 8-K
            13Signatures
      and Required Certifications
            14








Item 1. Financial
Information





BASIS OF
PRESENTATION





The
accompanying financial statements are presented in accordance with U.S.
generally accepted accounting principles for interim financial information and
the instructions to Form 10-K and item 310 under Regulation S-K.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary in order to make the financial
statements not misleading, have been included. Operating results for the three
months ended June 30, 2008 are not necessarily indicative of results that may be
expected for the year ending December 31, 2008. The financial statements are
presented on the accrual basis.





- 2
-






FINANCIAL
STATEMENTS




UNIVERSAL
FOG, INC.





AND
SUBSIDIARY




FINANCIAL
STATEMENTS










As
of June 30, 2008






Table
of Contents








Page
      #Unaudited
      Consolidated Balance Sheets
            4Unaudited
      Consolidated Statements of Operations
            5Unaudited
      Consolidated Statements of Cash Flows
            6Notes
      to the Unaudited Consolidated Financial Statements
            7 -
      8










- 3
-


Universal
Fog, Inc.


And
Subsidiary


Consolidated
Balance Sheet


As
of June 30, 2008 and December 31, 2007


(Unaudited)





June
      30,
              2008
            
            
            December
      31,
              2007AssetsTotal
      Assets
            
            $
            0
            
            
            
            0Liabilities
      and Stockholders’ EquityTotal
      Liabilities:
            
            
            0
            
            
            
            0Stockholders’
      Equity:Convertible preferred stock, $.0001 par value,10,000,000 shares authorized, none issued and outstanding
            
            
            0
            
            
            
            0Common stock, $.0001 par value,300,000,000 shares authorized, 44,694,634 shares issued and
      outstanding
            
            
            4,469
            
            
            
            4,469Preferential Dividend – Tom Bontems
            
            
            (442,057
            )
            
            
            (442,057
            )Additional Paid-in Capital
            
            
            1,205,877
            
            
            
            1,113,424Accumulated Deficit
            
            
            (768,289
            )
            
            
            (675,836
            )Total
      Stockholders’ Equity (Deficit)
            
            
            0
            
            
            
            0Total
      Liabilities and Stockholders’ Equity (Deficit)
            
            $
            0
            
            
            
            0








See
Notes to Unaudited Consolidated Financial Statements





- 4
-


Universal
Fog, Inc.


and
Subsidiary


Consolidated
Statements of Operations


(Unaudited)





For the Three Months Ended
                June 30,
              
              
              For the Six Months Ended
                June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007OPERATING
      EXPENSESGeneral
      and administrative
              
              $
              56,063
              
              
              $
              58,945
              
              
              $
              92,452
              
              
              $
              90,671Loss
      for continuing operations
              
              
              -
              
              
              
              (58,945
              )
              
              
              -
              
              
              
              (90,761
              )Income
      from discontinued operations
              
              
              -
              
              
              
              128,303
              
              
              
              -
              
              
              
              145,577Net
      Income (Loss)
              
              $
              (56,063
              )
              
              $
              69,358
              
              
              $
              (92,452
              )
              
              $
              54,816Income
      (Loss) per Common Share: Basic and DilutedContinuing
      Operations
              
              $
              0.00
              
              
              $
              0.00
              
              
              $
              0.00
              
              
              $
              0.00Discontinued
      Operations
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00Total
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00Weighted
      Average Common Shares Outstanding
              
              
              44,694,634
              
              
              
              40,694,634
              
              
              
              44,694,634
              
              
              
              40,694,634





See
Notes to Unaudited Consolidated Financial Statements


- 5
-


UNIVERSAL
FOG, INC.


AND
SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


(Unaudited)





2008
            
            
            2007Cash
      flows from operating activities:Net
      Income
            
            $
            (92,452
            )
            
            $
            23,412Net
      cash provided by (used in) operating activities
            
            $
            (92,452
            )
            
            $
            23,412Cash
      flows from investing activities:Net
      cash (used in) investing activities
            
            
            -
            
            
            
            -Cash
      flows from financing activities:Net
      cash provided by financing activities
            
            
            92,452
            
            
            
            0Net
      increase (decrease) in cash
            
            
            0
            
            
            
            23,412Cash
      at beginning of period
            
            
            0
            
            
            
            9,756Cash
      at end of period
            
            $
            0
            
            
            $
            33,168Supplemental
      Cash Flows Disclosures2008
            
            
            2007Interest
      paid
            
            $
            --
            
            
            $
            9,189Income
      taxes paid
            
            $
            --
            
            
            $
            --Non-Cash
      Investing and Financing Activities2008
            
            
            2007Common
      stock issued for services
            
            
            --
            
            
            $
            4,500Common
      stock issued in settlement of lawsuit(recorded
      in accrued liabilities at 12/31/06)
            
            
            
            
            
            $
            95,000







See
Notes to Consolidated Financial Statements.





- 6
-


UNIVERSAL
FOG, INC.


AND
SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS








1.           BASIS
OF PRESENTATION





The
accompanying unaudited interim consolidated financial statements of Universal
Fog, Inc, have been prepared in accordance with accounting principles generally
accepted in the United States of America and the rules of the Securities and
Exchange Commission and should be read in conjunction with the audited financial
statements and notes thereto contained in Universal Fog’s latest Annual Report
filed with the SEC on Form 10-KSB. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the consolidated financial statements that would
substantially duplicate the disclosure contained in the audited financial
statements for the most recent fiscal year as reported in Form 10-KSB, have been
omitted.





The
accompanying consolidated financial statements included the general accounts of
the Company, a Delaware corporation formerly Edmonds 6, Inc. (see above), and
its wholly owned Arizona subsidiary, also named Universal Fog, Inc. All material
intercompany transactions, accounts and balances have been eliminated in the
consolidation.





For
financial reporting purposes the reverse merger with Edmonds 6 (see above) has
been treated as a recapitalization of UFI with Edmonds 6 being the legal
survivor and UFI being the accounting survivor and the operating entity. That
is, the historical financial statements prior to May 9, 2005 are those of UFI
and its operations, even though they are labeled as those of the Company.
Retained earnings of UFI related to its operations, is carried forward after the
recapitalization. Operations prior to the recapitalization are those of the
accounting survivor, UFI and its predecessor operations, which began July
11, 1996. Earnings per share for the periods prior to the recapitalization
are restated to reflect the equivalent number of shares outstanding for the
entire period operations were conducted. Upon completion of the reverse merger,
the financial statements become those of the operating company, with adjustments
to reflect the changes in equity structure and receipt of the assets and
liabilities of UFI.





2.           CRITICAL
ACCOUNTING POLICIES





Refer to
the financial statements included in the Form 10-KSB/A filed with SEC on July
22, 2008.





3.           GOING
CONCERN





The
consolidated financial statements of the Company have been prepared assuming
that the Company will continue as a going concern. However, the Company has
suffered recurring operating losses and it has substantially no cash. These
conditions, among others, give rise to substantial doubt about the Company’s
ability to continue as a going concern. Management is continuing to seek
additional equity capital to fund its various activities. Management has also
eliminated or reduced unnecessary costs. However, there is no assurance that
steps taken by management will meet the Company’s needs or that it will continue
as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





4.           CAPITAL
STRUCTURE DISCLOSURES





The
Company’s capital structure is complex and consists of a series of convertible
preferred stock and a general class of common stock. The Company is authorized
to issue 310,000,000 shares of stock with a par value per share of $.0001,
10,000,000 of which have been designated as preferred shares and 300,000,000 of
which have been designated as common shares.





Convertible
preferred stock





On May 9,
2005, the Company issued 4,000,000 preferred stock shares to its majority common
stockholder. As part of the share exchange agreement, these shares were returned
to the Company.  See Note 7 and 8 for the exchange
agreement.





Common
stock





Each
common stock share contains one voting right and contains the rights to
dividends if and when declared by the Board of Directors.





Stock
options, warrants and other rights





As of
June 30, 2008, the Company had not adopted any employee stock option plans and
no other stock options, warrants or other stock rights have been granted or
issued.


- 7
-
 UNIVERSAL
FOG, INC.
 AND
SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







5.           COMMITMENTS
AND CONTINGENCIES





Leases





At March
31, 2008, the Company was not obligated under any capital or operating lease
agreements.





Legal
matters





The
Company is subject to legal proceedings that arise in the ordinary course of
business.





6.           RELATED
PARTY TRANSACTIONS





In
connection with a Securities Purchase Agreement, dated September 10, 2007 (the
“Securities Purchase Agreement”). in which Sun, Xin acquired 24,061,745 shares
of common stock of UFI for a purchase price of $500,000 from Tom Bontems, UFI
and Universal Fog Systems, Inc., an Arizona corporation which is wholly owned by
Tom Bontems (“UFSI”), entered into an Asset Purchase and Sale Agreement., also
dated September 10, 2007 (the “APSA”). Pursuant to the ASPA, UFSI agreed to
acquire all of the assets and assume all of the liabilities of UFI for no
additional consideration than entering into the Securities Purchase Agreement
and a Share Exchange Agreement, pursuant to which, as described in notes 7 and 8
to the Notes to our Financial Statements, a company known as China Health
Industries Holdings Limited and its wholly owned subsidiary, Harbin Humankind
Biology Technology Co. Limited, agreed to enter into a reverse merger with
UFI.





7.           CHANGE
IN CONTROL





As more
fully described in the 8-K filed on September 14, 2007, Sun Xin purchased
22,000,545 shares of common stock and 4,000,000 shares of convertible preferred
stock owned by Tom Bontems for $500,000. In addition, the 4,000,000 shares of
convertible preferred stock were subsequently cancelled and reissued 2,061,200
common shares to Sun Xin and 1,938,800 common shares to Tom
Bontems.





Simultaneously,
under the terms of an asset purchase and sale agreement executed the same day,
Universal Fog Systems, Inc. assumed all of the liabilities of Universal Fog,
Inc. and these liabilities were removed from the Company’s balance
sheet.  Subject to the conditions set forth in the asset purchase and
sale agreement, a second closing will take place within 90 days, at which time
the assets of Universal Fog, Inc. will be transferred to Universal Fog Systems,
Inc.  Conditions precedents to the second closing include a reverse
split of the common stock of Universal Fog, Inc. and the acquisition by
Universal Fog, Inc. of Harbin Humankind Biology Technology Co.
Limited.  Sun Xin acquired 53.8 % of the common stock of Universal
Fog, Inc.





Under the
terms of the purchase and sale agreement, even though the transfer of the assets
is not closed yet, Universal Fog Systems, Inc was assigned the right to manage
the assets of the Company and is bearing the gain or loss of the operations
after the close of the transfer of the liabilities.  As a result, the
Company lost control of its assets upon transferring the liabilities. For
accounting purposes, the sale of assets already occurred even though transaction
is not legally closed yet.





As a
result, all assets and liabilities are deemed to be transferred to Universal Fog
Systems, Inc as of September 14, 2007. Since Universal Fog Systems, Inc is owned
by the principal owner of the Company (Tom Bontems), the transaction is deemed
to be between entities under common control. As a result, no gain or loss are
recognized and the difference between the assets and liabilities transferred are
recorded as preferential dividends to principal shareholder in the stockholders’
equity section.





As a
result of the transaction, discontinued operations was presented in the income
statements.





8.           ONGOING
TRANSACTIONS





On
October 19, 2007, the Board of Directors approved a 1:20 reverse stock split of
the Company’s common stock. A written consent was approved by the shareholders
owning a majority of the shares, which consent provides that the Company shall
have the authority to amend our certificate of incorporation to effect a 1:20
reverse stock split of our common stock. A Preliminary Information Statement was
filed with the Commission on October 23, 2007, and is undergoing a review by the
staff of the Commission. The authorized common shares will remain at 310,000,000
of which 10,000,000 will remain as authorized preferred shares.





On
October 15, 2007, the Company entered in to a Share Exchange Agreement to
acquire 100% of the share capital of China Health Industries Holdings Limited
which owns 100% of the share capital of Harbin Humankind Biology Technology Co.
Limited. Pursuant to the agreement, the Company will acquire one hundred percent
(100%) of all of the issued and outstanding share capital from Sun Xin in
exchange for 60,000,000 shares of Universal Fog, Inc. common stock.





- 8
-




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





SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





The
information set forth below should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part
I- Item I of this Quarterly Report and the Company’s Annual Report on Form
10-KSBfor the year ended December 31, 2007, which contains the audited
consolidated financial statements and notes thereto and the Management’s
Discussion and Analysis of Financial Condition and Results of Operations for the
December 31, 2007 Annual Report.





Some of
the statements under “Description of Business,” “Risk Factors,” “Management’s
Discussion and Analysis or Plan of Operation,” and elsewhere in this Report and
in the Company’s periodic filings with the Securities and Exchange Commission
constitute forward-looking statements. These statements involve known and
unknown risks, significant uncertainties and other factors what may cause actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward- looking statements. Such
factors include, among other things, those listed under “Risk Factors” and
elsewhere in this Report.





In some
cases, you can identify forward-looking statements by terminology such as “may,”
“will,” “should,” “could,” “intends,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or the negative
of such terms or other comparable terminology.





The
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions that the Company will obtain or have access to adequate financing
for each successive phase of its growth, that there will be no material adverse
competitive or technological change in condition of the Company’s business, that
the Company’s President and other significant employees will remain employed as
such by the Company, and that there will be no material adverse change in the
Company’s operations, business or governmental regulation affecting the Company.
The foregoing assumptions are based on judgments with respect to, among other
things, further economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond the Company’s control.





Although
management believes that the expectations reflected in the forward-looking
statements are reasonable, management cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither management nor any
other persons assumes responsibility for the accuracy and completeness of such
statements.





CRITICAL
ACCOUNTING POLICIES





Financial
Reporting Release No. 60, which was released by the Securities and Exchange
Commission (the “SEC”), encourages all companies to include a discussion of
critical accounting policies or methods used in the preparation of financial
statements. The Company’s consolidated financial statements include a summary of
the significant accounting policies and methods used in the preparation of the
consolidated financial statements. Management believes the following critical
accounting policies affect the significant judgments and estimates used in the
preparation of the financial statements.





Use of
Estimates — Management’s discussion and analysis or plan of operation is based
upon the Company’s consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these consolidated financial statements requires
management 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 ongoing basis, management evaluates
these estimates, including those related to allowances for doubtful accounts
receivable and long-lived assets. Management bases these estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis of 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.





Management
must determine at what point in the sales process to recognize revenue. We
recognize revenue when title passes to the purchaser or when installation is
complete and the customer is invoiced. Early or improper revenue recognition can
affect the financial statements. We have established credit policies which, we
believe will eliminate or substantially lower our uncollectible accounts
receivable; however, management must make judgments regarding when and if to
classify a receivable as uncollectible and this may affect the financial
statements. The timing of purchase and the depreciation policies for property
and equipment may affect the financial statements. Advertising costs can be
deferred or may not be properly allocated to the proper accounting period and
this can affect the financial statements.





We review
the carrying value of property and equipment for impairment at least annually or
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of long-lived assets is measured
by comparison of its carrying amount to the undiscounted cash flows that the
asset or asset group is expected to generate. If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the property, if any, exceeds its fair market
value.





- 9
-






Effective
January 1, 2006, we adopted the provisions of SFAS No. 123(R), “Share-Based
Payment,” under the modified prospective method. SFAS No. 123(R) eliminates
accounting for share-based compensation transactions using the intrinsic value
method prescribed under APB Opinion No. 25, “Accounting for Stock Issued to
Employees,” and requires instead that such transactions be accounted for using a
fair-value-based method. Under the modified prospective method, we are required
to recognize compensation cost for share-based payments to employees based on
their grant-date fair value from the beginning of the fiscal period in which the
recognition provisions are first applied. During the year ended December 31,
2006, we did not make any payments by issuing shares of our common stock. If we
had made any share- based payments, these shares would have been issued at the
fair value of the shares at the date of issuance.





For
periods prior to adoption, the financial statements are unchanged, and the pro
forma disclosures previously required by SFAS No. 123, as amended by SFAS
No. 148, will continue to be required under SFAS No. 123(R) to the extent those
amounts differ from those in the Statement of Operations.





Plan of
Operation





Universal
Fog, Inc. was incorporated in the State of Arizona on July 11, 1996and was the
successor of the business known as Arizona Mist, Inc. which began in 1989. On
May 9, 2005, Universal Fog, Inc. entered into a Stock Purchase Agreement and
Share Exchange (effecting a reverse merger) with Edmonds 6, Inc.(Edmonds 6) and
its name was changed to Universal Fog, Inc. (hereinafter referred to as either
UFI or the Company). Edmonds 6 was incorporated on August19, 2004 under the laws
of the State of Delaware to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. Pursuant to
this agreement, Universal Fog, Inc. (which has been in continuous operation
since 1996) became a wholly owned subsidiary of Edmonds 6.





The
Company began manufacturing systems for outdoor cooling in Arizona and quickly
expanded to distribute throughout the United States. As the Company grew, so did
the need for more efficient, more effective, and higher quality commercial grade
products.





All
Universal Fog high pressure fog systems are custom designed and manufactured for
each specific application. We incorporate three different types of tubing in our
systems enabling us to comply with nearly any design requirement. Our low
profile 3/8” flexible nylon tubing utilizes our patented SLIP-LOKTM brass
fittings allowing  extreme versatility and easy installation. The use
of 3/8”high-pressure nitrogenized copper is aesthetically very pleasing and
enables us to conceal our mist lines behind walls, such as stucco, and meet
certain building code requirements. In addition, we also produce systems using
3/8”stainless steel tubing, though copper systems are recommended, providing one
of the most extensive product selections in the industry.




The
concept is inherent in nature, such as water vapor, clouds, and fog, which
manifest due to the earth’s environment. Universal Fog high pressure fog systems
can create the same environment where and when you want it. Using normal tap
water and pressurizing it to 800 PSI with our high-pressure pump modules, we
force water through a series of patented brass and stainless steel nozzles
creating a micro-fine mist or “fog”. With droplets ranging in size from 4 - 40
microns, the fog flash evaporates, removing unwanted heat in the process.
Temperature drops up to 40°F are typical in situations where high heat and low
humidity exist.





The
concept of fog and its benefits have been in use for over 50 years. While most
commonly known for cooling, fog can be used for a variety of
applications.





Results
of Operations





Comparison of the Three
Month Periods Ended June 30, 2008 and 2007




On
September 14, 2007, a share exchange agreement was completed in which Tom
Bontems sold his control shares in the Company to Sun Xin and simultaneously a
contract to transfer all of the assets and liabilities of Universal Fog,
Inc.  to Universal Fog Systems, Inc. was executed.  The
accounting treatment for the transaction is Discontinued Operations and
therefore there are no comparisons presented for the quarter ended June 30, 2008
and 2007.
 
 Liquidity
and Capital Resources
 
 We funded
our cash requirements for the three-month period ended June 30, 2008 through
capital contributions by our majority stockholder. The Company does not have any
material commitments for capital expenditures as of the date of this report.
Management believes sufficient cash flow will be available during the next
twelve months to satisfy its short-term obligations.




Comparison of the Six Month
Periods Ended June 30, 2008 and 2007





On
September 14, 2007, a share exchange agreement was completed in which Tom
Bontems sold his control shares in the Company to Sun Xin and simultaneously a
contract to transfer all of the assets and liabilities of Universal Fog, Inc. to
Universal Fog Systems, Inc. was executed.  The accounting treatment
for the transaction is Discontinued Operations and therefore there are no
comparisons presented for the six months ended June 30, 2008 and
2007.





- 10
-






Liquidity and Capital
Resources





We funded
our cash requirements for the six-month period ended June 30, 2008 through
capital contributions by our majority stockholder. The Company does not have any
material commitments for capital expenditures as of the date of this report.
Management believes sufficient cash flow will be available during the next
twelve months to satisfy its short-term obligations.





UFI has
suffered a loss from discontinued operations for the six-month period ending
June 30, 2008 of $92,452.





Change in
Control





As more
fully described in the 8-K filed on September 14, 2007, Sun Xin purchased
22,000,545 shares of common stock and 4,000,000 shares of convertible preferred
stock owned by Tom Bontems for $500,000. In addition, the 4,000,000 shares of
convertible preferred stock were subsequently cancelled and reissued 2,061,200
common shares to Sun Xin and 1,938,800 common shares to Tom
Bontems.





Simultaneously,
under the terms of an asset purchase and sale agreement executed the same day,
Universal Fog Systems, Inc. assumed all of the liabilities of Universal Fog,
Inc. and these liabilities were removed from the Company’s balance sheet.
Subject to the conditions set forth in the asset purchase and sale agreement, a
second closing will take place within 90 days, at which time the assets of
Universal Fog, Inc. will be transferred to Universal Fog Systems, Inc.
Conditions precedents to the second closing include a reverse split of the
common stock of Universal Fog, Inc. and the acquisition by Universal Fog, Inc.
of Harbin Humankind Biology Technology Co. Limited. Sun Xin acquired 53.8 % of
the common stock of Universal Fog, Inc.





Under the
terms of the purchase and sale agreement, even though the transfer of the assets
is not closed, Universal Fog Systems, Inc was assigned the right to manage the
assets of the Company and is bearing the gain or loss of the operations after
the close of the transfer of the liabilities. As a result, the Company lost
control of its assets upon transferring the liabilities. For accounting
purposes, the sale of assets occurred even though transaction is not legally
closed.





As a
result, all assets and liabilities are deemed to be transferred to Universal Fog
Systems, Inc as of September 14, 2007. Since Universal Fog Systems, Inc is owned
by the principal owner of the Company (Tom Bontems), the transaction is deemed
to be between entities under common control. As a result, no gain or loss is
recognized and the difference between the assets and liabilities transferred are
recorded as preferential dividends to principal shareholder in the stockholders’
equity section.





As a
result of the transaction, discontinued operations were presented in the income
statements.





Ongoing
Transactions





On
October 19, 2007, the Board of Directors approved a 1:20 reverse stock split of
the Company’s common stock. A written consent was approved by the shareholders
owning a majority of the shares, which consent provides that the Company shall
have the authority to amend our certificate of incorporation to effect a 1:20
reverse stock split of our common stock. A Preliminary Information Statement was
filed with the Commission on October 23, 2007, and is undergoing a review by the
staff of the Commission. The authorized common shares will remain at 310,000,000
of which 10,000,000 will remain as authorized preferred shares.





On
October 15, 2007, the Company entered in to a Share Exchange Agreement to
acquire 100% of the share capital of China Health Industries Holdings Limited
which owns 100% of the share capital of Harbin Humankind Biology Technology Co.
Limited. Pursuant to the agreement, the Company will acquire one hundred percent
(100%) of all of the issued and outstanding share capital from Sun Xin in
exchange for 60,000,000 shares of Universal Fog, Inc. common stock.





Related Party
Transactions





In
connection with a Securities Purchase Agreement, dated September 10, 2007 (the
“Securities Purchase Agreement”). in which Sun, Xin acquired 24,061,745 shares
of common stock of UFI for a purchase price of $500,000 from Tom Bontems, UFI
and Universal Fog Systems, Inc., an Arizona corporation which is wholly owned by
Tom Bontems (“UFSI”), entered into an Asset Purchase and Sale Agreement., also
dated September 10, 2007 (the “APSA”). Pursuant to the ASPA, UFSI agreed to
acquire all of the assets and assume all of the liabilities of UFI for no
additional consideration than entering into the Securities Purchase Agreement
and a Share Exchange Agreement, pursuant to which, as described in the
Subsequent Event note to the Notes to our Financial Statements, a company known
as China Health Industries Holdings Limited and its wholly owned subsidiary,
Harbin Humankind Biology Technology Co. Limited, agreed to enter into a reverse
merger with UFI.





Item 3. Quantitative and
Qualitative Disclosures about Market Risk





In the
normal course of business, operations of the Company are exposed to fluctuations
in interest rates. These fluctuations can vary the costs of financing and
investing yields. During the first three months of 2008, the Company has not
utilized any financing arrangements or investing arrangements and is not
currently subject to any market risk.





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Item
4(A)  Controls and Procedures





Evaluation of Controls. As of
the end of the period covered by this report on Form 10-Q, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures ("Disclosure Controls"). This evaluation (“Evaluation”) was performed
by our Chief Executive Officer, Chief Financial Officer and Principal Accounting
Officer, Thomas Bontems (“Bontems”) and Sun, Xin (“Sun”). In this section, we
present the conclusions of Bontems and Sun based on and as of the date of the
Evaluation with respect to the effectiveness of our Disclosure
Controls.





CEO/CFO/Principal Accountant
Certification. Attached to this quarterly report are certain
certifications of the CEO/CFO/Principal Accountant, which are required in
accordance with the Exchange Act and the Commission's rules implementing such
section (the "Rule 13a-14(a)/15d–14(a) Certifications"). This section of the
quarterly report contains the information concerning the Evaluation referred to
in the Rule 13a-14(a)/15d–14(a) Certifications. This information should be read
in conjunction with the Rule 13a-14(a)/15d–14(a) Certifications for a more
complete understanding of the topic presented.





Disclosure Controls.
Disclosure Controls are procedures designed with the objective of ensuring that
information required to be disclosed in our reports filed with the Commission
under the Exchange Act, such as this quarterly report, is recorded, processed,
summarized and reported within the time period specified in the Commission's
rules and forms. Disclosure Controls are also designed with the objective of
ensuring that material information relating to us is made known to the CEO and
the CFO by others, particularly during the period in which the applicable report
is being prepared.





Limitations on the Effectiveness of
Controls. Our management does not expect that our Disclosure Controls
will prevent all error and all fraud. A control system, no matter how well
developed and operated, can provide only reasonable, but not absolute assurance
that the objectives of the control system are met. Further, the design of the
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their design and
monitoring costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of a system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated objectives under all
potential future conditions. Over time, control may become inadequate because of
changes in conditions, or because the degree of compliance with the policies or
procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.





Scope of the Evaluation. The
CEO/CFO/Principal Accountant’s evaluation of our Disclosure Controls included a
review of the controls' (i) objectives, (ii) design, (iii) implementation, and
(iv) the effect of the controls on the information generated for use in this
quarterly report. In the course of the Evaluation, the CEO/CFO/Principal
Accountant sought to identify data errors, control problems, acts of fraud, and
they sought to confirm that appropriate corrective action, including process
improvements, was being undertaken. This type of evaluation is done on a
quarterly basis so that the conclusions concerning the effectiveness of our
controls can be reported in our quarterly reports on Form 10-QSB and annual
reports on Form 10-KSB/A. The overall goals of these various evaluation
activities are to monitor our Disclosure Controls, and to make modifications if
and as necessary.  Our intent in this regard is that the Disclosure
Controls will be maintained as dynamic systems that change (including
improvements and corrections) as conditions warrant.





Conclusions. Based upon the
Evaluation, our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives. Our CEO/CFO/Principal
Accountant has concluded that our disclosure controls and procedures are
effective at that reasonable assurance level to ensure that material information
relating to the Company is made known to management, including the
CEO/CFO/Principal Accountant, particularly during the period when our periodic
reports are being prepared, and that our Internal Controls are effective at that
assurance level to provide reasonable assurance that our financial statements
are fairly presented inconformity with accounting principles generally accepted
in the United States. Additionally, there has been no change in our Internal
Controls that occurred during our most recent fiscal quarter or fiscal year that
has materially affected, or is reasonably likely to affect, our Internal
Controls. Subsequent to this Evaluation, we became aware on April 17, 2008 that
our Form 10-KSB for the year ended December 31, 2007, contained financial
information for 2006 that was not accompanied by a valid auditor’s report and
was presented as if it had been accompanied by such a report. We filed an
amended Form 10-KSB within 24 hours and have engaged an auditor to provide the
required audit report.  The Company will take further steps to remedy
the situation as promptly as practicable





Item 4(A)T Controls and
Procedures





(a)           The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934, as amended). Management conducted an
evaluation of the effectiveness of the Company’s internal control over financial
reporting based on the criteria set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this evaluation, management has concluded that the
Company’s internal control over financial reporting was not effective as of June
30, 2008. See the discussion under Item 4(A) above.





(b)           This
quarterly report does not include an attestation report of the company’s
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only management’s
report in this quarterly report.





(c)           There
were no changes in the Company's internal controls over financial reporting,
known to the chief executive officer or the chief financial officer that
occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.


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PART
II - OTHER INFORMATION





Item
1.     Legal Proceedings.





The
Company is subject to legal proceedings that arise in the ordinary course of
business.





On March
22, 2007, UFI reached a settlement agreement with Brian Hahn in the contractual
violation law suit. The settlement agreement provides that Mr. Hahn receive
1,900,000 restricted shares of UFI’s common shares and be awarded warrants to
purchase an additional 2,000,000 restricted common shares at $0.125 per share.
The cost of the 1,900,000 shares was reflected in the Company’s consolidated
statement of operations for the year ended December 31, 2006 by an addition to
the accrued loss contingency of $82,398. The shares were valued at $95,000 which
is the fair value of the shares reflected by the closing bid price on the Over
the Counter Bulletin Board on March 22, 2007. Mr. Hahn signed the agreement on
April 5, 2007. The agreement provided that 1,900,000 shares would be issued
within 30 days of the final signing.





Item
2.     Changes in Securities.





None.





Item
3.     Defaults Upon Senior Securities.





None.





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





No matter
was submitted during the quarter ending June 30, 2008, covered by this report to
a vote of the Company’s shareholders, through the solicitation of proxies or
otherwise.





Item
5.     Other Information.





None.





Item
6.     Exhibits and Reports on Form 8-K.




(a)
            Exhibits31.1
            Certification
      of Chairman and Chief Financial Officer Pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of
      2002


31.2
            Certification
      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 302 of the Sarbanes Oxley Act of
      2002


32.1
            Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002


32.2
            Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of 2002(b)
            Reports
      on Form 8-K8-K
            Change
      in Certifying Accountant filed on April 4, 20088-K
            Change
      in Certifying Accountant filed on May 9, 20088-K/A
            Letter
      to SEC from Keith Zhen filed on May 19,
2008






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SIGNATURES








In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, there unto duly
authorized.








Universal
Fog, Inc.


Registrant








Date:
      August 14, 2008
            By:
      /s/ Sun, Xin
            
            By:
      /s/ Tom BontemsSun,
      Xin
            
            Tom
      BontemsChairman
      and CFO
            
            Chief
      Executive Officer









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