China Green Material (CAGM) 10-Q 2009 Q3 Quarterly report

United States

Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2009

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

For the transition period from _____ to _____

Commission File No. 0-26799

China Green Material Technologies, Inc.

(Name of registrant in its Charter)

Nevada	88-0381646
(State of Other Jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

27F(Changqing Building), 172 Zhongshan Road,

Harbin City, China 150040     11355

(Address of principal executive offices) (Zip Code)

00-86-451-82695957

(Registrant's telephone number including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o  No o

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

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if a smaller reporting company)

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

The number of shares of common stock, par value $.001 per share, outstanding as of November 13, 2009 was 18,711,388.

CHINA GREEN MATERIAL TECHNOLOGIES, INC.

FORM 10-Q

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009

INDEX

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1: Financial Statements	3
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3: Quantitative and Qualitative Disclosures about Market Risk	20
Item 4: Controls and Procedures	20
PART II - OTHER INFORMATION
Item 1: Legal Proceedings	21
Item 1A: Risk Factors	21
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3: Defaults Upon Senior Securities	21
Item 4: Submission of Matters to a Vote of Security Holders	21
Item 5: Other Information	21
Item 6: Exhibits	21

Item 1. Financial Statements

CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2009		December 31, 2008
Assets	(Unaudited)		(Audited)
Current Assets:
Cash and equivalents - non restricted	$	6,111,346	$	4,243,140
Cash - restricted		2,850		1,904
Accounts receivable, net of allowance for doubtful accounts of $35,266
and $26,847, respectively		7,017,957		5,354,334
Inventories		343,818		351,413
Other receivable		-		201
Deposit for purchase of patent rights		146,492		-
Deferred income tax assets		3,560		-
Prepaid expenses		44,224		14,988
Other current assets		533,470		472,413
Total Current Assets		14,203,717		10,438,393
Property and Equipment, Net		10,653,627		11,692,455
Intangible Assets, Net		5,088,576		5,585,576
Deferred Income Tax Assets		55,473		-
Investment-At Cost		310,478		310,807
Total Assets		30,311,871		28,027,231
Liabilities and Stockholders' Equity
Current Liabilities:
Account payable and accrued expenses		165,762		178,138
Customers deposits		7,529		14,524
Payroll payable		29,465		63,501
Due to shareholders/officers		288,468		1,294,838
Tax payable		513,344		73,653
Other current liabilities		7,150		130,837
Total Current Liabilities		1,011,718		1,755,491
Total  Liabilities		1,011,718		1,755,491
Stockholders' Equity
Common stock, $0.001 par value, 100,000,000 shares authorized,
18,711,388 shares issued and outstanding		18,711		18,711
Additional paid-in capital		17,895,324		17,895,324
Reserve funds		1,041,117		732,532
Retained earnings		6,706,450		3,974,440
Accumulated other comprehensive income		3,638,551		3,650,733
Total Shareholders’ Equity		29,300,153		26,271,740
Total Liabilities and Stockholders’ Equity	$	30,311,871	$	28,027,231

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
	For Three Months Ended September 30,						For Nine Months Ended September 30,
	2009			2008			2009			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	4,185,043		$	3,545,984		$	9,856,609		$	9,015,328
Cost of Goods Sold		2,152,844			1,814,724			5,106,128			4,573,734
Gross Profit		2,032,199			1,731,260			4,750,481			4,441,594
Operating Expenses
Selling expenses		80,751			73,702			196,358			200,436
Bad debt expenses (recoveries)		7,778			(179,355	)		8,427			(252,486	)
General and administrative expenses		179,143			231,434			520,309			659,585
Total Operating Expenses		267,672			125,781			725,094			607,535
Income From Operations		1,764,527			1,605,479			4,025,387			3,834,059
Other Income (Expenses)
Related parties rental income		6,014			4,874			18,039			14,316
Interest income		1,798			2,379			3,792			3,133
Other income (expenses), net		81			143			(375	)		(168	)
Loss on fixed and intangible assets disposal		(458,599	)		-			(459,611	)		-
Total Other (Expenses) Income		(450,706	)		7,396			(438,155	)		17,281
Income Before Income Taxes		1,313,821			1,612,875			3,587,232			3,851,340
Provision for Income Taxes		204,622			-			546,637			-
Net Income	$	1,109,199		$	1,612,875		$	3,040,595		$	3,851,340
Foreign Currency Translation Adjustment		18,965			269,386			(12,182	)		1,641,584
Comprehensive Income	$	1,128,164		$	1,882,261		$	3,028,413		$	5,492,924
Net Income Per Common Share
-Basic and Diluted	$	0.06		$	0.09		$	0.16		$	0.26
Weight Common Shares Outstanding
-Basic and Diluted		18,711,388			18,710,987			18,711,388			14,677,654

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED)
		For Nine Months Ended September 30,
		2009		2008
		Unaudited		Unaudited
Cash flows From Operation Activities:
Net Income	$	3,040,595	$	3,851,340
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities
Depreciation and amortization		970,702		930,953
Deferred income tax benefits		(58,980)		-
Bad debt expenses		8,427		(252,486)
Loss on disposal of fixed assets		64,432		-
Loss on disposal of intangible assets		395,179		-
Changes in operating assets and liabilities
Accounts receivable		(1,676,002)		1,208,625
Inventories		7,402		(840,162)
Other receivable		201		4,516
Prepaid expenses		(29,261)		19,401
Other current assets		(61,357)		796,617
Accounts payable and accrued expenses		(12,283)		(61,090)
Customer deposits		(6,991)		25,723
Payroll payable		(34,020)		14,578
Tax payable		439,979		78,755
Other current liabilities		(123,683)		32,123
Net Cash Provided by Operating Activities		2,924,340		5,808,893
Cash Flows From Investing Activities
Purchase of property and equipment		(64,384)		(2,388,922)
Deposit for purchase of patent rights		(146,492)		-
Proceeds from sold the property and equipment		158,803		-
Net Cash Used in Investing Activities		(52,073)		(2,388,922)
Cash Flows From Financing Activities
Payment to shareholders/officers loans		(1,025,441)		(20,505)
Proceeds from shareholders/officers loans		19,799		17,356
Net Cash Used in Financing Activities		(1,005,642)		(3,149)
Net Increase in Cash and Cash Equivalents		1,866,625		3,416,822
Effect of Exchange Rate Changes on Cash and Equivalent		2,527		226,581
Cash and Equivalents at Beginning of Period		4,245,044		101,336
Cash and Equivalents at End of Period	$	6,114,196	$	3,744,739

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA GREEN MATERIAL TECHNOLOGIES INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Organization and Principal Activities

On January 14, 2008, China Green Material Technologies, Inc. (“the company”), officially changed its name from Ubrandit.com and began to quote under the new symbol of CAGM.OB. Ubrandit.com used to be quoted on the Over-the-Counter Bulletin Board of the National Association of Securities Dealers, Inc., under the symbol UBDT.OB.

Concurrent with the name and symbol change, a 1 for 150 reverse split was effected on January 14, 2008 with fractional shares rounded up to 100 shares.

On February 29, 2008, the Company announced that the shareholders of its Series A Convertible Preferred Stock had chosen to convert their preferred shares into Company’s common stock (“Common Stock”). As a result, a total of 18,150,000 shares of Common Stock had been issued in connection with the conversion, and all Series A Convertible Preferred Stocks had been cancelled.

On February 9, 2007, the company acquired all of the outstanding capital stock of Advanced Green Materials, Inc. (“AGM”) by merging AGM into a wholly-owned subsidiary of the company. AGM is a holding company that owns 100% of the registered capital of ChangFangYuan Hi-Tech Environment-Friendly Industry Co., Ltd. (“CHFY”), a corporation organized under the laws of The People’s Republic of China. CHFY is engaged in the business of manufacturing and marketing starch-based biodegradable tableware and packing materials. All of CHFY’s business is currently in China.

AGM was organized under the laws of Nevada on June 8, 2006. It never initiated any business activity. Most of the company’s activities are conducted through its 100% owned equity ownership in CHFY. On August 18, 2006, AGM acquired all the outstanding 128,274,900 shares capital stock of CHFY.

CHFY was incorporated in Heilongjiang Province of PRC on May 12, 1999. It was formally known as Harbin TianHao Technology Co., Ltd. The company later changed its name to Harbin ChangFangYuan Hi-Tech Industrial Co., Ltd. on September 28, 2004, and then changed its name to Harbin ChangFangYuan Hi-Tech Environment-Friendly Industry Co., Ltd. on September 1, 2006.

From June 1, 2006 (date of inception of Longjun) to March 19, 2007, CHFY owned 95.23% equity ownership of Harbin Longjun Trade Co., Ltd. (“Longjun”), a corporation organized in Heilongjiang Province of People Republic of China (“PRC”) on June 1, 2006. On March 20, 2007, the minority shareholders of Longjun invested additional capital of RMB 0.8 million into Longjun, On May 22, 2007, Longjun changed its name to Harbin Longjun Industry Development Co., Ltd, and its individual shareholders invested additional capital of RMB 15 million into Longjun, including cash of RMB 9.2 million and intangible assets of RMB 5.8 million. Simultaneously, CHFY transferred its equity ownership of Longjun in the value of RMB 0.8 million to Longjun’s original minority shareholders. Accordingly, CHFY became 16% equity owner of Longjun, and lost its control of Longjun. Longjun engaged in the wholesale distribution and R&D of bio-degradable products and environmental project materials. All businesses of Longjun are currently in China and Longjun has not declared any dividend since June 1, 2006 (date of inception of Longjun).

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2.    Basis of Presentation – interim financial statements

The unaudited condensed consolidated financial statements of the company and its subsidiaries (“the company”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments), which is, in the opinion of the management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2008 was derived from the audited consolidated financial statements included in the company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All material inter-company balances and transactions have been eliminated.

3.    Summary of Significant Accounting Policies

a.   Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates.

b.   Foreign Currency Translation

The reporting currency of the company is the U.S. dollar. The functional currencies of its subsidiaries are local currencies, primarily the Chinese currency Yuan (“P.R.C” Renminbi). The financial statements are translated into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates of exchange for the conversion of revenues and expenses. Translation adjustments resulting from the process of translating the local currency of the financial statements into U.S. dollars are included in other comprehensive income or loss.

c.   Revenue Recognition

Revenue includes sales of products and services. Product revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers, net of allowance for estimated returns, when both title and risk of loss transfer to the customer, provided that no significant obligations remain. Deferred revenue represents the undelivered portion of invoiced value of goods sold to customers. Service income is recognized when services are provided. Revenue from service contracts, for which the company is obligated to perform, is recorded as deferred revenue and subsequently recognized over the term of the contract or when the service is completed. Sales transactions not meeting all the conditions of the full accrual method are accounted for using the deposit method of accounting. Under the deposit method, all costs are capitalized as incurred, and payments received from the buyer are recorded as customer deposits. Revenue represents net of value added taxes (“VAT”) for the sales revenue from PRC subsidiaries. There are no sales incurred for the period from May 12, 1999 (date of inception) to April 30, 2006.

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d. Income Taxes

The Company will file federal consolidated income tax returns with its US subsidiary and file state franchise tax returns individually with the State of Nevada, The Company’s PRC subsidiary files income tax returns under the Income Tax law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws.

The Company follow Statement of Financial Accounting Standards No. 109 – “Accounting for Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

e.   Recent Accounting Pronouncements

In June 2009, the FASB issued ASC 105, the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162. The FASB Accounting Standards Codification TM (“Codification”) will become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of ASC 105, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. ASC 105 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Adoption of ASC 105 is not expected to have a material impact on the Company’s results of operations or financial position.

In June 2009, the FASB issued ASC 810, Amendments to FASB Interpretation No. 46(R), which improves financial reporting by enterprises involved with variable interest entities. ASC 810 addresses (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities , as a result of the elimination of the qualifying special-purpose entity concept in SFAS 166 and (2) concerns about the application of certain key provisions of FIN 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. ASC 810 shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within the first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Adoption of ASC 810 is not expected to have a material impact on the Company’s results of operations or financial position.

In May 2009, the FASB issued ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. An entity should apply the requirements of ASC 855 to interim or annual financial periods ending after June 15, 2009. Adoption of ASC 855 did not have a material impact on the Company’s results of operations or financial position.

4.    Cash and Equivalents-restricted

Commencing from 2008, in accordance with the relevant Harbin local tax regulations, the Company is subject to the labor union fees at 2% of total payroll. The General Union of the City Government will return 40% back to the Company, and the returned amount should be deposited into a special bank account that is restricted to be used only for employees welfare purpose by the labor union department of the Company. As of September 30, 2009 and December 31, 2008, cash — restricted were $2,850 and $1,904, respectively.

5.    Inventories

Inventories on September 30, 2009 and December 31, 2008 consisted of the following:

	September 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Raw materials	$	253,278	$	203,488
Work in progress		12,112		7,402
Finished goods		59,086		112,232
Packaging and other		19,342		28,291
Total	$	343,818	$	351,413

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6.   Other Current Assets

As of September 30, 2009 and December 31, 2008, other current assets consist of following:

	September 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Rent receivable	$	439,475	$	329,791
Employee travel and operation fee advance		78,924		127,542
Security deposit		15,071		15,080
Total	$	533,470	$	472,413

7.    Deposit for Purchase of Patent rights

On September 17, 2009, in order to acquire advanced technology patents for manufacture, the Company entered into an agreement to purchase two patent rights from four individuals including two related parties, Mr. Zhonghao Su, Chief Executive Officer of the Company, and Mr. Yingjie Qiao, technical director of the Company. Pursuant to the patent sales agreement, Mr. Zhonghao Su will contribute his portion of patent rights without any consideration. The total amount of these two patent rights is RMB 15 million (equivalent to USD 2,197,374 as of September 30, 2009) payable to the other three individuals. The Company had paid RMB 1 million (equivalent to USD 146,492 as of September 30, 2009) as deposit for these two patent rights as of September 30, 2009, and expects to pay additional RMB 4 million when the full information regarding these two patent rights is delivered to the Company, and the rest amount of RMB10 million shall be paid by the Company when it receives the patent rights certificates and the ownership of patent rights has been completely transferred to the Company.  However, as of now, these two patent rights have not been authorized by China government.

8.   Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives listed below:

	Estimated Life
Building	20 years
Equipment and machinery	5 to 10 years
Vehicle	5 years
Office equipment	5 years
Leasehold improvements	lower of term of lease or 5 years

 

As of September 30, 2009 and December 31, 2008, property and equipment, at cost less accumulated depreciation, consisted of the following:

	September 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Building	$	5,484,811	$	5,487,890
Equipment and machinery		8,464,724		8,710,356
Vehicle		32,416		59,414
Office equipment		119,786		112,797
Leasehold improvement		173,601		173,698
Subtotal		14,275,338		14,544,155
Less: Accumulated depreciation		3,621,711		2,851,700
Total	$	10,653,627	$	11,692,455

For the nine months ended September 30, 2009 and 2008, depreciation expenses amounted to $872,450 and $832,902, respectively.

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9.    Intangible Assets, Net

Intangible assets is recorded at its cash equivalent cost in accordance with the cost principle. Cost is defined as the sum of all expenditures made to acquire the rights and privileges. Intangible assets have a limited life because the rights or privileges that give them value terminate or simply disappear. Therefore, the acquisition cost of an intangible asset must be written off over its estimated economic life.

The company acquired the land use right and patent right at September 9, 2005. All intangible assets were contributed by unrelated parties in exchange of its common stocks. The company kept inactive on land use right and patent right until January 1, 2006 and May 19, 2006. Accordingly, the company starts to amortize these rights from date it used them. The patent right is no longer used since September 2009. The Company disposed this patent right and occurred $458,599 loss for the quarter ended September 30, 2009.The intangible assets at cost less amortization consist of the following as of September 30, 2009 and December 31, 2008.

	September 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Land use right	$	5,501,164	$	5,504,252
Patent		-		474,899
Subtotal		5,501,164		5,979,151
Less: Accumulated amortization		412,588		393,575
Total	$	5,088,576	$	5,585,576

For the nine months ended September 30, 2009 and 2008 amortization expense amounted to $98,252 and $98,051, respectively.

The amortization expense for the next five years is as follows:

For Nine Months Ended September 30,		Amount
	2010	$  109,926
	2011	$  109,926
	2012	$  109,926
	2013	$  109,926
	2014	$  109,926

10.    Investment – At Cost

On March 20, 2007, Longjun’s minority shareholders invested additional capital of RMB 0.8 million into Longjun. On May 22, 2007, Longjun’s individual shareholders invested additional capital of RMB15 million into Longjun. Simultaneously, CHFY transferred its equity ownership of Longjun in the value of RMB0.8 million to Longjun’s original minority shareholders. Accordingly, CHFY became 16% equity owner of Longjun, and lost its control of Longjun on May 22, 2007. CHFY began to record this investment at cost on May 22, 2007. As of September 30, 2009 and December 31, 2008, the investment amounts at cost were $310,478 and $310,807, respectively.

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11.    Due to Shareholders/Officers

Commencing from year 2005, the major shareholders/officers began to advance necessary working capital to the Company to support its research, development, and operations. These amounts are unsecured, non-interest bearing and no set repayment date. As of September 30, 2009 and December 31, 2008, the net amounts due to the shareholders/officers were $288,468 and 1,294,838, respectively.

12.    Income and Other Taxes

a.   Corporation Income Taxes (“CIT”)

The Company will file federal consolidated income tax return with its US subsidiary and state franchise tax individually with the State of Nevada. The Company’s PRC subsidiary will file income tax returns under the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws.

In accordance with the relevant PRC tax laws and regulations, the Company’s PRC subsidiary, CHFY, is subject to CIT at 33% and 30% tax rate before and after September 1, 2006. Since CHFY merged with AGM and became a foreign wholly-own company on August 18, 2006, CHFY had been authorized to reduce its income tax rate by 3% to 30% from the regular 33% tax rate starting from the following month of acquisition date. Commencing from January 2008, PRC government had reduced the regular CIT tax rate from 33% to 25%. However, the company who is entitled to the privilege shall pay the tax based upon original CIT tax rate.

In accordance with the relevant tax laws and regulations of the PRC, CHFY is entitled to full exemption from CIT for the first two years and a 50% reduction in CIT for the next three years, commencing from the first profitable year after offsetting all tax losses carried forward from the previous five years. As 2007 was the Company’s first profitable year, CHFY was entitled to a full exemption from CIT for the year 2007 and 2008. Commencing from January 2009, CHFY had begun to be charged CIT at 15% rate.

The deferred income tax assets results from loss on disposition of patent right are not deductible.

The components of the provisions for income taxes were as follows:

	For Nine Months Ended September 30,
	2009		2008
	(Unaudited)		(Audited)
Current taxes:
Current income taxes in P.R. China	$	605,617	$	-
Deferred income taxes benefits		58,980		-
Total provision for income taxes	$	546,637	$	-

There were no valuation allowance as of September 30, 2009 and 2008.

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b.   Value Added Tax (“VAT”)

The Company’s PRC subsidiary, CHFY, is subject to VAT on merchandises sales in PRC. For the years ended December 31, 2006, a small scale tax rate of 6% was applicable. Commencing from March 1, 2007, general VAT tax rate of 17% was applicable. Since the CHFY is located in HeilongJiang District and belongs to Hi-Tech manufacturing Company, China National Tax Authority had authorized CHFY to offset the VAT tax for purchasing equipments and machineries with the regular VAT tax collected from sales products of CHFY. This authorization has begun in December 2007.

c.   Taxes Payable

As of September, 2009 and December 31, 2008, tax payable consists of the following:

	September 30, 2009			December 31, 2008
	(Unaudited)			(Audited)
Value-added taxes	$	240,254		$	73,922
Income tax payable		273,397			-
Individual income tax withholdings		(307	)		(269	)
Total	$	513,344		$	73,653

13.     Stockholders’ Equity

The company was authorized to issue 100,000,000 shares of Common Stock, $0.001 par value, of which 18,711,388 shares are issued and outstanding as of September 30, 2009 and December 31, 2008, respectively.

Holders of the Common Stock are entitled to one vote for each share in the election of directors and in all other matters to be voted on by the stockholders. There is no cumulative voting in the election of directors. Holders of Common Stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors with respect to the Common Stock out of funds legally available therefore and, in the event of liquidation, dissolution or winding up of the company, holders of Common Stock are entitled to share ratably  in all assets remaining after payment of liabilities. The holders of Common Stock have no preemptive or conversions rights and are not subject to further calls or assessments. There are no redemption or sinking fund provisions applicable to the Common Stock. The Common Stock currently outstanding is validly issued, fully paid and non-assessable. The Company is also authorized to issue 20,000,000 shares of Preferred Stock, $0.001 par value. The Articles of Incorporation gives the Board of Directors the authority to divide Preferred Stock into series, and to designate the rights and preferences of each series.

On February 9, 2007, the Company acquired all the outstanding capital stock of AGM by the merger of AGM into a wholly-owned subsidiary of the Company. In connection with the closing of the merger on February 9, 2007, the Company issued to the shareholders of AGM 272,250 shares of Series A Convertible Preferred Stock, which is convertible into 2,722,500,000 shares of the Company’s common stock. The holder of the Series A stock may cast 2,722,500,000 votes at any meeting of the Company’s shareholders.

On January 14, 2008, a 1 for 150 reverse split was effected with fractional shares rounded up to 100 shares.

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On February 29, 2008, the Company announced that the shareholders of its Series A Convertible Preferred Stock had chosen to convert their preferred shares into shares of the Company’s common stock (“Common Stock”). As a result, a total of 18,150,000 shares of Common Stock had been issued in connection with the conversion, and all Series A Convertible Preferred Stock had been cancelled.

14.    Reserve Funds

The Company’s subsidiary in PRC is required to maintain certain statutory reserves by appropriating from the profit after taxation in accordance with the relevant laws and regulations in the PRC and articles of association of the subsidiary before declaration or payment of dividends. The reserves form part of the equity of the Company.

The appropriation to the statutory surplus reserve and statutory common welfare fund reserve represent 10 percent and 5 percent of the profits after taxation, respectively. In accordance with the laws and regulations in the PRC, the appropriation to statutory reserve ceased when the balances of the reserve reach 50 percent of the registered capital of the Company. Commencing from year 2006, the appropriation to statutory common welfare fund is not required. Thus,  the Company had ceased the reservation of statutory common welfare fund from January 2009.

The reserve funds consisted of the following as of September 30, 2009 and December 31, 2008.

	September 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Statutory reserve fund	$	796,940	$	488,355
Statutory common welfare fund reserve		244,177		244,177
Total	$	1,041,117	$	732,532

15.    Lease Commitments

The company leases certain sales representation offices, general and administrative office, employee living space, and factory space under operating leases.

The following is a schedule of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms as of September, 2009

For Nine Months Ended September 30,	Amount
2010	$  46,276
Total minimum payments required	$  46,276

The total rent expenses for the nine months ended September 30, 2009 and 2008 were $136,697 and $167,997, respectively.

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16.    Related Parties Rental Income

The company lease out certain unused building with land use right, and equipment and machinery to its related party under operating leases agreements, and the lease terms all had been extended to December 31, 2009. The rental revenue and cost information for nine months ended September, 2009 and 2008 consisted of the following:

	September 30, 2009		September 30,2008
	(Unaudited)		(Unaudited)
Rental income	$	329,316	$	322,157
Less: Depreciation and amortization		311,277		307,841
Total Rental Income	$	18,039	$	14,316

17.    Basic and Diluted Income per Common Share

The company account for net income per common share in accordance with SFAS 128, Earnings per Share (“EPS”). SFAS 128 requires the disclosure of the potential dilution effect of exercising or converting securities or other contracts involving the issuance of common stock. Basic net income (loss) per share is determined based on the weighted average number of common shares outstanding. Diluted net income (loss) per share is determined based on the assumption that all dilutive convertible shares were converted or exercised.

18.    Foreign Subsidiary Operations

Substantially all of the company’s operations are carried out through its subsidiary located in the PRC. Accordingly, the company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC. The company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.

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19.    Concentration of Business

The company provides credit in the normal course of business. The company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

a.   Major Customers

The following summarizes sold to major customers (each 10% of more of sales):

	Sold to		Number of		Percentage
For Nine Months Ended September 30,	Major Customers		Customers		of Total Revenues
2009	$	7,177,229		4		72.82	%
2008	$	7,749,604		5		85.96	%

b.   Major Suppliers

The following summarizes purchased from major suppliers (each 10% of more of purchased):

	Purchased from		Number of		Percentage
For Nine Months Ended September 30,	Major Suppliers		Suppliers		of Total Purchased
2009	$	3,940,092		2		100.00	%
2008	$	4,611,688		2		99.45	%

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements:

The following discussion of the financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. China Green Material Technologies, Inc. is referred to herein as “we” or “our.” The words or phrases “would be,” “will allow,” “expect to”, “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

We are engaged in the development, manufacture, export and distribution of biodegradable consumer packaging materials in the People’s Republic of China (the “PRC”). The basic material we use is a starch-based compound that is non-toxic, microwaveable, fire retardant, odor-free, and durable under temperatures ranging from 40°C below zero up to 150°C above zero. In addition, our products have conformed to the world industrial 4R and 1D standard (i.e. Reduced consumption, Recyclable, Refillable, Reusable and Degradable). We currently offer over 100 product specifications, which mainly include tableware and various consumer packaging materials.

Up until October 2006, the Company was engaged entirely in the product development, the establishment of manufacturing facilities and marketing relationships. Thus, we recorded no revenue during 2004, 2005 and the first four months of 2006. The losses that the Company incurred in the aforesaid periods were mainly attributable to the administrative expenses of initiating the new business plan.

We realized our first revenue in May of 2006, during which the Company completed $4,120,716 in sales. The revenue was derived primarily from our primary independent distributor, Weihai Qiancheng Import & Export Co. Ltd. (“Weihai Qiancheng”). Our revenue continued to increase and customer base continued to be diversified as we entered into 2009. As of November 2009, we have four branch sales offices in cities of Weihai , Dalian, Qingdao and Jinan in Northeastern China and expect to further expand our client base.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009

COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2008

	For Three Months Ended September 30, 2009				For Three Months Ended September 30, 2008				2009 Vs 2008 Increase/ (decrease)
	(Unaudited)				(Unaudited)
Revenues	$	4,185,043			$	3,545,984			$	639,059		18%
Cost of Goods Sold		2,152,844		51%		1,814,724		51%		338,120		19%
Gross Profit		2,032,199		49%		1,731,260		49%		300,939		17%
Operating Expenses
Selling expenses		80,751				73,702				7,049		10%
Bad debt expenses (recoveries)		7,778				(179,355	)			187,133		-104%
General and administrative expenses		179,143				231,434				(52,291	)	-23%
Total Operating Expenses		267,672		6%		125,781		4%		141,891		113%
Income From Operations		1,764,527		42%		1,605,479		45%		159,048		10%
Other Income (Expenses)
Related parties rental income		6,014				4,874				1,140		23%
Interest income		1,798				2,379				(581	)	-24%
Other income, net		81				143				(62	)	-43%
Loss on fixed and intangible assets disposal		(458,599	)			-				(458,599	)
Total Other (Expenses) Income		(450,706	)			7,396				(458,101	)	-6194%
Income Before Income Taxes		1,313,821		31%		1,612,875		45%		(299,053	)	-19%
Provision for Income Taxes		204,622				-				204,622
Net Income	$	1,109,199		27%	$	1,612,875		45%	$	(503,675	)	-31%

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Revenue  Total revenues were approximately $4.19 million for the three months ended September 30, 2009 as compared to approximately $3.55 million for the three months ended September 30, 2008, an increase of approximately $0.64 million or 18 percent.  Although we sold lower unit price of products in the third quarter of year 2009 as compared to the same period of last year, the sales quantities had increased significantly as compared to the sales quantities in year 2008 by promoted selling effort. As a result, the total revenues had increased in the third quarter of year 2009 as compared to the same quarter last year.

Cost of Goods SoldCost of goods sold for the three months ended September 30, 2009 was approximately $2.15 million or 51 percent of revenues, as compared to approximately $1.81 million or 51 percent of revenues for the three months ended September 30, 2008. Gross margin was 49 percent for the three months ended September 30, 2009 and the same percent for the same period in year 2008. Commencing from year 2009, we focus our sales on end-user market which incurred more packaging cost in the third quarter of 2009 as compared to the same period of last year in order to ship the products to end users However, since we start using advanced technology patents for manufacturing in September 2009, our raw material application amount had been reduced in the current quarter of 2009. Also, the unit price of raw material purchased was reduced markedly in third quarter 2009 as compared to the same period of last year. In addition, the increased quantities of finish goods also contribute to the effect of reducing unit manufacture costs in the third quarter of 2009. As a result, the average unit costs had dropped in the third quarter of 2009. Because unit sales price and unit cost had been reduced simultaneously for the three months ended September 30, 2009, the gross margin in the third quarter of 2009 was almost the same as the third quarter of 2008.

Selling Expenses   Selling expenses were $80,751 for the three months ended September 30, 2009, as compared to $73,702 in the same period last year. It was mainly due to increased advertising fees in order to develop more end-user customers and the freight fees as a result of increased end-user customers for the three months ended September 30, 2009.

Bad Debt (Recoveries) Expenses   Bad debt expenses were $7,778 for the three months ended September 30, 2009, as compared to the recoveries of $(179,355) for the three months ended September 30, 2008. It was primarily due to the reverse of allowance of bad debt in the third quarter of 2008. The Company usually used allowance of bad debt on 0.5% of the accounts receivable balance. Commencing from fourth quarter of 2007, the Company changed its bad debt allowance estimates to  5% of accounts receivable, since it had faced a concentrated and high amount of overdue accounts receivable from WeiHai Qiancheng. After half a year in supervising and improving the accounts receivable collection effort, the Company had collected most of WeiHai Qiancheng accounts receivable. Accordingly, the Company dropped down its allowance rate from 5% back to 0.5% starting from the third quarter of 2008.

General and Administrative Expenses General and administrative expenses decreased by 23 percent from $231,434 for the three months ended September 30, 2008 to $179,143 for the three months ended September 30, 2009. The decrease was mainly due to the reduced professional fees, travel expenses, mail process fees, and employee salaries for the three months ended June 30, 2009 as compared to the same period last year.

Operating Expenses   Operating expenses were $267,672 for the three months ended September 30, 2009 as compared to $125,781 for the three months ended September 30, 2008, an increase of $141,891 or 113 percent mainly as a result of reverse of bad debt expense in the same period of the last year.

Income from Operations   Income from operations was approximately $1.76 million for the three months ended September 30, 2009 as compared to approximately $1.61 million for the three months ended September 30, 2008, an increase of approximately $159,048 or 10 percent. The increase was mainly due to improved total revenues in the third quarter of 2009.

Other Income (Expense)   Total other expenses were $450,706  for the three months ended September 30, 2009 as compared to total other income $7,396 for the three months ended September 30, 2008. The other expenses increased significantly due to the loss on the patent right disposal in third quarter of 2009.

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Income Tax Under the laws of the PRC, CHFY, as a wholly foreign owned enterprise, is subject to the corporate income tax exemption during its first and second profitable years and a 50% reduction in income tax in the subsequent three years. Year 2007 and 2008 were CHFY’s first and second profitable years and hence it was entitled to the income tax exemption during these years. Commencing from the first quarter of 2009, CHFY is subject to the corporation income taxes (“CIT”) in PRC at 15% rate.

Net Income   Our net income was approximately $1.11 million for the three months ended September 30, 2009 as compared to approximately $1.61 million for the three months ended September 30, 2008, a decrease of $0.5 million or 31 percent.  The decrease was mainly due to the loss on the patent right disposal in third quarter 2009. The fully diluted EPS was $0.06 for the three months ended September 30, 2009 compared to that of $0.09 in the same period of 2008.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2008

	For Nine Months Ended September 30, 2009				For Nine Months Ended September 30, 2008				2009 Vs 2008 Increase/ (decrease)
	(Unaudited)				(Unaudited)
Revenues	$	9,856,609			$	9,015,328			$	841,281		9%
Cost of Goods Sold		5,106,128		52%		4,573,734		51%		532,394		12%
Gross Profit		4,750,481		48%		4,441,594		49%		308,887		7%
Operating Expenses
Selling expenses		196,358				200,436				(4,078	)	-2%
Bad debt expenses (recoveries)		8,427				(252,486	)			260,913		-103%
General and administrative expenses		520,309				659,585				(139,276	)	-21%
Total Operating Expenses		725,094		7%		607,535		7%		117,559		19%
Income From Operations		4,025,387		41%		3,834,059		43%		191,328		5%
Other Income (Expenses)
Related parties rental income		18,039				14,316				3,723		26%
Interest income		3,792				3,133				659		21%
Other expenses, net		(375	)			(168	)			(207	)	123%
Loss on fixed and intangible assets disposal		(459,611	)			-				(459,611	)
Total Other (Expenses) Income		(438,155	)			17,281				(455,435	)	-2636%
Income Before Income Taxes		3,587,232		36%		3,851,340		43%		(264,108	)	-7%
Provision for Income Taxes		546,637				-				546,637
Net Income	$	3,040,595		31%	$	3,851,340		43%	$	(810,745	)	-21%

RevenueTotal revenues were approximately $9.86 million for the nine months ended September 30, 2009 as compared to approximately $9.02 million for the nine months ended September 30, 2008, an increase of approximately $0.84 million or 9 percent as the sales quantities had increased as compared to the sales quantities in year 2008 by promoted selling effort. As a result, the total revenues had been improved markedly in the current year.

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Cost of Goods Sold:Cost of goods sold for the nine months ended September 30, 2009 was approximately $5.1 million or 52 percent of revenues, as compared to approximately $4.57 million or 51 percent of revenues for the nine months ended September 30, 2008. Gross margin for the nine months ended September 30, 2009 was 48 percent, which is lower than the gross margin of 49 percent for the same period of 2008. The gross margin decrease is mainly due to increased packaging cost in the nine months of current year as compared to same period of last year, even though the unit cost of raw materials was reduced in the nine months of current year as compared to same period of last year.

Selling Expenses Selling expenses were $196,358 for the nine months ended September 30, 2009, as compared to $200,436 for the same period of last year. Even though the advertising fees and freight fees increased significantly in nine months of year 2009 as compared to the same period of last year, these increases had been offset by reduced employee compensation, traveling expenses, branch office costs, publication fees, and shop service fees in the nine months of current year. As a result, the overall selling expenses decreased slightly during the nine months of current year as compared to the same period of last year.

Bad Debt (Recoveries) Expenses    Bad debts expenses were $8,427 for the nine months ended September 30, 2009, as compared to the recoveries $(252,486) for the nine months ended September 30, 2008. It was primarily due to the reverse of allowance of bad debt in last year. The Company usually used allowance of bad debt on 0.5% of the accounts receivable balance. Commencing from fourth quarter of 2007, the Company changed its bad debt allowance estimates to 5% of accounts receivable, since it faced a concentrated and high amount of overdue accounts receivable from WeiHai Qiancheng. After half a year in supervising and improving the accounts receivable collection effort, the Company had collected most of WeiHai Qiancheng accounts receivable. Accordingly, the Company dropped down its allowance rate from 5% back to 0.5% starting from the third quarter of 2008.

General and Administrative Expenses General and administrative expenses decreased by 21 percent from $659,585 for the nine months ended September 30, 2008 to $520,309 for the nine months ended September 30, 2009. The decrease was mainly due to reduced professional fees, rent, and employee compensation for the nine months ended September 30, 2009 as compared to the same period last year.

Operating Expenses Operating expenses were $725,094 for the nine months ended September 30, 2009 as compared to $607,535 for the nine months ended September 30, 2008, an increase of $117,559 or 19 percent which was mainly a result of the reverse of bad debt expenses in the last year.

Income from OperationsIncome from operations was approximately $4.03 million for the nine months ended September 30, 2009 as compared to approximately $3.83 million for the nine months ended September 30, 2008, an increase of approximately $191,328 or 5 percent. The increase was mainly due to improved total revenues and reduced general and administrative expense in the current year.

Other Income (Expenses)Total other expenses were $(438,155) for the nine months ended September 30, 2009 as compared to total other income $17,281 for the nine months ended September 30, 2008. The other income decreased significantly was due to the loss on disposal of unused patent right in the current year.

 Income Tax Under the laws of the PRC, CHFY, as a wholly foreign owned enterprise, is exempted from corporate income tax for its first and second profitable years and a 50% reduction in income tax in the subsequent three years. Year 2007 and 2008 were Chang Fang Yuan’s first and second profitable years and therefore, we were entitled to the income tax exemption during year 2008 and 2007, respectively. Commencing from the first quarter 2009, Chang Fang Yuan is subject to corporation income taxes (“CIT”) in PRC at 15% rate.

Net IncomeOur net income was approximately $3.04 million for the nine months ended September 30, 2009 as compared to approximately $3.85 million for the nine months ended September 30, 2008, a decrease of approximately $0.81 million or 21 percent. This decrease was mainly due to the disposal loss of intangible patent right in the current year. The fully diluted  EPS was $0.16 for the nine months ended September 30, 2009 compared to that of $0.26 in the same period of 2008.

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Foreign Currency Translation Adjustment   Our major operations are in the PRC, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between the United States dollar and the Chinese Renminbi. Sales of the Company’s products are in Renminbi. During 2003 and 2004 the exchange rate of RMB to the dollar remained constant at 8.26 RMB to the dollar. On July 21, 2005, the Chinese government adjusted the exchange rate from 8.26 to 8.09 RMB to the dollar. In 2007, the RMB kept on appreciating to the dollar. As of September 30, 2009, the market foreign exchanges rate was increased to 6.8263 RMB to one dollar. The financial statements of Chang Fang Yuan (whose functional currency is the RMB) are translated into US dollars using the closing rate method. The balance sheet items are translated into US dollars using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the year. All exchange differences are recorded within equity. The foreign currency translation (loss) gain for the nine months ended September 30, 2009 and 2008 were $(12,182) and $1,641,584, respectively.

Liquidity and Capital Resources

The Company’s operations were initially capitalized by cash contributed to CHFY with a manufacturing facility and intellectual property contributed by the Company’s shareholders. Since that time the Company had funded operations primarily by means of loans from its shareholders and management in addition to its internally generated cash flow. As a result, on September 30, 2009, the Company owed $288,468 to certain members of its management and shareholders. These said loans do not bear interest and have not set repayment date, and thus they were recorded as current liabilities.

On September 30, 2009 the Company had the working capital of $13,191,999, which increased in an amount of $4,509,097 as compared to December 31, 2008 as its cash and equivalents balance increased significantly and accounts receivable balance increased during the current year.

 Net cash provided by operating activities was $2,924,340 for the nine months ended September 30, 2009, compared with $5,808,893 in the same period of 2008. The decrease was primarily attributable to increased outstanding account receivable in the year of 2009.

Net cash used in investing activities was approximately $52,073 for the nine months ended September 30, 2009, compared with $2,388,922 in the same period 2008. The decrease was primarily attributable to the purchase of fixed assets in the year of 2008.

Net cash outflow from financing activities was $1,005,642 for the nine months ended September 30, 2009, compared with net cash outflow from financing activities of $3,149 in the same period 2008. The financing cash outflow increase was primarily due to the fact that the amount returned to shareholders or officers was more than the amount borrowed from them during the current year as compared to year 2008.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition or results of operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of its disclosure controls and procedures as of September 30, 2009. 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 ensure 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 ensure that information the Company is required to disclose in the reports it files with the Commission is accumulated and communicated to its Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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, 2009 for the purposes described in this paragraph.

Changes in Internal Control Over Financial Reporting. During the most recent quarter ended September 30, 2009, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) ) 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

None

Item 1A.   Risk Factors

Not applicable.

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

We have not sold any equity securities during the quarter ended September 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

There were no defaults upon senior securities during the three-month period ended on September 30, 2009.

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

No matters were submitted to a vote of security holders during the three-month period ended on September 30, 2009.

Item 5.  Other Information

Not applicable

Item 6.   Exhibits

Exhibit Number   Description

31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer 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 Chief Financial Officer 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 Green Material Technologies, Inc.
Date:  November 16, 2009	By:	/s/  Zhonghao Su
		Zhonghao Su, Chief Executive Officer

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