UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20-549





FORM
10-Q





(Mark
One)





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





For the
quarterly period ended March 31, 2009





o
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT





For the
transition period from ______________ to _____________





Commission
file number: 000-51060




CHINA
HEALTH INDUSTRIES HOLDINGS, INC.


(Exact
name of registrant as specified in its charter)





Delaware
              (State
      or other jurisdiction of incorporation or
              organization)
            
            86-0827216
              (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)
            
            (Zip
      Code)





011-86-451
8989 1246


(Registrant’s
telephone number, including area code)





Universal
Fog, Inc.


Former Fiscal
Year: December 31


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90
days.          Yes x     No
 ̈





Indicate
by check mark whether the registrant 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” ion Rule 12b-2 of the Exchange Act.




Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer  ̈
            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  ̈        No
x





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes  ̈    No
 ̈





APPLICABLE
ONLY TO CORPORATE ISSUERS





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





As of May
14, 2009, there are 62,234,737 shares of $0.0001 par value common stock issued
and outstanding.





FORM
10-Q


TIA I,
INC.


INDEX





PagePART
      I
                            FINANCIAL
      INFORMATION
                            
                            3Item
      1. Financial Statements (Unaudited).
                            
                            3Consolidated
      Balance Sheets as of March 31, 2009 (Unaudited) and June 30,
      2008.
                            
                            3Consolidated
      Statements of Operations for the Three Months Ended March 31, 2009 and
      March 31, 2008 and the Nine Months Ended  March 31, 2009 and
      2008 (Unaudited).
                            
                            4Consolidated
      Statement of Changes in Stockholders’ Equity for the Nine Months ended
      March 31, 2009 (Unaudited).
                            
                            5Consolidated
      Statements of Cash Flows for the Nine Months Ended  March 31,
      2009 and 2008 (Unaudited).
                            
                            6Notes
      to Financial Statements.
                            
                            7Item
      2. Management’s Discussion and Analysis of Financial Condition and results
      of Operations.
                            
                            9Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk.
                            
                            13Item
      4. Controls and Procedures.
                            
                            14PART
      II
                            OTHER
      INFORMATION
                            
                            15Item
      1. Legal Proceedings.
                            
                            15Item
      1A. Risk Factors.
                            
                            15Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.
                            
                            15Item
      3. Defaults Upon Senior Securities.
                            
                            15Item
      4. Submission of Matters to a Vote of Security Holders.
                            
                            15Item
      5. Other Information.
                            
                            15Item
      6. Exhibits
                            
                            15




2


PART I - FINANCIAL
INFORMATION




Item
1. Financial Statements (Unaudited)




CHINA
HEALTH INDUSTRIES HOLDINGS, INC.
 (formerly
Universal Fog, Inc.)
 CONSOLIDATED
BALANCE SHEETS
 (UNAUDITED)
 
 March 31,
                  
                  
                  June 30,2009
                  
                  
                  2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                  
                  $
                  86,762
                  
                  
                  $
                  35,251Accounts
      receivable
                  
                  
                  109,875
                  
                  
                  
                  -Inventory
                  
                  
                  178,285
                  
                  
                  
                  107,125Prepaid
      expenses
                  
                  
                  33,969
                  
                  
                  
                  34,944Total
      current assets
                  
                  
                  408,891
                  
                  
                  
                  177,320Property
      and equipment, net of accumulated depreciation
                    of
      $111,051 and $68,841, respectively
                  
                  
                  1,058,457
                  
                  
                  
                  1,075,564Intangible
      assets, net of accumulated amortization
                    of
      $88,568 and $76,720, respectively
                  
                  
                  1,146,134
                  
                  
                  
                  1,152,925TOTAL
      ASSETS
                  
                  $
                  2,613,482
                  
                  
                  $
                  2,405,809LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                  
                  $
                  451,670
                  
                  
                  $
                  460,641Related party
      debt
                  
                  
                  576,189
                  
                  
                  
                  549,982Total
      current liabilities
                  
                  
                  1,027,859
                  
                  
                  
                  1,010,623STOCKHOLDERS'
      EQUITYCommon
      stock, $0.0001 par value, 300,000,000 shares
                    authorized,
      62,234,737 and 61,203,088 shares issued
                    and
      outstanding, respectively
                  
                  
                  6,223
                  
                  
                  
                  6,120Additional
      paid-in-capital
                  
                  
                  1,384,552
                  
                  
                  
                  342,490Accumulated
      other comprehensive income
                  
                  
                  251,658
                  
                  
                  
                  246,004Accumulated
      deficit
                  
                  
                  (56,810
                  )
                  
                  
                  (199,428
                  )Total
      stockholders' equity
                  
                  
                  1,585,623
                  
                  
                  
                  1,395,186TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  
                  $
                  2,613,482
                  
                  
                  $
                  2,405,809
 
 See
accompanying notes to the consolidated financial statements.
  3
  CHINA
HEALTH INDUSTRIES HOLDINGS, INC.
 (formerly
Universal Fog, Inc.)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)
 
 Three Months Ended
                  
                  
                  Nine Months EndedMarch 31,
                  
                  
                  March 31,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008REVENUE
                  
                  $
                  1,015,480
                  
                  
                  $
                  333,271
                  
                  
                  $
                  1,438,124
                  
                  
                  $
                  346,490COST
      OF GOODS SOLD
                  
                  
                  686,362
                  
                  
                  
                  250,294
                  
                  
                  
                  1,056,174
                  
                  
                  
                  266,491Gross
      profit
                  
                  
                  329,118
                  
                  
                  
                  82,977
                  
                  
                  
                  381,950
                  
                  
                  
                  79,999OPERATING
      EXPENSESSelling,
      general and administrative
                  
                  
                  39,665
                  
                  
                  
                  20,170
                  
                  
                  
                  89,109
                  
                  
                  
                  54,595Depreciation
      and amortization
                  
                  
                  15,864
                  
                  
                  
                  15,672
                  
                  
                  
                  42,310
                  
                  
                  
                  40,560Total
      operating expenses
                  
                  
                  55,529
                  
                  
                  
                  35,842
                  
                  
                  
                  131,419
                  
                  
                  
                  95,155Operating
      profit (loss)
                  
                  
                  273,589
                  
                  
                  
                  47,135
                  
                  
                  
                  250,531
                  
                  
                  
                  (15,156
                  )OTHER
      INCOME (EXPENSES)Interest
      income
                  
                  
                  100
                  
                  
                  
                  118
                  
                  
                  
                  326
                  
                  
                  
                  146Interest
      expenses
                  
                  
                  (10,761
                  )
                  
                  
                  -
                  
                  
                  
                  (40,708
                  )
                  
                  
                  -Other
      income
                  
                  
                  -
                  
                  
                  
                  315
                  
                  
                  
                  150
                  
                  
                  
                  312Other
      expenses
                  
                  
                  (1
                  )
                  
                  
                  -
                  
                  
                  
                  (146
                  )
                  
                  
                  -INCOME
      (LOSS) BEFORE INCOME TAXES
                  
                  
                  262,927
                  
                  
                  
                  47,568
                  
                  
                  
                  210,153
                  
                  
                  
                  (14,698
                  )Income
      tax expense
                  
                  
                  65,123
                  
                  
                  
                  -
                  
                  
                  
                  67,535
                  
                  
                  
                  -Net
      income (loss)
                  
                  
                  197,804
                  
                  
                  
                  47,568
                  
                  
                  
                  142,618
                  
                  
                  
                  (14,698
                  )OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation gain (loss)
                  
                  
                  (1,896
                  )
                  
                  
                  97,355
                  
                  
                  
                  5,654
                  
                  
                  
                  125,917Comprehensive
      income
                  
                  $
                  195,908
                  
                  
                  $
                  144,923
                  
                  
                  $
                  148,272
                  
                  
                  $
                  111,219Basic
      and diluted net income (loss) per share
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  (0.00
                  )Weighted
      average shares outstanding - basic
                    and
      diluted
                  
                  
                  62,234,737
                  
                  
                  
                  61,203,088
                  
                  
                  
                  61,541,951
                  
                  
                  
                  61,203,088
 
 See
accompanying notes to the consolidated financial statements.
  4
  CHINA
HEALTH INDUSTRIES HOLDINGS, INC.
 (formerly
Universal Fog, Inc.)
 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 (UNAUDITED)
 
 AccumulatedAdditional
                        
                        
                        
                        
                        
                        OtherCommon Stock
                        
                        
                        Paid-in
                        
                        
                        Accumulated
                        
                        
                        ComprehensiveShares
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        Deficit
                        
                        
                        Income
                        
                        
                        TotalBalances,
      June 30, 2008
                        
                        
                        61,203,088
                        
                        
                        $
                        6,120
                        
                        
                        $
                        1,342,490
                        
                        
                        $
                        (199,428
                        )
                        
                        $
                        246,004
                        
                        
                        $
                        1,395,186Shares
      issued to minority holders in reverse merger
                        
                        
                        1,031,649
                        
                        
                        
                        103
                        
                        
                        
                        (103
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Contributed
      capital
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        1,464
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        1,464Imputed
      interest on shareholder loan
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        40,701
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        40,701Net
      income
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        142,618
                        
                        
                        
                        -
                        
                        
                        
                        142,618Other
      comprehensive income
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        5,654
                        
                        
                        
                        5,654Balances,
      March 31, 2009
                        
                        
                        62,234,737
                        
                        
                        $
                        6,223
                        
                        
                        $
                        1,384,552
                        
                        
                        $
                        (56,810
                        )
                        
                        $
                        251,658
                        
                        
                        $
                        1,585,623
  5
 
 CHINA
HEALTH INDUSTRIES HOLDINGS, INC.
 (formerly
Universal Fog, Inc.)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 Nine Months EndedMarch 31,2009
                  
                  
                  2008Cash
      flows from operating activities:Net
      income (loss)
                  
                  $
                  142,618
                  
                  
                  $
                  (14,698
                  )Adjustments
      to reconcile net loss to net cash
                    used
      in operating activities:Depreciation
      and amortization expense
                  
                  
                  53,436
                  
                  
                  
                  40,560Imputed
      interest
                  
                  
                  40,701
                  
                  
                  
                  -Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  -
                  
                  
                  
                  (5,790
                  )Inventory
                  
                  
                  (71,160
                  )
                  
                  
                  (36,416
                  )Prepaid
      expenses
                  
                  
                  975
                  
                  
                  
                  (92,415
                  )Accounts
      payable & other current liabilities
                  
                  
                  6,776
                  
                  
                  
                  361,019Net
      cash provided by operating activities
                  
                  
                  173,346
                  
                  
                  
                  252,260Cash
      flows from investing activities:Notes
      receivable
                  
                  
                  (109,875
                  )
                  
                  
                  -Purchases
      of patents, property and equipment
                  
                  
                  (36,147
                  )
                  
                  
                  (246,919
                  )Net
      cash used in investing activities
                  
                  
                  (146,022
                  )
                  
                  
                  (246,919
                  )Cash
      flows from financing activities:Contributed
      capital
                  
                  
                  1,464
                  
                  
                  
                  -Proceeds
      from related party debt
                  
                  
                  26,207
                  
                  
                  
                  152,169Net
      cash provided by financing activities
                  
                  
                  27,671
                  
                  
                  
                  152,169Effects
      of foreign exchange on cash
                  
                  
                  (3,484
                  )
                  
                  
                  (86,536
                  )Net
      increase in cash and cash equivalents
                  
                  
                  51,511
                  
                  
                  
                  70,974Cash
      and cash equivalents, at beginning of year
                  
                  
                  35,251
                  
                  
                  
                  8,297Cash
      and cash equivalents, at end of year
                  
                  $
                  86,762
                  
                  
                  $
                  79,271Supplemental
      disclosures of cash flow information:Interest
      paid
                  
                  $
                  -
                  
                  
                  $
                  -Income
      taxes paid
                  
                  
                  -
                  
                  
                  
                  -Noncash
      investing and financing activities:Fixed
      assets purchased on account
                  
                  $
                  -
                  
                  
                  $
                  12,520Adjustment
      of fixed asset value
                  
                  
                  15,747
                  
                  
                  
                  -
 
 See
accompanying notes to the consolidated financial statements.
  6
  CHINA
HEALTH INDUSTRIES HOLDINGS, INC.
 (formerly
Universal Fog, Inc.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 Note
1 – BASIS OF PRESENTATION
 
 The
accompanying unaudited interim financial statements of China
Health Industries Holdings, Inc. (the “Company”) 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 (the “SEC”), and
should be read in conjunction with the Company’s audited 2008 annual financial
statements and notes thereto filed with the SEC on Form PRER14C by the Company
on October 2, 2008. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the result 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 financial statements, which would substantially duplicate the disclosure
required in the Company’s 2008 annual financial statements have been
omitted.
 
 Note
2 - GOING CONCERN
 
 The
Company had an accumulated deficit of $56,810 and a working capital deficit of
$618,968 as of March 31, 2009. This raises substantial doubt about the Company’s
ability to continue as a going concern.
 
 Management
has taken actions to revise its operating and financial requirements, which it
believes are sufficient to provide the Company with the ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments related to the recoverability or classification of asset-carrying
amounts or the amounts and classification of liabilities that may result should
the Company be unable to continue as a going concern.
 
 During
the period from December 14, 2003 (inception) through March 31, 2009, the
Company relied heavily for its financing needs on its majority owner; Mr. Xin
Sun. Loans from Mr. Sun are described in Note 5 to the unaudited consolidated
financial statements.
 
 Note
3 - CONTROL BY PRINCIPAL OWNERS
 
 The
directors, executive officers, their affiliates and related parties own,
beneficially and in the aggregate, the majority of the voting power of the
outstanding capital of the Company. Accordingly, if directors, executive
officers and their affiliates, voted their shares uniformly, they would have the
ability to control the approval of most corporate actions, including approving
significant expenses, increasing the authorized capital stock and the
dissolution, merger or sale of the Company’s assets.
 
 Note
4 - INVENTORY
 
 Inventories
consisted of the following at March 31, 2009 and June 30, 2008:
 
 March 31, 2009
                    
                    
                    June 30, 2008Raw
      materials
                    
                    $
                    149,857
                    
                    
                    $
                    82,650Supply
      and packing materials
                    
                    
                    28,414
                    
                    
                    
                    24,461Work-in-progress
                    
                    
                    -
                    
                    
                    
                    -Finished
      products
                    
                    
                    14
                    
                    
                    
                    14Total
                    
                    $
                    178,285
                    
                    
                    $
                    107,125
 
 Note
5 - RELATED PARTY DEBT
 
 “Related
party debt" represents temporary short-term loans from majority owner, Mr. Sun
Xin, a PRC citizen. These loans are unsecured, non-interest bearing and have no
fixed terms of repayment, and are therefore, deemed payable on demand. Cash
flows classified as proceeds from related party debt are classified as cash
flows from financing activities. The total borrowings from Mr. Sun were $576,189
and $549,982 as of March 31, 2009 and June 30, 2008, respectively.
 
 Interest
was imputed on the loans using the Chinese bank borrowing rate of 7.47%. The
total imputed interest expense for the nine months ended March 31, 2009 was
$40,701.
 
 7
 
 Note
6 - COMMITMENTS AND CONTINGENCIES
 
 The
Company’s assets are located in the PRC and revenues are derived from operations
in the PRC.
 
 In terms
of industry regulations and policies, the economy of the PRC has been
transitioning from a planned economy to market oriented economy. Although in
recent years the Chinese government has implemented measures emphasizing the
utilization of market forces for economic reforms, the reduction of state
ownership of productive assets and the establishment of sound corporate
governance in business enterprises, a substantial portion of productive assets
in PRC are still owned by the Chinese government. For example, all lands are
state owned and are leased to business entities or individuals through
governmental granting of Land Use Rights. The granting process is typically
based on government policies at the time of granting and it could be lengthy and
complex. This process may adversely affect our company’s future manufacturing
expansions. The Chinese government also exercises significant control over PRC’s
economic growth through the allocation of resources and providing preferential
treatment to particular industries or companies. Uncertainties may arise with
changing of governmental policies and measures.
 
 The
Company faces a number of risks and challenges not typically associated with
companies in North America and Western Europe, since its assets exist solely in
the PRC, and its revenues are derived from its operations therein. The PRC is a
developing country with an early stage market economic system, overshadowed by
the state. Its political and economic systems are very different from the more
developed countries and are in a state of change. The PRC also faces many
social, economic and political challenges that may produce major shocks and
instabilities and even crises, in both its domestic arena and in its
relationships with other countries, including the United States. Such shocks,
instabilities and crises may in turn significantly and negatively affect the
Company’s performance.
 
 Note
7 - NEW SUBSIDIARY
 
 On
October 14, 2008, Harbin Humankind set up a 99% owned subsidiary with its
primary business being manufacturing and distributing medicine. Mr. Xin Sun, the
Company’s majority owner, owns 1% interest of this subsidiary. The subsidiary is
consolidated in the consolidated financial statements of the
Company.
  8
  Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.




The
following discussion of the financial condition and results of operation of the
Company for the nine and three months ended March 31, 2009 and 2008 should be
read in conjunction with the selected financial data, the financial statements
and the notes to those statements that are included elsewhere in this Current
Report on Form 10-Q (“Form 10-Q”).





Cautionary
Note Regarding Forward-Looking Statements





We make
certain forward-looking statements in this report. Statements concerning our
future operations, prospects, strategies, financial condition, future economic
performance (including growth and earnings), demand for our services, and other
statements of our plans, beliefs, or expectations, including the statements
contained under the captions “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” “Business,” as well as captions elsewhere
in this document, are forward-looking statements. In some cases these statements
are identifiable through the use of words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can”, “could,”
“may,” “should,” “will,” “would,” and similar expressions. We intend such
forward-looking statements to be covered by the safe harbor provisions contained
in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”)
and in Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). The forward-looking statements we make are not guarantees of
future performance and are subject to various assumptions, risks, and other
factors that could cause actual results to differ materially from those
suggested by these forward-looking statements. Because such statements are
subject to risks and uncertainties, actual results may differ materially from
those expressed or implied by the forward-looking statements. Indeed, it is
likely that some of our assumptions will prove to be incorrect. Our actual
results and financial position will vary from those projected or implied in the
forward-looking statements and the variances may be material. You are cautioned
not to place undue reliance on such forward-looking statements. These risks and
uncertainties, together with the other risks described from time to time in
reports and documents that we file with the SEC should be considered in
evaluating forward-looking statements.





The
nature of our business makes predicting the future trends of our revenue,
expenses, and net income difficult. Thus, our ability to predict results or the
actual effect of our future plans or strategies is inherently uncertain. The
risks and uncertainties involved in our business could affect the matters
referred to in any forward-looking statements and it is possible that our actual
results may differ materially from the anticipated results indicated in these
forward-looking statements. Important factors that could cause actual results to
differ from those in the forward-looking statements include, without limitation,
the following:





•           the
effect of political, economic, and market conditions and geopolitical
events;


•           legislative
and regulatory changes that affect our business;


•           the
availability of funds and working capital;


•           the actions
and initiatives of current and potential competitors;


•           investor
sentiment; and


•           our
reputation.





We do not
undertake any responsibility to publicly release any revisions to these
forward-looking statements to take into account events or circumstances that
occur after the date of this report. Additionally, we do not undertake any
responsibility to update you on the occurrence of any unanticipated events which
may cause actual results to differ from those expressed or implied by any
forward-looking statements.


9





The
following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto as filed with
the SEC and other financial information contained elsewhere in this
Report.





Except as
otherwise indicated by the context, references in this Form 10-Q to “we,” “us,”
“our,” “the Registrant”, “our Company,” or “the Company” are to China Health
Industries Holdings, Inc., a Delaware corporation, China Health Industries
Holdings Limited, and its wholly owned subsidiary, Harbin Humankind Biology
Technology Co. Limited. Unless the context otherwise requires, all references to
(i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,”
“$” and “US$” are to United States dollars; (iii) “RMB” are to Yuan Renminbi of
China; (iv) “Securities Act” are to the Securities Act of 1933, as amended; and
(v) “Exchange Act” are to the Securities Exchange Act of 1934, as
amended.





Company
Overview





We were
incorporated in the state of Arizona on July 11, 1996 and was the successor of
the business known as Arizona Mist, Inc. which began in 1989. On May 9, 2005, we
entered into a Stock Purchase Agreement and Share Exchange (effecting a reverse
merger) with Edmonds 6, Inc. (Edmonds 6) and our name was changed to Universal
Fog, Inc. Edmonds 6 was incorporated on August 19, 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.





We
began manufacturing systems for outdoor cooling in Arizona and quickly expanded
to distribute throughout the United States.  Our primary product was a
misting system which consisted of a high pressure pump assembled to
specifications.





China
Health Industries Holdings Limited ("China Health") was incorporated on July 20,
2007 in Hong Kong under the Companies Ordinance as a limited liability company.
China Health was formed for the purpose of seeking and consummating a merger or
acquisition with a business entity organized as a private corporation,
partnership, or sole proprietorship as defined by the Statement of Financial
Accounting Standards (SFAS) No. 7.





Harbin
Humankind Biology Technology Co., Limited ("Harbin Humankind") was incorporated
in Harbin City, Heilongjiang Province, the PRC on December 14, 2003, as a
limited liability company under the Company Law of the PRC. The Company is
engaged in the business of production and distribution of healthcare and beauty
products. Harbin Humankind has a wholly-owned subsidiary, Harbin Huimeijia
Medicine Company ("Huimeijia"), which was incorporated on October 14, 2008.
Huimeijia will be producing and selling our medical drugs after it has been GMP
certified.





On August
20, 2007, the sole shareholder of China Health entered into a Share Purchase
Agreement with the owners of Harbin Humankind. Pursuant to the Agreement, China
Health purchased 100% of the ownership in Harbin Humankind for a cash
consideration of $60,408. Subsequent to completion of the Agreement, Harbin
Humankind became a wholly-owned subsidiary of China Health. The share purchase
transaction is being accounted for as a “reverse merger,” since the owner of
Harbin Humankind owns a majority of the outstanding shares of China Health ‘s
common stock immediately following the execution of the Agreement. Harbin
Humankind is deemed to be the acquirer in the reverse merger. Consequently, the
assets and liabilities and the historical operations that are reflected in the
financial statements for periods prior to the Agreement are those of Harbin
Humankind and are recorded at the historical cost basis. After completion of the
Agreement, China Health’s consolidated financial statements include the assets
and liabilities of both China Health and Harbin Humankind and Huimeijia, the
historical operations of Harbin Humankind and the operations of China Health and
its subsidiaries from the closing date of the Agreement.





On
December 31, 2008, China Health closed a reverse merger with Universal Fog, Inc,
a U.S. public traded shell company.  China Health is the accounting
acquirer in the transaction and the transaction is treated as a recapitalization
of the Company. After the transaction and a 1:20 reverse stock split, Xin Sun
owned 61,203,088 shares of common stock, representing 98.3% of the 62,234,737
total outstanding shares of common stock of the Company. On April 7, 2009, Mr.
Sun transferred 28,200,000 shares of common stock to 296 individuals, leaving
him with 33,003,088 shares of common stock of the Company, or approximately
53.03%. We changed our name from "Universal Fog, Inc." to "China Health
Industries Holdings, Inc." on February 19, 2009.


10





Results
of Operations





Nine
Months Ended March 31, 2009 Compared to the nine Months Ended March 31,
2008





Revenue. Our revenue
increased $1,091,634, or 315%, to $1,438,124 for the nine months ended March
31,2009, compared to revenue of $346,490 for the nine months ended March 31,
2008. The significant increase in revenue is directly due to the introduction of
two new products. With the new production facilities in place, the development
of new production lines and the new marking strategy, our output and sales
increased significantly.





Cost of Sales. Our cost of
sales increased $789,683, or 296%, to $1,056,174 for the nine months ended March
31, 2009, compared to cost of sales of $266,491 for the nine months ended March
31, 2008. These costs increased as a result of the increased sales, increased
labor costs and an increase in depreciation due to newly-purchased
machinery.





Gross Profit. We had gross
profit of $381,950 for the nine months ended March 31, 2009, an increase of
$301,951 or 377% compared to gross profit of $79,999 for the nine months ended
March 31, 2008. This increase was primarily attributable to the increase in our
revenue which was partly offset by our increase in cost of sales.





Operating Expenses. Operating
expenses increased $36,264, or 38%, to $131,419 for the nine months ended March
31, 2009, compared to operating expenses of $95,155 for the nine months ended
March 31, 2008. The increase was mainly attributable to increased selling and
administrative expenses due to increased sales activities.





Net Income (Loss). Net income
for the nine months ended March 31,2009 was $142,618, an increase of $157,316 or
1,070% compared to net loss for the nine months ended March 31, 2008 of $14,698.
The increase was primarily attributable to the enlargement of our production
scale and development of new production lines as discussed above.





Comprehensive Income.
Comprehensive income for the nine months ended March 31, 2009 was $148,272, an
increase of $37,053 or 33% compared to comprehensive income for the nine months
ended March 31, 2008 of $111,219. The comprehensive income includes the
contribution of foreign currency translation gains.





Three
Months Ended March 31, 2009 Compared to the Three Months Ended March 31,
2008





Revenue. Our revenue
increased $682,209, or 205%, to $1,015,480 for the three months ended March 31,
2009, compared to revenue of $333,271 for the three months ended March 31, 2008.
The significant increase in revenue is directly due to the introduction of two
new products. With the new production facilities in place, the development of
new production lines and the new marking strategy, our output and sales
increased significantly.





Cost of Sales. Our cost of
sales increased $436,068, or 174%, to $686,362, for the three months ended March
31, 2009, compared to cost of sale of $250,294 for the three months ended March
31, 2008. These costs increased as a result of the increased sales, increased
labor costs and an increase in depreciation due to newly-purchased
machinery.





Gross Profit. We had gross
profit of $329,118 for the three months ended March 31, 2009, an increase of
$246,141 or 297% compared to gross profit of $82,977 for the three months ended
March 31, 2008. This increase was primarily attributable to the increase in our
revenue which was partly offset by our increase in cost of sales.





Operating Expenses. Operating
expenses increased $19,687, or 55%, to $55,529 for the three months ended March
31, 2009, compared to operating expenses of $35,842 for the three months ended
March 31, 2008. The increase was mainly attributable to increased selling and
administrative expenses due to increased sales activities.





Net Income. Net income for
the three months ended March 31, 2009 was $197,804, an increase of $150,236 or
316% compared to net income for the three months ended March 31, 2008 of
$47,568. The increase was attributable to the enlargement of our production
scale and development of new production lines as discussed above.





Comprehensive Income.
Comprehensive income for the three months ended March 31, 2009 was $195,908, an
increase of $50,985 or 35% compared to comprehensive income for the three months
ended March 31, 2008 of $144,923. The comprehensive income includes the
contribution of foreign currency translation gains and losses.


11





Liquidity
and Capital Resources





We had a
working capital deficit of $618,968 as of March 31, 2009.





During
the nine months ended March 31, 2009, net cash increased by $51,511 or 146%,
consisting of $173,346 provided by operating activities, $146,022 used in
investment activities, $27,671 provided by financing activities and effects of
foreign exchange on cash of $3,484.





Net cash
provided by operating activities decreased $78,914 or 31% during the nine months
ended March 31, 2009 versus the comparable period in 2008. This decrease was
primarily due to changes in working capital associated with the increase in
inventory purchases and accounts payable resulting from the increase of
production and sales activities as well as the limited payment of vendors in
purchase activities.





The
primary drivers of cash used in investing activities were capital spending. Cash
used in investing activities was $146,022 and $246,919 for the nine months ended
March 31, 2009 and 2008, respectively. During the nine months ended March 31,
2009, a total of $36,147 cash outflow was used to purchase new equipment and
additions to facilities and $109,875 was lent by us to a possible future
customer.





Net cash
provided by financing activities for the nine months ended March 31, 2009
consisted of proceeds from related party debt of $26,207, which is a critical
source of our working capital funding, and contributed capital of
$1,464.





Critical
Accounting Policies and Estimates





The
discussion and analysis of the Company’s financial condition presented in this
section are based upon the audited consolidated financial statements of the
Company, including Harbin Humankind, which have been prepared in accordance with
the generally accepted accounting principles in the United States. For purposes
of this section entitled “Critical Accounting Policies and Estimates,” During
the preparation of the financial statements of the Company we were required 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, the Company evaluates its estimates and
judgments, including those related to sales, returns, pricing concessions, bad
debts, inventories, investments, fixed assets, intangible assets, income taxes
and other contingencies. The Company bases its estimates on historical
experience and on various other assumptions that it believes are reasonable
under current conditions. Actual results may differ from these estimates under
different assumptions or conditions.





In
response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding
Disclosure about Critical Accounting Policy,” The Company identified the most
critical accounting principles upon which its financial status depends. The
Company determined that those critical accounting principles are related to the
use of estimates, inventory valuation, revenue recognition, income tax and
impairment of intangibles and other long-lived assets. The Company presents
these accounting policies in the relevant sections in this management’s
discussion and analysis, including the Recently Issued Accounting Pronouncements
discussed below.





Revenue Recognition. The
Company recognizes revenue when the earnings process is complete. This generally
occurs when products are shipped to unaffiliated customer or services are
performed in accordance with terms of the agreement, title and risk of loss have
been transferred, collectability is reasonably assured and pricing is fixed or
determinable. Accruals are made for sales returns and other allowances based on
the Company’s experience





Accounts Receivable, Trade and
Allowance for Doubtful Accounts. The Company’s business operations are
conducted in the PRC. During the normal course of business, the Company extends
unsecured credit to its customers. Management reviews accounts receivable on a
regular basis to determine if the allowance for doubtful accounts is adequate.
An estimate for doubtful accounts is recorded when collection of the full amount
is no longer probable. At December 31, 2008, and 2007, no allowances for
doubtful accounts were accrued.





Inventories. Inventories are
stated at the lower of cost or market using the weighted average method. The
Company reviews its inventory on a regular basis for possible obsolete goods or
to determine if any reserves are necessary for potential obsolescence. As of
March 31, 2009 and 2008, the Company has determined that no reserves are
necessary.


12





Impairment of Long-Lived
Assets. The Company reviews all of its long-lived assets, including
tangible and intangible long-lived assets, for impairment indicators at least
annually and performs detailed impairment testing for all long-lived assets
whenever impairment indicators are present. When necessary, the Company records
charges for impairments of long-lived assets for the amount by which the present
value of future cash flows, or some other fair value measure, is less than the
carrying value of these assets.





Off-Balance Sheet
Arrangements. The Company has not entered into any financial guarantees
or other commitments to guarantee the payment obligations of any third parties.
The Company has not entered into any derivative contracts that are indexed to
China the Company’s shares and classified as shareholder’s equity or that are
not reflected in the Company’s financial statements. Furthermore, The Company
does not have any retained or contingent interest in assets transferred to an
unconsolidated entity that serves as credit, liquidity or market risk support to
such entity. The Company does not have any variable interest in any
unconsolidated entity that provides financing, liquidity, market risk or credit
support to the Company or engages in leasing, hedging or research and
development services with the Company.





Income Taxes. The Company has
adopted Statement of Financial Accounting Standards No. 109, “Accounting for
Income Taxes” (SFAS 109). SFAS 109 requires the recognition of deferred income
tax liabilities and assets for the expected future tax consequences of temporary
differences between income tax basis and financial reporting basis of assets and
liabilities. Provision for income taxes consist of taxes currently due plus
deferred taxes. Since the Company had no operations within the United States
there is no provision for US income taxes and there are no deferred tax amounts
as of March 31, 2009 and 2008. The charge for taxation is based on the results
for the year as adjusted for items, which are non-assessable or disallowed. It
is calculated using tax rates that have been enacted or substantively enacted by
the balance sheet date.





Deferred
tax is accounted for using the balance sheet liability method in respect of
temporary differences arising from differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax
basis used in the computation of assessable tax profit. In principle, deferred
tax liabilities are recognized for all taxable temporary differences, and
deferred tax assets are recognized to the extent that it is probably that
taxable profit will be available against which deductible temporary differences
can be utilized. Deferred tax is calculated at the tax rates that are expected
to apply to the period when the asset is realized or the liability is settled.
Deferred tax is charged or credited in the income statement, except when it
related to items credited or charged directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when they related to income taxes levied by the same taxation
authority and the Company intends to settle current tax assets and liabilities
on a net basis.





Recently
Issued Accounting Pronouncements





The
Company does not believe the recently issued accounting pronouncements would
have a material impacts on its financial statements.





Item 3.  Quantitative and Qualitative
Disclosures About Market Risk.




Not
applicable.





13




Item
4.   Controls and Procedures.


Evaluation
of our Disclosure Controls





As of the
end of the period covered by this Quarterly Report on Form 10-Q, our principal
executive officer and principal financial officer have evaluated the
effectiveness of our “disclosure controls and procedures” (“Disclosure
Controls”). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), are procedures that are
designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Exchange Act, such as this Quarterly
Report, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms.
Disclosure Controls are also designed with the objective of ensuring that such
information is accumulated and communicated to our management, including the CEO
and CFO, as appropriate to allow timely decisions regarding required disclosure.
Our management, including the CEO and CFO, does not expect that our Disclosure
Controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their 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. The design of any
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 goals under all potential future
conditions.





Based
upon their controls evaluation, our CEO and CFO have concluded that our
Disclosure Controls are effective at a reasonable assurance level.





Changes
in internal control over financial reporting





There
have been no changes in our internal controls over financial reporting during
our third fiscal quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.


14





PART
II - OTHER INFORMATION





Item 1. Legal
Proceedings.





There is
no material legal proceeding pending against us.




Item 1A. Risk Factors









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





None.





Item
3.  Defaults Upon Senior Securities





None.




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





None.





Item
5.  Other Information





Not
applicable.





Item
6.  Exhibits





Copies of
the following documents are included as exhibits to this report pursuant to Item
601 of Regulation S-K.




Exhibit No.
            
            SEC Ref. No.
            
            Title of Document1
            
            31.1
            
            Certification
      of the Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 20022.
            
            31.2
            
            Certification
      of the Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 20023
            
            32.1
            
            Certification
      of the Principal Executive Officer pursuant to U.S.C. Section 1350 as
      adopted pursuant  to Section 906 of the Sarbanes-Oxley Act of
      2002*4
            
            32.2
            
            Certification
      of the Principal Financial Officer pursuant to
  U.S





*The Exhibits attached to
this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to
liability under that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such
filing.


15


SIGNATURES





In
accordance with the Exchange Act, the registrant caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.





CHINA
      HEALTH INDUSTRIES
                HOLDINGS,
      INC.Date:
      May 14, 2009/s/
      Xin SunXin
      SunChief
      Executive Officer and Chief Financial
                Officer


16