China Longyi Group International (CGYG) 10-Q 2009 Q2 Quarterly report

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: June 30, 2009

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

Commission File No. 000-30183

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(Exact Name of Registrant as Specified in Its Charter)

NEW YORK	13-3874771
(State or other jurisdiction of	(I.R.S. Empl. Ident. No.)
incorporation or organization)

8/F East Area
Century Golden Resources Business Center
69 Banjing Road
Haidian District
Beijing, People's Republic of China, 100089
(Address of Principal Executive Offices)
+86-10-884-52568
(Registrant's Telephone Number, Including Area Code)

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

Yes Q             No £

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

Yes £             No £

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

Large accelerated filer £         Accelerated filer £        Non-accelerated filer £        Smaller reporting company Q

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes £             No Q

The numbers of shares outstanding of each of the issuer's classes of common equity, as of August 12, 2009 are as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.01 par value	77,655,862

TABLE OF CONTENTS
	PART I Financial Information	Page
Item 1.	Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4	Controls and Procedures	19
	PART II Other Information
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Information	20
Item 6.	Exhibits	20

Part I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

 

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2009

2

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS
		(Unaudited)			(Audited)
		June 30,			December 31,
ASSETS		2009			2008
Current assets
Cash and cash equivalents	$	17,765		$	51,307
Inventories		421,357			456,766
Other receivables		65,147			77,280
Interest receivable		113,642			135,768
Short term investment		809,219			1,035,686
Deposits and prepayments		31,673			34,294
Total current assets		1,458,803			1,791,101
Due from shareholders		75,471			75,441
Property, plant and equipment (net)		570,183			618,022
	$	2,104,457		$	2,484,564
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	-		$	167,468
Accrued liabilities		272,870			179,525
Due to directors		123,253			120,592
Due from related parties		19,877			19,869
Other payables		197,035			181,077
Total current liabilities		613,035			668,531
Stockholders' equity
Common stock: par value $.01; 200,000,000 shares authorized; 77,655,862 shares issued and outstanding		776,558			776,558
Additional paid-in capital		28,877,540			28,877,540
stage		(28,555,095	)		(28,258,774	)
Accumulated other comprehensive income		236,447			235,985
Total China Longyi stockholders' equity		1,335,450			1,631,309
Non-controlling interest		155,972			184,724
Total stockholders' equity		1,491,422			1,816,033
	$	2,104,457		$	2,484,564
See notes to consolidated financial statements

3

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

		Three months ended						Six months ended						Period from
		June 30,						June 30,						June 4, 1997
														(inception) to
		2009			2008			2009			2008			June 30, 2009
Revenues
Sales	$	11,291		$	32,589		$	35,004		$	116,105		$	664,071
Cost of sales		12,266			23,221			36,205			73,698			834,175
Gross margin		(975	)		9,368			(1,201	)		42,407			(170,104	)
Operating expenses
General and administrative expenses		140,773			190,909			347,867			347,983			16,748,294
Goodwill impairment loss		-			-			-			-			5,408,584
Write-off inventory and bus licenses		-			-			-			-			3,322,712
Research and development costs		-			-			-			-			8,850,928
		140,773			190,909			347,867			347,983			34,330,518
Loss from operations		(141,748	)		(181,541	)		(349,068	)		(305,576	)		(34,500,622	)
Other income (expense)
Interest income		6,799			17,703			18,865			62,870			264,688
Other income (expense)		2			(14,258	)		5,638			358			969,074
Transaction exchange gain		368			-			(508	)		71,624			1,018,909
Gain on asset disposal		-			-			-			-			1,172
Gain on debt settlement		-			-			-			-			156,018
Gain on disposal of subsidiary		-			-			-			-			4,093,455
Interest expense		-			-			-			-			(712,302	)
		7,169			3,445			23,995			134,852			5,791,014
Net Loss		(134,579	)		(178,096	)		(325,073	)		(170,724	)		(28,709,608	)
Add: Net loss attributable to non- controlling interest		12,884			6,310			28,752			10,509			154,513
Net loss attributable to China Longyi		(121,695	)		(171,786	)		(296,321	)		(160,215	)		(28,555,095	)
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of shares outstanding-basic and diluted		77,655,862			77,655,854			77,655,862			77,655,854
Comprehensive income(loss)
Net loss	$	(134,579	)	$	(178,096	)	$	(325,073	)	$	(170,724	)
Foreign currency translation adjustment		305			(39,968	)		462			201,749
Comprehensive income (loss)	$	(134,274	)	$	(218,064	)	$	(324,611	)	$	31,025
Comprehensive income (loss) attributable to non-controlling interest		(12,826	)		(13,904	)		(28,664	)		27,823
Comprehensive income (loss) attributable to China Longyi	$	(121,448	)	$	(204,160	)	$	(295,947	)	$	3,202
See notes to consolidated financial statements

4

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		Six months ended June 30,						Period from June 4, 1997 (inception) to
		2009			2008			June.30, 2009
Cash flows from operating activities:
Net loss	$	(296,321	)	$	(160,215	)	$	(28,555,095	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		21,588			21,421			1,098,864
Impairment loss for fixed assets		26,490			-			1,052,943
Net loss attributable to non-controlling interest		(28,752	)		(10,662	)		155,972
Write-off goodwill and inventory		-			-			7,101,506
Stock issued for services and debt		-			-			1,869,100
Gain on disposition in subsidiary		-						(3,882,796	)
Research and development expenses recorded in organization		-			-			8,612,730
Reorganization expenses recorded in organization		-			-			455,830
Changes in operating assets and liabilities:
Inventory		35,585			(69,253	)		(890,489	)
Other receivables		7,439			(22,555	)		5,312,743
Interest receivable		22,177			(64,619	)		(109,408	)
Deposits and prepayment		472			110,719			676,771
Accounts payable and accrued liabilities		(66,927	)		17,739			(3,439,587	)
Other payables		13,444			(365,803	)		(393,345	)
Net cash used in operating activities		(264,805	)		(543,228	)		(10,934,261	)
Cash flows from investing activities:
Reorganization - net of cash acquired		-			-			(320,579	)
Purchase of subsidiaries		-			-			(29,803,768	)
Redemption (purchase) of short term investment		226,846			373,664			(170,064	)
Purchases of intangible assets		-			-			(833,357	)
Purchases of property and equipment		-			(2,653	)		(556,247	)
Purchases of construction in progress		-			(83,013	)		(169,081	)
Sales of property and equipment		-			-			697,502
Deposit on subsidiary		-			-			(10,922	)
Net cash provided by (used in) investing activities		226,846			287,998			(31,166,516	)
Cash flows from financing activities:
Addition of short term loans		-			-			1,612
Collection from stockholders		-			382,387			427,691
Payments to stockholders		-			-			(1,634,763	)
Proceeds from issuance of stock		-			-			41,263,139
Proceeds from convertible promissory note		-			-			3,128,225
Dividends paid		-			-			(1,000,000	)
Proceeds from notes payable		-			-			649,492
Payments on notes payable		-			-			(612,582	)
Net cash provided by financing activities		-			382,387			42,222,814
Effect of foreign exchange rate fluctuation		4,417			(92,875	)		(104,272	)
Increase(decrease) in cash and cash equivalents		(33,542	)		34,282			17,765
Cash and cash equivalents, beginning of period		51,307			64,547			-
Cash and cash equivalents, end of period	$	17,765		$	98,829		$	17,765
Supplemental disclosures of cash flow information:
Cash paid for interest	$	-		$	-		$	712,302
Cash paid for income taxes	$	-		$	-		$	-
See notes to consolidated financial statements
5

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of China Longyi Group International Holdings Limited (the “Company” or “China Longyi”) include the accounts of China Longyi and its wholly-owned and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

1.

BUSINESS DESCRIPTION AND ORGANIZATION

BUSINESS

The Company was incorporated under the laws of the state of New York and amended their certificate of incorporation on October 16, 2007 and changed its name from Minghua Group International Holdings Limited to China Longyi Group International Holdings Limited and at the same time, implemented a 1-for-20 reverse stock split of issued and outstanding shares of our common stock which reduced the number of our issued and outstanding shares from 198,509,866 to 9,925,493, of which 4,349,307 previously subscribed shares were issued. These financial statements have been adjusted retrospectively to show all stock transactions using post-split amounts.

On November 12, 2007, the Company entered into a share purchase agreement, or the Share Purchase Agreement, with Daykeen Group Limited (“Daykeen”), a BVI company, or Daykeen, pursuant to which it acquired 100% ownership of Top Time International Limited (“Top Time”), a Hong Kong company. Daykeen is the sole shareholder of Top Time. Top Time owns 90% equity interest of Beijing Longyi Biology Technology Co. Ltd. (“Beijing SOD”), which is a holding company that owns 90.05% equity interest of Chongqing JiuZhou Dismutase Biology Technology Co. Ltd (“Chongqing SOD”), a corporation incorporated in China. Chongqing SOD is a manufacturer of superoxide dismutase, or SOD products. As a result of this acquisition transaction, Top Time became our wholly owned subsidiary and Daykeen became our controlling stockholder upon our issuance to Daykeen of the equity portion of the purchase price in accordance with the Share Purchase Agreement. Top Time was incorporated in Hong Kong in December 2006 and currently has two subsidiaries: Beijing SOD and Chongqing SOD. Beijing SOD is 90% owned by Top Time and was incorporated in China in March 2005. Chongqing SOD was incorporated in China in March 2007 and is 90.05% owned by Beijing SOD.

Through acquisition of Top Time, we changed our business to develop and manufacture SOD in China. As a result, on November 28, 2007, one of our subsidiaries, Top Team Holdings Limited (BVI), disposed five subsidiaries including Euromax International Investments Limited, Beijing China Cardinal Real Estate Consulting Co., Ltd, Eagle Bus Development Limited (HK), Good View Bus Manufacturing Company Limited (HK), and Guangzhou City View Bus Installation Company Limited (PRC).

6

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

1.

BUSINESS DESCRIPTION AND ORGANIZATION (Continued)

CAPITAL RESOURCES AND BUSINESS RISKS

The Company remains in the development stage and all future business operations are subject to all of the risks inherent in the establishment of a new business enterprise. The Company has no proven revenue stream from the sales of its products. Additional capital resources through current and future offerings of securities will be needed in order to accomplish the Company's present marketing, development and manufacturing plans. The manufacturing facility and other operations in China, as well as the business financial conditions and results of operations are, to a significant degree, subject to economic, political and social events in China.

The Company had incurred losses since inception and had little working capital until June 29, 2007. However, the substantial doubt about its ability to continue as a going concern, which contemplated the realization of assets and the payment of liabilities in the ordinary course of business, was alleviated on July 27, 2007, when management obtained $28,113,294 in funding through the issuance of additional stock to one of the Company's shareholders. On November 12, 2007, the Company completed an acquisition transaction with Top Time whereby it paid Daykeen, Top Time's sole shareholder, a total consideration of $54.9 million, in exchange for 100% ownership of Top Time, consisting of $30 million in cash and $24.9 million in shares of our common stock issuable within 90 days of the closing. The equity portion of the purchase price amounts to a total of 62,250,000 post reverse split shares of the Company's common stock.

On July 27, 2007, the Company instructed the prior Transfer Agent to issue the 2,500,000 post reverse split shares of common stock deliverable to Qiang Long in the name of Jolly Concept Management Limited, in accordance with Qiang Long's instructions. On December 14, 2007, the Company instructed present Transfer Agent to issue the replacement certificate showing the new name of the company and the correct number of shares, post reverse-split, and the remaining 4,349,307 shares of common stock issuable to Qiang Long, to Jolly Concept Management Limited and to Zhang, Lifang. The Company also agreed to issue 1,131,026 shares of common stock post-reverse-split to Luck Pond Enterprises Limited or its designee, for its services as finder in connection with the Qiang Long investment. On December 14, 2007, the Company instructed present Transfer Agent to issue the total amount of 62,250,000 shares of the Company's common stock, post-reverse-split, issuable to Daykeen, to Daykeen Investment Limited.

RESTRICTIONS ON TRANSFER OF ASSET OUT OF CHINA

Dividend payments by the Company's operating subsidiaries are limited by certain statutory regulations in China. No dividends may be paid by these subsidiaries without first receiving prior approval from the State Administration of Foreign Exchange. Dividend payments are restricted to 85% of profits, after tax. Repayments of loans or advances from subsidiaries to China Longyi, unless certain conditions are met, will be restricted by the Chinese government.

CONTROL BY PRINCIPAL STOCKHOLDERS

The directors, executive officers, affiliates and related parties own, beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, if they voted their shares uniformly, directors, executive officers and affiliates would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of China Longyi and the dissolution, merger or sale of the Company's assets.

7

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The consolidated financial statements for all periods presented include the financial statements of China Longyi Group International Holdings Limited, and its subsidiaries Top Team Holdings Limited, Full Ample Group Limited (Daykeen Group, BVI), Top Time International Limited (HK), Beijing SOD, and Chongqing SOD. The consolidated financial statements have been prepared in accordance with US GAAP. All significant intercompany accounts and transactions have been eliminated.

The Company has determined the People's Republic of China Chinese Yuan Renminbi (“RMB”) to be its functional currency. The accompanying consolidated financial statements are presented in United States (US) dollars. The consolidated financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation.

NON-CONTROLLING INTEREST IN SUBSIDIARIES

The Company owns 90% of the equity interests in Beijing SOD, and the remaining 10% is owned by Miss Ran Wang. Therefore, the Company records non-controlling interest expense to allocate 10% of the loss of the Beijing SOD to Miss Ran Wang, its non-controlling shareholder.

The Company owns 81% of the equity interest in Chongqing SOD 9% is owned by Miss Ran Wang, and the remaining 10% by Mr. Guoqing Tan. Therefore, the Company records non-controlling interest charge in the statement of operations to allocate 19% of the results of operations of Chongqing SOD to its non-controlling shareholders.

USE OF ESTIMATES

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

SIGNIFICANT ESTIMATES

Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term. The more significant areas requiring the use of management estimates related to property and equipment, accrued liabilities, and the useful lives for depreciation.

8

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

REVENUE RECOGNITION

Revenues are recognized as earned when the following four criteria are met: (1) a customer issues a purchase order or otherwise agrees to purchase products; (2) products are delivered to the customer; (3) pricing is fixed or determined in accordance with the purchase order or agreement; and (4) collectability is reasonably assured.

CASH AND CASH EQUIVALENTS

The Company invests idle cash primarily in money market accounts, certificates of deposits and short-term commercial paper. Money market funds and all highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents.

PROPERTY AND EQUIPMENT

Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset, or related groups of assets, may not be recoverable. Under the provisions of SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”, the Company recognizes an “impairment charge” when the expected net undiscounted future cash flows from an asset's use and eventual disposition are less than the asset's carrying value and the asset's carrying value exceeds its fair value. Measurement of fair value for an asset or group of assets may be based on appraisal, market values of similar assets or estimated discounted future cash flows resulting from the use and ultimate disposition of the asset or assets.

Expenditures for maintenance, repairs and betterments, which do not materially extend the normal useful life of an asset, are charged to operations as incurred. Upon sale or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or income (loss) is reflected in income.

Depreciation and amortization are provided for financial reporting purposes primarily on the straight-line method over the estimated useful lives of the respective assets as follows:

	Estimated
	Useful Life
Transportation equipment	5 years
Office, computer software and equipment	5 years
Furniture and fixtures	5 years
Production equipment	10 years
Building and improvements	20 years

9

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

INTANGIBLE ASSETS

The Company adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142), effective January 1, 2002. Under SFAS 142, goodwill and indefinite lived intangible assets are not amortized, but are reviewed annually for impairment, or more frequently, if indications of possible impairment exist. The Company has performed the requisite annual transitional impairment tests on intangible assets and made the impairment adjustments as necessary.

INCOME TAXES

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 109, “Accounting for Income Taxes,” these deferred taxes are measured by applying currently enacted tax laws.

The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because it has experienced operating losses since inception. The benefit of any tax loss carry forwards is fully offset by a valuation allowance, as there is a more than fifty percent chance that the Company will not realize those benefits.

There are net operating loss carry forwards allowed under the Hong Kong and China Governments' tax system.

RESEARCH AND DEVELOPMENT COSTS

Company sponsored research and development costs, related to both present and future products, are charged to operations when incurred and are included in operating expenses. Expenditures for research and development for the six months ended June 30, 2009 and 2008 were both $0 and a cumulative amount of $8,850,928 for the period from June 4, 1997 (inception) to June 30, 2009.

EARNING (LOSS) PER SHARE

Basic earning (loss) per common share ("LPS") is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earning per common share is calculated by adjusting the weighted average outstanding shares, assuming conversion of all potentially dilutive stock options.

There were no stock options nor potentially dilutive securities outstanding at June 30, 2009.

10

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to consolidated financial statements (Unaudited)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	EQUITY BASED COMPENSATION
	The Company accounts for employee stock options in accordance with SFAS 123(R), “Share-Based Payment.” Under SFAS 123(R) the Company is required to recognize share-based compensation expense at fair valued. The Company had no such compensation expense for the three or six months ended June 30, 2009.
	COMPREHENSIVE INCOME (LOSS)
	The accompanying financial statements are presented in U.S. dollars. The functional currency is the RMB. The financial statements are translated into U.S. dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Currency translation adjustments are presented as other comprehensive income.
	RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation.
3.	INVESTMENT
	The Company has a one year deposit certificate with an investment company in the PRC. The certificate generates interest at 5.5% to 8% per annum. The principal amount for the six months ended June 30, 2009 and 2008 was $809,219 and $1,035,686, respectively and was recorded on the balance sheet as a short term investment.
4.	INCOME TAXES
	Net operating loss carry forwards are allowed under the Hong Kong and Chinese governments' tax systems. In China, the previous five years' net operating losses are allowed to be carried forward to offset future taxable income. In Hong Kong, net operating losses can be carried forward indefinitely to offset future taxable income. No deferred tax asset has been recognized due to the uncertainty of the Company having future taxable profits.
5.	COMMITMENTS AND CONTINGENCIES
	From time to time, the Company has disputes that arise in the ordinary course of its business. Currently, according to management, there are no material legal proceedings to which the Company is a party to or to which any of their property is subject that will have a material adverse effect on the Company's financial condition.
6.	FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments” (“SFAS 107”) requires entities to disclose the fair values of financial instruments except when it is not practicable to do so. Under SFAS No. 107, it is not practicable to make this disclosure when the costs of formulating the estimated values exceed the benefit when considering how meaningful the information would be to financial statement users.

As a result of the difficulties presented in the valuation of the loans payable to related entities/parties because of their related party nature, estimating the fair value of these financial instruments is not considered practical. The fair values of all other assets and liabilities approximate their carrying amounts. None of the financial instruments held are derivative financial instruments and none were acquired or held for trading purposes in 2008.

11

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and the notes thereto.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the following “Management's Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” relating to the business of China Longyi Group International Holdings Limited and its subsidiary companies. The forward-looking statements include, among others, statements concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These statements are based on assumptions and are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Risks and uncertainties include risks related to new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; and any statements of belief or intention. As such, they are subject to risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward looking statements. Such risks and uncertainties include any of the factors mentioned in the “Risk Factors” section of the Company's annual report on Form 10-K filed on April 14, 2009. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to:

• “China Longyi,” “we,” “us,” “our,” or the “Company” are references to the combined business of China Longyi Group International Holdings Limited (formerly known as Minghua Group International Holdings Limited) and its wholly- and partially-owned subsidiaries: Minghua Acquisition Corp., a Delaware corporation; Top Team Holdings Limited, a British Virgin Islands company; and Top Time International Limited, or Top Time, a Hong Kong company, and Top Time's 90% majority owned PRC subsidiary, Beijing Longyi Biology Technology Co. Ltd., or Beijing SOD, and its 81% majority owned PRC subsidiary, Chongqing JiuZhou Dismutase Biology Technology Co., Ltd., or Chongqing SOD;

• “China” and “PRC” are references to the People's Republic of China;

• “RMB” refers to Renminbi, the legal currency of China;

• “U.S. dollar,” “$” and “US$” are to the legal currency of the United States;

• “Securities Act” means the Securities Act of 1933, as amended; and

• “Exchange Act” means the Securities Exchange Act of 1934, as amended.

Overview of our Business

We are a New York corporation that was formed on February 29, 1996. Prior to November 12, 2007, we had limited operations and did not engage in active business operations other than our search for, and evaluation of, potential business opportunities for acquisition or participation. On November 12, 2007, we entered into a share purchase agreement with Daykeen Group Limited, a British Virgin Islands company, pursuant to which we acquired 100% ownership of Top Time and its 90% majority owned subsidiary Beijing SOD, and Beijing SOD's 81% majority owned PRC subsidiary, Chongqing SOD.

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As a result of our acquisition of Top Time, our business is now manufacturing, developing and marketing superoxide dismutase, or SOD, products in China. SOD is an antioxidant enzyme that catalyzes the reduction of superoxide and plays a critical role in the defense of cells against the toxic effect of oxygen radicals. Our SOD products have a wide range of applications, especially as additive to foods, medicines and cosmetic products. In recent years, more and more people are choosing to eat or drink healthier foods and beverages, which are supplemented with our SOD products as an additive. We plan to market, sell and service our products nationally through a combination of company-owned offices and independent sales agents. Currently we have two sales offices, one located in Chengdu, and the other located in Chongqing, and we plan to establish agents in additional offices across China. We have targeted our approach to meet local market conditions which we believe provides the best possible products for our customers throughout China.

Second Quarter of 2009 Financial Performance Highlights

Due to the overall economic slowdown in the global economy, consumer demand for health supplementary products, including our SOD wine, decreased significantly. In order to reduce our cost of sales, the management made the decision to change the package of our products. As a result, we only sold products with the current package to reduce the level of inventory without producing new products during the second quarter of 2009. In addition, we sold our products at lower prices to increase market share. Therefore, our revenue decreased during the six months ended June 30, 2009. The following are some financial highlights for the three months ended June 30, 2009:

• Revenue: Revenue decreased $21,298, or 65.4%, to $11,291for the three months ended June 30, 2009, from $32,589 for the same period in 2008.

• Expense from operations: Expense from operations decreased $50,136, or 26.26%, to $140,773 for the three months ended June 30, 2009, from $190,909 for the same period in 2008.

• Net loss: Net loss decreased $43,517, or 24.43%, to $134,579 for the three months ended June 30, 2009, from $178,096 for the same period in 2008.

• Fully diluted net income per share: Fully diluted net loss per share was $0.00 for the three months ended June 30, 2009, as compared to $0.00 for the same period in 2008.

Provision for Income Taxes

• United States: China Longyi Group International Holding Limited is subject to United States tax at a tax rate of 34%. No provision for income taxes in the United States has been made as China Longyi Group International Holding Limited had no income subject to United States taxation in the second quarter of 2009.

• British Virgin Islands: Our wholly owned subsidiary Top Team Holdings Limited was incorporated in the British Virgin Islands, or the BVI, and, under the current laws of the BVI, is not subject to income taxes.

• China: Before the implementation of the enterprise income tax, or EIT, Foreign Invested Enterprises or FIEs, established in the PRC were generally subject to an EIT rate of 33.0%, which includes a 30.0% state income tax and a 3.0% local income tax. On March 16, 2007, the National People's Congress of China passed the new Corporate Income Tax Law, or EIT Law, and on November 28, 2007, the State Council of China passed the Implementing Rules for the EIT Law, or Implementing Rules, which took effect on January 1, 2008. The EIT Law and Implementing Rules impose a unified EIT of 25.0% on all domestic- invested enterprises and FIEs, unless they qualify under certain limited exceptions. Therefore, nearly all FIEs are subject to the new tax rate alongside other domestic businesses rather than benefiting from the old tax laws applicable to FIEs, and its associated preferential tax treatments, beginning January 1, 2008.

  The Old FIEs that are eligible for the “two-year exemption and three-year half reduction” or “five-year exemption and five-year half-reduction” under the original EIT Law, are allowed to remain to enjoy their preference until these holidays expire. The discontinuation of any such special or preferential tax treatment or other incentives would have an adverse effect on any organization's business, fiscal condition and current operations in China.

  In addition to the changes to the current tax structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to a EIT of 25.0% on its global income. The Implementing Rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that the Company should be classified as a resident enterprise, then the organization's global income will be subject to PRC income tax of 25.0%.

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Results of Operations

Three Months Ended June 30, 2009 Compared to Three Months ended June 30, 2008

The following table summarizes the results of our operations for the three months ended June 30, 2009 and provides information regarding the dollar and percentage increase or (decrease) from the three months ended June 30, 2008 to the same period of 2009.

		Three Months Ended
		June 30,						Increase		% Increase
Item		2009			2008			(Decrease)		(% Decrease)
Revenue	$	11,291		$	32,589		$	(21,298	)	(65.35%	)
Cost of Revenue		12,266			23,221			(10,955	)	(47.18%	)
Gross Profit		(975	)		9,368			(10,343	)	(110.41%	)
Operating Expenses		140,773			190,909			(50,136	)	(26.26%	)
Other Income		7,169			3,445			3,724		108.10%
Provision for Taxes		-			-			-		-
Net loss before non-controlling interest	$	(134,579	)	$	(178,096	)	$	(43,517	)	(24.43%	)

Revenues. Our revenues are derived primarily from sales of our SOD products. Revenues decreased $21,298, or 65.35%, to $11,291 for the three months ended June 30, 2009, from $32,589 for the same period in 2008. Our sales of SOD products decreased during the second quarter of 2009 because the management decides to change our products' package in order to reduce the cost of products. As a result, we only sold products with current package to reduce the level of inventory without producing new products during the second quarter of 2009. In addition, in order to increase of the market awareness of our products, we sold our products at prices lower than their costs which also contributed to the decline of our revenues.

Cost of Revenues.Our cost of revenues is primarily comprised of the costs of our raw materials, labor and overhead. Our cost of revenues decreased $10,955 or 47.18%, to $12,266 for the three months ended June 30, 2009, from $23,221 during the same period in 2008. This decrease was mainly due to the decrease in our raw materials and labor costs, which was generally in line with the decrease in our sales. As a percentage of revenues, the cost of revenues increased to 108.6% during the three months ended June 30, 2009 from 71.3% in the same period in 2008. Such decrease of gross margin was mainly attributable to the fact that we sold our products with the current package at prices which are lower than the costs of goods sold.

Gross Profit.Our gross profit decreased by $10,343, or 110.41%, to $(975) for the three months ended June 30, 2009 from $9,368 during the same period in 2008. Gross profit as a percentage of revenues were (8.6%) for the three months ended June 30, 2009, and a decrease of 37.4% from 29% during the same period in 2008.

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Operating Expenses. Our total operating expenses for the three months ended June 30, 2009 decreased $50,136, or 26.26%, to $140,773, from $190,909 for the same period in 2008. This reduction was mainly due to that the fact that a part of financial service fee paid by the company last year was not incurred during the same period in 2009.

Other Income. Other income was $7,169 during the three months ended June 30, 2009 an increase of $3,724 from $3,445 during a same period in 2008. This decrease was attributable to the lower interest income we received as a result of the decrease in the amount of principal of short term investment during the first quarter of 2009.

Net Loss attributable to China Longyi. As a result of the decrease in our operating expenses, our net loss decreased by $43,517, or 24.43%, to $134,579 for the three months ended June 30, 2009, from $178,096 for the same period in 2008.

Six Months Ended June 30, 2009 Compared to Six Months ended June 30, 2008

The following table summarizes the results of our operations for the six months ended June 30, 2009 and provides information regarding the dollar and percentage increase or (decrease) from the six months ended June 30, 2008 to the same period of 2009.

		Six Months Ended
		June 30,						Increase		% Increase
Item		2009			2008			(Decrease)		(% Decrease)
Revenue	$	35,004		$	116,105		$	(81,101	)	(69.85%	)
Cost of Revenue		36,205			73,698			(37,493	)	(50.87%	)
Gross Profit		(1,201	)		42,407			(43,608	)	(102.83%	)
Operating Expenses		347,867			347,983			(116	)	(0.00%	)
Other Income		23,995			134,852			(110,857	)	(82.21%	)
Provision for Taxes		-			-			-		-
Net loss before non-controlling interest	$	(325,073	)	$	(170,724	)	$	154,349		90.41%

Revenues. Revenues decreased $81,101, or 69.85%, to $35,004 for the six months ended June 30, 2009, from $116,105 for the same period in 2008. Our sales of SOD products decreased during the six months ended June 30, 2009 because the management decides to change our products' package in order to reduce the cost of products. As a result, we only sold products with current package to reduce the level of inventory without producing new products for the six months ended June 30, 2009. In addition, in order to increase of the market awareness of our products, we sold our products at prices lower than their costs which also contributed to the decline of our revenues.

Cost of Revenues. Our cost of revenues decreased $37,493, or 50.87%, to $36,205 for the six months ended June 30, 2009, from $73,698 during the same period in 2008. This decrease was mainly due to the decrease in our raw materials and labor costs, which was generally in line with the decrease in our sales. As a percentage of revenues, the cost of revenues increased to 103.4% during the six months ended June 30, 2009 from 63% in the same period in 2008. Such decreased of gross margin was mainly attributable to the fact that some of SOD products sold as lower price than the cost due to used in promotional purposes.

Gross Profit.Our gross profit decreased by $43,608, or 102.83%, to $(1,201) for the six months ended June 30, 2009 from $42,407 during the same period in 2008. Gross profit as a percentage of revenues was (3.4%) for the six months ended June 30, 2009, a decrease of 40% from 36.6% during the same period in 2008. Such percentage decrease was mainly due to the fact that we sold our products with the current package at prices which are lower than the costs of goods sold.

Operating Expenses. Our total operating expenses for the six months ended June 30, 2009 were $347,867, which have remained relatively stable as compared to $347,983 for the same period in 2008.

Other Income. Other income was $23,995 during the six months ended June 30, 2009, a decrease of $110,857 from $134,852 during a same period in 2008. This decrease was attributable to the lower interest income we received as a result of the decrease in the amount of principal of short term investment during the six months ended June 30, 2009.

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Net Loss attributable to China Longyi. As a result of the decrease in the sales of our products and other income, our net loss increased by $154,349, or 90.41%, to $325,073 for the six months ended June 30, 2009, from $170,724 for the same period in 2008.

Liquidity and Capital Resources

We had $17,765 in cash and cash equivalents as of June 30, 2009, and a one year cash investment of $809,219. As of such date, we also had total current assets of $1,458,803 and total assets of $2,104,457. We had total current liabilities (consisting of accounts payable, accrued liabilities, due to directors and other payables) in the amount of $613,035. Our stockholders' equity as of June 30, 2009 was $1,491,422. Since inception, we have accumulated a net loss of $28,555,095.

The following table summarizes the statements of cash flows from the financial statements for the six months ended June 30, 2009 compared to the six months ended June 30, 2008:

		Six months Ended June 30,
		2009			2008
Net Cash (Used In) Operating Activities	$	(264,805	)	$	(543,228	)
Net Cash Provided By Investing Activities		226,846			287,997
Net Cash Provided By Financing Activities		-			382,387
Net increase (decrease) in Cash and Cash Equivalents		(33,542	)		34,282
Cash and Cash Equivalents - Beginning of Period		51,307			64,547
Cash and Cash Equivalents – End of Period		17,765			98,829

Operating Activities

Net cash used in operating activities was $264,805 for the six-month period ended June 30, 2009, which is a decrease of $278,423 from $543,228 of net cash used in the operating activities for the same period of 2008. The decrease of the cash used in operating activities was mainly attributed to the significant decrease in other receivables and interest receivable and deposits and prepayment accounts.

Investing Activities

Net cash provided by investing activities for the six-month period ended June 30, 2009 was $226,846, which is a decrease of approximately $61,151 from net cash provided by investing activities of $287,997 for the same period of 2008. The decrease of the cash provided by investing activities was mainly due to the decline of redemption of short term investment during the six moths ended June 30, 2009 compared with the same period 2008. Our main use of cash in investing activities was to make a short term investment by holding a one-year certificate of deposit with a financial investment company in the PRC.

Financing Activities

Net cash provided by financing activities for the six-month period ended June 30, 2009 was $0 as compared to $382,387 provided by financing activities for the same period in 2008. We did not have any financing activities during the six months ended June 30, 2009.

The Company did not have any bank loans as of June 30, 2009.

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We believe that our currently available working capital should be adequate to sustain our operations at our current levels through at least the next twelve months. However, depending on our future needs and changes and trends in the capital markets affecting our shares and the Company, we may determine to seek additional equity or debt financing in the private or public markets.

Critical Accounting Policies

Economic and Political Risks

The Company faces a number of risks and challenges as a result of having primary operations and marketing in the PRC. Changing political climates in the PRC could have a significant effect on the Company's business.

Foreign Currencies

The company has determined that RMB to be its functional currency. The accompanying consolidated financial statements are presented in U.S. dollars. The consolidation financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Restrictions on Transfer of Assets Out of the PRC

Dividend payments by Beijing SOD are limited by certain statutory regulations in the PRC. No dividends may be paid by Beijing SOD without first receiving prior approval from the Foreign Currency Exchange Management Bureau. Dividend payments are restricted to 85% of profits, after tax.

Significant Estimates

Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term. The more significant areas requiring the use of management estimates related to property and equipment, accrued liabilities and, the useful lives for depreciation.

Revenue Recognition

Revenues are recognized as earned when the following four criteria are met: (1) a customer issues purchase orders or otherwise agrees to purchase products; (2) products are delivered to the customer; (3) pricing is fixed or determined in accordance with the purchase order or agreement; and (4) collectability is reasonably assured.

New Accounting Pronouncements

SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115. This Statement provides all entities with an option to report selected financial assets and liabilities at fair value. The Statement is effective as of the beginning of an entity's first fiscal year beginning after November 15, 2007, with early adoption available in certain circumstances.

SFAS No. 141 (Revised), Business Combinations. SFAS No. 141R broadens the guidance of SFAS No. 141, extending its applicability to all transactions and other events in which one entity obtains control over one or more other businesses. It broadens the fair value measurement and recognition of assets acquired, liabilities assumed, and interests transferred as a result of business combinations. SFAS No. 141R expands on required disclosures to improve the statement users' abilities to evaluate the nature and financial effects of business combinations.

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SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements - an amendment of ARB No. 51. SFAS No. 160 requires that ownership interests in subsidiaries held by parties other than the parent are to be included in the equity section of the balance sheet, but apart from the parent's equity. All changes in the parent's ownership interest in a subsidiary are to be accounted for as equity transactions. Any retained non-controlling equity interest in a deconsolidated subsidiary is to be initially measured at fair value, with any gain or loss on consolidation measured using this fair value.

SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133. SFAS No. 161 requires enhanced disclosures for all derivative instruments and hedging activities covered by SFAS No. 133.

SFAS NoSOP No. 07-01, Clarification of the Scope of the Audit and Accounting Guide “Investment Companies” and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. SOP 07-01 provides guidance for determining whether an entity is within the scope of the AICPA Audit and Accounting Guide Investment Companies. The provisions of the SOP are effective for fiscal years beginning on or after December 15, 2007, with earlier application encouraged. As of December 1, 2007 the FASB has proposed an indefinite deferral of this SOP.

EITF Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards. In this Issue, a consensus was reached that a realized income tax benefit from dividends or dividend equivalents that are charged to retained earnings and are paid to employees for equity-classified nonvested equity shares, nonvested equity share units, and outstanding equity share options should be recognized as an increase in additional paid-in capital. This Issue should be applied prospectively to the income tax benefits that result from dividends on equity-classified employee share-based payment awards that are declared in fiscal years beginning after December 15, 2007, and interim periods within those fiscal years. Early application is permitted.

SP No. FAS 158-1, Conforming Amendments to the Illustrations in FASB Statements No. 87, No. 88, and No. 106 and to the Related Staff Implementation Guides. This FSP provides conforming amendments to the illustrations in FASB Statements No. 87, 88, and 106 and to related staff implementation guides as a result of the issuance of FASB Statement No. 158. The conforming amendments made by this FSP are effective as of the effective dates of Statement No. 158. The unaffected guidance that this FSP codifies into Statements No. 87, 88, and 106 does not contain new requirements and therefore does not require a separate effective date or transition method.

FSP No. FIN 46(R)-7, Application of FASB Interpretation No. 46(R) to Investment Companies. This FSP addresses the application of FASB Interpretation (FIN) No. 46 (revised December 2003), Consolidation of Variable Interest Entities, by an entity that accounts for its investments in accordance with the specialized accounting guidance in the AICPA Audit and Accounting Guide, Investment Companies. The provisions of the FSP are effective when the entity adopts SOP 07-01.

SEC Staff Accounting Bulletin No. 109, Written Loan Commitments Recorded at Fair Value Through Earnings. SAB 109 expresses the current view of the staff that the expected net future cash flows related to the associated servicing of the loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. SEC registrants are expected to apply the views in Question 1 of SAB 109 on a prospective basis to derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007.

Inflation

Inflation does not materially affect our business or the results of our operations.

Seasonality

We may experience seasonal variations in our future revenues and our operating costs, however, we do not believe that these variations will be material.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures'

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including Jie Chen, our Chief Executive Officer, and Xinmin Pan, our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2009. Based on that evaluation, Ms. Chen and Mr. Pan concluded that as of June 30, 2009, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.

Internal Controls Over Financial Reporting

During the quarter ended June 30, 2009, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

From time to time, the Company has disputes that arise in the ordinary course of its business. Currently, there are no material legal proceedings to which the Company is a party to or to which any of its property is subject that will have a material adverse effect on the Company's financial condition.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.

UNREGISTERED SHARES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have not sold any equity securities during the fiscal quarter ended June 30, 2009 that were not previously disclosed in a current report on Form 8-K that was filed during that period.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to our security holders during the second quarter of 2009.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

Exhibit
Number	Description
31.1*	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

	CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
DATED: August 14, 2009	By: /s/ Jie Chen                                                           Jie Chen Chief Executive Officer (Principal Executive Officer)
DATED: August 14, 2009	By: /s/ Xinmin Pan                                                      Xinmin Pan Chief Financial Officer (Principal Financial Officer and Accounting Officer)

EXHIBIT INDEX

Exhibit
Number	Description
31.1*	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.