China Junlian Integrated Surveillance 10QSB 2007 Q3 Quarterly report (small business)

U. S. Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-QSB

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

[ ]

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

For the transition period from _____ to _____

Commission File No. 0-24483


CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.
	(Name of Small Business Issuer in its Charter)
Nevada		84-1461844
(State or Other Jurisdiction of incorporation or organization)		(I.R.S.Employer Identification No.)


Citic Plaza, 233 TianHeBei Road, Room 1602B-1603, Guangzhou, P.R. China	510613
(Address of Principal Executive Offices)	(Zip Code)

86-139250 71672

(Registrant’s telephone number including area code)

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:

November 14, 2007

Common Voting Stock: 9,720,000 shares

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.

(FORMERLY SUNBURST ACQUISITIONS VII, INC.)

CONSOLIDATED BALANCE SHEETS


	September 30, 2007		December31, 2006
	(Unaudited)
	USD		USD
ASSETS

Current Assets
Cash and cash equivalents	$7,151		$26,883
Trade receivables	1,198		-
Prepayments, deposits and other receivable	18,552		20,629
Inventories	1,496		-

Total Current Assets	28,397		47,512

Property, plant and equipment, net	53,463		58,629

TOTAL ASSETS	$81,860		$106,141

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Amount due to a director (Note 4)	$114,537		$94,646
Accrued expenses and other payable	9,096		18,245
Income tax payable	-		332

TOTAL LIABILITIES	123,633		113,223

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock, no par value; 20,000,000 shares authorized; no shares issued and outstanding	-		-
Common stock (Note 5)	28,435		28,435
Accumulated deficit	(81,562	)	(38,820	)
Statutory reserves	470		705
Accumulated other comprehensive income	10,884		2,598

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	(41,773	)	(7,082	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$81,860		$106,141

See the accompanying notes to the unaudited consolidated financial statements

CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.

(FORMERLY SUNBURST ACQUISITIONS VII, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS


	Three months ended		Three months ended
	Sep 30, 2007		Sep 30, 2006
	(Unaudited)		(Unaudited)
	USD		USD

Revenue	$47,604		$56,556
Cost of services rendered	(5,349	)	(9,830	)

Gross profit	42,255		46,726

Operating expenses
Selling expenses	(5,749	)	(10,939	)
General and administrative expenses	(51,094	)	(20,357	)
Depreciation	(2,935	)	(917	)


Total expenses	(59,778	)	(32,213	)

Profit (loss) before the following items and taxes	(17,523	)	14,513

Interest income	5		121
Finance costs	(71	)	-

Profit (loss) before income taxes	(17,589	)	14,634
Income taxes	-		(1,417	)

Net profit (loss)	(17,589	)	13,217

Net profit (loss) per share
- Basic and diluted	$(0.0018	)	$0.002

See the accompanying notes to the unaudited consolidated financial statements

CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.

(FORMERLY SUNBURST ACQUISITIONS VII, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS


	Nine months ended		Nine months ended
	Sep 30, 2007		Sep 30, 2006
	(Unaudited)		(Unaudited)
	USD		USD

Revenue	$164,464		$56,556
Cost of services rendered	(21,142	)	(9,830	)

Gross profit	143,322		46,726

Operating expenses
Selling expenses (Note 6)	(23,300	)	(10,939	)
General and administrative expenses (Note 7)	(148,976	)	(21,198	)
Depreciation	(8,621	)	(917	)


Total expenses	(180,897	)	(33,054	)

Profit (loss) before the following items and taxes	(37,575	)	13,672

Interest income	45		121
Finance costs	(72	)	-

Profit (loss) before income taxes	(37,602	)	13,793
Income taxes (Note 8)	(5,140	)	(1,417	)

Net profit (loss)	(42,742	)	12,376

Net profit (loss) per share
- Basic and diluted (Note 9)	$(0.0044	)	$0.0019

See the accompanying notes to the unaudited consolidated financial statements

CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.

(FORMERLY SUNBURST ACQUISITIONS VII, INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine months ended		Nine months ended
	Sep 30, 2007		Sep 30, 2006
	(Unaudited)		(Unaudited)
	USD		USD

Cash flows from operating activities
Net profit (loss)	$ (42,742	)	$12,376
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities :
Depreciation	8,621		917

Changes in operating assets and liabilities :
Trade receivables	(1,198	)	-
Prepayments, deposits and other receivable	2,077		(27,674	)
Inventories	(1,496	)	(589	)
Amount due to a director	19,891		81,008
Accrued expenses and other payable	(9,149	)	12,856
Income tax payable	(332	)	1,427

Net cash provided by (used in) operating activities	(24,328	)	80,321

Cash flows from investing activities
Payments to acquire property, plant and equipment	(3,764	)	(63,066	)

Net cash used in investing activities	(3,764	)	(63,066	)

Effect of foreign currency translation on cash and cash equivalents	8,360		4,492

Net increase (decrease) in cash and cash equivalents	(19,732	)	21,747

Cash and cash equivalents, beginning of period	26,883		-

Cash and cash equivalents, end of period	7,151		21,747

See the accompanying notes to the unaudited consolidated financial statements

CHINA JUNLIAN INTEGRATED SURVEILLANCE, INC.

(FORMERLY SUNBURST ACQUISITIONS VII, INC.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Description of the Company

Sunburst Acquisitions VII, Inc. (hereinafter referred as “Sunburst”) was established in Colorado on June 30, 1998 with 3,785,000 outstanding stock capital.

On August 28th 2006, Mr. Zhang Jun Chuan purchased 3,299,000 common stock of Sunburst, which was approximately 87.16% of the total shares. Moreover, on August 30th of the same year, Sunburst issued 5,935,000 shares of its common stock to the original stockholders of Splendid Group Investments Limited (hereinafter referred as “Splendid”) to exchange 100% of the equity interest of Splendid. Splendid is a holding company that owns 100% of the equity in Guangzhou Junlian Correspondence Technology Co., Ltd. (“Junlian”), a corporation established under the laws of the People’s Republic of China (the “PRC”) on May 23, 2006.

Upon the transaction, Splendid became a wholly-owned subsidiary of Sunburst and the original stockholders of Splendid became the majority stockholders of Sunburst. All of the officers and directors before the closing of the transaction resigned and current officers and directors were appointed to serve in their present capacities. This transaction constituted a reverse takeover transaction (the “RTO”).

China Junlian Integrated Surveillance, Inc. (the “Company”) is registered in Nevada in 2006.

On March 15th 2007, according to the decision of the general meeting of stockholders of Sunburst, China Junlian Integrated Surveillance, Inc. and Sunburst Acquisitions VII, Inc. were merged, therefore, the name of Sunburst Acquisitions VII, Inc. was changed as China Junlian Integrated Surveillance, Inc. and its state of incorporation was changed from Colorado to Nevada.

The Company, through Junlian, is engaged in consulting, systems development and customer service in the field of surveillance technology in the PRC. Junlian was organized by the management of Guangzhou Junlian Correspondence Science and Technology Co., Ltd (“Junlian S&T”), a company in which the Company’s present chairman has a beneficial interest.

In May 2006, Junlian S&T and Junlian entered into a Strategic Cooperation Agreement whereby Junlian provided services required by Junlian S&T in connection with fulfillment of its development contracts. In compensation of its services, Junlian S&T paid Junlian a fixed fee of approximately US$19,971 (Renminbi (“RMB”) 150,000) per month and a commission to be determined by Junlian S&T and Junlian on a per-project basis. On June 28, 2007, Junlian S&T and Junlian agreed to suspend the above Strategic Cooperation Agreement. In November 2007, Junlian S&T and Junlian entered into a new Strategic Cooperation Agreement, effective as of August 1, 2007, whereby Junlian provided services with upgraded technology to Junlian S&T and charged Junlian S&T a fixed fee of approximately US$23,965 (Renminbi (“RMB”) 180,000) per month and a commission to be determined by Junlian S&T and Junlian on a per-project basis. Junlian S&T has guaranteed that its aggregate annual payments to Junlian will be no less than US$399,425 (RMB 3,000,000).

For the immediate future, the primary or exclusive business of Junlian will be to provide services to Junlian S&T.

Revenue for the reporting period represents the fixed fee income received from Junlian S&T.

Basis of Presentation

(1) The accompanying consolidated financial statements of the Company and its subsidiaries (the “Group) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim consolidated financial information. Accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements.

In the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. Interim results are not necessarily indicative of results for a full year.

(2) The purchase method under reverse takeover accounting is adopted for the preparation of these consolidated financial statements. As such, the consolidated financial information is issued under the name of the legal parent, the Company, but a continuation of the consolidated financial information of Splendid.

(3) The Group has an accumulated deficit as of September 30, 2007. However, the management believes that the Group will generate sufficient revenue and cash flows to enable itself to continue as a going concern with the services income of Guangzhou Junlian Correspondence Technology Co., Ltd. (“Junlian”), a wholly owned subsidiary of Splendid, by providing services with upgraded technology to Guangzhou Junlian Correspondence Science and Technology Co., Ltd (“Junlian S&T”).

Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements for the nine months ended September 30, 2007 include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions are eliminated in consolidation.

Use of estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, the 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 consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates required to be made by the management include, but are not limited to, the recoverability of long-lived assets. Actual results could differ from those estimates.

Summary of Significant Accounting Policies (cont’d)

Cash and cash equivalents

Cash equivalents are highly liquid investments and have maturities of three months or less at the date of purchase. As of September 30, 2007, the majority of the cash and cash equivalents were denominated in RMB which is not freely convertible into foreign currencies.

Trade receivables

After initial recognition at fair value, trade receivables are measured at amortized cost using the effective interest method except that short-duration receivables with no stated interest rate are normally measured at original invoice amount unless the effect of imputing interest would be significant. Trade receivables are stated after provision for impairment. The amount of the provision for impairment is recognized in the income statement. A trade receivable amount is regarded as impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition and that loss event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. The carrying amounts of trade receivables are assumed to approximate their fair value. Normally no interest is charged on trade receivables.

Inventories

Inventories are measured at the lower of cost (weighted average method) and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. A write down on cost is made when the cost is not recoverable or if the selling prices have declined.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of 5 years.

Impairment of long-lived assets

The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable.

The impairment of long-lived assets is measured pursuant to the guidelines of Statement of Financial Accounting Standard (“SFAS”) No.144 “Accounting for the Impairment or Disposal of Long-Lived Assets”. When an indicator of impairment has occurred, management’s estimate of undiscounted cash flows attributable to the assets is compared to the carrying value of the assets to determine whether impairment has occurred. If an impairment of the carrying value has occurred, the amount of the impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss of the amount that the carrying value exceeds the estimated fair value.

Summary of Significant Accounting Policies (cont’d)

Income taxes

The Company accounts for income tax under the provisions of SFAS No. 109 “Accounting for Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Concentration of credit risk

The Company has a concentration of credit risk as its revenue was solely derived from services provided to a related party, Junlian S&T.

Fair value of financial instruments

The carrying amounts of certain financial instruments, including cash and cash equivalents, trade receivables, other receivable, other payable and amount due to a director approximate their fair values due to the short-term maturity of these items.

The Company’s management opines that the Company is not exposed to significant interest, price, foreign currency or credit risks arising from these financial instruments.

Revenue recognition

Revenue from fixed fee income is recognized when the right to receive is established and on a monthly basis over the term of the Strategic Cooperation Agreement.

Foreign currency translation

The financial records of subsidiaries that operate in the Mainland of the People’s Republic of China (PRC) are maintained in local currencies (RMB) as their functional currencies. Transactions in currencies other than RMB are translated into RMB at the exchange rates prevailing at the transaction dates, quoted by the People’s Bank of China (the “PBOC”). Monetary assets and liabilities denominated in currencies other than RMB at the balance sheet date are translated into RMB at the exchange rates quoted by the PBOC prevailing at the balance sheet date. Exchange differences arising from changes in exchange rates subsequent to the transaction dates for monetary assets and liabilities denominated in other currencies are included in the determination of net income/loss for the respective period.

Financial statements of subsidiaries have been translated into United States dollars (“US$”) for consolidation reporting purpose. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the periods. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency translations are included in accumulated other comprehensive income. There is no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

Summary of Significant Accounting Policies (cont’d)

Principles of consolidation

The Consolidated Financial Statements include the accounts of China Junlian Integrated Surveillance, Inc. and its majority-controlled subsidiary companies. Investments in business entities in which the company does not have majority-control, but has the ability to exercise significant influence over operating and financial policies (generally 20-50 percent ownership), are accounted for using the equity method.

Subsidiaries in the consolidation scope of the consolidated financial statement are as follow:


Name of the Company	Stock capital	Invested amount of the group toits subsidiaries	% of equityinterest	Location
Splendid Group Investments Limited	US$1	US$1	100	British Virgin Islands
Guangzhou Junlian Correspondence Technology Co., Ltd.	HK$700,000	HK$700,000	100	Guangzhou, PRC

4. Amount due to a Director


	As of
	September 30, 2007

Amount due to a director	$114,537

The amount is interest-free, unsecured and repayable on demand.

5. Common Stock


	No. of shares	Amount

Authorized :
Common stock, no par value	100,000,000	$ -

Issued and outstanding :
As of December 31, 2006	9,720,000	$28,435


As of September 30, 2007	9,720,000	$28,435

6. Selling expenses


	Nine months ended		Nine months ended
	Sep 30, 2007		Sep 30, 2006
Entertainment	$684		$679
Wages and salaries	17,268		7,315
Social security fee Housing fund	1,709 1,987		825 1,018
Travelling Other	1,638 14		925 177
Total selling expenses	$23,300	1	$10,939

7. General and administrative expenses


	Nine months ended		Nine months ended
	Sep 30, 2007		Sep 30, 2006
Audit fee	$12,739		$ -
Building management fee	10,222		213
Electricity and water	8,009		213
Entertainment	3,150		-
Motor vehicle expenses	2,078		1,085
Legal & professional fee	6,890		10,072
Housing fund	2,603		566
Rental expenses	68,997		1,772
Social security fee	1,950		946
Taxation	141		255
Communications	3,407		217
Travelling	3,892		249
Wages and salaries	21,385		3,016
Bank charges	266		919
Other	3,247		1,675
Total General and administrative expenses	$148,976	2	$ 21,198

Income Tax


	Nine months ended		Nine months ended
	Sep 30, 2007		Sep 30, 2006
Current tax expense	$5,140		$1,417
Deferred tax expense	–		–
Total income tax expense	$5,140	3	$1,417

Income tax expenses represent the current and deferred tax calculated at 27% on the estimated assessable profits of the Company’s subsidiary operating in the PRC.

The net deferred tax amount in the balance sheet is as follows:


	As of September 30, 2007	As of December 31, 2006
Deferred tax assets:
Tax loss carryforward	-	-
Capital allowance carryforward	4,792	-
Defered tax assets valuation allowance	(4,792)	-
Balance	-	-

An allowance is made to the extent that it is not probable that taxable profit will be available against which the unused tax loss carryforwards can be utilized. The realization of the future income tax benefits from temporary differences from capital allowances is available for 4 years.

9. Net Income per Share – Basic and Diluted

The basic and diluted net profit (loss) per share are calculated using the net profit (loss) and the weighted average number of common stock outstanding during the years. The company has no dilutive instruments and accordingly, the basic and diluted net profit (loss) per share are the same.


	As of	As of
	Sep 30, 2007	Sep 30, 2006

Net income	$(42,742)	$12,376
Weighted average number of shares outstanding	9,720,000	6,355,556
Net income per share	$(0.0044)	$0.0019

10. Commitments

Operating lease commitment

The Group had a non-cancellable operating lease for its office premises. The lease will expire in Nov 2009 and the annual rental is $93,761. The rental is paid by cash to the lessor, who is not the related party with the Group.

Rental expenses were $23,278 for the period from July to September 2007.

Rental expenses were $68,997 for the period from January to September 2007.

11.

Related party transactions

In May 2006, Junlian S&T and Junlian entered into a Strategic Cooperation Agreement whereby Junlian provided services required by Junlian S&T in connection with fulfilment of its development contracts. In compensation of its services, Junlian S&T paid Junlian a fixed fee of approximately US$19,971 (Renminbi (“RMB”) 150,000) per month and a commission to be determined by Junlian S&T and Junlian on a per-project basis. On June 28, 2007,

Junlian S&T and Junlian agreed to suspend the above Strategic Cooperation Agreement. In November 2007, Junlian S&T and Junlian entered into a new Strategic Cooperation Agreement, effective as of August 1, 2007, whereby Junlian provided services with upgraded technology to Junlian S&T and charged Junlian S&T a fixed fee of approximately US$23,965 (Renminbi (“RMB”) 180,000) per month and a commission to be determined by Junlian S&T and Junlian on a per-project basis. Junlian S&T has guaranteed that its aggregate annual payments to Junlian will be no less than US$399,425 (RMB 3,000,000).

Apart from the fixed fee income of $47,599 received from Junlian S&T and the transactions as disclosed above, the Group had no other material transactions with its related parties during the three months ended September 30, 2007.

Apart from the fixed fee income of $164,458 received from Junlian S&T and the transactions as disclosed above, the Group had no other material transactions with its related parties during the nine months ended September 30, 2007.

12.

Defined contribution plan

The Company has a defined contribution plan for all its qualified employees in the PRC. The Company and its employees are each required to make contributions to the plan at the rates specified in the plan. The only obligation of the Company with respect to the retirement plan is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in future years. The contributions of defined contribution plan were charged to the statement of operations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

Overview

China Junlian Integrated Surveillance, Inc. (“China Junlian”) has a single operating subsidiary: Guangzhou Junlian Correspondence Technology Co., Ltd., a corporation organized under the laws of the People’s Republic of China (“Junlian”). Junlian was organized in May 2006 to engage in consulting, systems development, and customer service in the field of surveillance technology. Junlian was organized by the management of Guangzhou Junlian Correspondence Science and Technology Co., Ltd. (“Junlian S&T”). For the immediate future, the primary or exclusive business of Junlian will be to provide services to Junlian S&T.

Junlian S&T has been involved in the business of developing and installing surveillance systems in China since 2003. In May 2006 it entered into a Strategic Cooperation Agreement with Junlian, pursuant to which Junlian provided services required by Junlian S&T in connection with fulfillment of its development contracts. That agreement was terminated in June 2007, but was recently replaced by a Strategic Cooperation Agreement made effective as of August 1, 2007. The new agreement is fundamentally identical to the prior agreement, except that the terms of compensation have been modified. Under the new agreement, in compensation for its services, Junlian S&T will pay Junlian a fixed fee of 180,000 Renminbi (“RMB”) per month, i.e. approximately $24,000. Junlian S&T also contracted to pay Junlian a commission to be determined by Junlian S&T and Junlian on a per-project basis, and guaranteed that its aggregate annual payments to Junlian would be no less than 3,000,000 RMB (@$400,000).

It must be noted, however, that the revenue reported by Junlian S&T for the year ended December 31, 2006 was less than 3,000,000 RMB. While Junlian S&T’s level of operations has increased several-fold in 2006, we still have no assurance that Junlian S&T will be able to fund an enhanced commitment to Junlian.

Results of Operations

The $164,458 in revenue recorded by China Junlian during the nine months ended September 30, 2007 represents the minimum payments by Junlian S&T. Because Junlian S&T was organized in May 2006 and commenced business in July 2006, there are no comparable nine month results. Revenue for the three months ended September 30, 2007 was less than revenue for the three months ended September 30, 2006 due to the hiatus between the first Strategic Cooperation Agreement and its replacement.

The expenses that we incurred in the first nine months of 2007 consisted primarily of rent ($68,997), as we have established an office that exceeds our current requirements but will permit us to expand operations when sufficient funding becomes available. The remainder of expenses was salaries, consulting fees and depreciation. Expenses in the first nine months of 2007 are less than we will incur in the coming months for a number of reasons:

First, we currently carry only a minimal level of business operations. So our overhead costs are low. We expect to increase our level of business activity substantially in the coming months.

Second, although we effected a reverse merger into a U.S. public company in 2006, our stock does not yet trade. So we did not incur any substantial costs in connection with being a public company. Early in 2008 we expect to initiate a public market for our securities. This will involve a substantial increase in the expenses we incur in dealing with regulators, securities professionals and shareholders.

We anticipate that in the future our business will expand to include services for clients other than Junlian S&T. That expansion will necessitate a revision to our financial model, as we will assume responsibility for financing individual development projects. Prior to undertaking that expansion, it will be necessary for us to obtain significant additional capital by selling debt or equity instruments.

Liquidity and Capital Resources

In June 2006 members of Management loaned 700,000 Hong Kong Dollars (approx. $90,189) to Splendid Group, which then contributed that sum to the capital of Junlian. The funds were used to outfit the offices necessary for Junlian to initiate operations and to provide initial working capital. Management does not expect that additional capital contributions will be required during the next year, and not until we expand our operations beyond service to Junlian S&T.

Because the initial business of Junlian is to provide consulting services to Junlian S&T, we have no immediate capital requirements beyond the initial offices and any expansions that the growth of business may demand. The capital invested in an office is not significant relative to the revenue that the office can generate. Therefore, even as we grow and expand, the availability of capital should not be a significant issue.

Our primary financial concern, therefore, is that we maintain sufficient working capital to enable us to finance our receivable from Junlian S&T – to pay our staff and office expenses while awaiting payment for the services they have provided. The aging of that receivable will depend, primarily, on the cash flow experienced by Junlian S&T. Because Junlian S&T requires significant downpayments before it enters into a project, we expect that Junlian S&T will be able to settle its account with us on a current basis. We do not, therefore, expect to have to maintain more than one month’s working capital in reserve.

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 or results of operations.

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2007. Pursuant to Rule13a-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, “disclosure controls and procedures” means controls and other procedures that are designed to insure that information required to be disclosed by the Company in the reports that it files with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time limits specified in the Commission’s rules. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to insure that information the Company is required to disclose in the reports it files with the Commission is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s system of disclosure controls and procedures was effective as of September 30, 2007 for the purposes described in this paragraph.

Changes in Internal Controls. There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during the Company’s third fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 5

Other Information

On November 11, 2007 Junlian entered into a Strategic Cooperation Agreement with Junlian S&T, pursuant to which Junlian agreed to provide services required by Junlian S&T in connection with fulfillment of its development contracts. In compensation for its services, Junlian S&T will pay Junlian a fixed fee of 180,000 Renminbi (“RMB”) per month, i.e. approximately $24,000. Junlian S&T also contracted to pay Junlian a commission to be determined by Junlian S&T and Junlian on a per-project basis, and guaranteed that its aggregate annual payments to Junlian would be no less than 3,000,000 RMB (@$400,000).

Item 6.

Exhibits

10.1

Strategic Cooperation Agreement dated November 13, 2007 between China Junlian Integrated Surveillance, Inc. and Guangzhou Junlian Correspondence Technology Co., Ltd.

31.1

Rule 13a-14(a) Certification – CEO

31.2

Rule 13a-14(a) Certification - CFO

Rule 13a-14(b) Certification

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 JUNLIAN INTEGRATED SURVEILLANCE, INC.

Date: November 14, 2007

By: /s/ Yuan Gang

Yuan Gang, Chief Executive Officer

By:/s/ Wang Lei

Wang Lei, Chief Financial Officer

China Junlian Integrated Surveillance Inactive 10QSB2007 Q3 Quarterly report (small business)