**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





or





o  **TRANSITION
      REPORT PURSUANT TO SECTION 13 0R 15(D) OF THE SECURITIES
      EXCHANGE**


**ACT
      OF 1934**





For
      the
      transition period from _______ to _______





*Commission
      File Number: 000-51497*





**BIO-BRIDGE
      SCIENCE, INC.**


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





Delaware
            
            20-1802936(State
                or Other jurisdiction of
            
            (IRS
                Employerincorporation
                or organization)
            
            Identification
                No.)1211
                West 22nd Street, Suite 615Oak
                Brook, Illinois
            
            60523(Address
                of principal executive offices)
            
            (Zip
                Code)





630-928-0869


(Issuer's
      telephone number including area code)





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





Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filero(Do not check if a smaller reporting company)
            Smaller
                reporting companyx





Indicate
      by check mark whether the registrant is a shell company:  Yes o No x





State
      the
      number of shares outstanding of each of the issuer's classes of common stock,
      as
      of the latest practicable date.





Common
      Stock Outstanding as of June 30, 2008: 34,587,676 shares









**Bio-Bridge
      Science, Inc.**


(A
      development stage company)


Index
      to
      Form 10-Q






PageItem
                1.
            
            Financial
                Statements
            
            1Condensed
                Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December
                31, 2007
            
            1Unaudited
                Condensed Consolidated Statements of Operations for the three and six
                month periods ended June 30, 2008 and 2007 and for the period from
                February 11, 2002 (inception) through June 30, 2008
            
            2Unaudited
                Condensed Consolidated Statements of Changes in Shareholders' Equity
                and
                Comprehensive Gain (Loss) for the period from February 11, 2002
                (inception) through June 30, 2008
            
            3Unaudited
                Condensed Consolidated Statements of Cash Flows for the six month
                periods
                ended June 30, 2008 and 2007 and for the period from February 11,
                2002
                (inception) through June 30, 2008
            
            9Notes
                to Unaudited Condensed Consolidated Financial Statements
            
            11Item
                2.
            
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operation
            
            23Item
                3.
            
            Quantitative
                and Qualitative Disclosure About Market Risk
            
            30Item
                4.
            
            Controls
                and Procedures
            
            30Part
                II
            
            Other
                Information
            
            30Item
                1.
            
            Legal
                Proceedings
            
            30Item
                1A.
            
            Risk
                Factors
            
            30Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            30Item
                3.
            
            Defaults
                Upon Senior Securities
            
            30Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            30Item
                5.
            
            Other
                Information
            
            30Item
                6.
            
            Exhibits
            
            30SIGNATURES
            
            31









**Item
      1. Financial Statements**





**BIO-BRIDGE
      SCIENCE INC. AND SUBSIDIARIES**


**(A
      DEVELOPMENT STAGE COMPANY)**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS** ****





**June
                30**
            
            **December
                31****2008**
            
            **2007****(Unaudited)****ASSETS****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            932,020
            
            $
            104,372Prepaid
                expenses and other current assets
            
            
            43,511
            
            
            28,662Trading
                securities, at fair value
            
            
            193,675
            
            
            1,509,916Total
                Current Assets
            
            
            1,169,206
            
            
            1,642,950Fixed
                assets, net
            
            
            59,849
            
            
            65,774Construction
                in progress
            
            
            2,160,203
            
            
            1,814,291Land
                use right, net of current portion
            
            
            380,886
            
            
            366,597Total
                Long-term Assets
            
            
            2,600,938
            
            
            2,246,662**TOTAL
                ASSETS**
            
            $
            3,770,144
            
            $
            3,889,612**LIABILITIES
                AND SHAREHOLDERS’ EQUITY****CURRENT
                LIABILITIES**Accrued
                expenses and other payables
            
            $
            159,328
            
            $
            121,270Due
                to related party
            
            
            61,233
            
            
            -Payable
                to contractors
            
            
            132,073
            
            
            124,017Total
                current liabilities
            
            
            352,634
            
            
            245,287Commitments
                and contingencies**SHAREHOLDERS’
                EQUITY**Preferred
                stock, $0.001 par value, 5,000,000 shares authorized, 4,000,000 shares
                issued and outstanding
            
            
            4,000
            
            
            4,000Common
                stock, $0.001 par value, 100,000,000 shares authorized,34,
                587,676 and 34,357,676 shares issued and outstanding,
                respectively
            
            
            34,588
            
            
            34,358Additional
                paid-in capital
            
            
            10,920,612
            
            
            10,349,611Preferred
                stock dividend
            
            
            137,000
            
            
            137,000Subscription
                receivable
            
            
            (265,035
            )
            
            (20
            )Stock
                to be issued, 393,334 and 50,000 shares, respectively
            
            
            393
            
            
            50Accumulated
                other comprehensive gain
            
            
            361,015
            
            
            221,358Deficit
                accumulated during the development stage
            
            
            (7,775,063
            )
            
            (7,102,032
            )Total
                Shareholders’ Equity
            
            
            3,417,510
            
            
            3,644,325**TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY**
            
            $
            3,770,144
            
            $
            3,889,612





See
      accompanying notes to the condensed consolidated financial
      statements.





1




**BIO-BRIDGE
        SCIENCE INC. AND SUBSIDIARIES**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 UNAUDITED
        CONDENSED CONSOLIDATED STATEMENT OF
        OPERATIONS
 FOR
        THE THREE AND SIX MONTHS ENDED JUNE 30, 2008
 AND
        FOR THE PERIOD FROM FEBRUARY 11, 2002
        (INCEPTION) THROUGH JUNE 30, 2008





**Three
                Months Ended**
              **June
                30,**
            
            **Six
                Months Ended**
              **June
                30,**
            
            **For
                The Period From February 11, 2002 (Inception) Through June 30,
                2008****2008**
            
            **2007**
            
            **2008**
            
            **2007****REVENUE**
            
            $
            5,142
            
            $
            333
            
            $
            7,427
            
            $
            690
            
            $
            12,174**COST
                OF GOODS SOLD**
            
            
            (1,957
            )
            
            (178
            )
            
            (2,848
            )
            
            (405
            )
            
            (5,656
            )**GROSS
                PROFIT**
            
            
            3,185
            
            
            155
            
            
            4,579
            
            
            285
            
            
            6,518Research
                and development cost
            
            
            (20,467
            )
            
            (38,355
            )
            
            (56,873
            )
            
            (82,050
            )
            
            (529,214
            )Selling
                and distribution expenses
            
            
            (21,281
            )
            
            (10,838
            )
            
            (33,610
            )
            
            (16,311
            )
            
            (121,891
            )General
                and administrative expenses
            
            
            (243,031
            )
            
            (419,374
            )
            
            (448,875
            )
            
            (718,600
            )
            
            (5,151,363
            )**LOSS
                FROM OPERATIONS**
            
            
            (281,594
            )
            
            (468,412
            )
            
            (534,779
            )
            
            (816,676
            )
            
            (5,795,950
            )Interest
                (expense) income
            
            
            (1,521
            )
            
            396
            
            
            (1,671
            )
            
            3,803
            
            
            15,318Unrealized
                loss on trading securities
            
            
            (519
            )
            
            (85,360
            )
            
            (71,381
            )
            
            (108,426
            )
            
            (443,573
            )Income
                on sale of trading securities
            
            
            64,916
            
            
            -
            
            
            55,150
            
            
            -
            
            
            52,332Dividend
                income
            
            
            13,533
            
            
            38,556
            
            
            59,650
            
            
            48,001
            
            
            187,130**NET
                LOSS**
            
            
            (205,185
            )
            
            (514,820
            )
            
            (493,031
            )
            
            (873,298
            )
            
            (5,984,743
            )**DEEMED
                PREFERRED STOCK DIVIDEND**
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,293,320
            )
            
            (1,293,320
            )**PREFERRED
                STOCK DIVIDENDS**
            
            
            (90,000
            )
            
            (90,000
            )
            
            (180,000
            )
            
            (137,000
            )
            
            (497,000
            )**NET
                LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS**
            
            $
            (295,185
            )
            $
            (604,820
            )
            $
            (673,031
            )
            $
            (2,303,618
            )
            $
            (7,775,063
            )**LOSS
                PER SHARE, attributable to common shareholders, basic and
                diluted**
            
            $
            (0.01
            )
            $
            (0.02
            )
            $
            (0.02
            )
            $
            (0.07
            )**WEIGHTED
                AVERAGE SHARES OUTSTANDING, basic and diluted**
            
            
            34,516,907
            
            
            33,785,874
            
            
            34,249,109
            
            
            33,720,633




See
        accompanying notes to the condensed consolidated financial
        statements.


2




**BIO-BRIDGE
      SCIENCE INC. AND SUBSIDIARIES**


**(A
      DEVELOPMENT STAGE COMPANY)**


**UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**


**IN** **SHAREHOLDERS'
      EQUITY AND COMPREHENSIVE INCOME**


**FOR
      THE PERIOD FROM**  **FEBRUARY
      11, 2002 (INCEPTION) THROUGH JUNE 30, 2008**


Additional
            
            
            
            Common
                Stock
            
            Accumulated
              Other
            
            Deficit
              Accumulated
              During
                theCommon
                Stock
            
            Paid-in
            
            Deferred
            
            To
                be
            
            Comprehensive
            
            DevelopmentShares
            
            Amount
            
            Capital
            
            Compensation
            
            Issued
            
            Gain
                (Loss)
            
            Stage
            
            TotalIssuance
                of 13,750,000 shares at $0.00004
            
            
            13,750,000
            
            $
            13,750
            
            $
            (13,200
            )
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            550Issuance
                of 7,461,090 shares at $0.0468
            
            
            7,461,090
            
            
            7,461
            
            
            341,719
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            349,180Issuance
                of 1,875,000 shares at $0.12
            
            
            1,875,000
            
            
            1,875
            
            
            223,125
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            225,000Foreign
                currency translation loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (499
            )
            
            -
            
            
            (499
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (114,476
            )
            
            (114,476
            )**BALANCE
                DECEMBER 31, 2002**
            
            
            23,086,090
            
            
            23,086
            
            
            551,644
            
            
            -
            
            
            -
            
            
            (499
            )
            
            (114,476
            )
            
            459,755Issuance
                of 3,508,425 shares at $0.12
            
            
            3,508,425
            
            
            3,509
            
            
            417,502
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            421,011Issuance
                of 201,200 shares at $0.32
            
            
            201,200
            
            
            201
            
            
            64,186
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            64,387Foreign
                currency translation loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (644
            )
            
            -
            
            
            (644
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (255,020
            )
            
            (255,020
            )**BALANCE
                DECEMBER 31, 2003**
            
            
            26,795,715
            
            
            26,796
            
            
            1,033,332
            
            
            -
            
            
            -
            
            
            (1,143
            )
            
            (369,496
            )
            
            689,489Issuance
                of 434,600 shares at $0.12
            
            
            434,600
            
            
            435
            
            
            51,715
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            52,150Issuance
                of 1,125,275 shares at $0.32
            
            
            1,125,275
            
            
            1,125
            
            
            358,961
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            360,086Issuance
                of 1,616,000 shares at $0.50
            
            
            1,616,000
            
            
            1,616
            
            
            806,382
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            807,998Fair
                market value of Stock options granted for services
            
            
            -
            
            
            -
            
            
            695,052
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            695,052Fair
                value of shares issued for services
            
            
            100,000
            
            
            100
            
            
            49,900
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            50,000Exercise
                of options
            
            
            200,000
            
            
            200
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            200Deferred
                consulting expenses
            
            
            -
            
            
            -
            
            
            -
            
            
            (390,890
            )
            
            -
            
            
            -
            
            
            -
            
            
            (390,890
            )Foreign
                currency translation loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (457
            )
            
            -
            
            
            (457
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (944,437
            )
            
            (944,437
            )**BALANCE
                DECEMBER 31, 2004**
            
            
            30,271,590
            
            $
            30,272
            
            $
            2,995,342
            
            $
            (390,890
            )
            $
            -
            
            $
            (1,600
            )
            $
            (1,313,933
            )
            $
            1,319,191


(continued)




3




**BIO-BRIDGE
      SCIENCE INC. AND SUBSIDIARIES**


**(A
      DEVELOPMENT STAGE COMPANY)**


**UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**


**IN
      SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (continued)**


**FOR
      THE PERIOD FROM FEBRUARY 11, 2002** **(INCEPTION)
      THROUGH JUNE 30, 2008**





Additional
            
            
            
            Common
                Stock
            
            Accumulated
              Other
            
            Deficit
              Accumulated
              During
                theCommon
                Stock
            
            Paid-in
            
            Deferred
            
            To
                be
            
            Comprehensive
            
            DevelopmentShares
            
            Amount
            
            Capital
            
            Compensation
            
            Issued
            
            Gain
                (Loss)
            
            Stage
            
            Total**BALANCE
                DECEMBER 31, 2004**
            
            
            30,271,590
            
            $
            30,272
            
            $
            2,995,342
            
            $
            (390,890
            )
            $
            -
            
            $
            (1,600
            )
            $
            (1,313,933
            )
            $
            1,319,191Issuance
                of 2,179,947 shares at $0.50
            
            
            2,179,947
            
            
            2,180
            
            
            1,087,794
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,089,974Stock
                options issued for services
            
            
            -
            
            
            -
            
            
            34,935
            
            
            (34,935
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Stock
                options granted to employees and officers
            
            
            -
            
            
            -
            
            
            680,604
            
            
            (680,604
            )
            
            -
            
            
            -
            
            
            -
            
            
            -Amortization
                of deferred compensation expenses
            
            
            -
            
            
            -
            
            
            -
            
            
            458,127
            
            
            -
            
            
            -
            
            
            -
            
            
            458,127Return
                of options
            
            
            -
            
            
            -
            
            
            (139,604
            )
            
            139,604
            
            
            -
            
            
            -
            
            
            -
            
            
            -Exercise
                of options
            
            
            -
            
            
            -
            
            
            (328
            )
            
            -
            
            
            328
            
            
            -
            
            
            -
            
            
            -Foreign
                currency translation loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            26,882
            
            
            -
            
            
            26,882Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,253,093
            )
            
            (1,253,093
            )**BALANCE
                DECEMBER 31, 2005**
            
            
            32,451,537
            
            $
            32,452
            
            $
            4,658,743
            
            $
            (508,698
            )
            $
            328
            
            $
            25,282
            
            $
            (2,567,026
            )
            $
            1,641,081




(continued)
  4
 **BIO-BRIDGE
            SCIENCE INC. AND SUBSIDIARIES**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **UNAUDITED
            CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**
 **IN
            SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (continued)**
 **FOR
            THE PERIOD FROM FEBRUARY 11, 2002 (INCEPTION) THROUGH JUNE 30, 2008**
  Common
                    
                    Stock
                    
                    Additional
                        Paid-in
                    
                    Deferred
                    
                    Common
                        Stock to be
                    
                    Accumulated
                      Other
                        Comprehensive
                    
                    Subscription
                    
                    Deficit
                      Accumulated
                      During
                        the DevelopmentShares
                    
                    Amount
                    
                    Capital
                    
                    Compensation
                    
                    Issued
                    
                    Gain
                        (Loss)
                    
                    Receivable
                    
                    Stage
                    
                    Total**BALANCE
                        DECEMBER 31, 2005**
                    
                    
                    32,451,537
                    
                    $
                    32,452
                    
                    $
                    4,658,743
                    
                    $
                    (508,698
                    )
                    $
                    328
                    
                    $
                    25,282
                    
                    $
                    -
                    
                    $
                    (2,567,026
                    )
                    $
                    1,641,081Reclassification
                        of deferred compensation balance to
                        additional-paid-in-capital
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (508,698
                    )
                    
                    508,698
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Issuance
                        of shares for previously exercised stock option
                    
                    
                    328,116
                    
                    
                    328
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (328
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Sales
                        of shares at $0.75 to $1.2 per share for cash, net of issuance
                        costs
                    
                    
                    540,348
                    
                    
                    540
                    
                    
                    872,637
                    
                    
                    -
                    
                    
                    240
                    
                    
                    -
                    
                    
                    (25,091
                    )
                    
                    -
                    
                    
                    848,326Compensatory
                        shares issued to consultant
                    
                    
                    122,000
                    
                    
                    122
                    
                    
                    223,773
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    223,895Employee
                        stock options
                    
                    
                    -
                    
                    
                    -
                    
                    
                    174,670
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    174,670Consultant
                        stock option
                    
                    
                    -
                    
                    
                    -
                    
                    
                    48,277
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    48,277Exercise
                        of options
                    
                    
                    50,000
                    
                    
                    50
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    50Foreign
                        currency translation loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    55,121
                    
                    
                    -
                    
                    
                    -
                    
                    
                    55,121Net
                        loss 1/1/06 to 12/31/06
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,323,894
                    )
                    
                    (1,324,364
                    )**BALANCE
                        DECEMBER 31, 2006**
                    
                    
                    33,492,001
                    
                    $
                    33,492
                    
                    $
                    5,469,402
                    
                    $
                    -
                    
                    $
                    240
                    
                    $
                    80,403
                    
                    $
                    (25,091
                    )
                    $
                    (3,890,920
                    )
                    $
                    1,667,526


(continued)


5




**BIO-BRIDGE
        SCIENCE INC. AND SUBSIDIARIES**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **UNAUDITED
        CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**
 **IN
        SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (continued)**
 **FOR
        THE PERIOD FROM FEBRUARY 11, 2002** **(INCEPTION)
        THROUGH JUNE 30, 2008**


Common
                    Stock
              
              Preferred
                    stock
              
              Preferred
                      stock dividend payable in common
              
              Additional
                      Paid-in
              
              Common
                        StockTo be
              
              Accumulated
                      Other Comprehensive
              
              Subscriptions
              
              Deficit
                        Developed During the DevelopmentShares
              
              Amount
              
              Shares
              
              Amount
              
              stock
              
              Capital
              
              Issued
              
              Gain
                  (loss)
              
              Receivable
              
              Stage
              
              Total**BALANCE
                  DECEMBER 31, 2006**
              
              
              33,492,001
              
              $
              33,492
              
              
              
              
              
              
              
              
              
              
              $
              5,469,402
              
              $
              240
              
              $
              80,403
              
              $
              (25,091
              )
              $
              (3,890,920
              )
              $
              1,667,526Issuance
                  of common stock at $0.75 per share for cash, net of issuance
                  costs
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              22,470
              
              
              30
              
              
              -
              
              
              -
              
              
              -
              
              
              22,500Issuance
                  of preferred shares at $0.75 per share for cash, net of issuance
                  costs
              
              
              -
              
              
              -
              
              
              4,000,000
              
              
              4,000
              
              
              -
              
              
              2,996,000
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              3,000,000Deemed
                  dividend related to beneficial conversion feature of convertible
                  preferred
                  stock
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,293,320
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,293,320
              )
              
              -Accrual
                  of preferred stock dividend
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              317,000
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (317,000
              )
              
              -Payment
                  of preferred stock dividend
              
              
              180,000
              
              
              180
              
              
              -
              
              
              -
              
              
              (180,000
              )
              
              179,820
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Compensatory
                  shares issued to consultant
              
              
              30,000
              
              
              30
              
              
              -
              
              
              -
              
              
              -
              
              
              67,694
              
              
              20
              
              
              -
              
              
              -
              
              
              -
              
              
              67,744Fair
                  value of vested employee stock options
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              173,715
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              173,715


(continued)


6


**BIO-BRIDGE
          SCIENCE INC. AND SUBSIDIARIES**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **UNAUDITED
          CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**
 **IN
          SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (continued)**
 **FOR
          THE PERIOD FROM FEBRUARY 11, 2002 (INCEPTION) THROUGH JUNE 30, 2008**
  Common
                      Stock
                
                
                Preferred
                      stock
                
                
                Preferred
                        stock dividend payable in common
                
                
                Additional
                          Paid-in
                
                
                Common
                          Stockto Be
                
                
                Accumulated
                        Other Comprehensive
                
                
                Subscriptions
                
                
                Deficit
                      Developed During the DevelopmentShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                stock
                
                
                Capital
                
                
                Issued
                
                
                Gain
                    (loss)
                
                
                Receivable
                
                
                Stage
                
                
                TotalFair
                    value of consultant stock options
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                147,190
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                147,190Issuance
                    of shares for previously exercised stock option
                
                
                240,000
                
                
                240
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (240
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Proceeds
                    from previously issued stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                25,071
                
                
                -
                
                
                25,071Exercise
                    of options
                
                
                415,675
                
                
                416
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                416Foreign
                    currency translation loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                140,955
                
                
                -
                
                
                -
                
                
                140,955Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,600,792
                )
                
                (1,600,792
                )**BALANCE
                    DECEMBER 31, 2007**
                
                
                34,357,676
                
                $
                34,358
                
                
                4,000,000
                
                $
                4,000
                
                $
                137,000
                
                $
                10,349,611
                
                $
                50
                
                $
                221,358
                
                $
                (20
                )
                $
                (7,102,032
                )
                $
                3,644,325
 (continued)


7
 **BIO-BRIDGE
            SCIENCE INC. AND SUBSIDIARIES**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **UNAUDITED
            CONDENSED CONSOLIDATED STATEMENTS OF CHANGES**
 **IN
            SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (continued)**
 **FOR
            THE PERIOD FROM FEBRUARY 11, 2002(INCEPTION) THROUGH JUNE 30,
            2008**
 Common
                              Stock
                          
                          Preferred
                              Stock
                          
                          Preferred
                              stock dividend payable in common
                          
                          Additional
                              paid-in
                          
                          Accumulated
                              other comprehensive
                          
                          Common
                              stock to be
                          
                          Subscriptions
                          
                          Deficit
                              accumulated during the developmentShares
                          
                          Amount
                          
                          Shares
                          
                          Amount
                          
                          stock
                          
                          capital
                          
                          gain
                              (loss)
                          
                          issued
                          
                          receivable
                          
                          stage
                          
                          Total**BALANCE
                              DECEMBER 31, 2007**
                          
                          
                          34,357,676
                          
                          $
                          34,358
                          
                          
                          4,000,000
                          
                          $
                          4,000
                          
                          $
                          137,000
                          
                          $
                          10,349,611
                          
                          $
                          221,358
                          
                          $
                          50
                          
                          $
                          (20
                          )
                          $
                          (7,102,032
                          )
                          $
                          3,644,325Sale
                              of 393,334 shares of common stock at $0.75 per share for cash, to be
                              issued
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          294,607
                          
                          
                          -
                          
                          
                          393
                          
                          
                          (265,015
                          )
                          
                          -
                          
                          
                          29,985Fair
                              value of warrants issued to directors
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          11,507
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          11,507Fair
                              value of vested employee stock options
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          85,066
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          85,066Accrual
                              of preferred stock dividend
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          180,000
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          (180,000
                          )
                          
                          -Payment
                              of preferred stock dividend
                          
                          
                          180,000
                          
                          
                          180
                          
                          
                          -
                          
                          
                          -
                          
                          
                          (180,000
                          )
                          
                          179,820
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -Issuance
                              of shares
                          
                          
                          50,000
                          
                          
                          50
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          (50
                          )
                          
                          -
                          
                          
                          -
                          
                          
                          -Foreign
                              currency translation gain
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          139,658
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          139,658Net
                              loss
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          -
                          
                          
                          (493,031
                          )
                          
                          (493,031
                          )**BALANCE
                              JUNE 30, 2008**
                          
                          
                          34,587,676
                          
                          $
                          34,588
                          
                          
                          4,000,000
                          
                          $
                          4,000
                          
                          $
                          137,000
                          
                          $
                          10,920,611
                          
                          $
                          361,016
                          
                          $
                          393
                          
                          $
                          (265,035
                          )
                          $
                          (7,775,063
                          )
                          $
                          3,417,510
  See
                  accompanying notes to the condensed consolidated financial
                  statements.


8
 BIO-BRIDGE
          SCIENCE INC. AND SUBSIDIARIES
 (A
          DEVELOPMENT STAGE COMPANY)
 **UNAUDITED
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**
 FOR
          THE SIX MONTHS ENDED JUNE 30,
          2008
 AND
          FOR THE PERIOD FROM FEBRUARY 11, 2002
          (INCEPTION)
 THROUGH
          JUNE 30, 2008


**For
                Six Months Ended June 30, 2008**
            
            **For
                the Period From February 11, 2002 (Inception) Through June 30,
                2008****2008**
            
            **2007****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                loss
            
            $
            (493,031
            )
            $
            (873,298
            )
            $
            (5,984,743
            )Adjustments
                to reconcile net loss to net cash used in operating activities:
            
            
            -Depreciation
            
            
            10,133
            
            
            9,408
            
            
            54,329Amortization
                of land use right
            
            
            9,222
            
            
            8,469
            
            
            82,546Non
                cash stock compensation expense
            
            
            96,573
            
            
            281,487
            
            
            1,744,355Write
                off for notes receivable
            
            
            -
            
            
            -
            
            
            40,000Unrealized
                loss on trading securities
            
            
            71,381
            
            
            108,426
            
            
            443,573Income
                on sale of trading securities
            
            
            (55,150
            )
            
            -
            
            
            (52,332
            )Loss
                on sale of investment
            
            
            -
            
            
            -
            
            
            2,107Change
                in operating assets and liabilities:
            
            
            
            
            
            
            
            
            -(Increase)
                decrease in prepaid expense and other assets
            
            
            (14,849
            )
            
            633
            
            
            (43,511
            )Decrease
                (increase) payable to contractors
            
            
            -
            
            
            (355,631
            )
            
            124,017Increase
                (decrease) in accrued expenses and other payable
            
            
            38,058
            
            
            (12,010
            )
            
            159,328Net
                Cash Used In Operating Activities
            
            
            (337,663
            )
            
            (832,516
            )
            
            (3,430,331
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of land use right
            
            
            
            
            
            -
            
            
            (394,559
            )Increase
                in construction in progress
            
            
            (220,900
            )
            
            (3,951
            )
            
            (1,918,836
            )Purchase
                of fixed assets
            
            
            (593
            )
            
            (720
            )
            
            (106,833
            )Purchase
                of investment
            
            
            -
            
            
            -
            
            
            (40,000
            )Purchase
                of trading securities
            
            
            -
            
            
            (2,000,000
            )
            
            (1,984,924
            )Proceeds
                from sale of trading securities
            
            
            1,300,010
            
            
            102,816
            
            
            1,400,008Net
                Cash Provided By (Used In) Investing Activities
            
            
            1,078,517
            
            
            (1,901,855
            )
            
            (3,045,144
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Proceeds
                from issuance of common stock
            
            
            29,985
            
            
            22,500
            
            
            4,295,890Proceeds
                from issuance of preferred stock
            
            
            -
            
            
            3,000,000
            
            
            3,000,000Proceeds
                from issuance of previously issued stocks
            
            
            -
            
            
            10,071
            
            
            -Proceeds
                from exercise of stock option
            
            
            -
            
            
            416
            
            
            994Advances
                from related party
            
            
            61,233
            
            
            (18,885
            )
            
            61,233Net
                Cash Provided By Financing Activities
            
            
            91,218
            
            
            3,014,102
            
            
            7,358,117**NET
                INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            832,072
            
            
            279,731
            
            
            882,642Effect
                of exchange rate changes on cash
            
            
            (4,424
            )
            
            (3,160
            )
            
            49,378Cash
                and cash equivalents, beginning of period
            
            
            104,372
            
            
            149,613
            
            
            -**CASH
                AND CASH EQUIVALENTS, END OF PERIOD**
            
            $
            932,020
            
            $
            426,184
            
            $
            932,020


See
        accompanying notes to the condensed consolidated financial
        statements.


9


**For
                Six Months Ended June 30, 2008**
            
            **For
                Six Months Ended June 30, 2007**
            
            **For
                the Period From February 11, 2002 (Inception) Through June 30,
                2008****Supplemental
                cash flow information**Interest
                Paid
            
            $
            -
            
            $
            -
            
            $
            -Income
                taxes Paid
            
            $
            -
            
            $
            -
            
            $
            -**Supplemental
                non-cash investing and financing activities**Deemed
                dividend related to beneficial conversion feature of convertible
                preferred
                stock
            
            $
            -
            
            $
            1,293,320
            
            $
            1,293,320Accrual
                of preferred stock dividend
            
            $
            180,000
            
            $
            137,000
            
            $
            497,000


See
        accompanying notes to the condensed consolidated financial
        statements.


10







**BIO-BRIDGE
      SCIENCE, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)


**NOTES
      TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL**


**STATEMENTS
      AS OF JUNE 30, 2008**




**NOTE
      1 - BASIS OF PRESENTATION**





The
      accompanying unaudited condensed consolidated financial statements of Bio Bridge
      Science Inc. (the "Company") have been prepared in accordance with accounting
      principles generally accepted in the United States of America for interim
      financial information and pursuant to the requirements for reporting on Form
      10-Q and Regulation S-K for scaled disclosures for smaller reporting companies.
      Accordingly, they do not include all the information and footnotes required
      by
      accounting principles generally accepted in United States of America for
      complete financial statements. However, such information reflects all
      adjustments (consisting solely of normal recurring adjustments), which are,
      in
      the opinion of management, necessary for the fair presentation of the
      consolidated financial position and the consolidated results of operations.
      Results shown for interim periods are not necessarily indicative of the results
      to be obtained for a full fiscal year.





The
      condensed consolidated balance sheet information as of December 31, 2007 was
      derived from the audited consolidated financial statements included in the
      Company's Annual Report on Form 10-KSB filed with the SEC on March 31, 2008.
      These interim financial statements should be read in conjunction with that
      report.




**NOTE
      2 - ORGANIZATION AND PRINCIPAL ACTIVITIES**




Bio-Bridge
      Science, Inc. (a development stage company) ("the Company") was incorporated
      in
      the State of Delaware on October 26, 2004. The Company is a development stage
      enterprise as defined by Statement of Financial Accounting Standards (SFAS)
      No.
      7, "Accounting and Reporting by Development Stage Enterprises." All losses
      accumulated since the inception of the Company will be considered as part of
      the
      Company's development stage activities. The Company has generated insignificant
      revenue. The Company's fiscal year end is December 31.




On
      December 1, 2004, the Company acquired all of the outstanding shares of
      Bio-Bridge Science Corporation ("BBSC"), a Cayman Islands corporation, in
      exchange for 29,971,590 shares of its common stock, and as a result, BBSC became
      a wholly owned subsidiary of Bio-Bridge Science, Inc. The acquisition was
      accounted for as a reverse merger (recapitalization) with BBSC deemed to be
      the
      accounting acquirer, and the Company the legal acquirer. Accordingly, the
      historical financial information presented in the financial statements is that
      of BBSC as adjusted to give effect to any difference in the par value of the
      issuer’s and the accounting acquirer stock with an offset to capital in excess
      of par value. The basis of the assets, liabilities and retained earnings of
      BBSC, the accounting acquirer, have been carried over in the
      recapitalization.





BBSC
      was
      incorporated in the Cayman Islands on February 11, 2002. At the time of the
      exchange, BBSC held a 100% interest in Bio-Bridge Science (Beijing) Corp. ("BBS
      Beijing") , a wholly-foreign funded enterprise of the People's Republic of
      China
      ("PRC") which was established on May 20, 2002. BBS Beijing is currently engaged
      in the development and commercialization of several vaccine candidates, such
      as
      HIV-PV vaccine I, cervical cancer vaccine, colon cancer vaccine, in mainland
      China.




History
      of losses and negative cash flows




The
      accompanying consolidated financial statements have been prepared on the basis
      that the Company will continue as a going concern which assumes the realization
      of assets and settlement of liabilities in the normal course of business. 
Since its inception, the Company has been engaged in organizational and
      pre-operating activities. The Company has generated insignificant revenues
      and
      has incurred accumulated losses and negative operating cash flows of $5,984,743
      and $3,430,331, respectively, from February 11, 2002 (inception) through June
      30, 2008. We incurred a net loss of $493,031 for the six months ended June
      30, 2008. On February 12, 2007, the Company raised $3,000,000 in a private
      placement in the form of a sale of shares of Series A convertible preferred
      stock and warrants to purchase common stock (See Note 4). Our capital
      requirements for the next 12 months, as they relate to further research and
      development relating to our product candidates have been and will continue
      to be
      significant. As of June 30, 2008, we have funded our operations through equity
      offerings whereby we raised an aggregate $7,358,117 since
      inception.




Based
      on
      our current operating plan, we believe that we have sufficient cash and cash
      equivalents to last approximately through December 2009. We will need to obtain
      additional financing in addition to the funds already raised through the sale
      of
      equity securities to fund our cash needs and continue our operations beyond
      December 2009. Additional financing, whether through public or private equity
      or
      debt financing, arrangements with stockholders or other sources to fund
      operations, may not be available, or if available, may be on terms unacceptable
      to us. Our ability to maintain sufficient liquidity is dependent on our ability
      to raise additional capital. If we issue additional equity securities to raise
      funds, the ownership percentage of our existing stockholders would be reduced.
      New investors may demand rights, preferences or privileges senior to those
      of
      existing holders of our common stock. Debt incurred by us would be senior to
      equity in the ability of debt holders to make claims on our assets. The terms
      of
      any debt issued could impose restrictions on our operations. If adequate funds
      are not available to satisfy either medium or long-term capital requirements,
      our operations and liquidity could be materially adversely affected and we
      could
      be forced to cut back our operations.




11




**NOTE
      3 - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES**





Principles
      of Consolidation





The
      accompanying consolidated financial statements include the accounts of
      Bio-Bridge Science Inc. and its wholly owned subsidiaries, Bio-Bridge Science
      Corp., Bio-Bridge Science (Beijing) Corp, Bio-Bridge Science Holding Co. and
      Bio
      Bridge Science (HK), Co. Inter-company accounts and transactions have been
      eliminated in consolidation.





Economic
      and Political Risks





The
      Company faces a number of risks and challenges since its operation is in PRC
      and
      its primary market is in the PRC. We have operations in China where we are
      currently engaged in pre-clinical testing of our vaccine candidates and other
      related activities. Our business operations may be adversely affected by the
      political environment in the PRC. The PRC has operated as a socialist state
      since 1949 and is controlled by the Communist Party of China. In recent years,
      however, the government has introduced reforms aimed at creating a "socialist
      market economy" and policies have been implemented to allow business enterprises
      greater autonomy in their operations. Changes in the political leadership of
      the
      PRC may have a significant effect on laws and policies related to the current
      economic reforms program, other policies affecting business and the general
      political, economic and social environment in the PRC, including the
      introduction of measures to control inflation, changes in the rate or method
      of
      taxation, the imposition of additional restrictions on currency conversion
      and
      remittances abroad, and foreign investment. These effects could substantially
      impair our business, profits or prospects in China. Moreover, economic reforms
      and growth in the PRC have been more successful in certain provinces than in
      others, and the continuation or increases of such disparities could affect
      the
      political or social stability of the PRC.





Use
      of
      Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting periods. Management makes these estimates using the best
      information available and the best judgment at the time the estimates are made,
      however actual results could differ materially from those
      estimates.





Cash
      and
      Cash Equivalents





For
      financial reporting purpose, the Company considers all highly liquid investments
      purchased with original maturity of three months or less to be cash equivalents.
      Cash of the Bio-Bridge Science (Beijing) Corporation, a subsidiary of the
      Company, is held in accounts at financial institutions, which are located in
      the
      PRC. The Company and subsidiaries have not experienced any losses in such
      accounts and do not believe that cash is exposed to any significant credit
      risk.
      All of BBS Beijing’s cash on hand and certain bank deposits are denominated in
      Renminbi ("RMB") and translated at the exchange rate at the end of the
      period.





Trading
      Securities





The
      Company accounts for trading securities using the guidance of SFAS No. 115,
      “Accounting for Certain Investments in Debt and Equity Securities”. The
      Company’s investment in trading securities is comprised of its investment in a
      Van Kampen unit investment fund. Trading
      securities are reported at fair value, with any changes in fair value during
      a
      period recorded as a charge or credit to net income (loss). Gains or losses
      realized upon sale of all securities are recognized at the time of sale. Cash
      received in excess of cumulative dividends is considered a return of
      principal.





Financial
      Assets and Liabilities Measured at Fair Value





Effective
      January 1, 2008, the Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 157, Fair Value Measurements. This Statement defines fair value
      for certain financial and nonfinancial assets and liabilities that are recorded
      at fair value, establishes a framework for measuring fair value, and expands
      disclosures about fair value measurements. This guidance applies to other
      accounting pronouncements that require or permit fair value measurements. On
      February 12, 2008, the FASB finalized FASB Staff Position (FSP) No. 157-2,
      Effective Date of FASB Statement No. 157. This Staff Position delays the
      effective date of SFAS No. 157 for nonfinancial assets and liabilities to
      fiscal years beginning after November 15, 2008 and interim periods within those
      fiscal years, except for those items that are recognized or disclosed at fair
      value in the financial statements on a recurring basis (at least annually).
      The
      adoption of SFAS No. 157 had no effect on the Company’s consolidated
      financial position or results of operations.


12




SFAS
      No. 157 establishes a fair value hierarchy that prioritizes the inputs used
      to measure fair value into three broad levels, considering the relative
      reliability of the inputs. The fair value hierarchy assigns the highest priority
      to quoted prices in active markets for identical assets or liabilities
      (Level 1) and the lowest priority to unobservable inputs (Level 3). A
      financial instrument's categorization within the fair value hierarchy is based
      upon the lowest level of an input to the valuation that is significant to the
      fair value measurement. The three levels of inputs within the fair value
      hierarchy are defined as follows:




Level
      1
      uses quoted prices (unadjusted) in active markets for identical assets or
      liabilities that the reporting entity has the ability to access at the
      measurement date.





Level 2
      uses inputs other than quoted prices included within Level 1 that are observable
      for the asset or liability, either directly or indirectly.





Level 3
      uses unobservable inputs for the asset or liability. Valuation is modeled using
      significant inputs that are unobservable in the market. These unobservable
      inputs reflect the Company's own estimates of assumptions that market
      participants would use in pricing the asset or liability.





At
      June
      30, 2008, the Company’s financial assets and liabilities that were measured at
      fair value include its investment in trading securities which have a cost of
      $194,193, a gross unrealized loss of $519, and a fair value of $193,675. The
      Company estimates the fair value of its trading securities based on unadjusted
      quoted prices in active markets of identical assets. In accordance with SFAS
      No.
      157, this is a Level 1 valuation.





Foreign
      Currency Translation





The
      Company’s financial information is presented in US dollars. The functional
      currency Renminbi (RMB) of the Company is translated into United States dollars
      from RMB at quarter / year-end exchange rates as to assets and liabilities
      and
      average exchange rates as to revenues and expenses. Capital accounts are
      translated at their historical exchange rates when the capital transactions
      occurred.




As
                  of and for the
                six
                  months ended
                June
                  30, 2008
            
            As
                  of and for the
                six
                  months ended
                June
                  30, 2007Period
                end  RMB : US$ exchange rate
            
            
            6.8591
            
            
            7.6155Average
                period  RMB : US$ exchange rate
            
            
            7.0819
            
            
            7.6749




The
      RMB
      is not freely convertible into foreign currency and all foreign exchange
      transactions must take place through authorized institutions. No representation
      is made that the RMB amounts could have been, or could be, converted into US
      dollars at the rates used in translation.





In
      2007
      the RMB appreciated against the US dollar by approximately 6.9%. The Chinese
      government manifested that it would adopt a more flexible exchange rate system.
      Therefore, it is expected that the RMB will appreciate gradually against major
      currencies in the future.





Income
      Taxes





The
      Company accounts for income tax using the liability method that allows for
      recognition of deferred tax benefits in future years. Under the liability
      method, deferred taxes are provided for the net tax effects of temporary
      differences between the carrying amounts of assets and liabilities for financial
      reporting purposes and the amounts used for income tax purposes. A valuation
      allowance is provided for deferred tax assets if it is more likely than not
      these items will either expire before the Company is able to realize their
      benefits, or that future utilization is uncertain.





Effective
      January 1, 2007, the Company adopted Financial Accounting Standards Board
      Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN
      48”) —an interpretation of FASB Statement No. 109, Accounting for Income Taxes.
      The Interpretation addresses the determination of whether tax benefits claimed
      or expected to be claimed on a tax return should be recorded in the financial
      statements. Under FIN 48, we may recognize the tax benefit from an uncertain
      tax
      position only if it is more likely than not that the tax position will be
      sustained on examination by the taxing authorities, based on the technical
      merits of the position. The tax benefits recognized in the financial statements
      from such a position should be measured based on the largest benefit that has
      a
      greater than fifty percent likelihood of being realized upon ultimate
      settlement. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties on income taxes, accounting in interim periods and
      requires increased disclosures. At the date of adoption, and as of June 30,
      2008, the Company does not have a liability for unrecognized tax
      benefits.


13




The
      Company files income tax returns in the U.S. federal jurisdiction and various
      states. The Company is subject to U.S. federal or state income tax examinations
      by tax authorities for years after 2002. During the periods open to examination,
      the Company has net operating loss and tax credit carry forwards for U.S.
      federal and state tax purposes that have attributes from closed periods. Since
      these NOLs and tax credit carry forwards may be utilized
      in future periods, they remain subject to examination.




The
      Company also files tax returns with other jurisdictions, including the PRC.
      These returns are subject to audit by the taxing authorities. The Company
      believes it files all returns properly. In accordance with the relevant tax
      laws
      and regulations of PRC, the applicable corporation income tax rate for the
      subsidiary was 15%. The Company is entitled to full exemption from CIT for
      the
      first two years and a 50% reduction in CIT for the next three years, commencing
      from the first profitable year after offsetting all tax losses carried forward
      from the previous five years. From January 2008, China implemented new CIT,
      in
      which local and foreign enterprises are subject to CIT of 25%, unless the
      enterprise is a high tech enterprise. We are able to enjoy the grandfathering
      treatment for our tax holiday, in which we are exempt from paying taxes in
      2008
      and 2009, and CIT rate is 12.5% from 2010-2012. The State Administration of
      Taxation of China has issued a circular recently that companies in the eight
      high tech encouraging industries are able to enjoy CIT deductions if approved
      after application. The Company believes it belongs to the eight industries,
      and
      expects to be able to enjoy 15% CIT after 2013 if qualified as a high-tech
      enterprise.




The
      Company’s policy is to record interest and penalties on uncertain tax provisions
      as income tax expense. As of June 30, 2008, the Company has no accrued interest
      or penalties related to uncertain tax positions.




Comprehensive
      Income





Comprehensive
      income is defined to include all changes in equity except those resulting from
      investments by owners and distributions to owners. The Company’s current
      components of comprehensive income consist of foreign currency translation
      adjustments.





Loss
      Per
      Share





Basic
      loss per share has been computed using the weighted average number of common
      shares outstanding during the period. Diluted loss per share is computed based
      on the weighted average number of common shares and all common equivalent shares
      outstanding during the period in which they are dilutive. Common equivalent
      shares consist of shares issuable upon the exercise of stock options or
      warrants. As of June 30, 2008 common stock equivalents composed of options
      convertible into 2,297,000 shares of the Company's common stock and warrants
      convertible into 3,366,666 shares of the Company's common stock. For the three
      and six month periods ended June 30, 2008 and 2007, common equivalent
      shares have been excluded from the calculation of loss per share as their effect
      is anti-dilutive.




Stock-Based
      Compensation





The
      Company periodically issues stock options and warrants to employees and
      non-employees in capital raising transactions, for services and for financing
      costs. The Company adopted SFAS No. 123R effective January 1, 2006, and is
      using
      the modified prospective method in which compensation cost is recognized
      beginning with the effective date (a) based on the requirements of SFAS No.
      123R
      for all share-based payments granted after the effective date and (b) based
      on
      the requirements of SFAS No. 123R for all awards granted to employees prior
      to
      the effective date of SFAS No. 123R that remain unvested on the effective date.
      The Company accounts for stock option and warrant grants issued and vesting
      to
      non-employees in accordance with EITF No. 96-18: “Accounting for Equity
      Instruments that are Issued to Other Than Employees for Acquiring, or in
      Conjunction with Selling, Goods or Services” and EITF No. 00-18 “Accounting
      Recognition for Certain Transactions involving Equity Instruments Granted to
      Other Than Employees” whereas the value of the stock compensation is based upon
      the measurement date as determined at either a) the date at which a performance
      commitment is reached, or b) at the date at which the necessary performance
      to
      earn the equity instruments is complete.




Recent
      Accounting Pronouncements





In
      December 2007, the FASB issued FASB Statement No. 141 (R), “Business
      Combinations” (FAS 141(R)), which establishes accounting principles and
      disclosure requirements for all transactions in which a company obtains control
      over another business. Statement 141 (R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008. Earlier
      adoption is prohibited.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS No. 160
      establishes accounting and reporting standards that require that the ownership
      interests in subsidiaries held by parties other than the parent be clearly
      identified, labeled, and presented in the consolidated statement of financial
      position within equity, but separate from the parent’s equity; the amount of
      consolidated net income attributable to the parent and to the noncontrolling
      interest be clearly identified and presented on the face of the consolidated
      statement of income; and changes in a parent’s ownership interest while the
      parent retains its controlling financial interest in its subsidiary be accounted
      for consistently. SFAS No. 160 also requires that any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair value
      when a subsidiary is deconsolidated. SFAS No. 160 also sets forth the disclosure
      requirements to identify and distinguish between the interests of the parent
      and
      the interests of the noncontrolling owners. SFAS No. 160 applies to all entities
      that prepare consolidated financial statements, except not-for-profit
      organizations, but will affect only those entities that have an outstanding
      noncontrolling interest in one or more subsidiaries or that deconsolidate a
      subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. Earlier
      adoption is prohibited. SFAS No. 160 must be applied prospectively as of the
      beginning of the fiscal year in which it is initially applied, except for the
      presentation and disclosure requirements. The presentation and disclosure
      requirements are applied retrospectively for all periods presented.





14




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities—an amendment of FASB Statement No. 133,”
(SFAS No.161). SFAS No.161 requires enhanced disclosures about an entity’s
      derivative and hedging activities, including (i) how and why an entity uses
      derivative instruments, (ii) how derivative instruments and related hedged
      items are accounted for under SFAS No. 133, and (iii) how derivative
      instruments and related hedged items affect an entity’s financial position,
      financial performance, and cash flows. This standard becomes effective for
      financial statements issued for fiscal years and interim periods beginning
      after
      November 15, 2008. Earlier adoption of SFAS 161 and, separately, comparative
      disclosures for earlier periods at initial adoption are encouraged. As SFAS
      No.161 only requires enhanced disclosures, this standard will have no impact
      on
      the Financial Statements





The
      Company does not believe that the adoption of the above recent pronouncements
      will have a material effect on the Company’s consolidated results of operations,
      financial position, or cash flows.




**NOTE 4
      - SHAREHOLDER'S EQUITY**




Preferred
      Stock




On
      December 31, 2006, the Company amended its certificate of incorporation to
      provide for 5,000,000 shares of Series A preferred stock. Pursuant to the
      Company's certificate of incorporation, its board of directors has the
      authority, without further action by the stockholders, to issue up to 5,000,000
      shares of undesignated preferred stock, par value $0.001 per share. The
      Company's board also has the authority, without the approval of the
      stockholders, to fix the designations, powers, preferences, privileges and
      relative, participating, optional or special rights and the qualifications,
      limitations or restrictions of any preferred stock issued, including dividend
      rights, conversion rights, voting rights, terms of redemption and liquidation
      preferences, any or all of which may be greater than the rights of the common
      stock. Preferred stock could thus be issued with terms that could delay or
      prevent a change in control of our company or make removal of management more
      difficult. In addition, the issuance of preferred stock may decrease the market
      price of the common stock and may adversely affect the voting and other rights
      of the holders of common stock.





*Issuance
      of 4,000,000 preferred shares at $ 0.75 per share for total consideration of
      $3,000,000*




On
      January 30, 2007, the Company entered into a Securities Purchase Agreement
      with
      three individuals, whereby the Company agreed to sell 4,000,000 shares of Series
      A Convertible Preferred Stock and warrants to purchase 3,000,000 shares of
      common stock at $1.00 per share. On February 12, 2007, the preferred stock
      and
      warrants were issued for $0.75 per unit, or $3,000,000 in
      aggregate.





The
      preferred stock earns dividends at a rate of 12% annually; dividends are paid
      in
      common shares of the Company valued at $1.00 per share, semiannually in arrears.
      The preferred stock dividend is cumulative and non-participating. The preferred
      stock has a liquidation preference of $0.75 per share and no voting rights.
      The
      preferred shares contain certain anti-dilution protection. The warrants are
      exercisable through January 30, 2010 into 3,000,000 shares of the Company’s
      common stock for $1.00 per share.





At
      the
      holder’s option, the preferred stock is convertible into the Company’s common
      stock on a one-for-one basis anytime up to January 30, 2010. The conversion
      price is initially set at $0.75 per share, subject to reset adjustments, but
      in
      no event can the reset conversion price drop below $0.50 per share. At the
      Company’s option, the preferred stock will be convertible into the
      Company’s common stock (at the conversion price initially set at $0.75 per
      share) when the average closing price of the common stock for any 20 consecutive
      trading days is at least $2.00. On January 30, 2010, the Company shall have
      the
      right to convert all the preferred stock then outstanding into shares of common
      stock.





The
      $3,000,000 proceeds were allocated to the preferred stock and warrants based
      on
      their relative fair values. The Company determined the fair value of the
      warrants to be $693,177 using a Black-Scholes option pricing model with the
      following assumptions: expected volatility of 50%, a risk-free interest rate
      of
      3.40%, an expected term of 3 years, and 0% dividend yield. The Company
      determined the warrants are properly classified as an equity instrument and
      no
      value was recorded for the warrants as any value assigned would result in an
      increase and decrease to additional-paid-in-capital in the same amount. The
      conversion terms of the preferred stock resulted in a beneficial conversion
      feature valued at $1,293,320. The Company recorded a charge to retained earnings
      for $1,293,320 representing a deemed dividend to the preferred stockholders
      with
      the offset recorded in additional paid in capital.





15




Certain
      registration payment arrangements were included with a private placement of the
      Company’s preferred stock. Among these, the Company was required to file a
      registration statement within 60 days of the February 12, 2007 closing of the
      private placement. The Company has not recorded any liability related to these
      registration rights because the Company and preferred shareholders agreed
      there would be no monetary damages if the Company did not meet its obligations
      under the registration rights agreement.





Two
      investors in the Series A preferred stock private placement were appointed
      as
      directors of the Company in 2007.




Common
      stock





*Issuance
      of common stock for cash*





The
      following represents transactions involving the purchases of the Company's
      common stock for cash categorized by period (for the period from the date of
      inception to June 30, 2008):





Issuance
      of common stock during 2002




Issuance
      of 13,750,000 shares at inception at $0.00004 per share for total consideration
      of $550


Issuance
      of 7,461,090 shares at $0.0468 per share for total consideration of
      $349,180


Issuance
      of 1,875,000 shares at $0.12 per share for total consideration of
      $225,000




Issuance
      of common stock during 2003





Issuance
      of 3,508,425 shares at $0.12 per share for total consideration of
      $421,011


Issuance
      of 201,200 shares at $0.32 per share for total consideration of
      $64,387





Issuance
      of common stock during 2004





Issuance
      of 434,600 shares at $0.12 per share for total consideration of
      $52,150


Issuance
      of 1,125,275 shares at $0.32 per share for total consideration of
      $360,086


Issuance
      of 1,616,000 shares at $0.50 per share for total consideration of
      $807,998





Issuance
      of common stock during 2005





Issuance
      of 2,179,947 shares at $0.50 per share for total consideration of
      $1,089,974




Issuance
      of common stock during 2006





Issuance
      of 540,348 shares at $1.20 per share for total consideration of
      $648,417


Sale
      of
      100,000 shares at $1.20 per share for total consideration of $120,000. The
      shares were issued in 2007.


Sale
      of
      140,000 shares at $0.75 per share for total consideration of $105,000. The
      shares were issued in 2007.





Issuance
      of common stock during 2007





Sale
      of
      30,000 shares at $0.75 per share for total consideration of
      $22,500.





Issuance
      of common stock in 2008




Sale
      of
      26,666 shares at $0.75 per share for total consideration of $20,000. At June
      30,
      2008, the $20,000 has not been received and is included in subscription
      receivable.





Sale
      of
      366,667 investment units with a unit price at $0.75 for a total consideration
      of
      $275,000. Each unit includes one share of common stock, a three-year warrant
      to
      purchase one-half share of common stock at $0.75 and a five-year warrant to
      purchase one-half share of common stock at $1.20 (an aggregate of 366,667
      warrants). Two directors of the Company each purchased 20,000 investment
      units in the offering and the 20,000 warrants acquired were considered
      additional compensation expense (See Note 5). At June 30, 2008, $29,985 of
      the
      total consideration of $275,000 had been received and  the balance of
      $245,015 is included in subscription receivable.





*Issuance
      of common stock for services*




On
      December 1, 2004, the Company issued 100,000 shares of its common stock to
      Richardson & Patel, LLC in consideration for legal services. The fair value
      of 100,000 shares was determined to be $50,000, based on the closing price
      of
      the shares when granted, and was recorded as legal expense in 2004.





16




On
      February 9, 2006, the Company agreed to issue CEOcast, Inc. 72,000 shares of
      common stock for investor relations services. 36,000 shares of common stock
      were
      granted on February 9, 2006 and an additional 36,000 shares were granted on
      May
      9, 2006. The fair value of the 72,000 shares was determined to be $140,400
      based
      on the closing price of the Company’s common stock on the dates the shares were
      granted, and was recorded as consulting expense in 2006.





On
      March
      6, 2006, the Company agreed to issue CH Capital LLC 50,000 shares for financial
      consulting services. 25,000 shares were granted on March 6, 2006 and an
      additional 25,000 shares were granted on September 6, 2006. The fair value
      of
      the 50,000 shares was determined to be $101,250 based on the closing price
      of
      the Company’s common stock on the date the shares were granted. The Company
      amortized $83,506 of expense in 2006 and $17,744 in 2007.





On
      March
      23, 2007, the Company granted three directors 10,000 shares each of restricted
      common stock for one year of board service. The fair value of 30,000 shares
      was
      determined to be $30,000, based on the closing price of the shares when granted,
      and was recorded as compensation cost when the shares were granted.





On
      July
      1, 2007, the Company granted two scientific board advisors 10,000 shares each
      of
      restricted common stock for one year of scientific board service. The fair
      value
      of 20,000 shares was determined to be $20,000, based on the closing price of
      the
      shares when granted, and was recorded as compensation cost when the shares
      were
      granted.





**NOTE
      5 - STOCK OPTION AND WARRANTS**





On
      December 1, 2004, the Company’s shareholders approved the 2004 Stock Incentive
      Plan. The 2004 Stock Incentive Plan provides for the grant of incentive stock
      options to our employees, and for the grant of non-statutory stock options,
      restricted stock, stock appreciation rights and performance shares to our
      employees, directors and consultants. The Company has reserved a total of
      2,000,000 shares of its common stock for issuance pursuant to the 2004 Stock
      Incentive Plan. The 2004 Stock Incentive Plan does not provide for automatic
      annual increases in the number of shares available for issuance under the plan.
      As of June 30, 2008, 1,877,000 options had been granted under this
      plan.





The
      administrator determines the exercise price of options granted under our 2004
      Stock Incentive Plan, but the exercise price must not be less than 85% of the
      fair market value of our common stock on the date of grant. In the event the
      participant owns 10% or more of the voting power of all classes of our stock,
      the exercise price must not be less than 110% of the fair market value per
      share
      of our common stock on the date of grant. With respect to all incentive stock
      options, the exercise price must at least be equal to the fair market value
      of
      our common stock on the date of grant. The term of an incentive stock option
      may
      not exceed 10 years, except with respect to any participant who owns 10% of
      the
      voting power of all classes of our outstanding stock or the outstanding stock
      of
      any parent or subsidiary of ours, which the term must not exceed five years
      and
      the exercise price must equal at least 110% of the fair market value on the
      grant date. The administrator determines the term of all other options; however,
      no option will have a term in excess of 10 years from the date of
      grant.





*Issuance
      of stock options*




In
      2004,
      the Company issued to Columbia China Capital Group, Inc. (“Columbia China”) an
      option to purchase 1,342,675 shares of common stock at $.001 per share to be
      exercised within a three-year period in consideration for financial consulting
      services to be provided over a two-year period. The fair value of the options
      was $670,098 at the date of grant, which was determined by the Black-Scholes
      valuation method using the following assumptions: no expected dividend yield;
      risk-free interest rates of 3.4%; expected life of 3 years; and estimated
      volatility of 85% based on recent history of the stock price in the industry.
      The Company revalued the fair value of the options at the end of each reporting
      period in accordance with EITF 96-18 and determined there was no significant
      change to the initial valuation. The Company amortized the value of the options
      over the two- year term of the service agreement. Amortization was $279,208
      in
      2004 and $251,287 in 2005. On December 1, 2004 and October 17, 2005, 200,000
      and
      300,000 options, respectively, were exercised. On October 18, 2005, Columbia
      China forfeited 350,000 options. The unamortized balance of deferred
      compensation of $139,604 was reclassified into additional paid-in capital in
      2005. On January 9, 2006 and March 2, 2007, Columbia China forfeited a total
      of
      97,000 additional options. In February 2007, Columbia China exercised 395,675
      options and no longer owns any options.





On
      December 1, 2004, the Company issued 100,000 shares of its common stock and
      an
      option to purchase an additional 50,000 shares of its common stock at $0.001
      per
      share to Richardson & Patel, LLC in consideration for past legal services.
      The shares issued were valued at $50,000, their fair value at the date of
      issuance. The options granted were valued at $24,954 at the date of grant,
      which
      was determined by the Black-Scholes valuation method, using the following
      assumptions: no expected dividend yield; risk-free interest rates of 3.4%;
      expected lives of 3 years; and estimated volatility of 85 percent based on
      recent history of the stock price in the industry. The value of the options
      $24,954 was reflected as a consulting expense in 2004.




On
      July
      1, 2005, the Company issued to two individual consultants an option to purchase
      20,000 shares of common stock at $.001 per share to be exercised within a
      three-year period in consideration for scientific advisory service to be
      provided over a one-year period, and all of these shares were exercised at
      the
      time when they were granted. The options granted were valued at $9,982 at the
      date of grant, which was determined by the Black-Scholes valuation method,
      using
      the following assumptions: no expected dividend yield; risk-free interest rates
      of 3.4%; expected lives of 3 years; and estimated volatility of 70 percent
      based
      on recent history of the stock price in the industry. The Company revalued
      the
      fair value of the options at the end of each reporting period in accordance
      with
      EITF 96-18 and determined there was no significant change to the initial
      valuation. The value of the options issued was reflected as deferred
      compensation and is being amortized over the one- year term of the service
      agreement. The consulting expense had been completely amortized in 2005 and
      2006.




17




On
      October 14, 2005, the Company issued to Mr. Liang Qiao, MD, the Company's chief
      executive officer, an option to purchase 600,000 shares of common stock at
      $0.55
      per share to be exercised with a ten-year (10) period. The options granted
      were
      valued at $157,770 at the date of grant, which was determined by the
      Black-Scholes valuation method, using the following assumptions: no expected
      dividend yield; risk-free interest rates of 3.4%; expected lives of four years;
      and estimated volatility of 70 percent based on recent history of the stock
      price in the industry. The value of the options will be amortized over the
      three
      year vesting period. For quarter ended June 30, 2008, $13,150 has been amortized
      and included in the accompanying statement of operations.




On
      October 14, 2005, the Company issued to 25 employees options to purchase
      1,345,000 shares of common stock at $0.5 per share to be exercised with a
      ten-year (10) period. The options granted were valued at $369,045 at the date
      of
      grant, which was determined by the Black-Scholes valuation method, using the
      following assumptions: no expected dividend yield; risk-free interest rates
      of
      3.4%; expected lives of 4 years; and estimated volatility of 70 percent based
      on
      recent history of the stock price in the industry. The value of the options
      will
      be amortized over the three year vesting period. For quarter ended June 30,
      2008, $29,155 has been amortized and included in the accompanying consolidated
      statement of operations.




On
      November 2, 2005, the Company issued to Mr. Wenhui Qiao (the Company's director
      and president) and Mr. Chuen Huei (Kevin) Lee (the Company's CFO) an option
      to
      purchase 300,000 shares of common stock at $0.001 per share. The options granted
      were valued at $149,738 at the date of grant, which was determined by the
      Black-Scholes valuation method, using the following assumptions: no expected
      dividend yield; risk-free interest rates of 3.4%; expected lives of 4 years;
      and
      estimated volatility of 70 percent based on recent history of the stock price
      in
      the industry. The value of the stock options of $149,738 was reflected as
      consulting expense in 2005.




On
      November 2, 2005, the Company issued to Adam Friedman Associates, LLC, the
      Company's investor relations consultant, an option to purchase 50,000 shares
      of
      common stock at $0.001 per share to be exercised within a one-year period in
      consideration for financial consulting service to be provided over a one-year
      period. The options were exercised in the second quarter of 2006 The options
      granted were valued at $24,952 at the date of grant, which was determined by
      the
      Black-Scholes valuation method, using the following assumptions: no expected
      dividend yield; risk-free interest rates of 3.4%; expected lives of 1.5 years;
      and estimated volatility of 70 percent based on recent history of the stock
      price in the industry. The value of the options was amortized over the one-
      year
      term of the service agreement.




On
      November 2, 2005, the Company issued to Ms. Ma Suifang, the Company's financial
      consultant, an option to purchase 8,116 shares of common stock at $.001 per
      share. The options granted were valued at $4,051 at the date of grant, which
      was
      determined by the Black-Scholes valuation method, using the following
      assumptions: no expected dividend yield; risk-free interest rates of 3.4%;
      expected lives of 3 years; and estimated volatility of 70 percent based on
      recent history of the stock price in the industry. The value of the stock
      options of $4,051 was reflected as consulting expense in 2005.




On
      July
      1, 2006, the Company issued options to two consultants to purchase 10,000 shares
      of common stock, individually. The fair value of the options was $44,982 at
      the
      date of grant, which was determined by the Black-Scholes valuation method,
      using
      the following assumptions: no expected dividend yield; risk-free interest rates
      of 3.4%; expected lives of 3 years; and estimated volatility of 49 percent
      based
      on recent history of the stock price in the industry. For the years ended
      December 31, 2007 and 2006, $22,491 and $22,491 was amortized and included
      as
      consulting expense respectively.






On
      April
      1, 2007, the Company granted Mr. Larry E. Henneman, Jr. an option to purchase
      20,000 shares of commons stock for legal services in connection with our patent
      application in the United States. The exercise price is $0.001 and the
      expiration date is five years from the grant date. The fair value of the options
      was $20,783 at the date of grant, which was determined using the Black-Scholes
      valuation method, using the following assumptions: no expected dividend yield;
      a
      risk-free interest rate of 3.4%; an expected life of 5 years; and an estimated
      volatility of 52 percent based on recent history of the stock price in the
      industry. The total of $20,783 was charged to consulting expense at the date
      the
      options were granted.





On
      April
      1, 2007, the Company granted Seven Star International Corp. an option to
      purchase 100,000 shares of common stock for 2 years of consulting service.
      The
      exercise price is $0.001 and the expiration date is five years from the grant
      date. The fair value of the options was $103,916 at the date of grant, which
      was
      determined by the Black-Scholes valuation method, using the following
      assumptions: no expected dividend yield; risk-free interest rates of 3.4%;
      expected lives of 5 years; and estimated volatility of 52 percent based on
      recent history of the stock price in the industry. The total of $103,916 was
      charged to consulting expense at the date the options were granted.





18




The
      following table summarizes the stock option activity under the plan and outside-
      the- plan issuances:





Options
              Granted
            
            Weighted
                Average
              Exercise
                PriceOutstanding
                at January
                1, 2008
            
            
            2,317,000
            
            $
            0.42Granted
            
            
            0
            
            
            0Exercised
            
            
            0
            
            $
            0Withdrawn
            
            
            (20,000
            )
            $
            0.001Outstanding
                at June 30, 2008
            
            
            2,297,000
            
            $
            0.42Exercisable
                at June 30, 2008
            
            
            2,140,751
            
            $
            0.42








The
      following table summarizes information about stock options outstanding as of
      June 30, 2008:




Options
                  Outstanding
              
              
              Options
                  ExercisableRange
                  of Exercise
                Prices
              
              
              Number
                  of Shares
              
              
              Weighted
                  Average
                Exercise
                  Price
              
              
              Weighted
                  Average
                Remaining
                  Contractual
                Life
                  (in years)
              
              
              Number
                  of Shares
              
              
              Weighted
                  Average Exercise Price$0.001
                  to $0.55
              
              
              2,297,000
              
              $
              0.42
              
              
              7.08
              
              
              2,140,751
              
              $
              0.422,297,000
              
              
              
              
              
              
              
              
              2,140,751




The
      aggregate intrinsic value of the 2,297,000 options outstanding and 1,984,501
      options exercisable as of June 30, 2008 was $3,055,010 and $2,847,199
      respectively. The aggregate intrinsic value for the options is calculated as
      the
      difference between the price of the underlying awards and quoted price of the
      Company's common shares for the options that were in-the-money as of June 30,
      2008.





A
      summary
      of the status of nonvested shares as of June 30, 2008 are as
      follows:





Number
                of
              SharesNonvested
                at January 1, 2008
            
            
            473,750Granted
            
            
            —Vested
            
            
            (314,167)
            )Withdrawn
            
            
            (3,334
            )Nonvested
                at June 30, 2008
            
            
            156,249





The
      total
      deferred compensation expense for the outstanding value of unvested stock
      options was $42,305 as of June 30, 2008 .




Common
      stock warrants




In
        November 2006, the Company issued a warrant to purchase 50,000 shares of
        common
        stock at $1.20 per share with a term of three years to an investor who purchased
        33,333 shares of common stock in 2006 at $0.75 per share. The Company determined
        the warrants are properly classified as an equity instrument and no value
        was
        recorded for the warrants as any value assigned would result in an increase
        and
        decrease to additional-paid-in-capital in the same amount.


On
      January 30, 2007, the Company issued warrants to purchase 3,000,000 shares
      of
      common stock at $1.00 per share with a term of three years to three individuals
      who also agreed to purchase 4,000,000 shares of Series A Convertible Preferred
      Stock at $0.75 per share (see discussion above). The
      Company determined the warrants are properly classified as an equity instrument
      and no value was recorded for the warrants as any value assigned would result
      in
      an increase and decrease to additional-paid-in-capital in the same
      amount.




On
      June
      4, 2008 and June 18, 2008, the Company issued two series of warrants to
      four investors to purchase 183,334 shares of common stock at $0.75 per share
      with a term of three years and to purchase 183,333 shares of common stock at
      $1.20 per share with a term of four years (366,667 warrants in the aggregate).
      Since
      two
      of the investors are our directors, we recorded the issuance of 20,000 warrants
      included in the sale units valued at $11,507 as compensation costs.The
      fair value of three-year warrant and four-year warrant issued to our directors
      was $5,898 and $5,609, respectively, at the grant date, which was determined
      using the Black-Scholes valuation method, using the following assumptions:
      no
      expected dividend yield; a risk-free interest rate of 2.4%; an expected life
      of
      3 and 5 years respectively; and an estimated volatility of 56 percent based
      on
      recent history of the stock price in the industry. The total of $11,507 was
      charged to compensation cost at the date the options were granted.




At
      June
      30, 2008, warrants outstanding were as follows:




Number
                of
              Shares
                under Warrants
            
            Weighted
                Average Exercise PriceWarrants
                outstanding at January 1, 2008
            
            
            3,050,000
            
            $
            1.01Warrants
                granted
            
            
            366,667
            
            
            .97Warrants
                expired
            
            
            -
            
            
            -Warrants
                outstanding at June 30, 2008
            
            
            3,416,667
            
            $
            1.00




The
        following table summarizes information about warrants outstanding at June
        30,
        2008:







Warrants
                Outstanding and ExercisableNumber
                of Shares Under Warrants
            
            Exercise
                Price
            
            Expiration
                Date
            
            Weighted
                  Average
              Exercise
                Price50,000
            
            $
            1.20
            
            
            November
                20, 2009
            
            $
            1.203,000,000
            
            $
            1.00
            
            
            January
                20, 2010
            
            $
            1.00183,334
            
            $
            0.75
            
            
            June
                4, 2011
            
            $
            0.75183,333
            
            $
            1.20
            
            
            June
                4, 2012
            
            $
            1.203,416,667
            
            $
            0.75-$1.20
            
            
            
            
            $
            1.00




19




**NOTE 6
      - COMMITMENTS AND CONTINGENCIES**





Construction
      in progress





In
      May
      2003, the Company acquired a land use right for approximately 2.8 acres of
      land
      in the Tianzhu Export Processing Zone, Shunyi District, Beijing, China, which
      the Company plans to develop into a laboratory and bio-manufacturing facility
      in
      compliance with Good Manufacturing Practices, or GMP, regulations primarily
      for
      clinical trials of HIV-PV Vaccine I. As of December 31, 2005, the Company had
      received all necessary permits and approvals. The general plans for development
      include the construction of a laboratory facility (“Phase One”) and construction
      of an administrative office building (“Phase Two”). The Company estimates the
      total project costs for Phase One will be approximately $2,730,000. At June
      30,
      2008, the Phase One construction and internal clean room decoration costing
      a
      total of approximately $1,900,000 is awaiting permanent electrical equipment
      to
      be installed, and is recorded as construction in progress. At June 30, 2008,
      $132,073 is due to the contractors of Phase One for the completed construction
      and internal clean room decoration and this obligation is recorded as due to
      contractors.




The
      Company estimates that the remaining costs associated with completion of Phase
      One project will be approximately $567,000, primarily for permanent electrical
      equipment to be installed and related works to be finished. As of June 30,
      2008,
      the Company had signed agreements with various contractors and vendors to finish
      the electricity project. The Company estimates the purchase and installation
      of
      the electrical and steam equipment will be completed in the third quarter
      of 2008. In addition, the Company estimates the cost of laboratory equipment
      it
      needs before Phase One is fully operational will be approximately $1,000,000.
      At
      June 30, 2008, the Company had not negotiated any contracts for the purchase
      of
      any of the laboratory equipment. The Company estimates the purchase and
      installation of the laboratory equipment will be completed by the end of
      2008. At June 30, 2008, Phase Two was still in the design stage. The Company
      estimates total project costs for Phase Two will be approximately $1,200,000.
      The Company estimates that construction may begin on Phase Two in 2010 or later,
      but currently has no plans for Phase Two construction.




Lease
      commitment




As
      of
      June 30, 2008, the Company had remaining outstanding commitments with respect
      to
      its non-cancelable operating lease for its office in Oak Brook, IL, of which
      $27,396 is due within one year, $28,041is due in 2009 and $4,751 is due in
      2010,
      and for its office in Beijing, PRC (which is leased from Mr. Wenhui Qiao, the
      Company's director and president), of which $22,744 is due within one
      year.





Research
      and Development Agreements




On
      May 6,
      2004, Beijing Institute of Radiation Medicine and the Company entered
      into agreements for conducted biodistribution and integration studies for HIV-PV
      Vaccine I. The aggregate amount for the testing is $28,494 and as of June 30,
      2008, the remaining commitment was $5,832. On April 1, 2007, we entered into
      a
      biosample inspection for vaccine development research agreement with Beijing
      Xingde Biomedicine Research Institute. The aggregate amount paid for the testing
      is $22,452 and the remaining commitment was $23,910 as of June 30, 2008. On
      March 1, 2008, we signed an agreement with Changchun Wandi Biotechnology Co.
      Ltd, to conduct SF9 cell culture and stability study. The payment will be on
      a
      monthly basis and the remaining commitment is $21,431 as of June 30,
      2008.





Royalty
      and License Arrangements





Mr.
      Liang
      Qiao, M.D., the Company's co-founder and chief executive officer, is one of
      the
      co-inventors of the Company's core technology that was assigned to Loyola
      University Chicago in April 2001. Under the agreement with Loyola University
      Chicago, the Company has obtained exclusive rights to this technology for use
      in
      its future products within the United States, Japan and the People's Republic
      of
      China, including mainland China, Hong Kong, Taiwan and Macau. The license
      continues perpetually or for the maximum period of time permitted by law, unless
      terminated earlier under the terms of the agreement. Pursuant to this agreement,
      Loyola receives a royalty of 4% from the net profit for all uses of the licensed
      technology, including uses under sublicenses. As of June 30, 2008, the Company
      had not generated any revenues from the sale of any products under development,
      nor had the Company received any revenues from sublicenses.




Distribution
      Agreement




On
      November 21, 2005, we entered into an exclusive distribution agreement with
      Xinhua Surgical Instruments Co. Ltd., (“Xinhua”) located in Shandong, China.
      Under this agreement, we have been granted exclusive distribution rights for
      all
      Xinhua surgical instruments in the United States, which are subject to FDA
      approval. The Company is responsible for advertising and marketing expenses
      in
      connection with distribution of Xinhua surgical instruments in the United
      States. Sales were $2,979 in 2007 and $1,768 in 2006. Minimum sales per the
      agreement are $50,000 in 2007, $60,000 in 2008, and increases 10% annually
      thereafter. Although we did not reach the minimum sales requirement in 2007,
      Xinhua indicated that we still have the exclusive distribution right in
      2008.





On
      March
      17, 2008, the Company entered into an exclusive agency agreement with Xinhua.
      Under the renewed Agreement, the Company has been granted exclusive distribution
      rights for all Xinhua surgical instruments in the United States, Australia,
      and
      New Zealand. The Company’s minimum annual sale requirement for these three areas
      for a whole year from the date of signing the agreement will be $55,000 and
      increases 10% annually thereafter. The Company is responsible for advertising
      and marketing expenses in connection with distribution of Xinhua surgical
      instruments in these three areas. Subject to minimum sale requirements, the
      Company's exclusivity rights in these three areas will be extended. The new
      agreement supersedes the previous agreement signed on November 21, 2005. Sales
      in 2008 as of June 30, 2008 were $7,427.




20





On
      December 6, 2005, we received confirmation from the FDA of our registration
      as a
      medical device establishment, which enables us to perform initial distributor
      and repackager operations. This confirmation is not a FDA approval of any
      product or any of our activities. It is neither a license, nor a certification.
      We market Xinhua surgical instruments that meet the criteria for Class I medical
      devices under FDA rules, which do not require pre-market notification to the
      FDA.





**NOTE 6
      - SUBSEQUENT EVENTS**





On
      July
      2, the Company entered into a securities purchase agreement with NFR
      International Pty Limited (“NFR”) and China Diamond Limited (“China Diamond”),
      two companies controlled by a member of our Board of Directors, Mr. Trevor
      Roy,
      and his wife, in which NFR and China Diamond agreed to purchase a total of
      3,448,276 investment units from BGES at $0.725 per unit. Each unit consists
      of
      one share of common stock, a four-year warrant to purchase 0.5 share of common
      stock at $0.725 and a five-year warrant to purchase 0.5 share of common stock
      at
      $1.10. The total investment of China Diamond and NFR is $2.5 million. $125,000
      of this total was paid upon execution of the equity purchase agreement and
      the
      balance will be paid in ten monthly equal amounts until May 1, 2009.





On
      July
      9, the Company entered into a securities purchase agreement with Cheung Hin
      Shun
      Anthony, a member of our Board Directors, in which Mr. Cheung agreed to purchase
      a total of 2,000,000 investment units from BGES at $0.725 per unit. Each unit
      consists of one share of common stock, a four-year warrant to purchase 0.5
      share
      of common stock at $0.725 and a five-year warrant to purchase 0.5 share of
      common stock at $1.10. The total investment is $1.45 million. $120,000 of this
      total was paid upon execution of the equity purchase agreement and the balance
      will be paid in ten equal installments until May 31, 2009.





On
      April
      30, 2008, the Company entered into an equity sale and purchase agreement with
      Huhhot Xinheng Baide Biotechnology Co. Ltd., (“HXBD”), pursuant to which we
      agreed to purchase newly issued shares of HXBD. The equity sale and purchase
      agreement was completed on July 31, 2008, and the Company purchased 51% of
      the
      outstanding capital interest of HXBD for RMB 6 million (approximately US$
      881,000). HXBD is located in the city of Huhhot in Inner Mongolia of the PRC
      and
      is organized under the laws of the PRC. HXBD manufactures
      and distributes bovine serum products, which is used in research, the production
      of pharmaceuticals, and production of veterinary medicines. The acquisition
      will
      be accounted for as a purchase in accordance with Statement of Financial
      Accounting Standards No. 141 “Business Combinations.” The assets acquired and
      liabilities assumed will be recorded at their fair values at the date of
      acquisition.




21




**Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of
      Operation**





Some
      of
      the statements made by us in this Quarterly Report on Form 10-Q are
      forward-looking in nature, including but not limited to, statements relating
      to
      our future revenue and expenses, product development, future market acceptance,
      levels of research and development, our management's plans and objectives for
      our current and future operations, and other statements that are not historical
      facts. Forward-looking statements include, but are not limited to, statements
      that are not historical facts, and statements including forms of the words
      "intend", "believe", "will", "may", "could", "expect", "anticipate", "plan",
      "possible", and similar terms. Actual results could differ materially from
      the
      results implied by the forward looking statements due to a variety of factors,
      many of which are discussed throughout this Quarterly Report and in our SEC
      filings. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which speak only as of the date hereof. We undertake
      no obligation to publicly release any revisions to these forward-looking
      statements that may reflect events or circumstances after the date hereof or
      to
      reflect the occurrence of unanticipated events, unless required by law. Factors
      that could cause actual results to differ materially from those expressed in
      any
      forward-looking statement made by us include, but are not limited
      to:





·
            our
                ability to finance our activities and maintain our financial
                liquidity;





·
            our
                ability to attract and retain qualified, knowledgeable
                employees;





·
            our
                ability to complete product
                development;





·
            our
                ability to obtain regulatory approvals to conduct clinical
                trials;





·
            our
                ability to design and market new products
                successfully;





·
            our
                failure to acquire new customers in the
                future;




·
            deterioration
                of business and economic conditions in our
                markets;





·
            intensely
                competitive industry conditions.




In
      this
      document, the words "we," "our," "ours," and "us" refers to Bio-Bridge Science,
      Inc. and our wholly owned subsidiaries, including Bio-Bridge Science (Beijing)
      Co. Ltd., a Wholly-Foreign Owned Enterprise of the People's Republic of China
      ("Bio-Bridge (Beijing)") , Bio-Bridge Science Corporation, a Cayman Islands
      corporation, Bio-Bridge Science Holding Co. Ltd, a Cayman Islands corporation,
      and Bio-Bridge Science(HK) CO. Ltd, a Hong Kong company.





**OVERVIEW**




Bio-Bridge
      Science, Inc. is a development stage company whose subsidiaries are focused
      on
      the commercial development of HIV-PV Vaccine I, HPV vaccine, colon cancer
      vaccine, mucosal adjuvant. The pre-clinical testing of HIV-PV Vaccine I on
      laboratory animals in Beijing, China was completed in June 2006. After the
      lab
      equipment is installed and we are able to produce vaccine candidate samples,
      we
      will apply to China's State Food and Drug Administration for approval to conduct
      clinical trials of HIV-PV Vaccine I. As of December 31, 2005, we had completed
      the construction of the outside body of our laboratory and bio-manufacturing
      facility in Beijing, China. The internal clean room installation project has
      been substantially completed as of end of 2006.




**History
      of Losses and Negative Cash Flows**




Since
      inception, we have generated few revenues. We incurred net losses of $205,185
      and $493,031 for the three and six month periods ended June 30, 2008,
      respectively. As of June 30, 2008, we had an accumulated deficit of $7,775,063.
      As of June 30, 2008, we have funded our operations through equity offerings
      whereby we raised an aggregate $7,295,000 since inception. In the second quarter
      of 2008, the Company raised $275,000 in a private placement in the form of
      investment unit priced at $0.75 per unit. A total of 366,337 investment units
      were sold in the second quarter of 2008. Each unit includes one share of common
      stock, a three-year warrant to purchase 0.5 share of common stock at $0.75
      and a
      five-year warrant to purchase 0.5 share of common stock at $1.20. Wenhui Qiao
      and Toshihiro Komoike, who are both our directors, purchased 20,000 investment
      units in the offering. $210,000 of the purchase price remains to be received
      as
      of July 30, 2008. Our capital requirements for the next 12 months, as they
      relate to further research and development relating to our product candidates,
      have been and will continue to be significant. We plan to raise more capital
      in
      the near future to meet our capital requirement for the development of our
      product candidates as well as our potential acquisitions and joint ventures
      in
      China.




22




**Plan
      of Operation**




Vaccine
      Development





Our
      primary corporate focus is on the commercial development of our potential
      vaccine products through our subsidiaries. Our capital requirements,
      particularly as they relate to product research and development, have been
      and
      will continue to be significant. Our future cash requirements and the adequacy
      of available funds will depend on many factors, including the pace at which
      we
      are able to obtain regulatory approvals of vaccine candidates, whether or not
      a
      market develops for our products and, if a market develops, the pace at which
      it
      develops, and the pace at which the technology involved in making our products
      changes.





The
      pre-clinical testing of HIV-PV Vaccine I on laboratory animals was completed
      in
      Beijing Institute of Radiation Medicine and the testing result was issued in
      June 2006 and showed encouraging results. After the vaccine samples are produced
      in our GMP facility, we will submit application for clinical trials with the
      Chinese SFDA. The clinical trial for therapeutic vaccine is expected to last
      three years. The clinical trial for preventive vaccine will last longer, most
      likely five to seven years.




We
      also
      plan to conduct the pre-clinical trials for colon cancer vaccine and HPV
      vaccine. We estimate that we will complete the pre-clinical trial of colon
      cancer vaccine by mid- 2009 and that of HPV vaccine by early 2010. We expect
      to
      enter clinical trials of colon cancer vaccine before the end of 2009. As we
      discussed previously, clinical trial for therapeutic vaccine is expected to
      last
      three years. All the technology to make HIV vaccine and colon cancer vaccine
      is
      based on the technology co-developed by our CEO, Dr. Liang Qiao. Because we
      use
      the same technology to develop our potential vaccine products, we expect to
      use
      the same GMP facility in Beijing, China, to produce the HIV vaccine and colon
      cancer vaccine for pre-clinical and clinical trials.




To
      date
      we have funded our operations from funds we raised in private offerings. During
      the next twelve months, we will need to raise capital through an offering of
      our
      securities or from loans to continue research and development of our various
      vaccine product candidates in China as well as conducting the potential
      acquisition activities in China. We estimate that our capital requirements
      for
      the next twelve months will be as follow:




·
            approximately
                $0.6 million for our laboratory/bio-manufacturing facility’ electricity
                work for Phase One laboratory manufacturing facility project in Beijing,
                China;




·
            approximately
                $1.1 million to purchase advanced laboratory equipment and supplies
                for
                our vaccine production;




·
            approximately
                $0.6 million for preparatory work for Phase I clinical
                study;




·
            approximately
                $1.0 million for working capital and general corporate needs;
                and




·
            approximately
                $0.7 million for pre-clinical trials on colon cancer vaccine and
                HPV
                vaccine.




We
      expect
      that the therapeutic vaccine can be brought to market in three years and the
      preventive vaccine can be brought to market in five to seven years, if we are
      successful in raising funds to complete development of the vaccines. As of
      June
      30, 2008, our cash and cash equivalents and trading securities position was
      $1,125,695 and we have entered into securities purchase agreements in July,
      2008
      with several investors that we will get funding of  $ 3,950,000. We still
      need to raise additional funds through the public or private sales of our
      securities, loans, or a combination of the foregoing to meet the expenses of
      our
      planned operations. We cannot guarantee that financing will be available to
      us,
      on acceptable terms or at all. We also may borrow from local banks in China
      given that our land use right and laboratory facility could be used as
      collateral for borrowing. If we fail to obtain other financing by the end of
      December 2009, either through an offering of our securities or by obtaining
      additional loans, we may be unable to develop our planned projects and may
      be
      forced to scale back.




Distribution
      of Xinhua surgical instruments





On
      November 21, 2005, we entered into an exclusive distribution agreement with
      Xinhua Surgical Instruments Co. Ltd., (“Xinhua”) located in Shandong, China.
      Under this agreement, we have been granted exclusive distribution rights for
      all
      Xinhua surgical instruments in the United States, which are subject to FDA
      approval. The Company is responsible for advertising and marketing expenses
      in
      connection with distribution of Xinhua surgical instruments in the United
      States. Sales were $7,427 in the first half of 2008, $2,979 in 2007 and $1,768
      in 2006. Minimum sales per the agreement are $50,000 in 2007, $60,000 in 2008,
      and increases 10% annually thereafter. Although we did not reach the minimum
      sales requirement in 2007, Xinhua indicated that we still have the exclusive
      distribution right in 2008.





On
      March
      17, 2008, we entered into an exclusive agency agreement with Xinhua. Under
      the
      renewed Agreement, we have been granted exclusive distribution rights for all
      Xinhua surgical instruments in the United States, Australia, and New Zealand.
      The Company’s minimum sale requirement for these three areas in 2008 will be
      $55,000 and increases 10% annually thereafter. The Company is responsible for
      advertising and marketing expenses in connection with distribution of Xinhua
      surgical instruments in these three areas. Subject to minimum sale requirements,
      the Company's exclusivity rights in these three areas will be extended. The
      new
      Agreement supersedes the previous agreement signed on November 21,
      2005.


23




Acquisitions
      of companies complementary to the Company





Another
      major corporate focus is for the Company to acquire other profitable vaccine
      companies or vaccine production related companies, such as those producing
      materials for vaccine production, in China. Such an acquisition may help support
      our development of our in-house vaccines candidates by providing us with
      operating cash flows, lower cost for material used in our vaccine production,
      skillful work force in vaccine production, and a distribution channel. We
      believe these companies will be complementary to us and make us more
      competitive.





On
      April
      30, 2008, the Company entered into an equity sale and purchase agreement with
      Huhhot Xinheng Baide Biotechnology Co. Ltd., (“HXBD”), pursuant to which we
      agreed to purchase newly issued shares of HXBD. The equity sale and purchase
      agreement was completed on July 31, 2008, and the Company purchased 51% of
      the
      outstanding capital interests of HXBD for RMB 6 million (approximately US$
      881,000). HXBD is located in the city of Huhhot in Inner Mongolia of the PRC
      and
      is organized under the laws of the PRC. HXBD manufactures
      and distributes bovine serum products, which is used in research, the production
      of vaccine products. The acquisition will be accounted for as a purchase in
      accordance with Statement of Financial Accounting Standards No. 141 “Business
      Combinations”. The assets acquired and liabilities assumed will be recorded at
      their fair values at the date of acquisition.





Potential
      Joint Venture





We
      entered into a non-binding memorandum of understanding with JR Scientific,
      Inc.,
      a Woodland, California based manufacturer of classical and custom cell culture
      medium and sera products ("JRS”) and Mr. Jan Baker, President and CEO of JRS on
      April 15, 2008. Under the MOU, the Company will form a joint venture together
      with JRS and several other investors in China. The joint venture is expected
      to
      mainly produce culture medium, serum, and other biomaterial for sale in China
      and other countries under the brand name of the joint venture. Cell culture
      medium and serum are used in vaccine production as well as scientific research.
      JRS and Mr. Baker as part of the MOU, agree to transfer technology and
“know-how” to the joint venture. The total investment for the joint venture is
      planned to be around RMB 10 million (about US$ 1.47 million). We expect to
      own
      at least 51% of the new joint venture. The joint venture is expected to be
      formed in the fourth quarter of 2008. However, the agreement is non-binding
      and
      we cannot assure you that a joint venture will be formed.





**Results
      of Operations**





**Three-month
      period ended June 30, 2008 and June 30, 2007**





During
      the quarter ended June 30, 2008, we had revenues of $5,142. The cost of revenue
      was $1,957 which was 38% of the total revenue.




During
      the quarter ended June 30, 2007, we had revenues of $333. The cost of revenue
      was $178, which was 53% of the total revenue. The decrease of the percentage
      of
      the cost of sales to sales was due to the decrease in costs of the surgical
      instruments. All these revenues were due to our selling surgical instruments
      in
      the United States. Since we entered into this agreement, we have established
      a
      sales inventory of Xinhua’s surgical instruments, printed marketing materials
      such as catalogs and post cards, compiled a list of potential customers, and
      implemented a strategic marketing plan for selling Xinhua’s
      instruments. The
      revenue has been increasing as a result of these efforts and we expect the
      increasing trend will continue in the near future.





For
      the
      quarter ended June 30, 2008, research and development expenses were $20,467,
      as
      compared to $38,355 for the quarter ended June 30, 2007. The decrease of $17,888
      is due primarily to the decrease of the pre-clinical trial development of our
      vaccine candidates.




For
      the
      quarter ended June 30, 2008, general and administrative expenses were $243,031
      as compared to $419,374 for the quarter ended June 30, 2007. The decrease of
      $176,343 is due primarily to decreases in consulting expense.





For
      the
      quarter ended June 30, 2008, selling and distribution expenses were $21,281
      as
      compared to $10,838 for the quarter ended June 30, 2007. The increase of $10,443
      is due primarily to increases in shipping and selling expense.





For
      the
      quarter ended June 30, 2008, interest expense was $1,521 as compared to interest
      income of $396 for the quarter ended June 30, 2007. The decrease of $1,917
      is
      due primarily to a decrease in cash balance and borrowing cost.





However,
      none of these revenues pertain to our core planned principal operation of
      developing vaccines. Therefore, we believe a separate analysis of these revenues
      is not as helpful as an analysis of our liquidity and capital
      resources.





Net
      loss for the quarter ended June 30, 2008, was $205,185 as compared to $514,820
      for the quarter ended June 30, 2007. This decrease of $309,635 in net loss
      is
      attributable primarily to the decrease in general and administrative expense
      and
      decrease in unrealized loss of trading securities.




24





**Six-month
      period ended June 30, 2008 and June 30, 2007**





During
      the six months ended June 30, 2008, we had revenues of $7,427. The cost of
      revenue was $2,848 which was 40% of the total revenue.




During
      the six months ended June 30, 2007, we had revenues of $690. The cost of revenue
      was $405, which was 59% of the total revenue. The decrease of the percentage
      of
      cost of sales to sales was due to the decrease in costs of the surgical
      instruments. All these revenues were due to our selling surgical instruments
      in
      the United States. Since we entered into this agreement, we have established
      a
      sales inventory of Xinhua’s surgical instruments, printed marketing materials
      such as catalogs and post cards, compiled a list of potential customers, and
      implemented a strategic marketing plan for selling Xinhua’s instruments. The
      revenue has been increasing as a result of these efforts and we expect the
      increasing trend will continue in the near future.





For
      the
      six months ended June 30, 2008, research and development expenses were $56,873,
      as compared to $82,050 for the six months ended June 30, 2007. The decrease
      of
      $25,177 is due primarily to the decrease of pre-clinical trial development
      of
      our vaccine candidates.




For
      the
      six months ended June 30, 2008, general and administrative expenses were
      $448,875 as compared to $718,600 for the six months ended June 30, 2007. The
      decrease of $269,725 is due primarily to decreases in consulting
      expense.





For
      the
      six months ended June 30, 2008, selling and distribution expenses were $33,610
      as compared to $16,311 for the six months end June 30, 2007. The increase of
      $17,299 is due primarily to increases in shipping and selling
      expense.





For
      the
      six months ended June 30, 2008, interest expense was $1,671 as compared to
      interest income of $3,803 for the six months ended June 30, 2007. The decrease
      of $5,474 is due primarily to a decrease in cash balance and borrowing cost.





However,
      none of these revenues pertain to our core planned principal operation of
      developing vaccines. Therefore, we believe a separate analysis of these revenues
      is not as helpful as an analysis of our liquidity and capital
      resources.





Net
      loss
      for the six months ended June 30, 2008, was $493,031 as compared to $873,298
      for
      the six months ended June 30, 2007. This decrease of $380,267 in net loss is
      attributable primarily to the decrease in general and administrative expense
      and
      decrease in unrealized loss on trading securities.





**Liquidity
      and Capital Resources**





Our
      principal sources of liquidity are cash and cash equivalent balances, which
      were
      $932,020 at June 30, 2008. Also, we had marketable securities valued at
      $193,675 as of June 30, 2008. These marketable securities were classified
      as trading securities.





Net
      cash
      used in operating activities was $337,662 for the six months ended June 30,
      2008
      and $832,516 for the six months ended June 30, 2007. The decrease was due
      primarily to a decrease in payments made to contractors for building our
      laboratory facilities.





Net
      cash
      provided by (used in) investing activities was $1,078,517 for the six months
      ended June 30, 2008 and ($1,901,855) for the six months ended June 30, 2007.
      This change was due to the sale in part of our trading securities during the
      six
      months ended June 30, 2008.




Net
      cash
      provided by financing activities was $91,127 for the six months ended June
      30,
      2008 compared to $3,014,102 for the six months ended June 30, 2007. This large
      decrease was mainly due to proceeds from the issuance of preferred stock in
      2007.





To
      date,
      our operations have been funded through issuances of our common stock and
      preferred stock whereby we raised an aggregate $7,358,117 from inception through
      June 30, 2008.





We
      estimate the total project costs for Phase One will be approximately $2,730,000.
      As of June 30, 2008, the remaining costs associated with completion of Phase
      One
      project will be approximately $567,000, primarily for permanent electrical
      equipment to be installed and related works to be finished. Also, we plan to
      use
      RMB 6 million (approximately $881,000) to acquire Xinheng Baide, a bovine serum
      manufacturing company in China. We plan to use our cash on hand to acquire
      the
      target, and in the meantime, to raise funds through private placements to
      increase our cash position and further to proceed with our potential joint
      venture with JRS in Beijing, China. We have signed securities purchase
      agreement with several board members and investors for investment in our Company
      in the form of common stock investment plus warrants.




On
        July
        2, 2008 ,
        the
        Company entered into a securities purchase agreement with NFR International
        Pty
        Limited (“NFR”) and China Diamond Limited (“China Diamond”), two companies
        controlled by a member of our Board of Directors, Mr. Trevor Roy, and his wife,
        in which NFR and China Diamond agreed to purchase a total of 3,448,276
        investments units from BGES at $0.725 per unit. Each unit consists of one
        share
        of common stock, a four-year warrant to purchase 0.5 share of common stock
        at
        $0.725 and a five-year warrant to purchase 0.5 share of common stock at $1.10.
        The total investment of China Diamond and NFR is $2.5 million. $125,000 of
        this
        total was paid upon execution of the equity purchase agreement and the balance
        will be paid in ten monthly equal amounts until May 1, 2009.
 
 On
        July
        9, 2008, the Company entered into a securities purchase agreement with Cheung
        Hin Shun Anthony, a member of our Board of Directors, in which Mr. Cheung
        agreed
        to purchase a total of 2,000,000 investment units from BGES at $0.725 per
        unit.
        Each unit consists of one share of common stock, a four-year warrant to purchase
        0.5 share of common stock at $0.725 and five-year warrant to purchase 0.5
        share
        of common stock at $1.10. The total investment is $1.45 million. $120,000
        of
        this total was paid upon execution of the equity purchase agreement and the
        balance will be paid in ten equal installments until May 31,
        2009.




Based
      on
      our current operating plan, we believe that we have sufficient cash and cash
      equivalents to last approximately through December 2009. We will need to
      obtain additional financing in addition to the funds already raised through
      the
      sale of equity securities to fund our cash needs and continue our operations
      beyond December 2009. Additional financing, whether through public or private
      equity or debt financing, arrangements with stockholders or other sources to
      fund operations, may not be available, or if available, may be on terms
      unacceptable to us. Our ability to maintain sufficient liquidity is dependent
      on
      our ability to raise additional capital. If we issue additional equity
      securities to raise funds, the ownership percentage of our existing stockholders
      would be reduced. New investors may demand rights, preferences or privileges
      senior to those of existing holders of our common stock. Debt incurred by us
      would be senior to equity in the ability of debt holders to make claims on
      our
      assets. The terms of any debt issued could impose restrictions on our
      operations. If adequate funds are not available to satisfy either medium or
      long-term capital requirements, our operations and liquidity could be adversely
      affected.




25




**Critical
      Accounting Policies**




Our
      discussion and analysis of our financial condition and results of operations
      are
      based on our consolidated financial statements, which have been prepared in
      accordance with accounting principles generally accepted in the U.S. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses for each period. The following represents a summary of our critical
      accounting policies, defined as those policies that we believe are the most
      important to the portrayal of our financial condition and results of operations
      and that require management's most difficult, subjective or complex judgments,
      often as a result of the need to make estimates about the effects of matters
      that are inherently uncertain.




Stock-Based
      Compensation





The
      Company periodically issues stock options and warrants to employees and
      non-employees in capital raising transactions, for services and for financing
      costs. The Company adopted SFAS No. 123R effective January 1, 2006, and is
      using
      the modified prospective method in which compensation cost is recognized
      beginning with the effective date (a) based on the requirements of SFAS No.
      123R
      for all share-based payments granted after the effective date and (b) based
      on
      the requirements of SFAS No. 123R for all awards granted to employees prior
      to
      the effective date of SFAS No. 123R that remain unvested on the effective date.
      The Company accounts for stock option and warrant grants issued and vesting
      to
      non-employees in accordance with EITF No. 96-18: “Accounting for Equity
      Instruments that are Issued to Other Than Employees for Acquiring, or in
      Conjunction with Selling, Goods or Services” and EITF No. 00-18 “Accounting
      Recognition for Certain Transactions involving Equity Instruments Granted to
      Other Than Employees” whereas the value of the stock compensation is based upon
      the measurement date as determined at either a) the date at which a performance
      commitment is reached, or b) at the date at which the necessary performance
      to
      earn the equity instruments is complete.





Impairment
      of Long-Lived Assets




We
      account for long-lived assets in accordance with SFAS No. 144, Accounting for
      the Impairment or Disposal of Long-Lived Assets, or SFAS No. 144, which was
      adopted on January 1, 2002. SFAS No. 144 supersedes SFAS No. 121, Accounting
      for
      the Impairment of Long-Lived Assets and for Long- Lived Assets To Be Disposed
      of, or SFAS No. 121. Our long-lived assets consist of land use right, notes,
      fixed assets, construction in process, and prepaid consulting fees. We regularly
      evaluate our long-lived assets, including our intangible assets, for indicators
      of possible impairment whenever events or changes in business circumstances
      indicate that the carrying amount of the assets may not be fully recoverable.
      An
      impairment loss would be recognized when estimated undiscounted future cash
      flows expected to result from the use of an asset and its eventual disposition
      are less than its carrying amount. Impairment, if any, is measured using
      discounted cash flows. In the period ended June 30, 2008, we performed an
      evaluation of our long-lived assets and concluded there was no
      impairment.




Research
      and Development Costs




We
      account for research and development expense under the guidance of SFAS No.2,
      Accounting for Research and Development Costs, which was adopted in October
      1974. Research and development costs are charged to operations as incurred.
      Our
      research and development costs include salaries of research and development
      personnel and contract service expenses for conducting pre-clinical trial
      studies.





Registration
      Payment Arrangements





The
      Company accounts for registration payment arrangements under Financial
      Accounting Standards Board (FASB) Staff Position EITF 00-19-2, *Accounting
      for Registration Payment Arrangements* (“FSP
      EITF 00-19-2”). FSP EITF 00-19-2 specifies that the contingent obligation to
      make future payments under a registration payment arrangement should be
      separately recognized and measured in accordance with SFAS No. 5, *Accounting
      for Contingencies* .
      FSP
      EITF 00-19-2 was issued in December, 2006. The Company adopted FSP EITF 00-19-2,
      effective January 1, 2007. Certain registration payment arrangements were
      included with a private placement of the Company’s preferred stock in the first
      quarter of 2007. The Company did not record any liability related to these
      registration payment arrangements because it determined there is a remote chance
      that the Company will be required to remit any payments for failing to obtain
      an
      effective registration statement.





Financial
      Assets and Liabilities Measured at Fair Value





Effective
      January 1, 2008, the Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 157, Fair Value Measurements. This Statement defines fair value
      for certain financial and nonfinancial assets and liabilities that are recorded
      at fair value, establishes a framework for measuring fair value, and expands
      disclosures about fair value measurements. This guidance applies to other
      accounting pronouncements that require or permit fair value measurements. On
      February 12, 2008, the FASB finalized FASB Staff Position (FSP) No. 157-2,
      Effective Date of FASB Statement No. 157. This Staff Position delays the
      effective date of SFAS No. 157 for nonfinancial assets and liabilities to
      fiscal years beginning after November 15, 2008 and interim periods within those
      fiscal years, except for those items that are recognized or disclosed at fair
      value in the financial statements on a recurring basis (at least annually).
      The
      adoption of SFAS No. 157 had no effect on the Company’s consolidated
      financial position or results of operations.




26





At
      June
      30, 2008, the Company’s financial assets and liabilities that were measured at
      fair value include its investment in trading securities which have a cost of
      $194,194, a gross unrealized loss of $519, and a fair value of $193,675. The
      Company estimates the fair value of its trading securities based on unadjusted
      quoted prices in active markets of identical assets.





**Recent
      Accounting Pronouncements**





In
      December 2007, the FASB issued FASB Statement No. 141 (R), “Business
      Combinations” (FAS 141(R)), which establishes accounting principles and
      disclosure requirements for all transactions in which a company obtains control
      over another business. Statement 141 (R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008. Earlier
      adoption is prohibited.








In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS No. 160
      establishes accounting and reporting standards that require that the ownership
      interests in subsidiaries held by parties other than the parent be clearly
      identified, labeled, and presented in the consolidated statement of financial
      position within equity, but separate from the parent’s equity; the amount of
      consolidated net income attributable to the parent and to the noncontrolling
      interest be clearly identified and presented on the face of the consolidated
      statement of income; and changes in a parent’s ownership interest while the
      parent retains its controlling financial interest in its subsidiary be accounted
      for consistently. SFAS No. 160 also requires that any retained noncontrolling
      equity investment in the former subsidiary be initially measured at fair value
      when a subsidiary is deconsolidated. SFAS No. 160 also sets forth the disclosure
      requirements to identify and distinguish between the interests of the parent
      and
      the interests of the noncontrolling owners. SFAS No. 160 applies to all entities
      that prepare consolidated financial statements, except not-for-profit
      organizations, but will affect only those entities that have an outstanding
      noncontrolling interest in one or more subsidiaries or that deconsolidate a
      subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. Earlier
      adoption is prohibited. SFAS No. 160 must be applied prospectively as of the
      beginning of the fiscal year in which it is initially applied, except for the
      presentation and disclosure requirements. The presentation and disclosure
      requirements are applied retrospectively for all periods presented.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities—an amendment of FASB Statement No. 133,”
(SFAS No.161). SFAS No.161 requires enhanced disclosures about an entity’s
      derivative and hedging activities, including (i) how and why an entity uses
      derivative instruments, (ii) how derivative instruments and related hedged
      items are accounted for under SFAS No. 133, and (iii) how derivative
      instruments and related hedged items affect an entity’s financial position,
      financial performance, and cash flows. This standard becomes effective for
      financial statements issued for fiscal years and interim periods beginning
      after
      November 15, 2008. Earlier adoption of SFAS 161 and, separately, comparative
      disclosures for earlier periods at initial adoption are encouraged. As SFAS
      No.161 only requires enhanced disclosures, this standard will have no impact
      on
      the Financial Statements





The
      Company does not believe that the adoption of the above recent pronouncements
      will have a material effect on the Company’s consolidated results of operations,
      financial position, or cash flows.




**Construction
      in progress**





In
      May
      2003, the Company acquired a land use right for approximately 2.8 acres of
      land
      in the Tianzhu Export Processing Zone, Shunyi District, Beijing, China, which
      the Company plans to develop into a laboratory and bio-manufacturing facility
      in
      compliance with Good Manufacturing Practices, or GMP, regulations primarily
      for
      clinical trials of HIV-PV Vaccine I. As of December 31, 2005, the Company had
      received all necessary permits and approvals. The general plans for development
      include the construction of a laboratory facility (“Phase One”) and construction
      of an administrative office building (“Phase Two”). The Company estimates the
      total project costs for Phase One will be approximately $2,730,000. At June
      30,
      2008, Phase One construction and internal clean room decoration was
      substantially completed at a cost of approximately $2,160,000, and is recorded
      as construction in progress. At June 30, 2008, $132,073 is due to the
      contractors of Phase One for the completed construction and internal clean
      room
      decoration and this obligation is recorded as due to contractors.




The
      Company estimates that the remaining costs associated with completion of Phase
      One project will be approximately $567,000, primarily for permanent electrical
      equipment to be installed and related works to be finished. As of June 30,
      2008,
      the Company had signed an agreement with several contractors and vendors to
      finish the electricity project, and the remaining commitment is $62,306. The
      Company estimates the purchase and installation of the electrical and steam
      equipment will be completed in the third quarter of 2008. In addition, the
      Company estimates the cost of laboratory equipment it needs before Phase One
      is
      fully operational will be approximately $1,000,000. At June 30, 2008, the
      Company had not negotiated any contracts for the purchase of any of the
      laboratory equipment. The Company estimates the purchase and installation of
      the
      laboratory equipment will be completed by the end of 2008. At June 30,
      2008, Phase Two was still in the design stage. The Company estimates total
      project costs for Phase Two will be approximately $1,200,000. The Company
      estimates that construction may begin on Phase Two in 2010 or later, but
      currently has no plans for Phase Two construction.




27




**Lease
      commitment**




As
      of
      June30, 2008, the Company had remaining outstanding commitments with respect
      to
      its non-cancelable operating lease for its office in Oak Brook, IL, of which
      $27,396 is due within one year, $28,041is due in 2009 and $4,751 is due in
      2010,
      and for its office in Beijing, PRC (which is leased from Mr. Wenhui Qiao, the
      Company's director and president), of which $22,744 is due within one
      year.





**Research
      and Development Agreements**




On
      May 6,
      2004, Beijing Institute of Radiation Medicine and the Company entered
      into agreements for conducted biodistribution and integration studies for HIV-PV
      Vaccine I. The aggregate amount for the testing is $28,494 and as of June 30,
      2008, the remaining commitment was $5,832. On April 1, 2007, we entered into
      a
      biosample inspection for vaccine development research agreement with Beijing
      Xingde Biomedicine Research Institute. The aggregate amount paid for the testing
      is $22,452 and the remaining commitment was $23,910 as of June 30, 2008. On
      March 1, 2008, we signed an agreement with Changchun Wandi Biotechnology Co.
      Ltd, to conduct SF9 cell culture and stability study. The payment will be on
      a
      monthly basis and the remaining commitment is $21,431 as of June 30,
      2008.





**Royalty
      and License Arrangements**





Mr.
      Liang
      Qiao, M.D., the Company's co-founder and chief executive officer, is one of
      the
      co-inventors of the Company's core technology that was assigned to Loyola
      University Chicago in April 2001. Under the agreement with Loyola University
      Chicago, the Company has obtained exclusive rights to this technology for use
      in
      its future products within the United States, Japan and the People's Republic
      of
      China, including mainland China, Hong Kong, Taiwan and Macau. The license
      continues perpetually or for the maximum period of time permitted by law, unless
      terminated earlier under the terms of the agreement. Pursuant to this agreement,
      Loyola receives a royalty of 4% from the net profit for all uses of the licensed
      technology, including uses under sublicenses. As of June 30, 2008, the Company
      had not generated any revenues from the sale of any products under development,
      nor had the Company received any revenues from sublicenses.





**Distribution
      Agreement**




On
      November 21, 2005, we entered into an exclusive distribution agreement with
      Xinhua Surgical Instruments Co. Ltd., (“Xinhua”) located in Shandong, China.
      Under this agreement, we have been granted exclusive distribution rights for
      all
      Xinhua surgical instruments in the United States, which are subject to FDA
      approval. The Company is responsible for advertising and marketing expenses
      in
      connection with distribution of Xinhua surgical instruments in the United
      States. Sales were $2,979 in 2007 and $1,768 in 2006. Minimum sales per the
      agreement are $50,000 in 2007, $60,000 in 2008, and increases 10% annually
      thereafter. Although we did not reach the minimum sales requirement in 2007,
      Xinhua indicated that we still have the exclusive distribution right in
      2008.





On
      March
      17, 2008, the Company entered into an exclusive agency agreement with Xinhua.
      Under the renewed Agreement, the Company has been granted exclusive distribution
      rights for all Xinhua surgical instruments in the United States, Australia,
      and
      New Zealand. The Company’s minimum annual sale requirement for these three areas
      for a whole year from the date of signing the agreement will be $55,000 and
      increases 10% annually thereafter. The Company is responsible for advertising
      and marketing expenses in connection with distribution of Xinhua surgical
      instruments in these three areas. Subject to minimum sale requirements, the
      Company's exclusivity rights in these three areas will be extended. The new
      agreement supersedes the previous agreement signed on November 21, 2005. Sales
      in 2008 as of June 30, 2008 were $7,427.





On
      December 6, 2005, we received confirmation from the FDA of our registration
      as a
      medical device establishment, which enables us to perform initial distributor
      and repackager operations. This confirmation is not a FDA approval of any
      product or any of our activities. It is neither a license, nor a certification.
      We market Xinhua surgical instruments that meet the criteria for Class I medical
      devices under FDA rules, which do not require pre-market notification to the
      FDA.




**Contractual
      Obligations**




Payments
      due under contractual obligations at June30, 2008 mature as
      follows:





Payments
                due by period ($ in thousands)Contractual
                Obligations
            
            Total
            
            Less
                than
              1
                year
            
            1
                to 3
              yearsLease
                obligation
            
            $
            83
            
            $
            50
            
            $
            33Payable
                to contractors
            
            
            132
            
            
            132
            
            
            —R&D
                agreement obligation
            
            
            51
            
            
            51
            
            
            —Total
            
            $
            266
            
            $
            233
            
            $
            33




28




**Item
      3. Quantitative and Qualitative Disclosure about Market Risk**





The
      Company is  a  smaller  reporting  company and is
      not required to provide the information required by this.





**Item
      4. Controls and Procedures**





(a)
      Evaluation of disclosure controls and procedures. As of the end of the period
      covered by this report, we carried out an evaluation, under the supervision
      and
      with the participation of our management, including our Chief Executive Officer
      and Chief Financial Officer, of the effectiveness of the design and operation
      of
      our disclosure controls and procedures, as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon
      that
      evaluation, our Chief Executive Officer and Chief Financial Officer concluded
      that our disclosure controls and procedures were effective as of the end of
      the
      applicable period to ensure that the information required to be disclosed by
      us
      in reports that we file or submit under the Exchange Act (i) is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms and (ii) is accumulated
      and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate to allow timely decisions regarding required
      disclosures.





(b)
      Changes in internal controls over financial reporting. There was no change
      in
      our internal control over financial reporting during our most recent fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, our internal control over financial reporting.





**PART
      II - OTHER INFORMATION**





**Item
      1.****Legal
      Proceedings**





Not
      Applicable.





**Item
      1A. Risk Factors**




There
      have been no material changes in the risk factors previously disclosed in Form
      10-KSB we filed with the SEC on March 31, 2008.




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





Not
      applicable.





**Item
      3.****Defaults
      Upon Senior Securities**





Not
      applicable.





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





Not
      applicable.





**Item
      5.****Other
      Information**





Not
      applicable.





**Item
      6.**  **Exhibits**





The
      exhibits listed in the Exhibit Index are filed as part of this
      report.


29




**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, thereunto duly
      authorized.




**Bio-Bridge
                Science, Inc.***/s/
                Dr. Liang Qiao*
            
            
            *Dated:
                August 14, 2008**By:
                Dr. Liang Qiao**Chief
                Executive Officer*




30




**EXHIBIT
      INDEX**





3.1(i)*
            
            Certificate
                of incorporation of the registrant, as currently in
                effect3.1(ii)*
            
            Bylaws
                of the registrant, as currently in effect3.1(iii)**
            
            Certificate
                of Designation of Series A Preferred Stock4.1**
            
            Form
                of Common Stock Warrant Agreement dated January 20074.2**
            
            Registration
                Rights Agreement dated January 200710.1**
            
            Securities
                Purchase Agreement dated January 200731.1
            
            Certification
                of Chief Executive Officer31.2
            
            Certification
                of Chief Financial Officer32.1
            
            Section
                1350 Certifications of Chief Executive Officer and Chief Financial
                Officer





*
      Previously filed with the Securities and Exchange Commission pursuant to
      Registration Statement No. 333-121786.




**
      Previously filed as an exhibit to the Registrant's Form 10-KSB for its year
      ended December 31, 2006.




31