China Green, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATIONS PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - China Green, Inc.	f10q0311ex32i_greensolution.htm
EX-31.1 - CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - China Green, Inc.	f10q0311ex31i_greensolution.htm

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 March 31, 2011

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

For the transition period from ______to______.

GREEN SOLUTIONS CHINA, INC.

(Exact name of registrant as specified in Charter

DELAWARE		333-166747		75-3269182
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

Room 3601, the Centre, Queen’s Road no.99

Central, Hong Kong

(Address of Principal Executive Offices)

_______________

(852) 3691-8831

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o 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 filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of as of May 23, 2011: 6,514,750 shares of Common Stock.

GREEN SOLUTIONS CHINA, INC.

FORM 10-Q

March 31, 2011

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and results of Operations	21
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4T.	Control and Procedures	30

PART II--OTHER INFORMATION

Item 1	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	(Removed and Reserved)	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

SIGNATURE		32

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

GREEN SOLUTIONS CHINA, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)

(Stated in US dollars)

GREEN SOLUTIONS CHINA, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

Page(s)


CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME	1

CONDENSED CONSOLIDATED BALANCE SHEETS	2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	3

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	4-19

GREEN SOLUTIONS CHINA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNADUITED)

(Stated in US dollars)

			Three months ended			Three months ended			Nine months ended			Nine months ended
	Note		March 31, 2011			March 31, 2010			March 31, 2011			March 31, 2010

Service income		9	$	1,521,324		$	3,134,563		$	6,767,165		$	10,583,682

Cost of services		9		(4,358,298	)		(1,254,690	)		(7,580,078	)		(4,430,067	)

Gross (loss) / profit		9		(2,836,974	)		1,879,873			(812,913	)		6,153,615

General and administrative expenses				(721,312	)		(851,134	)		(934,241	)		(902,452	)

(Loss) / Income before taxation				(3,558,286	)		1,028,739			(1,747,154	)		5,251,163

Income tax		10		-			(11,782	)		-			(60,448	)

Net (loss) / income				(3,558,286	)		1,016,957			(1,747,154	)		5,190,715

Other comprehensive income - Foreign currency translation adjustments				163,782			2,467			676,564			(17,416	)

Total comprehensive income			$	(3,394,504	)	$	1,019,424		$	(1,070,590	)	$	5,173,299

Net income per share – basic and diluted			$	(0.55	)	$	0.16		$	(0.27	)	$	0.84

Weighted average number of shares outstanding during the period – basic and diluted

6,514,750

6,338,084

6,514,750

6,184,056

The annexed notes form an integral part of these financial statements.

GREEN SOLUTIONS CHINA, INC.

CONDENSED CONSOLIATED BALANCE SHEETS

AS OF MARCH 31, 2011 AND JUNE 30, 2010

(Stated in US dollars)

			As of		As of
			March 31, 2011		June 30, 2010
	Note		(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents		3	$	438,160	$	1,141,108
Accounts receivables		4		4,773,677		3,898,480
Deposit paid for labor services				1,075,179		2,228,619
Deposit paid for contract procurements		5		1,221,356		2,629,028
Deposit paid for hotel investment negotiation		6		5,954,108		3,963,761
Rental deposit				35,244		35,244

Total current assets				13,497,724		13,896,240

Plant and equipment, net		7		2,039,538		2,697,473

Total non-current assets				2,039,538		2,697,473


TOTAL ASSETS			$	15,537,262	$	16,593,713

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Accrued expenses			$	50,307	$	41,484
Accrued share-based compensation				-		-
Tax payable				138,452		133,196

TOTAL LIABILITIES				188,759		174,680

CONTINGENCIS AND COMMITMENTS		11

STOCKHOLDERS’ EQUITY
Preferred stock ($0.00001 par value, 100,000,000 share shares authorized, none issued and outstanding)				-		-
Common stock ($0.00001 par value, 500,000,000 shares; shares authorized, 6,514,750 shares issued and outstanding)		8		65		65
Additional paid-in capital		8		4,008,511		4,008,511
Accumulated comprehensive income				1,559,580		883,016
Retained earnings				9,780,347		11,527,441

TOTAL STOCKHOLDERS’ EQUITY				15,348,503		16,419,033

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	15,537,262	$	16,593,713

The annexed notes form an integral part of these financial statements.

GREEN SOLUTIONS CHINA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)

(Stated in US dollars)

	Three months ended			Three months ended			Nine months ended			Nine months ended
	March 31, 2011			March 31, 2010			March 31, 2011			March 31, 2010

Cash flows from operating activities
Net (loss) / income	$	(3,558,286	)	$	1,016,957		$	(1,747,154	)	$	5,190,715
Depreciation		253,975			150,423			750,461			415,616
Stock based compensation		-			795,000			-			795,000
(Increase) / decrease in accounts receivables		(1,009,241	)		2,011,958			(875,197	)		(748,862	)
Decrease / (Increase) in deposit paid for labor service		1,625,306			(695,145	)		1,153,440			(695,145	)
Decrease / (Increase) in contract procurements		2,514,390			(95,406	)		1,407,673			(95,406	)
(Increase) / Decrease in deposit paid for hotel investment negotiation		(442,235	)		(127,450	)		(1,990,347	)		(2,025,715	)
(Decrease) / Increase in accrued expenses		(1,421	)		37,503			8,822			96,905
Increase in tax payable		-			11,782			-			60,338
Decrease in amount due to a shareholder		-			-			-			(23,899	)
Decrease in amount due to a director		-			-			-			(64,499	)

Net cash (used in) / from operating activities	$	(617,512	)	$	3,105,622		$	(1,292,302	)	$	2,905,048

Cash flows from investment activities
Purchase of plant and equipment		-			(346,877	)		-			(364,216	)

Net cash used in investment activities	$	-		$	(346,877	)	$	-		$	(364,216	)


Cash flows from financing activities
Proceeds from issuance of common stock		-			5			-			498,022
Dividend paid		-			(2,194,234	)		-			(2,194,234	)

Net cash used in financing activities	$	-		$	(2,194,229	)	$	-		$	(1,696,212	)


Net (decrease) / increase in cash and cash equivalents	$	(617,512	)	$	564,516		$	(1,292,302	)	$	844,620
Effect of foreign currency translation on cash and
cash equivalents		144,524			2,351			589,354			(27,573	)
Cash and cash equivalents - beginning of period		911,148			1,099,637			1,141,108			849,457

Cash and cash equivalents - end of period	$	438,160		$	1,666,504		$	438,160		$	1,666,504

The annexed notes form an integral part of these financial statements.

GREEN SOLUTIONS CHINA, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2011 AND 2010

(Stated in US dollars)

1.	ORGANIZATION AND DESCRIPTION OF BUSINESS

Effect from November 29, 2010, the company changed its name from China Green, Inc. to Green Solutions China, Inc. (“Green Solutions” or the “Company”).

Green Solutions China, Inc. consists of Green Solutions China, Inc., Glorious Pie Limited (the “Glorious Pie”) and Earn Bright Development Limited (the “Earn Bright”) (Collectively named as the “Group”). Green Solutions China, Inc. was incorporated in the State of Delaware on July 11, 2008. Glorious Pie Limited was incorporated in the British Virgin Islands on 12 June, 2006, under the International Business Companies Act, British Virgin Islands. Earn Bright Development Limited, a wholly owned subsidiary of Glorious Pie, was incorporated in Hong Kong on December 17, 2008.

In connection with private placement of the Company completed in July 2009, the Company issued 166,000 shares of our common stock to 296 Investors at $3.00 per share for an aggregate purchase price of $498,000.

On August 13, 2009, the Company closed a share exchange and stock purchase transaction by issuing 10,355,000 shares of its common stock in exchange for 100% of the outstanding common stock of Glorious Pie. This transaction was accounted for as a reverse acquisition and resulted in Glorious Pie becoming the accounting acquirer, whereby the historical financial statements of Green Solutions have become those of Glorious Pie.

On March 10, 2010, the Board of Directors of the Company adopted resolutions approving a Reverse Stock Split on the basis of one share for every two outstanding shares. The number of shares of the Company’s common stock issued and outstanding had been reduced from 13,029,500 to 6,514,750.

The Group is engaged in developing its model in the areas of hospitality facilities and large scale landscape architecture and engineering. The Group is specialized on providing greenery services to greenery construction projects in China, including, but not limited to, design advice, trading and quality control service of seed, provision of seedling and performance arrangement of greenery engineering and plantation.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of presentation and consolidation

The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America for consolidated financial information.

The consolidated financial statements are prepared on the basis with assumption the reverse merger was undergone at the beginning of July 1, 2007. The historical consolidated financial statements of the Company will be those of Green Solutions China, Inc. and of the consolidated entities from the July 1, 2007, the date of merger, and subsequent.

The consolidated financial statements for the Company for the nine months ended March 31, 2011 and 2010, includes the financial statements of Green Solutions China, Inc., its 100% owned subsidiary, Glorious Pie Limited, and its wholly owned subsidiary, Earn Bright Development Limited. Inter-company transactions and balances are eliminated in consolidation.

In connection with the reverse acquisition and recapitalization, all share and per share amounts will be retroactively restated.

As of March 31, 2011, the particulars of the subsidiaries are as follows:

Name of company	Place of incorporation	Date of incorporation	Attributable equity interest	Issued capital

Glorious Pie Limited	British Virgin Islands	June 12, 2006	100%	US$100

Earn Bright Development Limited	Hong Kong	December 17, 2008	100%	US$1,285 (HK$10,000)

b) Use of estimates

In preparing of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery. Actual results could differ from those estimates.

c) Cash and Cash Equivalents

The Group considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of March 31, 2011 and June 30, 2010, there were cash and cash equivalents of $438,160 and $1,141,108 respectively.

d) Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The Group recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Group becomes aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted.

e) Accounting for the Impairment of Long-Lived Assets

In accordance with ASC 360, Property Plant and Equipment, the Group tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. At March 31, 2011, the Group did not recognize any impairment loss.

f) Plant and Equipment

Plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

Furniture, fixtures and equipment

5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.

Management considers that we have no residual value for plant and equipment.

g) Fair value of Financial Instruments

The carrying values of the Group’s financial instruments, including cash and cash equivalents, accounts receivables, other receivables and prepayments, accounts payables, and other accrued liabilities their fair values due to the short-term maturity of such instruments.

h) Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in Hong Kong dollar and Renminbi (RMB). Management has adopted ASC 740 Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

The functional currency of the wholly-owned subsidiaries is the RMB and Hong Kong dollar respectively. The financial statements of the subsidiary are translated to United States dollars in accordance with ASC 740 using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Foreign currency translation gains and losses are included in current operations.

	Three months ended March 31, 2011		Three months ended March 31, 2010		Nine months ended March 31, 2011		Nine months ended March 31, 2010
Period ended RMB : US$ exchange rate		6.5501		6.8361		6.5501		6.8361
Average period RMB : US$ exchange rate		6.5713		6.8360		6.6610		6.8377

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$ at the rates used in translation.

i) Revenue Recognition

Greenery construction revenue

The Group accepts contracts on a fixed price basis. Revenue from fixed price construction contracts are recognized on the percentage-of-completion method measured by the ratio of costs incurred to date to the estimated total cost s to be incurred for each contract. Revenue from unit price contracts and service agreements are recognized as services are performed.

Contract costs include all direct material, direct labor, subcontractor costs and other indirect costs related to contract performance, such as supplies, tools and equipment maintenance. General and administrative costs are charged to expense as incurred.

Greenery maintenance revenue

The Group accepts contracts on a fixed price basis. Revenue are recognized on fixed price greenery maintenance contracts in straight-line basis over the contracted period except in those circumstances in which sufficient historical evidence indicated that the costs of performing services under the contract are incurred on other than a straight-line basis.

Hotel management revenue

The Group accepts contracts on service agreement basis. Revenue from service agreements are billed monthly based on certain percent of gross revenue generated by operating activity of the client.”

j) Cost of revenue

Greenery construction and maintenance

Regarding the trading of seeding and provision of greenery construction and greenery maintenance projects, the respective cost of revenue consists primarily of material costs, labor cost, subcontracting expenses, and related expenses, which are directly attributable to the greenery construction projects.

Hotel management

Regarding the design and consultancy services to the hotel facilities, the respective cost of revenue includes the consultancy expenses in professional staff involved and the design and consultancy fee with other third-party experts, and also the depreciation expenses on those fixtures and movable assets being placed with the hotel by the Group.

k) Income Taxes

The Group adopts ASC Topic 740, “Income Taxes”, regarding accounting for uncertainty in income taxes which prescribes the recognition threshold and measurement attributes for financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. In addition, the guidance requires the determination of whether the benefits of tax positions will be more likely than not sustained upon audit based upon the technical merits of the tax position. For tax positions that are determined to be more likely than not sustained upon audit, a company recognizes the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not determined to be more likely than not sustained upon audit, a company does not recognize any portion of the benefit in the financial statements. The guidance provides for de-recognition, classification, penalties and interest, accounting in interim periods and disclosure.

For the nine months ended March 31, 2011 and year ended June 30, 2010, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2011 and June 30, 2010, the Company did not have any significant unrecognized uncertain tax positions.

l) Comprehensive Income

ASC 220, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statement of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

m) Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

n) Segment reporting

ASC 280, "Disclosure about Segments of an Enterprise and Related Information" requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

During the nine months ended March 31, 2011 and 2010, the Company is organized into three main business segments: greenery construction consultancy, greenery maintenance and hotel management.

Greenery consulting services generally include landscape planning and design, concept applications, selection and provision of seedling, performance targeting and benchmarking, plantation management and quality control. Based on our assessment of a potential project’s sophistication, we would either directly implement our project plans or outsource services to selected subcontractors.

Greenery maintenance consulting services includes maintaining environment condition of the projects which has been completed by us in the past.

Hotel management services include applying eco-engineering concepts to renovate the Carnival City Hotel, Health City Hotel and Yu Zu Tang located in Dongguan into eco-friendly hotels. The Group’s consultancy plans generally include site assessment, energy optimization applications, resource efficiency planning, material selection and equipment installation.

The detail disclosure on segment information is set out in note 9 in the financial statement.

o) Earnings per share

The Group computes net earnings (loss) per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, 2011 and June 30, 2010, the Group had no common stock equivalents that could potentially dilute future earnings per share.

p) Share base compensation

In accordance with ASC 718, Compensation – Stock Based Compensation, the Group accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the good or services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable.

3.	CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of the following:

	As of		As of
	March 31, 2011		June 30, 2010

Cash at bank	$	280,670	$	1,002,875
Cash on hand		157,490		138,233
	$	438,160	$	1,141,108

4.	ACCOUNTS RECEIVABLES

Accounts receivables consist of the following:

	As of			As of
	March 31, 2011			June 30, 2010
Accounts receivables related to:

Hotel facilities		$	232,724		$	121,227
Greenery construction projects			4,093,010			3,645,067
Greenery maintenance projects			447,943			132,186
		$	4,773,677		$	3,898,480

At the balance sheet date, most of the accounts receivables were related to greenery construction projects and their credit year is usually ranged from 90 days to 180 days.

5.	DEPOSIT PAID FOR CONTRACT PROCUREMENTS

Main contractors require the Company to put escrow money during negotiation of contract. Once the contract is successfully bided, the escrow money will be kept by the contractors until the contract has been completed. If the bid is fail, the escrow money will be refunded.

6.	DEPOSIT PAID FOR HOTEL INVESTMENT NEGOTIATION

The Group has placed the following amount of deposit being held in escrow by the counter-party for the negotiation for acquiring certain equity interest of the hotel facilities located hereunder as of March 31, 2011 and June 30, 2010 which gives comfort to the negotiating party that the Group shows its financial strength and capability to get the acquisition closed if the acquisition deal is reached:

	As of		As of
Deposit for hotel investment negotiation	March 31, 2010		June 30, 2010

Dongguan City, Changan Town,	$	-	$	293,746
Xin Min Administration Region, Jianan Road Section

Shanghai Huaxun Holding Limited		3,053,389		1,343,798
No. 258, Mei Yuen Road, Jia Ding Area, Shanghai

Kang Zu Yuan Hotel	-			901,978
Dongguan City, Changan Town,
Zhen An Zhong Road, Section No. 269

Jiansu Dong'an Hotel		-		522,261
Jiansu Dong'an Technopark

Carnival City Club Hotel		-		901,978
No. 358, Sha Tau Management Zone,
Chengan, Dongguan

Shanghai Qingqiu Huaxun Investment Holding Limited		2,900,719		-
No. 258, Mei Yuen Road, Jia Ding Area, Shanghai

	$	5,954,108	$	3,963,761

7.	PLANT AND EQUIPMENT, NET

Plant and equipment and being part of hotel facilities and consist of the following:

	As of		As of
	March 31, 2011		June 30, 2010
At cost
Plant and equipment	$	4,902,462	$	2,648,609
Acquisition for the period / year		-		2,247,523
Exchange difference		193,475		6,330
		5,095,937		4,902,462
Aggregated depreciation
Beginning for the year		2,204,989		1,565,598
Charge for the year		750,461		633,062
Exchange difference		100,949		6,329
		3,056,399		2,204,989

Net book value	$	2,039,538	$	2,697,473

All of them depreciation charge were included in the cost of service. Management considers that there are no residual value for plant and equipment.

8.	COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL

The number of shares of common stock outstanding and additional paid-in capital at March 31, 2011 and June 30, 2010 is as follows:

	Common Stock				Additional paid-in
	Number		Amount		Capital		Amount

As of the date of inception 1		50,000	$	0.5	$	0.5	$	1
Private placement on August 2009 2		166,000		1.5		497,998.5		498,000
Share issued for compensation on August 2009 3		856,250		8.5		2,568,741.5		2,568,750
Share issued for takeover a subsidiary 4		5,177,500		52.0		52.0		104
Share issued for compensation on for the three months ended March 31, 2010 5		265,000		2.5		794,997.5		795,000
		6,514,750	$	65.0	$	3,861,790.0	$	3,861,855
Reversal of accrued compensation to an executive officer and shareholder for the year ended June 30, 2008		-		-		50,000.0		50,000
Reversal of accrued compensation to an executive officer and shareholder for the year ended June 30, 2009		-		-		50,000.0		50,000
Reversal of accrued compensation to an executive officer and shareholder for the year ended June 30, 2010		-		-		46,721.0		46,721
As of June 30, 2010 and March 31, 20116		6,514,750	$	65.0		4,008,511.0		4,008,576

1 On July 17, 2008, Green Solutions China, Inc. issued 50,000 shares of common stock to Mr. Wa Kei Anthony Wong, former president and director, at par value USD0.00001 as the founder shares as compensation for the services that he rendered in connection with the Company’s incorporation.

2 In connection with the Company’s private placement completed in July 2009, the Company issued 166,000 shares of its common stock to 296 investors at USD$3.00 per share for an aggregate purchase price of USD$498,000.

3 On August 12, 2009, the Company has issued 127,083 shares of share-based compensation at par value USD0.00001 to its director as compensation for services that he rendered. Furthermore, the Company also issued 729,167 shares of non-employee stock based compensation at par value USD0.00001 to third parties as compensation for their consulting services rendered. The total number of 856,250 shares had been compensated.

4 On August 12, 2009, Green Solutions China, Inc. acquired all of the issued and outstanding common stock of Glorious Pie Limited by issuing 5,177,500 common shares to the Glorious Pie Limited Shareholder under a Share Exchange and Stock Purchase Agreement with Glorious Pie Limited.

5 For the three months ended March 31, 2010, the Company has newly issued total 265,000 shares of comment stock at par value as compensation for non-employees.

6 The Company effectuated a 2:1 reverse stock split during the quarter ended March 31, 2010. The Company has 500,000,000 shares of common stock authorized and 6,514,750 shares of common stock issued and outstanding. All statements are reversely stated in accordance with SAB Topic 4C.

As of March 31, 2011 and June 30, 2010, the Company has 500,000,000 shares of common stock authorized and 6,514,750 shares of common stock issued and outstanding.

9.	BUSINESS SEGMENT

The Group is engaged in provision of designing and consultancy services in hotel facilities and also involved in provision of engineering services to greenery construction and maintenance projects, which include, but is not limited to, provision of seedling and skillful workers to those construction projects.

Segment information is disclosed in accordance to ASC 250, “Disclosures about Segments of an Enterprise and Related Information” as below:

	Greenery Construction Project			Greenery Maintenance Works			Hotel Facilities			Total
	Three months ended			Three months ended			Three months ended			Total Three months ended
	March 31, 2011			March 31, 2011			March 31, 2011			March 31, 2011

Revenue from external customers	$	634,343		$	327,432		$	559,549		$	1,521,324

Cost of sales		(3,776,600	)		(295,766	)		(285,932	)		(4,358,298	) )

Gross ( loss) / profit	$	(3,142,257	)	$	31,666		$	273,617		$	(2,836,974	) )

	Greenery Construction Project			Greenery Maintenance Works			Hotel Facilities			Total
	Three months ended			Three months ended			Three months ended			Three months ended
	March 31, 2010			March 31, 2010			March 31, 2010			March 31, 2010

Revenue from external customers	$	1,840,796		$	604,482		$	689,285		$	3,134,563

Cost of sales		(816,159	)		(272,017	)		(166,514	)		(1,254,690	) )

Gross profit	$	1,024,637		$	332,465		$	522,771		$	1,879,873

	Greenery Construction Project			Greenery Maintenance Works			Hotel Facilities			Total
	Nine months ended			Nine months ended			Nine months ended			Nine months ended
	March 31, 2011			March 31, 2011			March 31, 2011			March 31, 2011

Revenue from external customers	$	4,547,783		$	444,789		$	1,774,593		$	6,767,165

Cost of sales		(6,370,035	)		(378,502	)		(831,541	)		(7,580,078	)

Gross profit	$	(1,822,252	)		66,287		$	943,052		$	(812,913	)

	Greenery Construction Project			Greenery Maintenance Works			Hotel Facilities			Total
	Nine months ended			Nine months ended			Nine months ended			Nine months ended
	March 31, 2010			March 31, 2010			March 31, 2010			March 31, 2010

Revenue from external customers	$	6,681,881		$	1,812,995		$	2,088,806		$	10,583,682

Cost of sales		(3,262,638	)		(703,550	)		(463,879	)		(4,430,067	)

Gross profit	$	3,419,243		$	1,109,445		$	1,624,927		$	6,153,615

	Greenery Construction Project		Greenery Maintenance Works		Hotel Facilities		Total
	As of		As of		As of		As of
	March 31, 2011		March 31, 2011		March 31, 2011		March 31, 2011

Segment non - current assets	$	-	$	-	$	2,039,538	$	2,039,538

Segment current assets
(excluding cash and cash equivalents and rental deposit)	$	6,217,088	$	620,401	$	6,186,831	$	13,024,320

Segment current liability	$	-	$	-	$	-	$	-

	Greenery Construction Project		Greenery Maintenance Works		Hotel Facilities		Total
	As of		As of		As of		As of
	Jun 30, 2010		Jun 30, 2010		Jun 30, 2010		Jun 30, 2010

Segment non - current assets	$	-	$	-	$	2,697,473	$	2,697,473

Segment current assets
(excluding cash and cash equivalents)	$	8,502,714	$	132,186	$	4,084,988	$	12,719,888

Segment current liability	$	-	$	-	$	-	$	-

10.

TAXATION

Income/ (loss) before tax consisted of the following:

	Three months ended			Three months ended
	March 31, 2011			March 31, 2010

United States (a)	$	(219,422	)	$	(832,500	)
PRC (b)		(3,338,805	)		1,849,464
Hong Kong (c)		(59	)		(7	)
BVI (d)		-			-
	$	(3,558,286	)	$	1,016,957

Component subjected to tax expense (benefit) consisted of the following:

	Three months ended		Three months ended
	March 31, 2011		March 31, 2010

United States	$	-	$	-
PRC (b) (i)		-		217,549
Hong Kong		-		-
BVI		-		-
	$	-	$	217,549

Tax expense consisted of the following:

	Three months ended		Three months ended
	March 31, 2011		March 31, 2010

United States	$	-	$	-
PRC (b) (iv)		-		17,512
Hong Kong		-		-
BVI		-		-
	$	-	$	17,512

a.	United States Tax

The Company has a net operating loss carry forward at March 31, 2011 for tax purposes totaling $3,869,420, expiring through the year 2028. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carry forwards after a change in control (generally greater than a 50% change in ownership). Temporary differences, which give rise to a net deferred tax asset, are as follows:

	Three months ended			Year ended
	March 31, 2011			June 30, 2010

Gross deferred tax assets:
Net operating loss carry forwards	$	1,315,603		$	1,204,154

Total deferred tax assets		1,315,603			1,204,154
Less: valuation allowance		(1,315,603	)		(1,204,154	)

Net deferred tax asset recorded	$	-		$	-

The valuation allowance at March 31, 2011 was $1,315,603. The net change in valuation allowance during the nine months ended March 31, 2011, was an increase of $111,449. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of March 31, 2011.

The actual tax benefit differs from the expected tax benefit for the six months ended March 31, 2011 and year ended June 30, 2010 (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes) as follows:

	Three months ended			Year ended
	March 31, 2011			June 30, 2010

Expected tax expense (benefit) – Federal	$	1,315,603		$	1,204,154
Change in valuation allowance		(1,315,603	)		(1,204,154	)

Actual tax expense (benefit)	$	-		$	-

PRC Tax

PRC’s legislative body, the National People’s Congress, adopted the unified Enterprise Income Tax (“EIT”) Law on March 16, 2007. This new tax law replaces the existing separate income tax laws for domestic enterprises and foreign-invested enterprises and became effective on January 1, 2008. However, there will be a transition year for enterprises, whether foreign-invested or domestic, that are currently receiving preferential tax treatments granted by relevant tax authorities. Enterprises may continue to enjoy the lower rate and will transit into the new rate over a five year beginning on the effective date of the EIT Law. Enterprises that are currently entitled to exemptions for a fixed term may continue to enjoy such treatment until the exemption term expires. Preferential tax treatments may continue to be granted to industries and projects that qualify for such preferential treatments under the new law.

The tax exemption was terminated on January 2, 2009. The estimated tax savings for the six months ended December 31, 2008 amounted to $107,108. If the income tax had been applied, the basic and diluted earnings per share would have been decreased by $00 and $0 per share for the nine months ended March 31, 2011 and 2010 respectively.

Under the new EIT Law, the withholding tax mechanism for non-resident enterprises was retained from the previous separate income tax laws. It was stated that EIT payable by non-resident enterprises on its PRC-sourced income should be withheld at source and the payer shall be the withholding agent. The withholding agent shall withhold the tax from the amount paid or payable at the time the amount is paid or becomes due. As a general business practice for non-resident enterprises that generate PRC-sourced income, Glorious Pie Limited has received its revenues from its clients (which include government landscaping contractors and hotel operators) on a net of withholding tax basis.

(i) The components subjected to tax expense (benefit) consisted of the following:

	Three months ended		Three months ended
	March 31, 2011		March 31, 2010

Business Tax (b) (ii)	$	-	$	8,616
Enterprises Income Tax (b) (ii)		-		8,896

	$	-	$	17,512

(ii) Calculation for component subjected to Business Tax and Enterprises Income Tax consisted of followings:

	Three months ended			Three months ended
	March 31, 2011			March 31, 2010

Turnover for the period	$	1,521,324		$	3,134,563
Less: Net of withholding turnover by greenery projects		(961,775	)		(2,445,278	)
Net of withholding turnover by hotel consulting		(559,549	)		(516,965	)

Turnover subject to provision for Business Tax		-			172,320
Less: Costs and expenses1		-			(45,229	)

Income subject to provision for Enterprises Income Tax	$	-		$	127,091

	Three months ended		Three months ended
	March 31, 2011		March 31, 2010

Business Tax (b) (ii)	$	-	$	8,616
Enterprises Income Tax (b) (ii)		-		8,896

	$	-	$	17,512

1Under PRC Tax Law, when a non-resident enterprises, that doesn’t have any establishment or place of business in the PRC, EIT payable by a non-resident enterprise on the income sourced from China shall be withheld at source, and the payer shall be withholding agent. The withholding agent shall withhold the tax from the amount paid or payable at the time the amount is paid or becomes due.

2 For period ended June 30, 2010, Glorious Pie Limited has assigned the whole set of methodology and the know-how on the co-ordination and supervision of the progress and milestone of greenery project management with direct contact of those subcontractors (‘Intellectual Property’) to its Hong Kong subsidiary, Earn Bright Development Limited, which has licensed this set of Intellectual Property to the same group of clients of Glorious Pie Limited in PRC as Glorious Pie Limited be the agent of Earn Bright.. Such business activities has resulted in the licensing for use of intellectual property in China and any income derived from the use of such intellectual property licensing in China is deemed to be a ‘royalty’ in nature and such passive income sourced from China would be subject to PRC EIT being withheld at source by PRC payor. Under above circumstance, all revenue generated from greenery projects were net of tax revenue as its customers withhold all PRC tax liability derived by a Company’s revenue and profit from each project, including Business Tax and EIT, which resulted Company was not necessary to bear tax obligation.

3 Referring to previous paragraph, Glorious Pie Limited was deemed a non-resident enterprises and its’ customers were deemed a payer and further identified as tax withholding agent as well for any kind of income being sourced from China. The original hotel consulting agreement by itself does not give rise to any PRC taxable income for the period ended June 30, 2010.

However, since certain assets originated from the performance of hotel consultancy work of Glorious Pie Limited were transferred from Glorious Pie Limited to Earn Bright Development Limited over the reporting period to facilitate the management’s intention to seek for external funding in Hong Kong. Earn Bright Development Limited was entitled to certain percentages of revenues generated by Glorious Pie Limited through its hotel consultancy operations over the corresponding periods. Coupled with the transfer of such assets to Earn Bright Development Limited as described above, there is a new contract executed between the hotel and Earn Bright Development Limited to allow Earn Bright to receive certain amount of investment return on the placement of such asset with the hotel as being retained therein. Such activity is deemed to have Earn Bright derives ‘income sourced from China’ which is of a investment return in nature and being passive income. Therefore, Earn Bright Development Limited receives net of withholding tax revenues from the hotel operators via Glorious Pie Limited, the lack of direct contractual relationship between Earn Bright Development Limited and the hotel operators may lead to the view by PRC tax authorities that Earn Bright Development Limited may directly subject to PRC taxes on its PRC-sourced income since March 8, 2009. For the sake of prudence, we determined that it was necessary to include tax provisions for Earn Bright Development Limited’s PRC-sourced income. As all businesses in Earn Bright Development Limited operate under the Closer Economic Partnership Arrangement (CEPA) between the PRC and Hong Kong, its PRC-sourced income was subject to a 5% Business Tax and a 7% Enterprises Income Tax.

Therefore, the withholding tax amount of turnover from hotel consulting amount was difference between PRC-source income of Glorious Pie Limited and Earn Bright Development Limited.

4 Costs and expenses include depreciation, repair and maintenance, legal and professional costs, and miscellaneous.

(iii) Income Tax Expense and provision for tax liability stated in balance sheet for the year at the statutory tax rate of applicable under PRC tax jurisdiction

	As of		As of
	March 31, 2011		June 30,2010

Tax at the statutory tax rate of applicable in jurisdictions:
jurisdictions:
- Business Tax	$	-	$	38,105
- Enterprises Income Tax		-		22,367
		-		60,472
Balance brought forward		133,196		72,303
Foreign exchange translation		5,256		421

Tax payable	$	138,452	$	133,196

c.	Hong Kong Tax

Earn Bright Development Limited has not been carrying out any business activity in Hong Kong and Earn Bright Development Limited is not subjected to Hong Kong profit tax as there is no assessable profit for the three months ended March 31, 2011 and year ended June 30, 2010.

BVI Tax

Glorious Pie Limited is subjected to British Virgin Island (BVI) tax law. The Management of Glorious Pie Limited determined that the company did not operate in BVI and therefore is not subject to BVI tax. Therefore, Glorious Pie Limited did not incur any BVI tax during the years presented.

A reconciliation of the statutory U.S. federal tax rate and effective tax rate is as follows:

	Three months ended			Three months ended
	March 31, 2011			March 31, 2010

Tax expense at statutory rate - US	$	34.00	%	$	34.00	%
Earning in jurisdictions taxed at rate different from statutory rate in US		(22.00	%)		(22.00	%)
Income withheld under PRC Tax jurisdiction		(12.00	%)		(4.00	%)
Effective tax rate		0.00	%		8.00	%

The deferred tax asset and liability has not been recognized because no valuation allowance to be established for the nine months ended March 31, 2011 and year ended June 30, 2010.

11.	COMMITMENTS AND CONTINGENCIES

(a)	Operating lease commitments

The Company leased certain office space under a non-cancellable operating lease agreement with a term of 1 year with fixed monthly rentals, expiring on April 30, 2011, and generally did not contain significant renewal options. Total rent expenses for the nine months ended March 31, 2011 and 2010 was $74,755 and $0, respectively. Future minimum rental payments due under the non-cancelable operating lease agreement are as follows:

Year ended June 30, 2011

9,344

(b)	Contingencies

There are no foreseeable contingencies for the three months ended March 31, 2011 and June 30, 2010.

12. SIGNIFICANT CONCENTRATION

The Group’s revenue derived from major customers for the three months ended March 31, 2011 and 2010 are as follows:

	Three months ended March 31, 2011
			Percentage of
	Revenue		total revenue

Dongguan Garden Project Co.	$	634,343		42	%
Dongguan Carnival City Hotel		373,292		24	%
Dongguan Xinyue’an Garden Co., Ltd.		327,432		22	%
	$	1,335,067		88	%




	Three months ended March 31, 2010
			Percentage of
	Revenue		total revenue

Zhejiang Hongxin Garden Arts Co., Ltd.	$	1,840,804		59	%
Dongguan Xinyue’an Garden Co., Ltd.		334,772		11	%
Dongguan Carnival City Hotel		340,758		11	%
	$	2,516,334		81	%

13. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2010, the FASB issued an accounting standards update to require further disaggregated disclosures that improve financial statement users’ understanding of (1) the nature of an entity’s credit risk associated with its financing receivables and (2) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and the reasons for those changes. This update will be effective for the Company in the second quarter of fiscal 2011, except for the disclosures relating to activity that occurred during a reporting period which is effective for the Company in the third quarter of fiscal 2011. Since this update addresses only disclosures related to credit quality of financing receivables and the allowance for credit losses, it is not expected that the adoption of this update will have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2010, the FASB issued Accounting Standard Update 2010-17, “Revenue Recognition—Milestone Method (Topic 605): Milestone Method of Revenue Recognition” or ASU 2010-17. This Update provides guidance on the recognition of revenue under the milestone method, which allows a vendor to adopt an accounting policy to recognize all of the arrangement consideration that is contingent on the achievement of a substantive milestone (milestone consideration) in the period the milestone is achieved. The pronouncement is effective on a prospective basis for milestones achieved in fiscal years and interim periods within those years, beginning on or after June 15, 2010. The Company does not expect the adoption of ASU 2010-17 to have a significant impact on its consolidated financial statements.

In February 2010, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement that amended the subsequent events pronouncement issued in May 2009. The amendment removed the requirement to disclose the date through which subsequent events have been evaluated. This pronouncement became effective immediately upon issuance and is to be applied prospectively. The adoption of this pronouncement did not have a material impact on Group’s consolidated financial statements.

In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements,” which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. This guidance was effective for the Company in the current quarter, except for the Level 3 activity disclosures, which are effective for fiscal years beginning after December 15, 2010. The adoption of this guidance, which is related to disclosure only, will not have a material impact on the Group’s consolidated financial position, results of operations or cash flows.

In December 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 2009-17”). ASU 2009-17 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. The new standard requires a number of new disclosures, including additional disclosures about the reporting entity’s involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity is required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. ASU 2009-17 is effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year-end entity. Based on the Group’s evaluation of ASU 2009-17, the adoption of this statement did not impact the Group’s consolidated financial statements.

In October 2009, the FASB issued EITF 08-1, “Revenue Arrangements with Multiple Deliverables”, which is also known as Accounting Standards Update (ASU) No. 2009-13, “Revenue Recognition (ASC 605): Multiple-Deliverable Revenue Arrangements (ASU 2009-13). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. ASU 2009-13 significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. ASU 2009-13 will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided that the guidance is retroactively applied to the beginning of the year of adoption. The Group is currently evaluating the impact this update will have on the Group’s consolidated financial statements.

In September 2009, the EITF reached final consensus on a new revenue recognition standard, Issue No. 09-3, “Applicability of AICPA Statement of Position 97-2 to Certain Arrangements That Contain Software Elements”, as codified in FASB Accounting Standards Update (ASU) 985. ASU 985 amends the scope of AICPA Statement of Position 97-2, Software Revenue Recognition to exclude tangible products that include software and non-software components that function together to deliver the product’s essential functionality. This Issue shall be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted, provided that the guidance is retroactively applied at the beginning of the year of adoption. The Group is currently evaluating the potential impact of ASU 985 on the Group’s results of operations or financial condition.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Green Solutions China, Inc. (formerly known as China Green, Inc., formerly known as China Eco-Hospitality Operations, Inc.) is a blank check company formed on July 11, 2008 as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business that has its principal operations in an eco-friendly industry. On August 13, 2009, we entered into a Share Exchange and Stock Purchase Agreement with Glorious Pie, the Glorious Pie Shareholder and the Representative of our Investors. At the Closing, pursuant to the terms of the Share Exchange and Stock Purchase Agreement, we acquired all of the issued and outstanding common stock of Glorious Pie from the Glorious Pie Shareholder in exchange for our issuance of 10,355,000 common shares to the Glorious Pie Shareholder (the “Exchange Shares”). The Exchange Shares represented approximately 82.84% of our common stock issued and outstanding after the closing of the Share Exchange. As a result of the Share Exchange, Glorious Pie became our wholly-owned subsidiary.

Operating through Glorious Pie, our British Virgin Islands subsidiary, and Earn Bright, our Hong Kong operating subsidiary, we engage in providing eco-friendly project consulting services. We are currently focused on the areas of eco-friendly property consulting and eco-friendly construction projects. Our services can be applied to development or reconstruction projects in social facilities, parks, outdoor public areas, corporate buildings, hotels, commercial and residential properties. Our mission is to create an eco-friendly environment that can benefit both humans and nature. We actively seek for opportunities to apply ecological engineering (eco-engineering) concepts, the integration of ecological and engineering applications, in design, monitoring and construction of ecosystems, in both landscaping projects and property management to integrate human society with the natural environment. We advise our clients on overall project planning, selection and supervision of external consultants, and coordination of labor services and materials supplies. As such, we focus our business in three interrelated business segments: (i) Greenery Construction Consulting, (ii) Greenery Maintenance Consulting, and (iii) Eco-friendly Property Consulting and Development. Our target clients include landscaping contractors and property owners or operators who seek to construct or develop eco-friendly establishments.

As an eco-friendly project consulting company, the key to our future growth and success will be our ability to procure more profitable projects and build upon our reputation. We are focused on deepening our existing relationships as well as building new relationships to expand our project channels. We integrate our understanding in the dynamics of the local industries with our financial capital to formulate strategic ways to procure new consulting and management services contracts. Our capability to build professional project teams to provide quality advice and execute project plans is important to us. We maintain a broad network of contacts of external consultants, labor service subcontractors and materials suppliers which serves as a platform for us to build project teams based on the required knowledge and expertise. We continue to identify and develop new relationships with different professionals and experts to optimize our platform.

Currently, our main source of revenue is generated through contracts in Greenery Construction Consulting and Greenery Maintenance Consulting with government landscaping contractors. We generate net income from the difference between the consulting fees paid to us by the government contractors and our total subcontracting costs. Our subcontracting costs are typically paid to subcontracted consultants, labor service subcontractors and materials suppliers.

We also generate revenues from three eco-friendly hotels in our Eco-friendly Property Consulting and Development segment. We have entered into separate revenue-sharing contracts with each of these hotels which includes providing consulting services and investments of eco-friendly designs and practices for these hotels. We have invested in certain equipments and fixtures in these hotels, such as furniture and fixtures, and electrical appliances. Pursuant to our revenue-sharing contracts, we possess full ownership over all of these assets and can remove them from the hotels at our discretion at any time. To the extent that an asset is not able to be removed from the hotel without damage, we are entitled to be paid the undepreciated balance of the asset. The equipment and fixtures that we purchase have a useful life equal to five years and do not have salvage values. The nature of these investments is to introduce eco-friendly designs and changes into the hotels as well as improve the look and feel to attract or retain customers.

We have been subject to 5% PRC business tax and 7% PRC profit tax since January 2, 2009.

Our Services

Greenery Construction Consulting

Our Greenery Construction Consulting business has mainly been focused on large-scale outdoor PRC government projects such as public infrastructure and social facilities development; however, we have been engaged to conduct private real estate development projects in the past. We develop budgetary plans for each project and arrange for and subcontract the necessary technical and labor services needed to execute our plan, including horticultural planning and design, concept applications, selection and provision of agriculture, performance targeting and benchmarking, plantation management and quality control.

We outsource the labor related to our project construction work to subcontractors. A deposit is required by the Chinese government during the contract bidding process. We provide the funding needed for the required deposit. We reserve the right to recall these deposits in the event that we have decreased demand for labor services or other business or liquidity reasons with a 45-day written notice. We subcontract project managers in the PRC who monitor and oversee the progress of each project.

We enter into supplier agreements with the subcontractors whereby such subcontractors are to supply our client with greenery materials, including plants, soil, and other related items that are necessary for us to carry out our intended project. The suppliers agreements typically have a term of 10 years. Our services agreements provide that the subcontractor provide us with on-site execution guidance and advisory services for certain greenery construction consulting and greenery maintenance consulting projects and on-site safety and security. The services agreements have a term of ten years.

Over the past nine months, we completed five large-scale landscape consulting and development projects and are currently working on one large-scale landscape consulting and development projects. We are seeking more large-scale landscaping projects stimulated by the RMB 4 trillion economic stimulus plan launched by the PRC government, and are working with existing customers to secure more maintenance service contracts.

Greenery Maintenance Consulting

During the first quarter of our current fiscal year, management elected to focus company resources on growing the Greenery Construction Consulting and Eco-friendly Property Consulting and Development business segments but devoted no resources to the operations of the Greenery Maintenance Consulting business segment since profit margins were not expected to be as high as those expected to be generated in the other business segments. Management continues to look for profitable opportunities within the Greenery Maintenance Consulting business and may pursue such additional opportunities during the fiscal year ending June 30, 2011, at a time when the Company expects margins to improve.

In the past, we offer consulting services to the same group of government contractors for Greenery Construction Consulting as for Greenery Maintenance Consulting projects. We work with external consultants to conduct site reviews and develop maintenance plans with our clients who outline all assessment criteria and performance targets. The external consultant acts as the site supervisor and we select subcontractors to execute the maintenance work. We conduct periodic performance and quality assessments to ensure the sites are maintained appropriately. The maintenance plans typically include soil quality analysis and renovation, root evaluation, plantation disease and strength analysis, pruning, pest control, weed control, floral treatments, earth surface treatment and restoration, maintenance and reconstruction of structural elements. In addition to working with subcontractors who perform maintenance on existing elements, our internal and external consultants recommend structural upgrades and development ideas to our clients

Eco-friendly Property Consulting and Development

Our Eco-friendly Property Consulting and Development business, also known as “ECHOO,” an acronym for eco-hospitality operations, applies eco-engineering concepts to real properties and manages the subcontracted labor necessary for the renovations needed to become more eco-friendly. Our current customer base for this business segment is three hotels. Our consulting services generally include site assessment, energy optimization applications, resource efficiency planning, material selection and equipment installation. Our management performs all of the consulting services for this business segment. However, we outsource the labor necessary to institute our consulting recommendations. In return, we enter into fixed-term revenue-sharing agreements with the hotel owners to receive a portion of the hotel’s future monthly revenue or a guaranteed minimum monthly amount as consulting fees for services we provided. We believe this business arrangement benefits both, our Company and the hotels. The hotels may enjoy an increase in revenue as a result of being an eco-friendly hotel.

We may purchase new property, plant and equipment as an investment into our business in accordance with the needs of our customers. Property, plant and equipment we purchase support the transformation of the hotels into eco-friendly hotels in a number of ways. For example, heatproof glasses that we installed can maintain the building’s warmth and allow natural lighting to penetrate so as to reduce indoor heating and lighting. Additionally, we selected blinds and curtains to reduce indoor temperature fluctuation. We also assisted in designing the construction of walls with insulated materials to prevent heat loss. Indoor walls were painted to reflect sunlight penetrated through windows and reduce energy consumption on lighting. In anticipation of the summer season, we have replaced old air conditioners with new air conditioning systems to reduce electricity costs. Some old electrical appliances that were owned by the hotel owners, such as CRT televisions, were energy inefficient. We replaced the old CRT televisions with LCD televisions to reduce heat generation in the indoor areas. These upgrades not only make the hotels eco-friendly but also help improve the look and feel of the hotels.

Fees are paid monthly within 15 days after the hotels’ monthly revenues are booked. The hotels are obligated to keep full and accurate books and records which shall be available to us and our agents for inspections and audits. We believe this business arrangement has benefited both our Company and the hotels, with the implementation of our ECHOO program.

In our Eco-friendly Property Consulting and Development business, we continue to receive recurring and growing revenues from three completed ECHOO hotels and are currently seeking to identify suitable targets in Guangdong, Shanghai and other cities in PRC. Although the economy of Guangdong province was severely affected by the financial crisis in 2008 and 2009, the province continues to be a key focus of the Chinese government. The long-term sustainability of the economic conditions of Guangdong province is expected to support a long-term demand for hotel services.

RESULTS OF OPERATIONS

Three Months ended March 31, 2011 Compared to the Three Months ended March 31, 2010

The following tables set forth key components of our results of operations for the periods indicated, in U.S. dollars, and key components of our revenue for the period indicated, in dollars.

	Three months			Three month
	Ended			Ended
	March 31,				March 31,
	2011				2010

Service Income	$	1,521,324			$	3,134,563
Cost of services		(4,358,298	)			(1,254,690	)
Gross (loss) / profit		(2,836,974	)			1,879,873
General and administrative expenses		(721,312	)			(851,134	)
(Loss) / Income before taxation		(3,558,286	)			1,028,739
Income tax		-				(11,782	)
Net (loss) / income	$	(3,558,286	)		$	1,016,957

Service Income. Our service income for the three months ended March 31, 2011 was $1,521,324 as compared to $3,134,563 for the three months ended March 31, 2010. The decrease of $1,613,239 or approximately 51.5%, was mainly attributable to Greenery Construction Consulting segment, which decreased by $1,206,453 and Greenery Maintenance Consulting segment, which decreased by $277,050 for the three months ended March 31, 2011 as compared with the same period in 2010. We were unable to complete as many construction and maintenance projects as we had for the same period in the prior year.

Income from our greenery construction consulting segment decreased by $1,206,453 for the three months ended March 31, 2011, as compared with the same period in 2010. For the three months ended March 31, 2011, we had one completed project and one on-going project. The completed project was Gaobu Town Plaza Project Part III Phase III with revenue $447,161. The carried-over on-going project was Shahe River Greenery Project Phase III with revenue $187,182. These projects had contributed to 100% of our greenery construction consulting revenue. We had focused our efforts on a smaller number of larger scale projects as compared with focusing on volume in the prior year. Typically larger projects require us to be on site for a longer period of time, thus allowing us to build strong long term relationships with our customers. Further, the profit margin on a larger project is typically greater than the margins yielded on completing many smaller projects. Our revenue per project was $317,172 for the three months ended March 31, 2011.

Income from our greenery maintenance consulting segment decreased by $277,050 for the three months ended March 31, 2011, as compared with the same period in 2010 due to a decrease in the number of projects we were able to complete during the three month period ended March 31, 2011.

Income from our hotel consulting segment decreased by $129,736 for the three months ended March 31, 2011, as compared with the same period in 2010 due to a decrease in the number of customers for the three months ended March 31, 2011 as compared to the three months ended March 31, 2010.

Cost of Services. Our cost of services for the three months ended March 31, 2011 was $4,358,298as compared to $1,254,690 for the three months ended March 31, 2010, an increase of $3,103,608 or approximately 247.4%. The increase of our cost of services was mainly attributable to an increase in labor and material costs for the Greenery Construction Consulting projects and Greenery Maintenance projects. Also contributing was an increase in depreciation expense for our hotel equipment.

Gross Profit (Loss). For the three months ended March 31, 2011 as compared to the three months ended March 31, 2010, we had a gross loss of $2,836,974and gross profit $1,879,873, respectively, reflecting a difference of $4,716,847. This was attributed to the loss in our Greenery Construction Consulting segment. One of our greenery construction projects, River Greenery Project Phase III, was not completed on time as scheduled. This delayed our revenue recognition of amount $615,928. Labor and material costs also increased for the period.

The gross profit margin on our Eco-friendly Property Consulting and Development business decreased from 75.8% to 48.9% due to the decrease in hotel consulting revenue and increase in depreciation expense.

General and Administrative Expenses. We incurred general and administrative expenses of $721,312 for the three months ended March 31, 2011, a decrease of $ 129,822 or -15.3% Our general and administrative expenses decreased as we did not incur any share based compensation for the three months ended March 31 2011, as compared to $795,000 for the three months ended March 31, 2010.

Net Income (Loss). We had net loss of $3,558,286 for the three months ended March 31, 2011 as compared to net income $1,016,957 for the three months ended March 31, 2010, representing a change of $ 4,575,243. The change in our net income was largely due to the increase in labor costs and material costs..

Nine Months ended March 31, 2011 Compared to the Nine Months ended March 31, 2010

The following tables set forth key components of our results of operations for the periods indicated, in U.S. dollars, and key components of our revenue for the period indicated, in dollars.

	Nine months			Nine month
	Ended			Ended
	March 31,				March 31,
	2011				2010

Service Income	$	6,767,165			$	10,583,682
Cost of services		(7,580,078	)			(4,430,067	)
Gross profit		(812,913	)			6,153,615
General and administrative expenses		(934,241	)			(902,452	)
Income before taxation		(1,747,154	)			5,251,163
Income tax		-				(60,448	)
Net income	$	(1,747,154	)		$	5,190,715

Service Income. Our service income for the nine months ended March 31, 2011 was $6,767,165 as compared to $10,583,682 for the nine months ended March 31, 2010, a decrease of $3,816,517 or approximately 36.1%. Decrease in our service income was mainly attributable to Greenery Construction Consulting segment, which decreased by $2,134,098 and Greenery Maintenance Consulting segment, which decreased by $1,368,206 for the nine months ended March 31, 2011 as compared with the same period in 2010. We were unable to complete as many construction and maintenance projects as we had for the same period in the prior year.

Income from our greenery construction consulting segment decreased by $2,134,098 for the nine months ended March 31, 2011, as compared with the same period in 2010. For the nine months ended March 31, 2011, we had five completed project and one on-going project. The five completed projects are Shahe River Bank Greenery Project Phase I, Shahe River Bank Greenery Project Phase II, Gaobu Town Plaza Project Part III Phase I, Gaobu Town Plaza Project Part III Phase II, and Gaobu Town Plaza Project Part III Phase III with revenues of $335,221, $1,350,623, $207,066, $1,000,905, and $1,019,189, respectively. The on-going project is Shahe River Greenery Project Phase III with revenue $634,778. These projects have contributed to 100% of our greenery construction consulting revenue. We have focused our efforts on a smaller number of larger scale projects as compared with focusing on volume in the prior year. Typically larger projects require us to be on site for a longer period of time, thus allowing us to build strong long term relationships with our customers. Further, the profit margin on a larger project is typically greater than the margins yielded on completing many smaller projects. Our revenue per project has decreased to $757,964 for the nine months ended March 31, 2011, as compared with the same period in 2010.

Income from our greenery maintenance consulting segment decreased by $1,368,206 for the nine months ended March 31, 2011, as compared with the same period in 2010. It was because we found less profitable greenery maintenance projects for the nine months ended March 31, 2011. For the nine months ended March 31, 2011, we had one new Greenery Maintenance Consulting project. It is Garden Road Upgrade Maintenance Project with revenue of $444,789.

Income from our hotel consulting decreased by $314,213 for the nine months ended March 31, 2011, as compared with the same period in 2010. Number of customers decreased for the nine months ended March 31, 2011.

Cost of Services. Our cost of services for the nine months ended March 31, 2011 was $7,580,078as compared to $4,430,067 for the nine months ended March 31, 2010, an increase of $3,150,011or approximately 71.1%%. The increase of our cost of services was mainly attributable to the increased labor and material costs for our Greenery Construction Consulting projects and Greenery Maintenance projects. In addition, depreciation expense of our hotel equipment increased since we invested more property, plant, and equipment in the hotels.

Gross Profit (Loss). For the nine months ended March 31, 2011 as compared to the nine months ended March 31, 2010, we had gross loss of $812,913 and gross profit of $6,153,615, respectively, reflecting a change of $6,966,528 or approximately -113.21% . Our gross profit margin (gross profit divided by revenue) decreased from approximately 58.14% for the nine months ended March 31, 2010 to approximately -12.0% for the same period ended 2011, representing a decrease of 113.2%. This was attributed to a decrease in profit margin in Greenery Construction Consulting which decreased from 51.2% to -40.1%. Our gross profit margin in this business segment decreased as labor and material costs increased.

The gross profit margin on our Eco-friendly Property Consulting and Development business decreased from 77.8% to 53.1% due to the decrease in hotel consulting revenue and increase in depreciation expense.

General and Administrative Expenses. We incurred general and administrative expenses of $934,241 for the nine months ended March 31, 2011, an increase of $31,789 or 3.5%. Our general and administrative expenses increased due to significant increase of salary for the nine months ended March 2010.

Net Income (Loss). We had net loss of $1,747,154 for the nine months ended March 31, 2011 as compared to net income $5,190,715 for the nine months ended March 31, 2010, representing a decrease of $6,937,869 or approximately 133.7%. The decrease in our net income was largely due the increase in labor and material costs.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2011, we had cash and cash equivalents of $438,160, and incurred an accumulated net loss of $9,780,347.

The following table sets forth a summary of our cash flows for the periods indicated:

	For the three months ended
	March 31, 2011			March 31, 2010

Net Cash (used in) / generated from Operating Activities	$	(617,512	)	$	3,105,622
Net Cash used in Investment Activities		-			(346,877	)
Net Cash generated from Financing Activities		-			(2,194,229	)
Net (decrease) / increase in Cash and Cash Equivalents		(617,512	)		564,516
Effect of Foreign Currency Translation		144,523			2,351
Cash, Beginning of the Period		911,148			1,099,637
Cash, End of the Period	$	438,160		$	1,666,504

Comparison of the three months ended March 31, 2011 to the three months ended March 31, 2010

Net cash used in operating activities was $617,512 for the three months ended March 31, 2011, compared to net cash generated from operations of $3,105,622 for the three months ended March 31, 2010. The $3,723,134 decrease was primarily due to smaller sales coupled with an increase in accounts receivables. Our accounts receivables increased by $1,009,241 for the three months ended March 31, 2011..

The following table sets forth a summary of our cash flows for the periods indicated:

	For the nine months ended
	March 31, 2011			March 31, 2010

Net Cash (used in) / generated from Operating Activities	$	(1,292,302	)	$	2,905,048
Net Cash used in Investment Activities		-			(364,216	)
Net Cash generated from Financing Activities		-			(1,696,212)
Net (decrease) / increase in Cash and Cash Equivalents		(1,292,302	)		844,620
Effect of Foreign Currency Translation		589,353			(27,573)
Cash, Beginning of the Period		1,141,108			849,457
Cash, End of the Period	$	438,160		$	1,666,504

Comparison of the nine months ended March 31, 2011 to the nine months ended March 31, 2010

Net cash used in operating activities was $1,292,302 for the nine months ended March 31, 2011, compared to net cash generated from operations of $2,905,048 for the nine months ended March 31, 2010. The $4,197,350 decrease was primarily due to smaller sales coupled with an increase in accounts receivables. Our accounts receivables increased by $875,197 for the nine months ended March 31, 2011.

Our outstanding accounts receivable related to hotel consulting as of March 31, 2011 was $232,723. This is the total amount that we are entitled to receive from the hotels as stated in the revenue-sharing consulting agreements. The amount is outstanding as both hotels are required to pay us within 15 days after the end of every month. Both hotels have paid us within the terms and on time since inception of both consulting agreements. Therefore, we do not believe it is necessary to introduce any provision of bad debt for these accounts. We also possess the rights to perform inspection on their sites and books of records. We can also remove the equipments and fixtures on their sites that are owned by us if we identify any adverse changes to the hotel owners’ ability and willingness to comply with the contract terms. At the moment, we are confident that the hotel owners will continue to pay us within the terms and on time.

Net cash used in investment activities was 0 for the nine months ended March 31, 2011. Compared to net cash used in investment activities of $364,216 for the nine months ended March 2010.Net cash from investment activities increased because we did not purchase any new property, plant and equipment for our ECHOO hotel projects for the nine months ended March 31, 2011.

Net cash used in financing activities was 0 for the nine months ended March 31, 2011, compared to net cash used in financing activities of $1,696,212 for the nine months ended March 31, 2010. Net cash from financing activities increased because we did not pay out any dividend for the nine months ended March 31, 2011.

Subsequent to March 31, 2011, we have collected a total amount of $232,724 from our accounts receivable due as of March 31, 2011. The following is a breakdown of the accounts receivable that we have collected for amounts outstanding as of March 31, 2011:

Counterparty	Amount Collected		Date Amount Collected

Hotel Management
Carnival City Hotel	$	151,311	April 15, 2011
Healthy City Hotel	$	49,945	April 15, 2011
Yu Zu Tang Hotel	$	31,468	April 15, 2011

Critical Accounting Policies and Estimates

Revenue Recognition

Greenery construction revenue

The Company accepts contracts on a fixed price basis. Revenue from fixed price construction contracts are recognized on the percentage-of-completion method measured by the ratio of costs incurred to date to the estimated total costs to be incurred for each contract. Revenue from unit price contracts and service agreements are recognized as services are performed.

Greenery maintenance revenue

The Company accepts contracts on a fixed price basis. Revenue are recognized on fixed price greenery maintenance contracts in straight-line basis over the contracted period except in those circumstances in which sufficient historical evidence indicated that the costs of performing services under the contract are incurred on other than a straight-line basis.

Hotel management revenue

The Company accepts contracts on a service agreement basis. Revenue from service agreements are billed monthly based on a certain percent of gross revenue generated by operating activity of the client.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted.

Plant and Equipment

Plant and equipment, other than construction in progress, is stated at cost less depreciation and amortization and accumulated impairment loss.

Plant and equipment is carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

Furniture, fixtures & equipment

5 year useful life

The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.

Our management considers that we have no residual value for plant and equipment.

Cost of revenue

Regarding the design and consulting services to the hotel facilities, the respective cost of revenue includes the consulting expenses in professional staff involved and the design and consulting fee with other third-party experts, and also the depreciation expenses on those fixtures and movable assets being placed with the hotel by the Company.

Regarding the trading of seeding and provision of greenery engineering projects, the respective cost of revenue consists primarily of material costs, labor cost, subcontracting expenses, and related expenses, which are directly attributable to the greenery construction projects.

Income Taxes

For the period ended March 31, 2011 and year ended June 30, 2010, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2011 and year ended June 30, 2010, the Company did not have any significant unrecognized uncertain tax positions.

Recently Issued Accounting Pronouncements

In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements,” which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. This guidance was effective for the Company in the current quarter, except for the Level 3 activity disclosures, which are effective for fiscal years beginning after December 15, 2010. The adoption of this guidance, which is related to disclosure only, will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 2009-17”). ASU 2009-17 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. The new standard requires a number of new disclosures, including additional disclosures about the reporting entity’s involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity is required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. ASU 2009-17 is effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year-end entity. Based on the Company’s evaluation of ASU 2009-17, the adoption of this statement did not impact the Company’s consolidated financial statements.

In October 2009, the FASB issued EITF 08-1, “Revenue Arrangements with Multiple Deliverables”, which is also known as Accounting Standards Update (ASU) No. 2009-13, “Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (ASU 2009-13). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. ASU 2009-13 significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. ASU 2009-13 will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided that the guidance is retroactively applied to the beginning of the year of adoption. The Company is currently evaluating the impact this update will have on the Company’s consolidated financial statements.

In September 2009, the EITF reached final consensus on a new revenue recognition standard, Issue No. 09-3, “Applicability of AICPA Statement of Position 97-2 to Certain Arrangements That Contain Software Elements”, as codified in FASB Accounting Standards Update (ASU) 985. ASU 985 amends the scope of AICPA Statement of Position 97-2, Software Revenue Recognition to exclude tangible products that include software and non-software components that function together to deliver the product’s essential functionality. This Issue shall be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted, provided that the guidance is retroactively applied at the beginning of the year of adoption. The Company is currently evaluating the potential impact of ASU 985 on the Company’s results of operations or financial condition.

Inflation and Seasonality

Inflation and seasonality did not significantly impact our operations during the last two fiscal years.

Off-Balance Sheet Arrangements

As of the date hereof, we do not have any off-balance sheet debt, nor do we have any transactions, arrangements or relationships with any special purpose entities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls. Our Chief Executive Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of our third fiscal quarter 2011 pursuant to Rule 13a-15(b) of the Securities and Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. Based on his evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures were not fully effective for the purpose for which it is intended due to the following reasons as of March 31, 2011:

Share-based compensation – There was a material weakness in the process related to the evaluating certain equity based transaction and the accounting treatment for these non-frequent transactions. We have restated our consolidated financial statements for the year ended June 30, 2009 and for the period ended March 31, 2010 as a result of accounting treatment for our provision and settlement of share-based compensation for employee and non-employee which were issued on August 13, 2009.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last 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

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

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

On April 12, 2011, our former CEO, Chi Yip Tai entered into a total of eleven (11) Share Purchase Agreements pursuant to which he sold an aggregate of 5,177,500 shares of his shares of the Company’s common stock to third parties at a purchase price of $3.00 per share, aggregating $15,532,500 in proceeds. In aggregate, these shares represent 79.47% of the Company’s issued and outstanding common stock. Effective upon the closing of the Share Purchase Agreements, Chi Yip Tai owns no shares of the Company’s stock.

Item 3. Defaults Upon Senior Securities

None

Item 4. (Removed and Reserved)

Item 5. Other Information

Effective April 13, 2011, Chi Yip Tai resigned from his position as our Director and CEO, and Wei Guo Wang, our Chief Financial Officer (“CFO”), was appointed as CEO of the Company.

Item 6. Exhibits

(a)	Exhibits

	31.1 Certifications of the Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15(d)-14(a)).

	32.1 Certifications of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 23, 2011	GREEN SOLUTIONS CHINA, INC.

	By:	/s/ Wei Guo Wang
		Name: Wei Guo Wang
		President, Chief Executive
		Officer and Chief Financial Officer
		(Principal Executive Officer, Principal Accounting
		Officer and Principal Financial Officer)

China Green, Inc. - FORM 10-Q - May 23, 2011

Attached files

China Green, Inc. Reports