CIIG Merger 10K 2009 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

ANNUAL REPORT

ON FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 2009

Commission File Number 001-34150

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		88-0484183
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Room D, 2F, Building 12, Xinxin Huayuan, Jinshui Road, Zhengzhou, Henan Province, The People’s Republic of China

(Address, including zip code, of principal executive offices)

(011) 86-375-2754377

(Registrants’ telephone number, including area code)

Securities Registered Under Section 12(b) of the Exchange Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

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 and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ('232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting Company x

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

Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 2008 based upon the closing price was approximately $40,448,000.

The number of outstanding shares of the registrant’s Common Stock on September 28, 2009 was 80,000,000.

China Infrastructure Investment Corporation

Annual Report on Form 10-K

For the Year Ended June 30, 2009

Table of Contents

PART I DESCRIPTION OF BUSINESS		3

ITEM 1.	Business	3

ITEM 1A.	Risk Factors	11

ITEM 1B.	Unresolved Staff Comments	17

ITEM 2.	Properties	18

ITEM 3.	Legal Proceedings	18

ITEM 4.	Submission of Matters to a Vote of Security Holders	18

PART II		19

ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19

ITEM 6.	Selected Financial Data	20

ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	30

ITEM 8.	Financial Statements and Supplementary Data	30

ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	30

ITEM 9A(T).	Controls and Procedures	31

ITEM 9B.	Other Information	31

PART III		31

ITEM 10.	Directors, Executive Officers, and Corporate Governance	31

ITEM 11.	Executive Compensation	35

ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38

ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	40

ITEM 14.	Principal Accountant Fees and Services	41

PART IV		41

ITEM 15.	Exhibits and Financial Statement Schedules	41

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PART I

DESCRIPTION OF BUSINESS

ITEM 1.

Business

Forward Looking Statements

This Report contains forward-looking statements. Generally, the words “believes”, ”anticipates”, “may”, “will”, “should”, “expect”, “intend”, “estimate”, “continue” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the SEC from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements. It is important to note that actual results could differ materially from historical results or those contemplated in the forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, and include risks associated with our target markets and risks pertaining to competition, other trend information and our ability to successfully enhance our operations. Factors that could cause actual results to differ materially include, but are not limited to, those identified in “Item 1A-Risk Factors” and in other of our filings with the U.S. Securities and Exchange Commission. All references to “China Infrastructure Investment Corporation”, “us”, “we” or the “Company” in this Annual Report on Form 10-K mean China Infrastructure Investment Corporation, a Nevada corporation, and all entities owned or controlled by China Infrastructure Investment Corporation, except where it is made clear that the term only means the parent company.

Prior Operations of the Company

Learning Quest Technologies, Inc. (n/k/a China Infrastructure Investment Corporation and hereinafter the “Company”) was formed as a Nevada corporation on January 11, 2001, originally under the name of “Learning Quest Technologies, Inc.” We were in the business of developing, licensing and marketing educational products and services. Our business model centered on the development and distribution of high quality, educational tools and solutions for creating, authoring, publishing, presenting and selling education and training materials and content via the Internet. We commenced limited operations but were unsuccessful in fully implementing our business plan. We ceased operations and focused our efforts on seeking a business opportunity.

On February 8, 2008, we entered into a Share Exchange Agreement with Color Man Holdings Limited, a British Virgin Islands company (“CMH”) and Joylink Holdings Limited, a British Virgin Islands company and the sole stockholder of CMH (“Joylink”). As a result of the share exchange, we acquired all of the issued and outstanding securities of CMH from Joylink in exchange for 54,400,000 newly–issued shares of our common stock (the “Exchange”).

Current Operations of The Company

History and Organizational Structure of CMH and Wise On China Limited

CMH was formed on April 11, 2005 as a British Virgin Islands company. Upon the consummation of the Exchange, the Company acquired Ten (10) shares of CMH’s capital stock, representing one hundred percent (100%) of the total issued and outstanding shares of capital stock of CMH. Wise On China Limited (“WOC”) was established and incorporated on November 2, 2005. CMH’s sole business is to act as a holding company for WOC, and WOC’s sole business is to act as a holding company for Pingdingshan Pinglin Expressway Co., Ltd (“Ping”). CMH owns one (1) share of WOC. Neither CMH nor WOC have a Board of Directors, however each company has one (1) Executive Director that serves as the legal representative and which may appoint a General Manager to lead each company’s routine operations. CMH’s current Executive Director is RCD (Nominee) Limited and WOC’s current Executive Director is Siu Choi Fat. Both CMH and WOC have their office located at Room 42, 4F, New Henry House, 10 Ice House Street, Central, Hong Kong.

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History of Ping and the Pinglin Expressway

In accordance with the PRC’s National Expressway Network Plan formulated by the State and “the Tenth Five-Year Plan” of Henan Province on the Comprehensive Traffic System Development Plan formulated by the Henan government for the purpose of completing the Pingdingshan-Linru portion of the Nanjing-Luoyang expressway (also referred to herein as the “Nanluo Expressway”), Ping competed in and won an open bid to fund, operate and manage such Pingdingshan-Linru portion in early 2003.

Thereafter, Ping was incorporated under the laws of the PRC on May 12, 2003 by four (4) investors, Henan Shengrun Venture Investment Management Co., Ltd. (“HSV”), Henan Pingdingshan Zhongya Road and Bridge Construction Co., Ltd. (“HPZ”), Pingdingshan Expressway Construction Co., Ltd. (“PECC”) and Zhongyuan Trust & Investment Co., Ltd. (“ZTI”). At establishment, the percentage of each party’s equity interest was 46%, 18%, 18% and 18%, respectively. In May 21, 2007, PECC, HPZ and ZTI transferred all of their shares to HSV and Li Xipeng. After the transfer, Ping was held by HSV and Li Xipeng with equity interests of 95% and 5%, respectively. On June 18, 2007 (effective July 30, 2007), HSV and Li Xipeng entered into an equity transfer agreement pursuant to which they transferred all of their shares to WOC. the Company’s approved operation tenure is thirty (30) years.

Currently, Ping is wholly-owned by WOC. WOC has contributed RMB 260,000,000 (US$33,090,802) in registered capital of Ping with a total investment equal to RMB 750,000,000 (US$95,454,237). Ping’s office is located at Pinglin Toll Road Station, New District, Pingdingshan City, Henan Province, the PRC.

Current Business of Ping

Ping was founded with the purpose of providing to society high quality infrastructure services and to promote regional economic development by investing in, constructing, operating and managing an expressway property from the cities of Linru to Pingdingshan in Luoyang-Nanjing, the PRC, and the rental of petrol stations and service districts along the toll roads thereon. Such expressway is referred to hereinafter as the “Pinglin Expressway” or the “Expressway” ..

With the approval from Henan Communications Bureau and the State Development and Reform Committee of China [NO. 2003-1784], the Company is permitted to construct and operate the Pinglin Expressway in Henan Province for thirty (30) years from 2003. Pursuant to the permission from Henan Communications Bureau and Henan Development and Reform Committee [NO. 2005-1885], the Company is entitled to operate six (6) toll gates. All the rates applicable to the automobiles are defined by the Henan Communications Bureau and Henan Development and Reform Committee.

The location of the Expressway is in Henan Province in central China, and is a hinge terminal of the traffic backbone throughout China. The “five (5) longitudinal roads and seven (7) transverse roads” in the national expressway network plan are intercrossed with each other in Henan, extending more than 1,000 km, and more than sixty percent (60%) of vehicles are those passing through Henan from other provinces.

The Pinglin Expressway is a significant part of the Nanluo Expressway, a national trunk in the expressway network in China. The Nanluo Expressway links the northwestern regions to the southeastern coastal regions of the PRC. The construction of Pinglin Expressway started from October 23, 2003 and completed in two (2) phases. The first phase of the construction which covered the part with a length of approximately 86 kilometers, linking Ruzhou and Pingdingshan in Henan Province, commercially opened on December 31, 2005. On May 31, 2006, the second phase of the construction, with the length of approximately 21 kilometers, linking Pingdingshan and Yexian in Henan Province was completed. With the operation of Pinglin Expressway, the key transport artery, national trunk Nanluo Expressway was entirely opened to traffic.

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Today, the Pinglin Expressway is a dual carriageway four (4) lane expressway, the toll section of which is 106 km in length. Toll revenue from the passing vehicles through the Expressway’s six (6) toll gates (South Pingdingshan, Pingdingshan New Town, Baofeng, Xiaotun, Ruzhou and Wenquan) is the primary source of the Company’s earnings. The Expressway is also located between two (2) key cities, Luoyang and Luohe. The Expressway extends from east to west, from Shilipu (the end of the Luohe-Pingdingshan expressway), through Yexian and Pingdingshan and then to New Xiying village at the joint of Pingdingshan and Luoyang. The road is lined with the Lianhuo (Lianyungang-Huoerguosi) national highway through the ringroad in Luoyang, and then extends to the southeast of Luohe City and connects with the Beijing-Zhuhai national highway into a network to form a convenient channel between Luoyang and Luohe. In addition to the traffic flow of the line itself, we believe it also attracts the traffic flow from the Lianhuo highway to Zhengzhou then to the Beijing-Zhuhai national highway to alter to Luoyang-Luohe section of the Luonan route. Furthermore, the Expressway extends east to link the highway network of the Jiangsu and Anhui Provinces and also links the seaports, including Shanghai.

The Company’s operating income is primarily achieved through toll charges on vehicles passing through the Expressway’s toll gates. The standard of toll charges is approved and set by the provincial price administrative bureau. The Company's revenue equals the relevant standard toll rate of the type of vehicles multiplied by the relative miles of travel through the Expressway, and is cleared by the Henan Expressway System Toll Collection Center each month (the Expressway has a charge system and clearing center which calculates and allocates toll charge income according to the charge standards and the miles of travel of vehicles on the Expressway). The Company is specialized in the operation and management of expressways. The maintenance projects are outsourced to professional road construction enterprises.

The Company began generating operating revenue in January 2006. The Expressway was not fully operational until June 2006, therefore our operating income was low and growth was moderate. After several years of operations, awareness of the Expressway has gradually increased, and passenger and commercial vehicle traffic continues to increase. We believe that along with income growth in the future, the profit earning capacity of the Company will improve steadily.

Enterprise Strategy

Henan is the province with the largest population in China. However, its urbanization rate is far below the national average level. With rapid economic and social development and the accelerated process of urbanization in Henan, demand is growing rapidly for infrastructure, such as the Expressway and other transportation infrastructure, urban facilities such as heating, water supply, and sewerage treatment. The existing infrastructure can no longer meet the needs of the region’s social development.

Because the Chinese government’s financial revenue growth is limited, its investment alone is unable to build huge infrastructure projects in a relatively short period of time. In order to attract other funding, local governments are willing to grant to commercial companies the right to invest in the construction and operation of projects, or directly sell the equity of the established enterprises to recover their early input.

The Company plans to invest in the construction and purchase of additional expressways, thermoelectricity, water supply, sewage treatment facilities and other infrastructure assets with good profit prospects in the next few years. In doing so, it intends to seize the current historic opportunity of rapid development of infrastructure in China and Henan. We believe that this will rapidly strengthen and expand the Company’s place in infrastructure industries. This should also create advantages of scale thereby further reducing costs of operation. The amount of investment in infrastructure is often relatively large, and investment funds need to be in position within two (2) or three (3) years in advance, therefore the amount of capital from the Company’s operations alone cannot meet the demand for investment in the future. The Company desires to actively participate in the capital markets and to use various channels of financing to enhance its ability to raise funds, thereby promoting and achieving its long-term development strategies.

Based on the operation and management of the Expressway, the Company desires to take full advantage of free cash flow and capital market instruments to invest in the construction or purchase of infrastructure assets and to exploit all the advantages in management, government relationships and stockholder support to make the Company a professional, continuously-growing infrastructure investment operator.

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In addition, the Company intends to energetically push forward its standard management, human-based services, establish an information management platform and continue to improve the road conditions and traffic capacity so as to provide travelers with a smooth, safe and comfortable traveling environment. With the increasing influence of the Expressway on the substitution and division of other transportation lines in the context of the great macroeconomic environment which is resulting in continuous and rapid growth in China and given the specific area where the roads are located, we believe that the Company’s income from toll and profits will continue to increase.

General Overview on Industry and Market

General

With efforts to advance China’s expressway system out of the developmental stage, the PRC issued a series of polices to encourage the development of expressways. China’s main objectives with respect to road construction during the “Tenth Five-Year Plan” are (a) that total road mileage will reach 2.1~2.3 million km in 2010, (b) that the main national highways with “five (5) in longitudinal direction and seven (7) in transverse” will be built across China, (c) that eight (8) interprovincial roads will be built in the western areas where the expressway will connect ninety percent (90%) of the cities with more than 200,000 in population and (d) that the expressway network will be developed in the eastern parts of China. In 2020, the PRC estimates that China’s total road mileage will extend more than 70,000 km, connecting all cities with more than 200,000 in population and forming a nationwide expressway network.

As compared with common roads, the expressways have distinct economic and technical characteristics and are indicative of the advanced productivity in road transportation. According to the Pingdingshan-Linru Expressway Project Feasibility Study Report, although expressways only account for approximately 1.72% of the total road mileage in China, the traffic volume undertaken thereby is a quarter of the total volume. At present, the running speed of China’s motor vehicles in the expressways are two times that of secondary roads; a two-way expressway with four (4) lanes covers an area 2.5 times that of a common secondary road, and its traffic capacity is eight (8) to ten (10) times that of the latter (as such figures are represented in the aforementioned PL Report). We believe that once the expressways are connected with each other, it will have an immense opportunity for economic growth.

We believe that as a result of recent progress in the social and economic development in China, road transportation has taken on an important position among the five (5) areas constituting the comprehensive transportation system (road, railway, airway, watercourse and pipeline). We believe that the expressway as a modern traffic infrastructure have become a backbone channel due to its many characteristics such as large traffic volume, high speed, far-reaching influence and extensive penetration, thus establishing its crucial position in China’s comprehensive transportation system. We believe that expressways highlight the road grade standard and running speed and thus effectively improve the “bottleneck” situation with traffic transportation in some areas as well as promote the optimization and upgrade of the road network. Along with national economic development, we believe China’s passenger and freight transportation will continue to rise. We believe that demand for special transportation, land development, regional economic development and an increase in people’s travel demands have resulted from an increase in economic income and a change in life style, and that such demands will require continued development of expressways to satisfy such demands.

Socio-Economic Conditions of Henan Province and Pingdingshan

Henan Province has the largest population in China and its GDP in 2008 ranked fifth (5th) in the whole country. In 2008, Henan’s GDP growth increased by 12.1% up from the previous year, higher than the national growth rate of 9.0%. Pingdingshan is an important energy base and industrial city in Henan Province, which has abundant coal and salt resources. Coal mining, electricity, chemicals, and the steel and mechanical industries are the pillar industries of the city. In 2008, Pingdingshan’s GDP ranked fourth in Henan Province and its growth rate was higher than the average level of the whole province. Pingdingshan had a population of 5.06 million in 2006.

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The Road Network Conditions of Henan Province and Pingdingshan City

Henan Province, which we believe has unique road advantages, is located in the central part of China. There are nine (9) national expressways including Lianhuo and Beijing-Hong Kong-Macao, and nine (9) national ways including No. 107 and No. 310, both of which pass through Henan. At the end of 2008, the total provincial traffic mileage had achieved 240,000 km. The density of the road network reached 144.1 km per hundred square kilometer and with the rapid development of expressways, traffic mileage had reached 4,841 km by the end of 2008, ranking first in the country (these figures have been quoted from the 2008 Annual Report of the PRC listed company Central Expressway, Symbol: 600020).

According to the Annual Report cited above, there are two (2) expressways, two (2) national roads and four (4) provincial roads which pass through Pingdingshan. However, the proportion of high-grade roads mileage is very low. The comprehensive technical level of the city road network ranges between level three (3) and level four (4), and it is accompanied by serious problems such as disorderly traffic, accidents and traffic jams. The average speed of the road network is only 37.61 km and the integrated saturation is 1.5, fifty percent (50%) over the normal capacity. As expressways under-construction become open to traffic in succession, we believe road network conditions will gradually improve.

Main Advantages

Geographic Location

The infrastructure has a natural characteristic of regional monopolization, and there is no other resource to replace it within a specific region. Therefore, the geographic location decides the market space of infrastructure assets and has a substantial influence on the profit-earning capability of such assets, and so does the expressway industry. The Pinglin Expressway is located between Luoyang and Pingdingshan, two (2) major industrial cities among the city group in central China and Henan Province. In the north, the Expressway connects with the northwest area through the Lianyungang-Huo’erguosi expressway in Luoyang, and in the east connects to Anhui, Jiangsu, Zhejiang and Shanghai through Luohe city. In the south, the Expressway connects with the Beijing-Zhuhai expressway through Luohe City. With the gradual emergence of the effects produced by China’s initialization of its domestic demand policy, we believe the logistics between the coastal areas and inland China will result in further growth.

Ping’s Corporate Governance Structure

The Company has a standard and highly effective corporate governance structure. Ping has implemented a management system of responsibility by the General Manager under the leadership of its Board of Directors and has established an internal control system. Ping currently implements a series of incentive and binding policies to encourage management to create value for its stockholder, thus avoiding the defects commonly encountered in state-owned enterprises such as internally-connected person control and absence of the owners. We believe these standards and practices will ensure that the Company’s operating activities will not deviate from the track of healthy development.

Governmental Relationships

The operation of the infrastructure industry will not be separated from the support and cooperation of the governmental departments. Whether the infrastructure is working at optimum levels is associated with the integral competitiveness of a city and even a district. Therefore, each local government attaches great importance to the construction and operation of the infrastructure and provides a strategic priority to its development. Henan is located in central China, and has been positioned as an agricultural province for a long time, where the urbanization rate is lower than the average level of the whole country, the infrastructures are backward and the local governments have more eagerness to advance the infrastructure. However, due to certain restrictions on local finance, it is impossible to complete such a significant project only by depending on the investment from the government. During the construction of Pinglin Expressway, the Company experienced many links such as project examination and approval, bank funding, license authorization, charging approval and governmental custody and high efficiency management. As a result, we believe Ping has achieved recognition from the various governmental departments and has established a good cooperative relationship with them. We believe this will also establish a solid basis for long-term development of the Company.

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Financial Advantages

We believe the Company's major financial advantages to be (a) sound operation, (b) low market risk, (c) no cyclical fluctuation, (d) strong capacity of cash flow from operation, (e) large free cash flow and (f) strong solvency and capital accumulation capacity. Furthermore, infrastructure industries are in line with the state’s industrial policy and concessions on charge standards and interest rates on bank loans.

Qualifications

The Company entered into that certain Chartered Right Agreement on Pingdingshan-Linru Expressway Project on April 10, 2003 with the Pingdingshan Communications Bureau (authorized by Pingdingshan People’s Government), upon which, the Company is entitled to the rights of construction, operation and toll collection. A copy of such Agreement is referenced to this Report as Exhibit 10.2.

In accordance with Y. F. G. S. F. [2006] No. 1460 filed jointly by Henan Provincial Development and Reform Commission and Henan Provincial Department of Communications, the toll collection standard of Pingdingshan-Linru expressway was specially increased on October 20, 2006, and the charging standard after the adjustment is as follows:

	Type of Vehicle	Charging: RMB: Yuan/car km	Charging: USD: Dollar/car km
Type A	Small passenger car, truck loaded below 2 tons	0.55	0.0759
Type B	Middle-sized passenger car, truck loaded 2-5 tons	0.75, 0.80	0.1035, 0.1104
Type C	Large-sized passenger car, truck loaded 5-8 tons	1.10, 1.40	0.1518, 0.1931
Type D	Truck loaded 8-20 tons l	1.75	0.2414
Type E	Truck loaded 20-40 tons	2.10	0.2897
Type F	Truck loaded more than 40 tons	RMB0.08/ton. km	0.0110/ton.km

Technical Information

According to the rules in “Road Engineering Technical Standard” issued by Ministry of Communications of PRC, the main technical indexes of Pinglin Expressway are in the table as follows:

Construction mileage	107km
Grade of the Road	Dual-carriageway with two (2) lanes each direction
Design Speed	120km/h
Road Surface Type	Asphalt concrete
Design Load for Bridge/Culvert	Automobile - S 20, Trailer-120
Terrain	Plain lightly undulate area

Employees

Ping attaches great importance to the cultivation of professional managerial persons and pursues a talent policy of retaining professionals by undertaking an enterprise culture. Through continuously improving its corporate governance structure, management system and talent introduction and incentive system, Ping has created an excellent working atmosphere and development opportunity, which integrates the individual occupational plan with the Company’s development and reduces the turnover of the employees, especially the core technicians, thus forming a relatively stable and high-quality employee team. Figure 1 below sets forth the current institutional structure of Ping:

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As of June 30, 2009, we had approximately 375 full-time employees. The number of employees by functions is listed below:

	Number of Employees		% of Total Employees
Toll Collection Operations		264	70.4
Maintenance and Operations		43	11.5
Finance and Accounting		5	1.2
Administration		52	14.0
Executive Management		11	2.9
Total		375	100

Institutional Structure

There are six (6) departments in the Company, and the main function of each department is as follows:

Operation and Management Department: This Department is responsible for toll collection management, routine maintenance of operating facilities and statistics of traffic volume.

Engineering Maintenance Department: This Department is responsible for the organization of Expressway maintenance, for managing infrastructure and maintenance projects, for coordinating the relationship between the parties participating in the projects, for managing project quality and for selecting and purchasing fixed assets and project materials.

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Road Administration Department: This Department is responsible for implementing national laws and regulations on the expressways, maintaining road assets and property rights according to the law, supervising and investigating expressway cases and other road administration such as comprehensive management and special treatment and supervising the maintenance work.

Planned Finance Department: This Department is responsible for setting and optimizing the financial system and flow, conducting basic accounting checks, controlling and managing financial matters, managing capital plans, managing contracts, researching and preparing mid and long term development plans, conducting internal audits and other matters related to industry, commerce and taxation.

Human Resources Department: This Department is responsible for drafting human resources plans and allocating the staff, organizing and implementing staff training and career development, providing performance and salary management as well as other personnel services.

Office Department: This Department is responsible for managing administrative affairs, drafting the Company’s systems and documents, managing the archives, stamps and vehicles and organizing and administrating conference-related matters.

Intellectual Property

We currently do not own any copyrights, trademarks or patents.

Competition

Our competition consists of other expressways. As newly-constructed expressways continue to open, the expressway network improves and the density of road network increases, a portion of traffic flow will change whereby travelers will opt for shorter traveling routes, while the expressway network has the clustering effect on traffic flow. Thus, relevant expressways will form competition against each other. The Pinglin Expressway has its competitive advantage in route; according to China’s expressway general plan, it will be the shortest route in the province.

Secondly, the common roads have competition between each other. Although on the common roads there are some problems such as low velocity, high oil consumption and low safety, the charges for the vehicle are inexpensive so that some of the traffic flow may be attracted. However, as the economy grows and people’s income rises, we believe time and safety factors will be more of a priority, especially in long distance road transportation, and the advantage of expressways will be prominent.

Thirdly, there are competitions from railways and air transportation. The capacity of air-express is limited, and it costs much more than expressways do, so it is restrained in its availability to the general public. The railway transportation has a lower cost, but it is different from the road transportation due to different service objects. Moreover, the total social demand for passenger and freight transportation is increasing, so the increase in the railway transportation capacity can’t completely offset by the growth in demand for expressways.

Research and Development

The Company did not incur any expenses on research and development during the fiscal years ended June 30, 2009 or June 30, 2008.

Environmental Laws

The Company did not incur any expenses in connection with compliance with environmental laws (federal, state, local and foreign) during the fiscal year ended June 30, 2009.

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ITEM 1A.

Risk Factors

The financial condition, business, operations, and prospects of the Company involve a high degree of risk. You should carefully consider the risks and uncertainties described below, which constitute the material risks relating to the Company, and the other information in this report. If any of the following risks are realized, the Company’s business, operating results and financial condition could be harmed and the value of the Company’s stock could suffer. This means that investors and stockholders of the Company could lose all or a part of their investment.

RISKS RELATING TO THE PEOPLE’S REPUBLIC OF CHINA

Certain Political and Economic Considerations Relating to China Could Adversely Affect Our Company.

The PRC is transitioning from a planned economy to a market economy. While the PRC government has pursued economic reforms since its adoption of the open-door policy in 1978, a large portion of the PRC economy is still operating under five-year plans and annual state plans. Through these plans and other economic measures, such as control on foreign exchange, taxation and restrictions on foreign participation in the domestic market of various industries, the PRC government exerts considerable direct and indirect influence on the economy. Many of the economic reforms carried out by the PRC government are unprecedented or experimental, and are expected to be refined and improved.

Other political, economic and social factors can also lead to further readjustment of such reforms. This refining and readjustment process may not necessarily have a positive effect on our operations or future business development. Our operating results may be adversely affected by changes in the PRC’s economic and social conditions as well as by changes in the policies of the PRC government, such as changes in laws and regulations (or the official interpretation thereof), measures which may be introduced to control inflation, changes in the interest rate or method of taxation, and the imposition of additional restrictions on currency conversion.

The Chinese Government Exerts Substantial Influence Over The Manner In Which We Must Conduct Our Business Activities Which Could Adversely Affect Our Company.

China only recently has permitted provincial and local economic autonomy and private economic activities. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and State ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to toll collection standards, taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

The Chinese Legal System Has Inherent Uncertainties That Could Limit The Legal Protections Available To You.

Our contractual arrangements are governed by the laws of the People’s Republic of China. China’s legal system is based upon written statutes. Prior court decisions may be cited for reference but are not binding on subsequent cases and have limited value as precedents. Since 1979, the Chinese legislative bodies have promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their non-binding nature, the interpretation and enforcement of these laws and regulations involve uncertainties, and therefore you may not have legal protections for certain matters in China.

- 11 - -

All Of Our Assets Are Located In China, Any Dividends Of Proceeds From Liquidation Is Subject To The Approval Of The Relevant Chinese Government Agencies.

Our assets are located inside China. Under the laws governing foreign invested enterprises in China, dividend distribution and liquidation are allowed but subject to special procedures under the relevant laws and rules. Any dividend payments will be subject to the decision of our Board of Directors and subject to foreign exchange rules governing such repatriation. Any liquidation is subject to both the relevant government agency’s approval and supervision as well the foreign exchange control. This may generate additional risk for our investors in case of dividend payments and liquidation.

Future Inflation In China May Inhibit Our Activity To Conduct Business In China.

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation. These factors have led to the adoption by Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. While inflation has been more moderate since 1995, high inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China and thereby harm our business operations.

Currency Conversion And Exchange Rate Volatility Could Adversely Affect Our Financial Condition.

The PRC government imposes control over the conversion of Renminbi into foreign currencies. Under the current unified floating exchange rate system, the People’s Bank of China (PBOC) publishes an exchange rate, which we refer to as the PBOC exchange rate, based on the previous day’s dealings in the inter-bank foreign exchange market. Financial institutions authorized to deal in foreign currency may enter into foreign exchange transactions at exchange rates within an authorized range above or below the PBOC exchange rate according to market conditions.

Pursuant to the Foreign Exchange Control Regulations of the PRC issued by the State Council which came into effect on April 1, 1996, and the Regulations on the Administration of Foreign Exchange Settlement, Sale and Payment of the PRC which came into effect on July 1, 1996, regarding foreign exchange control, conversion of Renminbi into foreign exchange by Foreign Investment Enterprises (“FIEs”), for use on current account items, including the distribution of dividends and profits to foreign investors, is permissible. FIEs are permitted to convert their after-tax dividends and profits to foreign exchange and remit such foreign exchange to their foreign exchange bank accounts in the PRC. Conversion of Renminbi into foreign currencies for capital account items, including direct investment, loans, and security investment, is still under certain restrictions. On January 14, 1997, the State Council amended the Foreign Exchange Control Regulations and added, among other things, an important provision, which provides that the PRC government shall not impose restrictions on recurring international payments and transfers under current account items.

Enterprises in the PRC (including FIEs) which require foreign exchange for transactions relating to current account items, may, without approval of the State Administration of Foreign Exchange, or SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks by providing valid receipts and proofs.

Convertibility of foreign exchange in respect of capital account items, such as direct investment and capital contribution, is still subject to certain restrictions, and prior approval from the SAFE or its relevant branches must be sought.

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Since 1994, the exchange rate for Renminbi against the United States dollars has remained relatively stable, most of the time in the region of approximately RMB8.3 to US$1.00. However, in 2005, the Chinese government announced that would begin pegging the exchange rate of the Chinese Renminbi against a number of currencies, rather than just the U.S. Dollar. As our operations are primarily in China, any significant revaluation of the Chinese Renminbi may materially and adversely affect our cash flows, revenues and financial condition. For example, to the extent that we need to convert United States dollars into Chinese Renminbi for our operations, appreciation of this currency against the United States dollar could have a material adverse effect on our business, financial condition and results of operations. Conversely, if we decide to convert Chinese Renminbi into United States dollars for other business purposes and the United States dollar appreciates against this currency, the United States dollar equivalent of the Chinese Renminbi we convert would be reduced.

The Value Of Our Securities Will Be Affected By The Foreign Exchange Rate Between U.S. Dollars And Renminbi.

The value of the Company’s Common Stock will be affected by the foreign exchange rate between U.S. dollars and Renminbi, and between those currencies and other currencies in which our sales may be denominated. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operational needs and should the Renminbi appreciate against the U.S. dollar at that time, our financial position, the business of the Company, and the price of our Common Stock may be harmed. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of declaring dividends on our Common Stock or for other business purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar equivalent of our earnings from our China operations would be reduced.

You May Experience Difficulties In Effecting Service Of Legal Process, Enforcing Foreign Judgments Or Bringing Original Actions In China Based On United States Or Other Foreign Laws Against Us.

We conduct our operations in China and a significant portion of our assets is located in China. In addition, our directors and executive officers reside within China, and substantially all of the assets of these persons are located within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon those directors or executive officers, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Moreover, our Chinese counsel has advised us that China does not have treaties with the U.S. and many other countries that provide for the reciprocal recognition and enforcement of judgment of courts. As a result, recognition and enforcement in China of judgments of a court of the U.S. or any other jurisdiction in relation to any matter may be difficult or impossible.

Our Significant Amount Of Deposits In Certain Banks In China May Be At Risk If These Banks Go Bankrupt During Our Deposit Period.

As of June 30, 2009, we had approximately RMB35.4 million (approximately US$5.2 million) in banks in China, which almost constitute all of our total cash. The terms of these deposits are, in general, up to twelve (12) months. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006, which has come into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since China’s concession to WTO, foreign banks have been gradually permitted to operate in China and have been severe competitors against Chinese banks in many aspects, especially since the opening of Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those banks in which we have deposits has increased. In the event of bankruptcy of one of the banks which holds our deposits, we are unlikely to recover our deposits back in full since we are unlikely to be classified as a secured creditor based on PRC laws.

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RISKS RELATING TO OUR BUSINESS

Because Our Operating History Is Limited And The Revenue And Income Potential Of Our Business And Markets Are Unproven, We Cannot Predict Whether We Will Meet Internal or External Expectations Of Future Performance.

We believe that our future success depends on our ability to significantly increase revenue from toll collections, of which we have a limited history. The Expressway marketplace features high investment and a long recovery period. The main market risk in connection with our Company is the future traffic volume less than the predicted amount. Accordingly, our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies with a limited operating history. These risks include our ability to:

offer new and innovative services on the Expressway;

attract billboard advertisers;

attract more travelers;

respond effectively to competitive pressures and address the effects of strategic relationships or corporate combinations;

maintain our current, and develop new, strategic relationships;

increase awareness of the Expressway and continue to build traveler loyalty;

attract and retain qualified management and employees; and

upgrade our technology to support increased traffic and expanded services.

Our Business And Growth Could Suffer If We Are Unable To Hire And Retain Key Personnel That Are In High Demand.

We depend upon the continued contributions of our senior management and other key personnel, including Li Xipeng and Zhang Chunxian. The loss of the services of any of our executive officers or other key employees could have a material adverse effect on our business, operations, revenues or prospects. We do not maintain key man insurance on the lives of these individuals at present. As we plan to expand, we will have to attract managerial staff. We may not be able to identify and retain qualified personnel due to our lack of understanding of different cultures and lack of local contacts. This may impede any potential expansion. Our future success will also depend on our ability to attract and retain highly skilled and qualified technical, engineering, managerial, finance, marketing, security and customer service personnel in China. Qualified individuals are in high demand, and we may not be able to successfully attract, assimilate or retain the personnel we need to succeed.

If We Need Additional Capital To Fund Our Growing Operations, We May Not Be Able To Obtain Sufficient Capital And May Be Forced To Limit The Scope Of Our Operations.

We may experience increased capital needs and we may not have enough capital to fund our future operations without additional capital investments. Our capital needs will depend on numerous factors, including (i) our profitability; (ii) the success of our competitors; (iii) the amount of our capital expenditures; and (iv) new infrastructure project investment. We cannot assure you that we will be able to obtain capital in the future to meet our needs.

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If we cannot obtain additional funding, we may be required to:

reduce our investments in infrastructure industry;

limit our expansion efforts; and

decrease or eliminate capital expenditures.

Such reductions could materially adversely affect our business and our ability to compete. Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing stockholders. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

Competition With The Railways and Airways in China May Have A Negative Impact On Our Business

With the rapid development of the domestic expressway, China is also giving great support to the development of railways and airways. The construction of a special passenger railway and the speed-up of railways in general will be able to greatly improve the transport capacity of passengers and freight by railway and bring about a division of the target clients of the Expressway which could be an impediment to our growth and have a negative impact on our revenues.

RISKS RELATING TO OUR COMMON STOCK

Our Common Stock Price Is Volatile And Could Decline In The Future.

The stock market in general and the market price for other companies based in the PRC have experienced extreme stock price fluctuations. In some cases, these fluctuations have been unrelated to the operating performance of the affected companies. Many companies in the toll road industry have experienced dramatic volatility in the market prices of their common stock. We believe that a number of factors, both within and outside of our control, could cause the price of our Common Stock to fluctuate, perhaps substantially. Factors such as the following could have a significant adverse impact on the market price of our Common Stock:

announcements of technological innovations by us or our competitors;

our ability to obtain additional financing and, if available, the terms and conditions of the financing;

our financial position and results of operations;

litigation;

period-to-period fluctuations in our operating results;

changes in estimates of our performance by any securities analysts;

new regulatory requirements and changes in the existing regulatory environment;

the issuance of new equity securities in a future offering;

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changes in interest rates;

changes in toll road standards;

market conditions of securities traded on the NASDAQ Capital Market;

investor perceptions of us and the toll road industry generally; and

general economic and other national conditions.

We May Have Difficulty Raising Necessary Capital To Fund Operations As A Result Of Market Price Volatility For Our Shares Of Common Stock.

In recent years, the securities markets in the United States have experienced a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values or prospects of such companies. For these reasons, our shares of Common Stock can also be expected to be subject to volatility resulting from purely market forces over which we will have no control. If our business development plans are successful, we may require additional financing to continue to develop and exploit existing and new technologies and to expand into new markets. The exploitation of our technologies may, therefore, be dependent upon our ability to obtain financing through debt and equity or other means.

Our Common Stock Is Considered A “Penny Stock” And As A Result, Related Broker-Dealer Requirements Affect Its Trading And Liquidity.

Our common stock is deemed to be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the Exchange Act. Penny stocks are stocks:

With a price of less than $5.00 per share;

That are not traded on a “recognized” national exchange; or

In issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $5.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three (3) years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to resell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.

Shares Eligible For Future Sale May Adversely Affect The Market Price Of Our Common Stock.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act of 1933, as amended, subject to certain limitations. In general, effective February 15, 2008, pursuant to Rule 144, a stockholder (or stockholders whose shares are aggregated) who has satisfied a six (6) months holding period may, under certain circumstances, sell within any three (3) month period a number of securities which does not exceed one percent (1%) of the then outstanding shares of common stock. In addition, effective February 15, 2008, Rule 144 also permits, under certain circumstances, the sale of securities, without any limitations, by a non-affiliate of our company that has satisfied a one (1) year holding period. Any substantial sale of common stock pursuant to Rule 144 may have an adverse effect on the market price of our Common Stock.

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One Stockholder Which is 50% Controlled By Our Chief Executive Officer and Chairman of the Board of The Company Exercises Significant Control Over Matters Requiring Stockholder Approval.

After giving effect to the issuance of all the shares of Common Stock, Joylink has voting power equal to sixty-eight percent (68%) of our voting securities as of the date of this Report. Moreover, Joylink is fifty percent (50%) controlled by Li Xipeng, the Company’s Chief Executive Officer and Chairman of the Board. As a result, Joylink, and our CEO through such stock ownership, exercises control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership in Joylink may also have the effect of delaying or preventing a change in control of us that may be otherwise viewed as beneficial by stockholders other than Joylink.

We May Incur Significant Costs To Ensure Compliance With U.S. Corporate Governance And Accounting Requirements.

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC. We expect all of these applicable rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

We May Be Required To Raise Additional Financing By Issuing New Securities With Terms Or Rights Superior To Those Of Our Shares Of Common Stock, Which Could Adversely Affect The Market Price Of Our Shares Of Common Stock.

We may require additional financing to fund future operations, including expansion in current and new markets, programming development and acquisition, capital costs and the costs of any necessary implementation of technological innovations or alternative technologies. We may not be able to obtain financing on favorable terms, if at all. If we raise additional funds by issuing equity securities, the percentage ownership of our current stockholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of Common Stock, which could adversely affect the market price and the voting power of shares of our Common Stock. If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of Common Stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us.

We Do Not Foresee Paying Cash Dividends In The Foreseeable Future.

We have not paid cash dividends on our stock and we do not plan to pay cash dividends on our stock in the foreseeable future.

ITEM 1B.

Unresolved Staff Comments

None.

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ITEM 2.

Properties

DESCRIPTION OF PROPERTIES

All land in China is owned by the State. Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes. In the case of land used for industrial purposes, the land use rights are granted for a period of fifty (50) years. This period may be renewed at the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations.

Ping owns land use rights with respect to its office location at Pinglin Toll Road Station, New District, Pingdingshan City, Henan Province, the PRC. Pursuant to the approval from The Ministry of Land and Resources of the PRC [No. 2004-289] dated September 10, 2004, Ping was granted approximately Seven Hundred (700) hectares land use right for construction purpose, among which approximately Eight (8) hectares were used in association with the office and service facilities and the others were used for the construction of toll road infrastructures.

CMH and WOC share offices at Room 42, New Henry House, 10 Ice House Street, Central, Hong Kong. This office consists of approximately Three Thousand (3,000) square feet.

We believe that all of our properties and equipment have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

LEGAL PROCEEDINGS

ITEM 3.

Legal Proceedings

In the normal course of business, we are named as defendant in lawsuits in which claims are asserted against us. In our opinion, the liabilities, if any, which may ultimately result from such lawsuits, are not expected to have a material adverse effect on our financial position, results of operations or cash flows. As of the date hereof, there is no outstanding litigation with the Company except as set forth below.

The Company entered into an agreement to purchase a land use right from Pingdingshan No. 3 Cement Factory for $1,843,646. However, the Company was not informed that such land use right was pledged by the cement factory as collateral for loans from Pingdingshan Suburb Huancheng Credit Corporation (“PSHCC”). Pingdingshan No. 3 Cement Factory went bankrupt and PSHCC who loaned them money then sued the Company for the loss of the collateral. On July 13, 2006, judgment was made by the Henan Pingdingshan Intermediary Court in which the Company was required to pay PSHCC $485,851. The amount was paid in August 2006 and was netted against Other Income, Net in the statement of income for the year ended June 30, 2007. The Company appealed the ruling to Henan Pingdingshan Intermediary Court again. Pursuant to the final judgment made on April 25, 2008, the compensating claim from PSHCC was rejected. Currently, the Company is in the progress of pursuing the amount paid. While during the pursuing progress, PSHCC appealed such final judgment to Henan Higher Court and is waiting for the judgment. No receivable for the contingency was recorded as of June 30, 2009 or 2008.

ITEM 4.

Submission of Matters to a Vote of Security Holders

None.

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PART II

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S

COMMON EQUITY AND OTHER STOCKHOLDER MATTERS

The Registrant’s Common Stock is traded on the NASDAQ Capital Market under the symbol “CIIC”. The following table sets forth on a per share basis for the periods shown, the high and low closing bid prices of our Common Stock. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Closing Bid Prices	High		Low
Calendar Year Ending December 31, 2009
1st Quarter (excluding March 3rd):	$	1.88	$	1.00
2nd Quarter:	$	1.68	$	0.76

Calendar Year Ended December 31, 2008
1st Quarter:	$	5.10	$	4.30
2nd Quarter:	$	5.00	$	4.15
3rd Quarter (July 1 through August 11):	$	4.50	$	4.00
NASDAQ STOCK MARKET:
3rd Quarter (August 11 through September 30):	$	4.10	$	3.00
4th Quarter (excluding October 27th and October 29th):	$	3.40	$	1.35

Calendar Year Ended December 31, 2007
1st Quarter:	NONE		NONE
2nd Quarter:	NONE		NONE
3rd Quarter:	$	0.05	$	0.05
4th Quarter (through December 18th prior 1 for 2 reverse split):	$	0.05	$	0.05
4th Quarter (from December 19th after 1 for 2 reverse split):	$	0.02	$	0.02

When the trading price of the Company’s Common Stock is below $5.00 per share, the Common Stock is considered to be a “penny stock” that is subject to rules promulgated by the SEC (Rule 15-1 through 15g-9) under the Exchange Act. These rules impose significant requirements on brokers under these circumstances, including: (a) delivering to customers the SEC’s standardized risk disclosure document; (b) providing customers with current bid and ask prices; (c) disclosing to customers the brokers-dealer’s and sales representatives compensation; and (d) providing to customers monthly account statements.

Holders of Common Equity

As of September 25, 2009 and as of the date of this Report, the Company has an aggregate of 80,000,000 shares of its Common Stock issued and outstanding and eight (8) stockholders of record.

Dividends

Prior to the closing of the Exchange, the Company effectuated a 2-1 reverse stock split for the issued and outstanding shares of its Common Stock. The effective date for this reverse split was December 3, 2007.

On January 22, 2008, the Company completed a dividend distribution to its shareholders of record as of January 18, 2008 in the amount equal to five percent (5%) (1,250,005 shares) of the then issued and outstanding Common Stock. Following the dividend distribution and immediately prior to the consummation of the Exchange, the Company had 26,250,005 shares of Common Stock issued and outstanding.

The further issuance of dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of the Company’s Board of Directors. The company presently intends to retain all earnings, if any, for use in its business operations and accordingly, the Board does not anticipate declaring any cash dividends for the foreseeable future. We have not paid any cash dividends on our Common Stock.

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Securities Authorized for Issuance under Equity Compensation Plans

The following table discloses information as of June 30, 2009 with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.

	(a)		(b)		(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
N/A		-0-		-0-		-0-
Total		-0-		-0-		-0-

Options and Warrants

As of the date of this Report, we have no outstanding options or warrants.

Transfer Agent

Interwest Transfer Company, Inc., 1981 East Murray Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City, UT 84117, telephone (801) 272-9294, facsimile (801) 277-3147 currently acts as our transfer agent and registrar.

Performance Graph

Not required for a smaller reporting company.

Recent Sales of Unregistered Securities

The Company effectuated a 2-1 reverse split of its Common Stock effective on December 3, 2007 effectively reducing the number of issued and outstanding shares of Common Stock to 25,000,000 shares.

On February 8, 2008, pursuant to the terms of the Exchange Agreement, the Company acquired all of the issued and outstanding capital stock of CMH in exchange for the issuance by the Company of 54,400,000 newly-issued shares of Common Stock to the Stockholder (Joylink Holdings, Inc.).

ITEM 6.

Selected Financial Data

Not required for a smaller reporting company.

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ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this Report. This Report contains forward-looking statements. Generally, the words “believes”, ”anticipates”, “may”, “will”, “should”, “expect”, “intend”, “estimate”, “continue” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the SEC from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Business Overview

The Company is engaged in the investment, construction, operation and management of the Pinglin Expressway toll road and the rental of petrol stations and service districts along the toll roads.

With the approval from Henan Communications Bureau and the State Development and Reform Committee of China [NO. 2003-1784], the Company is permitted to construct and operate the Pinglin Expressway in Henan, China for thirty (30) years from 2003. Pursuant to the permission from Henan Communications Bureau and Henan Development and Reform Committee [NO. 2005-1885], the Company is entitled to operate six (6) toll gates. All the rates applicable to the automobiles are defined by the Henan Communications Bureau and Henan Development and Reform Committee.

The Pinglin Expressway is a significant part of the Nanluo Expressway, a key national trunk highway in China which connects Nanjing to Luoyang. The Nanluo Expressway links the northwestern regions to the southeastern coastal regions of China. The construction of the Pinglin Expressway started on October 23, 2003 and was completed in two (2) phases. The first phase of the construction (covering a section of approximately 86 kilometers in length) linking Ruzhou and Pingdingshan in Henan Province, began commercial operations on December 31, 2005. On May 31, 2006, the second phase of the construction (covering a section of approximately 21 kilometers in length) linking Pingdingshan to Yexian in Henan Province was completed. With the operation of Pinglin Expressway the Nanluo Expressway became completely operational.

The Pinglin Expressway is a dual carriageway four (4) lane expressway, the toll section of which is 106 km in length. Toll revenue from vehicles passing through the Expressway’s six (6) toll gates (South Pingdingshan, Pingdingshan New Town, Baofeng, Xiaotun, Ruzhou and Wenquan) is the primary source of the Company’s revenue. The Expressway is also located between two (2) key cities, Luoyang and Luohe. The Expressway extends from east to west, from Shilipu (the end of the Luohe-Pingdingshan expressway), through Yexian and Pingdingshan and then to New Xiying village at the joint of Pingdingshan and Luoyang. The road is linked with the Lianhuo (Lianyungang-Huoerguosi) national highway in Luoyang, and then extends to the southeast of Luohe City and connects with the Beijing-Zhuhai national highway to form a convenient channel between Luoyang and Luohe. In addition to the traffic flow of the line itself, we believe it also attracts the traffic flow from the Lianhuo highway to Zhengzhou and then to the Beijing-Zhuhai national highway to alter the route of the Pinglin Expressway. Furthermore, the Expressway extends east to link the highway network of the Jiangsu and Anhui provinces and also links seaports, including Shanghai.

The Company’s operating revenue is generated through toll charges on vehicles that pass through the toll gate. The standard of toll charges is approved and set by the provincial price administrative bureau. The Company’s revenue is equal to the relevant standard toll rate for the types of vehicles, multiplied by the relative miles of travel through the Expressway which the Company is operating, and is cleared by the Henan Expressway System Toll Collection Center each month (Henan Expressway has a system of charges and a clearing center which calculates and allocates toll charge income according to the charge standards and the miles of vehicle travel in the Expressway). The Company specializes in the operation and management of expressways, and maintenance projects are outsourced to professional road construction enterprises.

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Enterprise Strategy

Significant Accounting Policies

We prepare our financial statements in accordance with generally accepted accounting principles in the United States, which require us to make estimates and assumptions that affect the reported amounts of our assets and liabilities, to disclose contingent assets and liabilities on the date of the financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than other in their application.

This section should be read together with the Summary of Significant Accounting Policies included as Note 2 to the consolidated financial statements included herein.

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We determine the estimated useful lives and related depreciation charges for our toll road infrastructures, property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of toll road infrastructures, property, plant and equipment of a similar nature and functions and the practice in similar industries. Toll road infrastructures, property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of the toll road infrastructures are calculated to write off their cost, commencing from the date of commencement of commercial operations of the toll roads, based on the ratio of actual traffic volume compared to the total expected traffic volume of the toll roads as estimated by reference to traffic projection reports prepared by an independent PRC organization each year. It could change significantly as a result of technical innovations and competitor actions in response to severe industry cycles. Other properties, plant and equipment are depreciated or amortized over their estimated useful lives, using the straight-line method. We will increase the depreciation charge where useful lives are less than previously estimated lives, or we will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

Revenue Recognition

The Company’s revenue represents toll revenue net of business tax, and is recognized when all of the following criteria are met:

The amount of revenue can be measured reliably;

It is probable that the economic benefits associated with the transaction will flow to the enterprise;

The costs incurred or to be incurred in respect of the transaction can be measured reliably; and

Collectibility is reasonably assured.

The rental income is measured at the fair value of the consideration receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales tax.

Fair Value of Financial Instruments

The Company’s financial instruments include restricted cash, accounts receivable, notes receivable, due from related parties, other receivables, other payables and accrued liabilities, short-term bank loans, payable to contractors, other current liabilities and deferred taxes. We estimated that the carrying amount approximates fair value due to their short-term nature. The fair value of the Company’s long-term bank loans and deferred revenue are estimated based on the current rates offered to the Company for debt of similar terms and maturities. The Company’s fair value of long-term bank loans and deferred revenue was not significantly different from the carrying value at June 30, 2009 and 2008.

Impairment of Long-Lived Assets

We review periodically the carrying amounts of long-lived assets including toll road infrastructures, property, plant and equipment, land use rights, construction in progress, long-term investment and long-term deferred assets with finite useful lives or beneficial periods, to assess whether they are impaired. We evaluate these assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable such as a change of business plan or a period of continuous losses. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its projected future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. In determining estimates of future cash flows, significant judgment in terms of projection of future cash flows and assumptions is required. There were no impairments for the years ended June 30, 2009 and 2008.

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Contingencies

In the normal course of business, we are subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters. We recognize a liability for such contingency if we determine that it is probable that a loss has incurred and a reasonable estimate of the loss can be made. We may consider many factors in making these assessments, including past history and the specifics of each matter. As we have not become aware of any toll related claim since operations commenced, we have not recognized such a liability for the years ended June 30, 2009 and 2008.

Recent Accounting Pronouncements

In December 2008, the Financial Accounting Standards Board (“FASB”) approved FSP No. FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. These disclosures include how investment allocation decisions are made, information about major categories of plan assets, significant concentrations of risks within plan assets, and fair value measurements of plan assets. Our effective date is June 30, 2009. The adoption of FSP No. FAS 132(R)-1 did not have an impact on the Company’s financial statements.

In April 1, 2009, the FASB approved FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends Statement 141(R) and eliminates the distinction between contractual and non-contractual contingencies. Under FSP FAS 141(R), an acquirer is required to recognize at fair value an asset acquired or liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be determined during the measurement period. If the acquisition-date fair value cannot be determined, the acquirer applies the recognition criteria in SFAS No. 5, Accounting for Contingencies and Interpretation 14, “Reasonable Estimation of the Amount of a Loss – and interpretation of FASB Statement No. 5,” to determine whether the contingency should be recognized as of the acquisition date or after it. The adoption of FSP FAS 141(R)-1 did not have an impact on the Company’s financial statements.

FSP FAS 115-2 and FAS 124-2 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. It did not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. We are required to adopt this FSP for our interim and annual reporting periods ending after June 15, 2009. This FSP does not require disclosures for periods presented for comparative purposes at initial adoption. The adoption of FSP FAS 115-2 and FAS 124-2 did not have an impact on the Company’s financial statements.

On April 9, 2009, the FASB also approved FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments to require disclosures about fair value of financial instruments in interim period financial statements of publicly traded companies and in summarized financial information required by APB Opinion No. 28, Interim Financial Reporting. We are required to adopt this FSP for our interim and annual reporting periods ending after June 15, 2009. This FSP does not require disclosures for periods presented for comparative purposes at initial adoption. The adoption of FSP FAS 107-1 and APB 28-1 did not have an impact on the Company’s financial statements.

In February 2008, the FASB issued Financial Staff Position (FSP) SFAS 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”), which delays the effective date of SFAS No. 157, Fair Value Measurement (“SFAS No. 157”), for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. FSP 157-2 partially defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. The adoption of SFAS No. 157 for all non-financial assets and non-financial liabilities is effective for us beginning July 1, 2009. It’s not expected that this adoption will have a material impact on the Company.

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In May 2009, the FASB issued SFAS No. 165, Subsequent Events, (“SFAS No. 165”). SFAS NO. 165 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. SFAS No. 165 is effective for interim and annual periods ending after June 15, 2009.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 amends FASB 46(R) to require an enterprise to perform an analysis and ongoing reassessments to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity and amends certain guidance for determining whether an entity is a variable interest entity. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009 and for all interim reporting periods after that. and is not anticipated to have any material impact on the Company’s consolidated financial statements. The Company is currently evaluating the impact of the adoption of SFAS 167.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162, (“SFAS No. 168”). SFAS No. 168 establishes that the FASB Accounting Standards Codification TM (“Codification”) will become the source for authoritative United States generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Effective for financial statements issued for interim and annual periods ending after September 15, 2009 the Codification will supersede all then-existing non-SEC accounting and reporting standards. Effective for the first quarter of 2010 references to legacy GAAP will be replaced by references to the Codification, where appropriate.

Results of Operations

Results of Operations for the Fiscal Year Ended June 30, 2009 Compared to the Fiscal Year Ended June 30, 2008

The following table sets forth a summary of certain key components of our results of operations for the periods indicated, in dollars and as a percentage of revenues.

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	Fiscal Years Ended June 30				Fiscal Years Ended June 30
	2009		2008		2009			2008
					% of Revenue

Revenues	$	50,270,277	$	56,424,236		100.0	%		100.0	%

Operating costs		5,603,843		6,814,079		11.2	%		12.1	%

Depreciation and amortization		12,130,615		6,483,911		24.1	%		11.5	%

Gross profit		32,535,819		43,126,246		64.7	%		76.4	%

General and administrative expenses		5,404,212		3,268,346		10.7	%		5.8	%

Income from operations		27,131,607		39,857,900		54.0	%		70.6	%

Interest expense, net		24,739,090		23,941,036		49.2	%		42.4	%

Other income, net		676,601		905,832		1.3	%		1.6	%

Income from operations before income taxes		3,069,118		16,822,696		6.1	%		29.8	%

Income tax expense		859,412		4,287,907		1.7	%		7.6	%

Net income	$	2,209,706	$	12,534,789		4.4	%		22.2	%

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Revenues

Our revenues are derived from the operation of the Expressway. Our revenues decreased approximately $6.1 million, or 10.9%, from approximately $56.4 million for the year ended June 30, 2008 to approximately $50.3 million for the year ended June 30, 2009. The decrease was mainly attributable to the decrease in the traffic volume of commercial vehicles, a toll free policy introduced by the Chinese government and the cancellation of the toll stations of nearby local trunk road.

On December 26, 2005, the first phase of the Expressway was completed and we commenced toll operations. On May 31, 2006, with the completion of the remaining part (second phase), the entire Expressway was put into operation. A key transport artery, the national trunk Nanluo Expressway, was entirely put into operation as well. The converted average daily traffic volume, a guideline specifically used in the toll road industry to evaluate operational performance, decreased 936 units, or 6.6%, from 14,258 units for the year ended June 30, 2008 to 13,322 units for the year ended June 30, 2009, which is mainly due to the following factors:

Commercial vehicles, especially coal trucks, are one of the main categories of vehicles on the Expressway with a high toll rate. During the year ended June 30, 2009, due to the spread of the sub-prime mortgage crisis throughout the world, China’s coal market decreased. On the other hand, incidents of coal mine accidents in China lead to a suspension of operations of coal mines in Henan province. As a result, the traffic volume of commercial vehicles as a component of our total traffic volume decreased approximately 3.3%, from approximately 72.5% for the year ended June 30, 2008 to approximately 69.2% for the year ended June 30, 2009.

In 2008, the Chinese government introduced regulations to reduce increases in the market price of certain products. The regulations prescribed that a toll free policy should be applied to those vehicles transporting fruit, vegetables, fowl, marine products, eggs and milk. As a result, a portion of our traffic volume was toll free.

From May 1, 2009, in response to the regulation introduced by the Chinese government, the government of Henan province removed the toll stations of certain local trunk roads in Henan province. Then, a portion of the vehicles, especially the short-distance vehicles, chose to utilize the toll free local trunk roads instead. As a result, the converted average daily traffic volume decreased 10.6% and 8.3%, respectively, from 12,582 units in April, to 11,246 units and 11,543 units in May and June, respectively.

Due to these factors set forth above, our revenue for the year ended June 30, 2009 decreased 10.9% compared to the year ended June 30, 2008.

Operating Costs

Our operating costs mainly represent the road maintenance costs, road management costs, direct construction costs and labor costs associated with the toll operations. For the year ended June 30, 2009, our operating costs decreased approximately $1.2 million, or 17.8%, to approximately $5.6 million, compared to approximately $6.8 million for the year ended June 30, 2008. This decrease is mainly due to the decrease of road maintenance costs. Due to the decline in our revenues in the fiscal year ended June 30, 2009, costs only related to routine maintenance, improvement of traffic symbols and road surface were planned and expended.

Depreciation and Amortization

Our total depreciation and amortization related to toll operations sharply increased approximately $5.6 million, or 87.1%, from approximately $6.5 million for the year ended June 30, 2008 to approximately $12.1 million for the year ended June 30, 2009.

Depreciation of toll road infrastructures is calculated to write-off their cost on a units-of-usage basis. The Company depreciated and recorded the depreciation based on the ratio of actual traffic volume incurred during the period compared to the total expected traffic volume of the toll roads during the operation licensing period, as estimated.

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Management assessed the future total expected traffic volume at each period end. Considering the current economy environment and the actual traffic volume evolvement during the year ended June 30, 2009, compared to prior years’ estimate, management believed that a significant decline in the future total anticipated volume occurred. As a result, the depreciation for the year ended June 30, 2009 sharply increased because of the reduction in estimated total anticipated traffic using units-of-usage basis.

Gross Profit

Our gross profit decreased approximately $10.6 million, or 24.6%, from approximately $43.1 million for the year ended June 30, 2008 to approximately $32.5 million for the year ended June 30, 2009. Such gross profit decrease is primarily due to the decrease in our revenues.

Gross profit as a percentage of revenues decreased from 76.4% for the year ended June 30, 2008 to 64.7% for the year ended June 30, 2009.

General and Administrative Expenses

Our general and administrative expenses mainly represent the employee payroll and welfare, traveling expenses, vehicle gasoline and maintenance costs, entertainment expenses, consulting fees, provisions for doubtful debts, depreciation and miscellaneous taxes. General and administrative expenses increased approximately $2.1 million, or 65.4%, from $3.3 million for the year ended June 30, 2008 to approximately $5.4 million for the year ended June 30, 2009. The increase in our administration expenses was mainly due to the following: (a) due to the upgrade of the service fee from our agencies and an increase in lawsuits during the fiscal year ended June 30, 2009, our consulting and audit fees increased approximately amounted to $1.3 million and (b) provision for a doubtful third party note receivable approximately amounted to $0.8 million was provided during the fiscal year ended June 30, 2009.

Interest Expense, Net

Net interest expense increased approximately $0.8 million, or 3.3%, from approximately $23.9 million for the year ended June 30, 2008 to approximately $24.7 million for the year ended June 30, 2009. This increase is mainly due to the change in the exchange rate.

Income Tax Expense

Income tax expense decreased approximately $3.4 million, or 80.0%, from approximately $4.3 million for the year ended June 30, 2008 to approximately $0.9 million for the year ended June 30, 2009, as a result of the decrease in our income from operations. Our effective tax rate was 28% and 25% for the years ended June 30, 2009 and 2008, respectively.

Net Income

Our net income decreased approximately $10.3 million, or 82.4%, from approximately $12.5 million for the year ended June 30, 2008 to approximately $2.2 million for the year ended June 30, 2009. This decrease is primarily due to the decrease in our revenues and the increase in depreciation and amortization and general and administrative expenses.

Liquidity and Capital Resources

We generally finance our operations through, to a substantial extent, operating profit and a combination of borrowings from banks and capital contributions from Wise On China Limited. During the reporting periods, we arranged a number of bank loans to satisfy our financing needs. As of the date of this Report, we have not experienced any difficulty in raising funds by bank loans, and we have not experienced any liquidity problems in settling our payables in the normal course of business and repaying our bank loans when they fall due.

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The following table sets forth the summary of our cash flow, in dollars, for the periods indicated:

	Years Ended June 30
	2009			2008
Net cash provided by operating activities	$	5,936,909		$	16,719,854
Net cash (used in) provided by investing activities		(6,588,912	)		2,008,190
Net cash used in financing activities		(3,415,899	)		(16,841,173	)
Net (decrease) increase in cash and cash equivalents		(4,067,902	)		1,886,871
Effect of exchange rate changes on cash		(87,182	)		(1,948,489	)
Cash and cash equivalents at beginning of period		5,769,344			5,830,962
Cash and cash equivalents at end of period	$	1,614,260		$	5,769,344

Operating Activities

Net cash provided by operating activities was approximately $5.9 million for the year ended June 30, 2009, as compared to $16.7 million for the year ended June 30, 2008. This decrease is mainly due to the decrease of net income.

Investing Activities

Net cash used in investing activities was approximately $6.6 million for the year ended June 30, 2009, as compared to approximately $2.0 million net cash provided by investing activities for the year ended June 30, 2008. The change is mainly due to the following: (a) a related party company (Tai Ao) commenced its toll operation in December 2008. At the beginning, Tai Ao lacked working capital to fulfill its daily operations. As a result, we provided an additional payment on behalf of Tai Ao for approximately $10.9 million for the year ended June 30, 2009; and (b) our payments associated with toll road construction decreased approximately $4.3 million during the year ended June 30, 2009.

Financing Activities

Net cash used in financing activities was $3.4 million for the year ended June 30, 2009, as compared to approximately $16.8 million for the year ended June 30, 2008. Such change is mainly due to: (a) our repayment of short-term bank loans and notes payable during the year ended June 30, 2008 which amounted to approximately $11.0 million and $5.5 million; (b) proceeds from short-term bank loans amounted to approximately $7.3 million for the year ended June 30, 2009, designed to fulfill our working capital demands; and (c) our repayment of the mature part of our long-term bank loans approximately amounting to $10.7 million during the year ended June 30, 2009.

Working Capital

Our working capital increased by approximately $127.2 million from a working capital deficiency of approximately $6.7 million as of June 30, 2008 to approximately $120.5 million as of June 30, 2009. This was primarily due to our increase in restricted cash, current portion of notes receivable from related parties and advance to a related party approximately amounted to $3.5 million, $141.1 million and $10.9 million, respectively, and a decrease in other payables and accrued liabilities and payable to contractors of approximately $2.6 million and $2.1 million, respectively, partially offset by a decrease in cash and cash equivalents and accounts receivable which approximately amounted to $4.2 million and $0.9 million, respectively, and an increase in short-term bank loans, a current portion of long-term loans and notes payable amounting to approximately $7.3 million, $17.1 million and $3.5 million, respectively. The increase in restricted cash represented our pledge deposit for the issuance of notes payable. The increase in our current portion of notes receivable from related parties represent the increase in relevant principals, which will come to maturity during the coming year. The increase in advances to a related party represented our additional payment on behalf of Tai Ao during the year. The decrease in accounts receivable represented our declined monthly revenues. To remedy our working capital deficiency, we received proceeds from short-term bank loans which amounted to approximately $7.3 million during the year ended June 30, 2009.

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The Company currently generates its cash flow through operations and the Company believes that its cash flow generated from operations will be sufficient to sustain operations for the next twelve (12) months. Also, from time to time, the Company may come up with new expansion opportunities for which our management may consider seeking external funding and financing.

Capital Expenditures

We made capital expenditures of approximately $2.2 million and $6.7 million for the year ended June 30, 2009 and 2008, respectively. The capital expenditures principally consisted of toll road infrastructures, toll stations and ancillary facilities, communication and monitoring equipments and other equipment related to our toll operations. If we are permitted to construct and operate a new toll road or invest other toll road companies, we may require additional funds.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Our exposure to interest rate risk for changes in interest rates relates primarily to the interest expense incurred by the bank loans and the interest income generated by the loans to our related parties or bank deposits. We have not used any derivative financial instruments in our investment portfolio or for cash management purposes. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest expense or interest income may increase of expectations due to changes in interest rates in the PRC.

Foreign Exchange Risk

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

ITEM 8.

Financial Statements and Supplementary Data

Reference is made to pages F-1 through F-28 comprising a portion of this Annual Report immediately following the signature page of this Form 10-K.

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None.

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ITEM 9A(T).

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Form 10-K for the year ended June 30, 2009 our management, under the supervision of the CEO and CFO, conducted an evaluation of disclosure controls and procedures. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2009.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control structure and procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of June 30, 2009 based on the framework set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on that evaluation, our CEO and CFO concluded that our internal control over financial reporting as of June 30, 2009 was effective.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

Except as disclosed above, there were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

Other Information

None.

PART III

ITEM10.

Directors, Executive Officers, and Corporate Governance

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Set forth below are the names of the Company’s directors and officers, their business experience during the last five (5) years, their ages and all positions and offices that they shall hold with the Company following the expiration of the ten (10) day time period following the mailing of an Information Statement complying with Form 14F-1 under the Exchange Act in connection with the Exchange. The Company has no “significant employees”.

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Name	Age	Position(s)
Li Xipeng	46	Chief Executive Officer and Chairman of the Board
Zhang Chunxian	44	Chief Financial Officer and Director
Lin Jie	48	Vice President of Operations
Wu Lei	32	Vice President of Strategy Development
Wang Feng	36	Secretary
Sun Jianhao	46	Director
Huang Yuemin	52	Director
Xu Huiqing	55	Director
Li Changlai	45	Director
Mu Xinjie	39	Director

Family Relationships

There are no family relationships between or among the members of the Board of Directors or other executives. None of our directors and officers are directors or executive officers of any company that files reports with the SEC, except that Mu Xinjie previously served as Chief Financial Officer of Jingwei International Limited (JNGW.OB).

Biographies (Business Experience)

Li Xipeng has served as Chief Executive Officer of the Company and has served as a Director of the Company since the closing date of the Exchange and as Chairman of Ping since May 2003. Prior to that, Mr. Li served as Chairman of HSV in the PRC since May 2001 and prior to that he served as Chairman of Henan Shengrun Real Estate Co., Ltd. in the PRC since May 2000. Mr. Li is also currently the legal representative of Ping. Mr. Li graduated from Zhongnan University of Economics and Law and he earned his EMBA at Cheung Kong Graduate School of Business.

Zhang Chunxian has served as Chief Financial Officer of the Company since March 9, 2008 and has served as Chief Financial Officer of Ping since May 2003. Prior to that, Mr. Zhang served as Manager in the Trust and Investment Department of Zhongyuan Trust and Investment Co., Ltd. in the PRC. Mr. Zhang is a Chinese Certified Public Accountant.

Lin Jie has served as a Vice President of Operations of the Company since March 9, 2008 and has served as Manager of the Finance Department and as Assistant to the General Manager of Ping since May 2003. Prior to that, Ms. Lin served as Manager of the Finance Department of Henan Shengrun Real Estate Co., Ltd. in the PRC since March 2000.

Wu Lei has served as Vice President of Strategy Development of the Company since March 9, 2008. Ms. Wu earned her BSc. at Wuhan University (Law) in 2000 and her Masters degree in economics in 2006. Ms. Wu has no prior work experience.

Wang Feng has served as corporate Secretary of the Company since March 9, 2008 and has served as the corporate Secretary of Ping since May 2007. Prior to that, Mr. Wang served as Investment Manager of Henan Hi-Tech Venture Capital Co., Ltd. in the PRC from March 2006 to May 2007 and as Investment Manager of Zhongyuan Trust and Investment Co., Ltd. in the PRC from November 2003 through February 2006. Prior to that Mr. Wang earned his Masters degree from Beijing Information Science and Technology University and his BSc. at Hunan University. Mr. Wang is a Chinese Certified Public Accountant.

Sun Jianhao has served as a Director of the Company since March 9, 2008 and has served as Chairman of Pingdingshan Zhongya Road and Bridge Construction Co., Ltd. in the PRC since November 2004. Prior to that Mr. Sun served as Deputy Director of Pingdingshan Development and Planning Commission in the PRC from September 2004 through October 2004. Prior to that Mr. Sun served as Deputy Director of Pingdingshan New District Management Commission in the PRC from August 1999 through August 2004.

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Huang Yuemin has served as a Director of the Company since March 9, 2008 and has served as Manager in the International Operations Department, General Manager and Chairman of Zhongyuan Trust and Investment Co., Ltd. in the PRC since March 1990. Prior to that, Mr. Huang served as Director in the Investment Department of Henan Development and Planning Commission in the PRC since August 1984 through February 1990. Mr. Huang earned his Associate’s degree from Tianjin University.

Xu Huiqing has served as a Director of the Company since March 9, 2008 and has served as Chairman and General Manager of Pingdingshan High Way Construction Co., Ltd. in the PRC since June 2003. Prior to that, Mr. Xu served as Deputy Director of Pingdingshan Bureau of Communications in the PRC from March 2002 through June 2003. Prior to that, Mr. Xu served as Deputy Director General for Pingdingshan Geography and Mine Bureau in the PRC from May 1994 through March 2002.

Li Changlai has served as a Director of the Company since March 9, 2008 and has served as General Manager of Weilan Highway Investment Construction Co., Ltd. since December 2004. Prior to that, Mr. Li served as Chief Engineer of Henan Highway Development Co., Ltd. from June 2002 through December 2004. Prior to that Mr. Li served as Manager of Department of Zhumadian Expressway Managing for Henan Highway Development Co., Ltd. in the PRC from October 2001 through June 2002. Mr. Li earned his Masters degree at Changan University.

Mu Xinjie has served as a Director of the Company since March 9, 2008. From April 2007 through December 2007, Mr. Mu served as Chief Financial Officer of Jingwei International Limited (OTCBB: JNGW.OB). Prior to that, Mr. Mu served as Senior Accountant for Geller and Company in the department serving exclusively Bloomberg, LLP from January 2006 through April 2007. Prior to that, Mr. Mu served as Chief Financial Officer of Tongyuan Technology Company from March 2005 through October 2005. Prior to that, Mr. Mu served as Senior Accountant of Flightsafety International, Inc., a wholly-owned subsidiary of Berkshire Hathaway from September 1999 through March 2005. Mr. Mu earned his BCs at Hebei University of Science and Technology (Chemical Engineering) and his MBA at the City University of New York.

Involvement in Certain Legal Proceedings

None of the members of the Board of Directors or other executives has been involved in any bankruptcy proceedings, criminal proceedings, any proceeding involving any possibility of enjoining or suspending members of our Board of Directors or other executives from engaging in any business, securities or banking activities, and have not been found to have violated, nor been accused of having violated, any federal or state securities or commodities laws.

Promoters and Control Persons

None.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent (10%) of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent (10%) stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Based solely on a review of the copies of such forms furnished to us, we believe that during the year ended June 30, 2009 all officers, directors and ten percent (10%) beneficial owners who were subject to the provisions of Section 16(a) complied with all of the filing requirements during the year, except for the following persons have failed to file the corresponding documents set forth below:

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Name	Form Type(s)	Type of Holder
Li Xipeng	Form 3, Form 4	Chief Executive Officer and Chairman of the Board
Zhang Chunxian	Form 3, Form 4	Chief Financial Officer and Director
Lin Jie	Form 3, Form 4	Vice President of Operations
Wu Lei	Form 3, Form 4	Vice President of Strategy Development
Wang Feng	Form 3	Secretary
Sun Jianhao	Form 3, Form 4	Director
Huang Yuemin	Form 3	Director
Xu Huiqing	Form 3	Director
Li Changlai	Form 3	Director
Mu Xinjie	Form 3, Form 4	Director
Joylink Holdings, Inc.	Form 3, Form 4	10% Holder

Code of Ethics

We have adopted a Code of Ethics, as required by the rules of the SEC and NASDAQ (referenced hereto as Exhibit 14.1). This Code of Ethics applies to all of our directors, officers and employees. The Code of Ethics, and any amendments to, or waivers from, the Code of Ethics, is available in print, at no charge, to any stockholder who requests such information.

Committees of our Board of Directors

Our Board of Directors has an Audit Committee, a Compensation Committee and a Nominating Committee. A brief description of each committee is set forth below.

Audit Committee – The purpose of the Audit Committee is to provide assistance to our Board of Directors in fulfilling their oversight responsibilities relating to our consolidated financial statements and financial reporting process and internal controls in consultation with our independent registered public accountants and internal auditors. The Audit Committee is also responsible for ensuring that the independent registered public accountants submit a formal written statement to us regarding relationships and services which may affect the auditors’ objectivity and independence. During fiscal 2009, members of the Audit Committee were independent directors Huang Yuemin, Xu Huiqing and Mu Xinjie. Our Audit Committee financial expert is Mu Xinjie, an independent director. The Audit Committee met 2 times during the fiscal year ended June 30, 2009.

Compensation Committee – Independent directors Xu Huiqing, Huang Yuemin and Li Changlai were members of our Compensation Committee during fiscal 2008. The purpose of the Compensation Committee is to review and make recommendations to our Board of Directors regarding all forms of compensation to be provided to the executive officers and directors of our company, including stock compensation and loans, and all bonus and stock compensation to all employees. The Compensation Committee met 2 times during the fiscal year ended June 30, 2009.

Nominating Committee – Independent directors Li Changlai, Huang Yuemin and Xu Huiqing were members of our Nominating Committee, effective May 21, 2008. The purpose of the Nominating Committee is to review the composition and evaluate the performance of the Board, recommend persons for election to the Board and evaluate director compensation; The nominating committee is also responsible for reviewing the composition of committees of the Board and recommending persons to be members of such committees, and maintaining compliance of committee membership with applicable regulatory requirements. The Nominating Committee met 2 times during the fiscal year ended June 30, 2009. The Company has not adopted procedures by which security holders may recommend nominees to the Company’s Board of Directors.

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ITEM 11.

Executive Compensation

Compensation Discussion and Analysis

Not required for smaller reporting companies.

Summary Compensation Table

The following table sets forth certain information with respect to the compensation paid to the Named Executive Officers of the Company during the years ended June 30, 2009 and June 30, 2008.

Name And Principal Function	Year		Salary	Bonus		Employer’s Contribution to Mandatory Pension and other benefits	Total
(a)	(b)		($) (c)	($) (d)		($)	($) (j)
Li Xipeng, Chief Executive Officer (1)		2009 2008	-0- -0-		-0- -0-	-0- - 0-		-0- -0-

Zhang Chunxian, Chief Financial Officer (2)		2009 2008	16,283 15,000		7,309 7,517	-0- 5,730		23,592 28,247

Lin Jie, Vice President of Operations (3)		2009 2008	12,655 11,706		5,824 5,998	-0- 4,472		18,479 22,176

Wu Lei Vice President of Strategy Development (4)		2009 2008	11,237 4,713		4,875 1,100	4,506 1,800		20,654 7,613

Wang Feng, Secretary (5)		2009 2008	12,376 11,623		5,211 4,619	877 4,440		18,464 20,682

Narrative Disclosure to Summary Compensation Table

During the year ended June 30, 2009, we paid an aggregate of approximately $214,547 in cash compensation to our management team members, including $129,331 for salary, $55,179 for bonus and $30,037 for benefits. We paid an aggregate of approximately $81,369 to our senior executive officers, including salary, bonus and benefits. During the year ended June 30, 2008, we paid an aggregate of approximately $205,683 in cash compensation to our management team members, including $109,568 for salary, $54,260 for bonus and $41,855 for benefits. We paid an aggregate of approximately $78,718 to our senior executive officers, including salary, bonus and benefits. Our senior executive officers are eligible to receive cash bonuses which are paid on the basis of their success in achieving designated individual goals and the Company’s success in achieving specific company-wide goals. The amount of the bonus is determined by our board compensation committee at the end of each fiscal year.

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In order to retain experienced and senior level executives, we believe the salary and bonus compensation of our senior executives is one of the highest among local equivalent companies. The Company will continue to provide competitive salary and bonus compensation to retain and recruit high quality executives and employees.

The Company will introduce option and equity based incentive scheme in the future as compensation for our senior executives and independent directors for the successful operation results.

All senior executives have the standard three-year employment service contracts in accordance with applicable PRC regulations. None of these service contracts provides benefits upon termination. These are standard employment service contracts without any specific terms and duration for any positions that the senior executives are holding. In addition, we did not provide any pension or retirement plans for senior executives other than the mandatory plans required by the PRC government.

The Company currently does not have an equity/option – based compensation plan for senior executives. None of the senior executives has been granted any rights to equity or options.

Grants of Plan-Based Awards

None.

Outstanding Equity Awards at Fiscal Year-End

None.

Option Exercises and Stock Vested

None.

Pension Benefits

None.

Non-Qualified Deferred Compensation

None.

Potential Payments Upon Termination or Change of Control

None.

Additional Narrative Disclosure

None.

Director Compensation

The following table sets forth certain information relative to compensation paid to outside directors as of years ended June 30, 2009 and June 30, 2008:

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Name And Principal Function	Year		Salary	Bonus		other benefits	Total
(a)	(b)		($) (c)	($) (d)		($)	($) (j)
Huang Yuemin (1)		2009 2008	-0- -0-		-0- -0-	- 0 – - 0 –		-0- -0-

Mu Xinjie (2)		2009 2008	52,560 14,211		-0- -0-	-0- -0-		52,560 14,211

Sun Jianhao (3)		2009 2008	-0- -0-		-0- -0-	-0- -0-		-0- -0-

Xu Huiqing (4)		2009 2008	-0- -0-		-0- -0-	-0- -0-		-0- -0-

Li Changlai (5)		2009 2008	-0- -0-		-0- -0-	-0- -0-		-0- -0-

Narrative To Director Compensation Table

During the fiscal year ended June 30, 2009, we paid $52,570 to one independent director, Mr. Xinjie Mu, for his financial and accounting expertise on the Audit Committee. Commencing in February 2008, the Company pays him $4,380 (RMB 30,000) per month. We did not have any other compensation arrangement for any other directors in 2009. The Company did not pay salaries or any other bonuses or benefits to other directors.

During the fiscal year ended June 30, 2008, we paid $14,211 to one independent director, Mr. Xinjie Mu, for his financial and accounting expertise on the Audit Committee. Commencing in February 2008 (the Company pays him $4,139 (RMB 30,000) per month). We did not have any other compensation arrangement for any other directors in 2008. The Company did not pay salaries or any other bonuses or benefits to other directors.

We intend to implement compensation arrangements for independent directors in fiscal year 2009, which will include both cash and stock option plans which may include fees for retainers, committee services, services as chairman of the board or on committees and meeting attendance.

Employee Agreement

We have entered into three-year service contracts with all of our employees in accordance with applicable PRC regulations. None of these service contracts provides benefits upon termination. We were required by PRC law to make monthly contributions in amounts equal to 20.0%, 8.2%, and 10% of our employees’ average monthly salary in the preceding year to a pension plan, a medical insurance plan, and employee housing plan, respectively, each for the benefit of our employees subject to certain statutory limits.

Our employees are not subject to any collective bargaining agreement. We have not been involved in any material labor disputes. We believe that we have a good relationship with our employees.

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We may terminate his or her employment for cause at any time, with prior written notice, for certain acts of the executive officer, including but not limited to, a conviction of a felony, or willful gross misconduct by the executive officer in connection with his or her employment, and in each case if such acts have resulted in material and demonstrable financial harm to us. An executive officer may, with prior written notice, terminate his or her employment at any time for any material breach of the employment agreement by us that is not remedied promptly after receiving the remedy request from the employee. Furthermore, either party may terminate the employment agreement at any time without cause upon advance written notice to the other party. Upon termination, the executive officer is generally entitled to a severance pay of at least one (1) month but not exceeding twelve (12) months amount of salary.

Each executive officer has agreed to hold, both during and subsequent to the terms of his or her agreement, in confidence and not to use, except in pursuance of his or her duties in connection with the employment, any of our confidential information, technological secrets, commercial secrets and know-how.

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth each person known by us to be the beneficial owner of five (5%) percent or more of our Common Stock, all directors individually and all directors and officers as a group as of September 25, 2009. Each person named below has sole voting and investment power with respect to the shares shown unless otherwise indicated.

Name and Address of Beneficial Owner (1)	Amount of Direct Ownership After Exchange		Amount of Indirect Ownership After Exchange		Total Beneficial ownership After Exchange		Percentage of Class (2)

Li Xipeng, Chief Executive Officer and Chairman of the Board		0	32,486,250	(3)	32,486,250	(3)	40.61	%

Zhang Chunxian, Chief Financial Officer and Director		0	6,497,250	(4)	6,497,250	(4)	8.13	%

Lin Jie, Vice President of Operations		0	6,497,250	(5)	6,497,250	(5)	8.13	%

Wu Lei, Vice President of Strategy Development		0	6,497,250	(6)	6,497,250	(6)	8.13	%

Wang Feng, Secretary		0	0		0		0	%

Sun Jianhao, Director		0	6,497,250	(7)	6,497,250	(7)	8.13	%

Huang Yuemin, Director		0	0		0		0	%

Xu Huiqing, Director		0	0		0		0	%

Li Changlai, Director		0	0		0		0	%

Mu Xinjie, Director		0	0		0		0	%

ALL DIRECTORS AND OFFICERS AS A GROUP (10 PERSONS):		0	58,475,250		58,475,250		73.10	%

Joylink Holdings Limited Room 42, 4F, New Henry House 10 Ice House Street Central, Hong Kong		64,972,500	0		64,972,500		81.22	%

Shu Hongying Room 14 Unit 4, 11 Building Sichangdong Street Zhengzhou, Henan the PRC		0	6,497,250	(8)	6,497,250	(8)	8.13	%

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(1)	Unless otherwise noted, each beneficial owner has the same address as the Company.

(2)

Applicable percentage of ownership is based on 80,000,000 shares of our Common Stock outstanding as of September 25, 2009, together with securities exercisable or convertible into shares of Common Stock within sixty (60) days of September 25, 2009 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Note that affiliates are subject to Rule 144 and Insider trading regulations - percentage computation is for form purposes only.

(3)	Li Xipeng, the Company’s Chairman and Chief Executive Officer, owns 50% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Li Xipeng may be considered to beneficially own 32,486,250 shares.

(4)	Zhang Chunxian, the Company’s Chief Financial Officer and Director, owns 10% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Zhang Chunxian may be considered to beneficially own 6,497,250 shares.

(5)	Lin Jie, the Company’s Vice President, owns 10% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Lin Jie may be considered to beneficially own 6,497,250 shares.

(6)	Wu Lei, the Company’s Vice President, owns 10% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Wu Lei may be considered to beneficially own 6,497,250shares.

(7)	Sun Jianhao, the Company’s Vice President, owns 10% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Sun Jianhao may be considered to beneficially own 6,497,250 shares.

(8)	Shu Hongying owns 10% of Joylink Holdings Limited, which owns 64,972,500 shares of the Company’s Common Stock. Therefore, Shu Hongying may be considered to beneficially own 6,497,250 shares.

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ITEM 13.

Certain Relationships and Related Transactions, and Director Independence

Transactions With Related Persons

Notes Receivable to Related Persons

On October 1, 2007, the Company issued a note to Tai Ao Expressway Co., Ltd. (“Tai Ao”) in the principal amount of approximately $70,130,050 for Tai Ao’s construction working capital. The note was originally due on June 30, 2008 and bore an interest rate equal to 7.83%, with interest to be paid annually and the principal to be paid at maturity. Tai Ao is controlled by Henan Shengrun Venture Investment Management Co., Ltd., whose controlling shareholder is Li Xipeng, the Company’s Director and Chief Executive Officer and Ping’s Chairman. On June 26, 2008, the Company and Tai Ao entered into a renewal agreement pursuant to which the note was extended to June 29, 2010, bearing interest at a rate of 7.83% per annum. Interest shall be paid annually and the principal shall be repaid at maturity. During the fiscal year ended June 30, 2009, the Company received $0 in principal and $4,935,189 in interest payments on the note. As of September 18, 2009, a total of $74,794,750 was outstanding under the note.

On October 1, 2007, the Company issued a note to Xinyang Expressway Co., Ltd (“Xinyang”) in the principal amount of approximately $69,670,334 for Xinyang’s construction working capital. The note was originally due on June 30, 2008 and bore an interest rate equal to 7.83%, with interest to be paid annually and the principal to be paid at maturity. Xinyang is controlled by Henan Yuao Bailing Investment Co., Ltd., whose controlling shareholder is Li Xipeng, the Company’s Director and Chief Executive Officer and Ping’s Chairman. On June 26, 2008, the Company and Xinyang entered into a renewal agreement pursuant to which the note was extended to June 29, 2010, bearing interest at a rate of 7.83% per annum. Interest shall be paid annually and the principal shall be repaid at maturity. During the fiscal year ended June 30, 2009, the Company received $623,206 in principal and $5,261,827 in interest payments on the note. As of September 18, 2009, a total of $74,320,570 was outstanding under the note.

On April 12, 2009, the Company issued a note to Henan Ruijia Industry Co., Ltd (“Ruijia”) in the principal amount of approximately US$2,191,445 for Ruijia’s working capital demand. Ruijia is controlled by Henan Yuao Bailing Investment Co., Ltd., whose controlling shareholder is Li Xipeng, the Company’s Director and Chief Executive Officer and Ping’s Chairman. Such note is due on April 11, 2010, bearing interest at a rate of 5.31% per annum. The principal and the interest shall be repaid at maturity. During the fiscal year ended June 30, 2009, the Company received $0 in principal and $0 in interest payments on the note. As of September 18, 2009, a total of $2,216,980 was outstanding under the note.

The Company generated interest income on such notes receivable equal to $9,335,849 and $9,668,217 in the aggregate for the years ended June 30, 2009 and 2008, respectively.

Advances Made on Behalf of Related Person

During the 2008 fiscal year, the Company made advances to suppliers on behalf of Tai Ao for the purchase of construction materials, amounting to approximately $22 million as of June 30, 2008 in order to assist them with their working capital needs. The Company provided an additional payment on behalf of Tai Ao equal to approximately $11 million for the year ended June 30, 2009 bringing the total advance amount to approximately $33 million. Such balance of $33 million as of September 18, 2009 is unsecured, interest free and due on demand.

Agreements With Promoters and Certain Control Persons

None.

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Director Independence

The following directors are independent: Sun Jianhao, Huang Yuemin, Xu Huiqing, Li Changlai and Mu Xinjie. The following directors are not independent: Li Xipeng and Zhang Chunxian.

ITEM 14.

Principal Accountant Fees and Services

Audit Fees

During the fiscal years ended June 30, 2009 and 2008, the fees for our principal accountant were approximately $310,000 and $265,000, respectively, representing services for quarterly reviews and the year end audits.

Audit-Related Fees

During the fiscal years ended June 30, 2009 and 2008, the fees for our principal accountant’s audit related services were $1,125 and $0, respectively, and were reasonably related to the performance of the audit or review of financial statements.

Tax Fees

During the fiscal years ended June 30, 2009 and 2008, our principal accountant did not render tax compliance, tax advice and tax planning services.

All Other Fees

During the fiscal years ended June 30, 2009 and 2008, there were no fees for products and services provided by the principal accountant other than those set forth above.

Audit Committee Pre-Approval

The policy of the Audit Committee is to pre-approve all audit and non-audit services provided by the independent accountants. These services may include audit services, audit-related services, tax fees, and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. The Audit Committee has delegated pre approval authority to certain committee members when expedition of services is necessary. The independent accountants and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent accountants in accordance with this pre-approval delegation, and the fees for the services performed to date. All of the services described above in this Item 14 were approved in advance by the Audit Committee during the fiscal year ended June 30, 2009.

PART IV

ITEM 15.

Exhibits and Financial Statement Schedules

(a)

Financial Statements and Schedules

The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.

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(b)

Exhibits

EXHIBIT NO.	DESCRIPTION	LOCATION

3.1	Articles of Incorporation of Learning Quest Technologies, Inc.	Incorporated by reference to Exhibit 3.01 to the Company’s Form 10-SB as filed with the SEC on December 17, 2004.
3.2	Amended and Restated Bylaws of China Infrastructure Investment Corporation, dated as of May 21, 2008.	Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K as filed with the SEC on May 22, 2008.
3.3	Certificate of Incorporation of Color Man Holdings Limited	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
3.4	Certificate of Incorporation of Wise On China Limited	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
3.5	Certificate of Incorporation of Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
3.6	Company Charter of Color Man Holdings Limited (Memorandum of Association and Articles of Association	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
3.7	Company Charter of Wise On China Limited	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
3.8	Articles of Association of Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.1	Share Exchange Agreement, dated February 8, 2008, by and among Learning Quest Technologies, Inc., Color Man Holdings Ltd. and Joylink Holdings Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.2	Chartered Rights Agreement on Pingdingshan-Linru Expressway Project, dated April 10, 2003, by and between Pingdingshan Pinglin Expressway Co., Ltd. and Pingdingshan Bureau of Communications	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.3	Loan Contract of the Year 2004, dated December 28, 2004, by and between the China Development Bank and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.

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10.4	Loan Contract of the Fixed Assets (No. YBZ No. 0054, 2005), dated July 29, 2005, by and between The Pingdingshan Branch of Industrial and Commerical Bank of China and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.5	Loan Contract, dated February 25, 2005, by and between the Agricultural Bank of China, Xinhua Branch of Pingdingshan City and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.6	Loan Contract of the Year 2007, dated September 28, 2007, by and between the China Development Bank and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.7	Loan Contract, dated June 7, 2005, by and between the Agricultural Bank of China, Xinhua Branch of Pingdingshan City and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.8	General Loan Contract, dated November 29, 2004, by and between the China Development Bank and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
10.9	Loan Contract of the Fixed Assets (No. YBZ No. 0051, 2005), dated July 29, 2005, by and between The Pingdingshan Branch of Industrial and Commerical Bank of China and Pingdingshan Pinglin Expressway Co., Ltd.	Incorporated by reference to that Company’s Current Report on Form 8-K as filed with the SEC on February 11, 2008.
14.1	Code of Ethics	Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on September 29, 2008
16.1	Auditor Letter	Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on September 29, 2008
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Provided herewith
31.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Provided herewith

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32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Provided herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Provided herewith
99.1	Audit Committee Charter of the Company	Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K as filed with the SEC on May 22, 2008
99.2	Compensation Committee Charter of the Company	Incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K as filed with the SEC on May 22, 2008
99.3	Corporate Governance and Nominating Committee Charter of the Company	Incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K as filed with the SEC on May 22, 2008

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

	CHINA INFRASTRUCTURE INVESTMENT CORPORATION
Date: September 28, 2009

	By:	/s/Li Xipeng
		Li Xipeng
		Chief Executive Officer, Principal Executive Officer and Chairman of the Board

		/s/Zhang Chunxian
		Zhang Chunxian
		Chief Financial Officer, Principal Financial and Accounting Officer and Director

In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the dates indicated.

Signatures	Title	Date

/s Li Xipeng	Chief Executive Officer,	September 28, 2009
	Principal Executive Officer and
Li Xipeng	Chairman of the Board

/s/ Zhang Chunxian		September 28, 2009
	Chief Financial Officer,
Zhang Chunxian	Principal Financial and
	Accounting Officer and
	Director

/s/ Sun Jianhao	Director	September 28, 2009

Sun Jianhao

/s/ Huang Yuemin	Director	September 28, 2009

Huang Yuemin

/s/ Xu Huiqing	Director	September 28, 2009

Xu Huiqing

/s/ Li Changlai	Director	September 28, 2009

Li Changlai

/s/ Mu Xinji	Director	September 28, 2009

Mu Xinjie

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACOUNTING FIRM

To the Board of Directors and Shareholders of:

China Infrastructure Investment Corp.

We have audited the accompanying consolidated balance sheets of China Infrastructure Investment Corp. and Subsidiaries (the “Company”) as of June 30, 2009 and 2008, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Infrastructure Investment Corp. and Subsidiaries as of June 30, 2009 and 2008, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Weinberg & Company, P.A.

Boca Raton, Florida

September 16, 2009, except for Note 17 which

is as of September 27, 2009

F-1

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

	June 30, 2009		June 30, 2008

CURRENT ASSETS
Cash and cash equivalents	$	1,614,260	$	5,769,344
Restricted cash		3,550,761		29,104
Notes receivable, net		104,676		776,936
Accounts receivable		1,089,546		2,006,848
Other receivables		148,934		419,642
Notes receivable from related parties, current		151,332,301		10,197,016
Advance to a related party		32,680,154		21,733,471
Other current assets		940,712		991,768
Total current assets		191,461,344		41,924,129

Toll road infrastructures, net		437,178,980		443,672,007
Plant and equipment, net		15,662,302		15,943,451
Land use rights, net		47,264,452		49,066,392
Long-term investment		1,577,840		1,455,223
Notes receivable from related parties, long-term		-		139,872,158
Deferred taxes		4,725,650		6,059,721
Total long-term assets		506,409,224		656,068,952

TOTAL ASSETS	$	697,870,568	$	697,993,081

See accompanying notes to the consolidated financial statements.

F-2

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

	June 30, 2009		June 30, 2008


CURRENT LIABILITIES
Other payables and accrued liabilities	$	2,191,314	$	4,840,299
Short-term bank loans		7,304,815		-
Current portion of long-term bank loans		27,767,064		10,678,425
Notes payable		3,521,542		-
Payable to contractors		22,090,622		24,224,039
Deferred taxes		7,852,128		8,556,534
Deferred revenue, current		78,803		72,679
Other current liabilities		163,130		225,915
Total current liabilities		70,969,418		48,597,891

LONG-TERM LIABILITIES
Long-term bank loans		440,585,554		466,512,413
Deferred revenue, long-term		6,502,203		6,555,149
Total long-term liabilities		447,087,757		473,067,562

TOTAL LIABILITIES		518,057,175		521,665,453

CONTINGENCIES

SHAREHOLDERS’ EQUITY
Common stock, $.001 par value, 150,000,000 shares authorized, 80,000,000 shares issued and outstanding as of June 30, 2009 and June 30, 2008, respectively		80,000		80,000
Additional paid-in capital		141,152,164		140,573,673
Accumulated other comprehensive income		27,516,099		26,818,531
Retained earnings		11,065,130		8,855,424
Total Shareholders’ Equity		179,813,393		176,327,628

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	697,870,568	$	697,993,081

See accompanying notes to the consolidated financial statements.

F-3

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	YEARS ENDED JUNE 30,
	2009			2008

REVENUES	$	50,270,277		$	56,424,236

OPERATING COSTS		5,603,843			6,814,079

DEPRECIATION AND AMORTIZATION		12,130,615			6,483,911

GROSS PROFIT		32,535,819			43,126,246

General and administrative expenses		5,404,212			3,268,346

INCOME FROM OPERATIONS		27,131,607			39,857,900

OTHER INCOME (EXPENSES)

Interest expense		(34,140,068	)		(33,745,902	)

Interest income		9,400,978			9,804,866

Other income, net		676,601			905,832

INCOME FROM OPERATIONS BEFORE INCOME TAXES		3,069,118			16,822,696

INCOME TAX EXPENSE		(859,412	)		(4,287,907	)

NET INCOME		2,209,706			12,534,789

OTHER COMPREHENSIVE INCOME

Foreign currency translation gain		697,568			16,626,051

OTHER COMPREHENSIVE INCOME, NET		697,568			16,626,051

COMPREHENSIVE INCOME	$	2,907,274		$	29,160,840

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED		80,000,000			64,472,131

NET INCOME PER COMMON SHARE, BASIC AND DILUTED	$	0.03		$	0.19

See accompanying notes to the consolidated financial statements.

F-4

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

	Common Stock							Accumulated Other
	Number of shares		Par value		Additional Paid-in Capital			Comprehensive Income		(Deficit) Retained Earnings			Total

BALANCE AT JULY 1, 2007		54,400,000	$	54,400	$	140,662,392		$	10,192,480	$	(3,679,365	)	$	147,229,907

Foreign currency translation gain		-		-		-			16,626,051		-			16,626,051

Recapitalization		25,600,000		25,600		(88,719	)		-		-			(63,119	)

Net income		-		-		-			-		12,534,789			12,534,789

BALANCE AT JUNE 30, 2008		80,000,000		80,000		140,573,673			26,818,531		8,855,424			176,327,628

Foreign currency translation gain		-		-		-			697,568		-			697,568

Contributed capital		-		-		578,491			-		-			578,491

Net income		-		-		-			-		2,209,706			2,209,706

BALANCE AT JUNE 30, 2009		80,000,000	$	80,000	$	141,152,164		$	27,516,099	$	11,065,130		$	179,813,393

See accompanying notes to the consolidated financial statements.

F-5

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended June 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,209,706		$	12,534,789
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts		779,615			-
Investment income from non-affiliated company		(116,819	)		-
Depreciation and amortization		12,740,142			7,039,349
Deferred taxes		629,665			4,062,447
Deferred revenue		(604,984	)		(571,640	)
Imputed interest		532,054			507,834
Interest income		(9,338,257	)		(9,700,215	)
Debt exemption from shareholder		578,491			-
Gain from disposal of plant and equipment		-			103,343
Changes in operating assets and liabilities:
(Increase) Decrease In:
Accounts receivable		917,302			714,209
Other receivables		270,708			969,937
Other current assets		51,056			(853,027	)
Increase (Decrease) In:
Other payables and accrued liabilities		(2,648,985	)		1,844,339
Other current liabilities		(62,785	)		68,489
Net cash provided by operating activities		5,936,909			16,719,854

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of construction in progress		(1,844,237	)		(6,114,070	)
Purchases of plant and equipment		(318,481	)		(545,399	)
Proceeds from disposition of plant and equipment		-			61,177
Increase in notes receivable		(102,217	)		-
Decrease in payable to contractors		(2,133,417	)		(2,187,846	)
Proceeds from interest of notes receivable from related parties		10,232,171			16,126,375
Increase in principal of notes receivable to related parties		(1,567,154	)		(120,470	)
Increase in advance to a related party		(10,855,577	)		(5,211,577	)
Net cash (used in) provided by investing activities		(6,588,912	)		2,008,190

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term bank loans		-			170,899,229
Repayments of long-term bank loans		(10,715,240	)		(173,774,644	)
Proceeds from short- term bank loans		7,301,199			-
Repayments of short- term bank loans		-			(11,038,061	)
Proceeds from notes payable		3,519,799			-
Repayments of notes payable		-			(5,530,068	)
Restricted cash		(3,521,657	)		2,602,371
Net cash used in financing activities		(3,415,899	)		(16,841,173	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(4,067,902	)		1,886,871
Effect of exchange rate changes on cash		(87,182	)		(1,948,489	)
Cash and cash equivalents at beginning of year		5,769,344			5,830,962

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,614,260		$	5,769,344

See accompanying notes to the consolidated financial statements.

F-6

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended June 30,
	2009		2008
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	33,499,020	$	32,923,471
Income taxes paid	$	89,606	$	689,879

SUPPLEMENTAL NON-CASH DISCLOSURES:

During the years ended June 30, 2009 and 2008, $1,693,861 and $6,114,071 were transferred from construction in progress to toll road infrastructures, respectively.

During the years ended June 30, 2009 and 2008, $150,375 and $0 were transferred from construction in progress to plant and equipment, respectively.

See accompanying notes to the consolidated financial statements.

F-7

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

China Infrastructure Investment Corporation (Formerly Learning Quest Technologies, Inc.) and subsidiaries (“CIIC” or the “Company”) was incorporated under the laws of the State of Nevada on January 11, 2001. Effective April 5, 2008, the Company changed its name to China Infrastructure Investment Corporation.

On February 8, 2008, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Color Man Holdings Limited, a British Virgin Islands company (“CMH”) and Joylink Holdings Limited, a British Virgin Islands company and the sole stockholder of CMH (the “Stockholder”). As a result of the share exchange, CIIC acquired all of the issued and outstanding securities of CMH, an inactive holding company, from the Stockholder in exchange for 54,400,000 newly-issued shares of CIIC’s common stock, par value $0.001 per share (“Common Stock”), representing 68% of CIIC’s issued and outstanding Common Stock (the “Exchange”). The Company effectuated a 2-1 reverse split of its Common Stock effective on December 3, 2007 effectively reducing the number of issued and outstanding shares of Common Stock to 25,000,000 shares. On January 22, 2008, the Company completed a dividend distribution to its shareholders of record as of January 18, 2008 in the amount equal to five percent (5%) (1,250,005 shares) of the then issued and outstanding Common Stock. There were 26,250,005 shares outstanding in CIIC immediately before the Share Exchange Transaction and the cancellation of 650,005 shares at the time of the Exchange. The Exchange was intended to constitute a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. As a result of the Exchange, CMH became a wholly-owned subsidiary of CIIC. Generally accepted accounting principles require that a company whose shareholders retain the majority interest in a combined business be treated as the acquirer for accounting purpose, resulting in a reverse acquisition. Accordingly, the share exchange transaction has been accounted for as a recapitalization of CIIC.

CMH was formed on April 11, 2005 as a British Virgin Islands company with authorized capital of US$50,000 divided into 50,000 shares, each having a par value of US$1.00. Wise On China Limited (“WOCL”) was established and incorporated on November 2, 2005 with authorized share capital of HK$10,000 (approximately US$1,279.44) divided into 10,000 shares, each having a par value of HK$1.00 (approximately US$0.13). CMH’s sole business is to act as a holding company for WOCL, and WOCL’s sole business is to act as a holding company for the Company. CMH owns one share of WOCL approximately equal to US$0.13 in registered capital.

Pingdingshan Pinglin Expressway Co., Ltd (“Ping”) was incorporated under the laws of the People’s Republic of China (“PRC”) on May 12, 2003 by four investors, namely, Henan Shengrun Venture Investment Management Co., Ltd. (“SVIC”), Henan Pingdingshan Zhongya Road and Bridge Construction Co., Ltd. (“PZRB”), Pingdingshan Expressway Construction Co., Ltd. (“PECC”), and Zhongyuan Trust & Investment Co., Ltd. (“ZTIC”). At establishment, the percentage of each party’s equity interests was 46%, 18%, 18% and 18% respectively. On May 21, 2007, PZRB, PECC, and ZTIC transferred their equity interests in Ping to SVIC and LI, Xi Peng. As a result, Ping is held by SVIC and Li, Xi Peng with equity interests of 95% and 5%, respectively. Ping’s approved operation tenure is 30 years from May 21, 2007. On July 30, 2007, Ping’s shareholders completed an acquisition and exchange transaction with WOCL. After the transfer, WOCL owned 100% interest of Ping.

F-8

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

With the approval from Henan Transportation Bureau and the State Development and Revolution Committee of China [NO. 2003-1784], the Company is permitted to construct and operate the toll road from Pingdingshan to Linru, Henan, China, for 30 years from 2003. Pursuant to the permission from Henan Transportation Bureau and Henan Development and Revolution Committee [NO. 2005-1885], the Company is entitled to operate 6 toll gates. All the rates applicable to the automobiles are defined by the Henan Transportation Bureau and Henan Development and Revolution Committee.

The principal activities of the Company are investment, construction, operation, and management of the Pingdingshan – Linru section (“Pinglin Expressway”), and the rent of petrol stations and service districts along the toll roads. Currently, all the operations of the Company are in the People’s Republic of China (“PRC”).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The consolidated financial statements include the accounts of China Infrastructure Investment Corporation and the following subsidiaries:

(i)

Color Man Holdings Limited (“CMH”) (An inactive holding company, 100% subsidiary of CIIC).

(ii)

Wise On China Limited (“WOCL”) ( An inactive holding company,100% subsidiary of CMH)

(iii)

Pingdingshan Pinglin Expressway Co., Ltd. (“Ping”) ( 100% subsidiary of WOCL)

Inter-company accounts and transactions have been eliminated in consolidation.

F-9

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Concentrations

The location of the toll road and the operations of the Company are solely in the Henan Province, PRC for the years ended June 30, 2009 and 2008.

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

(d) Use of Estimates

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

A significant estimate of the Company is the estimate of future total traffic volume. This estimate is used for the calculation of depreciation relating to the toll road. Also see Note 2(h).

Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ materially from those estimates.

(e) Fair Value of Financial Instruments

Statement of Financial Accounting Standards (“SFAS”) No. 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

F-10

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Fair Value of Financial Instruments (continued)

These tiers include:

• Level 1—defined as observable inputs such as quoted prices in active markets;

• Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

• Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The assets measured at fair value on a recurring basis subject to the disclosure requirements of SFAS No. 157 as of June 30, 2009 are as follows:

			Fair Value Measurements at Reporting Date Using
	Carrying value as of June 30, 2009		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	1,614,260		1,614,260		-		-

Restricted cash	$	3,550,761		3,550,761		-		-

Cash and cash equivalents consist primarily of highly rated money market funds at a variety of well-known institutions with original maturities of three months or less. The original cost of these assets approximates fair value due to their short term maturity.

(f) Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. The Company maintains no bank accounts in the United States of America. Also see Note 12 for restricted cash.

F-11

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Plant and Equipment

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

Motor vehicles		8 years
Machinery		8 years
Office equipment		6 years
Toll stations and ancillary facilities		27 years
Communication and monitoring equipment		10 years

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

(h) Toll Road Infrastructures

Toll road infrastructures are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of the toll road infrastructures are calculated to write off their cost, commencing from the date of commencement of commercial operation of the toll roads, based on the ratio of actual traffic volume compared to the total expected traffic volume of the toll roads as assessed by management each year, with reference to traffic projection reports prepared by an independent PRC organization in prior years. Also see Note 2(d).

(i) Construction in Progress

Construction in progress represents costs incurred in the construction of expressways and bridges. The costs includes development expenditures and other direct costs, including interest cost on the related borrowed funds during the construction period attributable to the development of plant and equipment and toll road infrastructures. Construction in progress is transferred to the appropriate category of plant and equipment and toll road infrastructures when completed and ready for intended use. Depreciation commences when the assets are ready for their intended use. There was no construction in progress at June 30, 2009 and 2008.

F-12

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(j) Capitalized Interest

The Company capitalizes interest as a component of communication and monitoring equipment and toll toad construction costs. No interest expense was capitalized by the Company for the years ended June 30, 2009 and 2008, since construction was completed.

(k) Land Use Rights

According to the laws of China, land in the PRC is owned by the Government and cannot be sold to an individual or company. However, the government grants the user a “land use right” to use the land. The land use rights granted to the Company are being amortized when the toll road is ready to operate, using the straight-line method over the approved toll road operating period of 27 years.

(l) Impairment of Long-Term Assets

Long-term assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in SFAS No. 144. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. There were no impairments for the years ended June 30, 2009 and 2008.

(m) Revenue Recognition

Revenue represents toll revenue net of business tax, and is recognized when all of the following criteria are met:

- The amount of revenue can be measured reliably,

- It is probable that the economic benefits associated with the transaction will flow to the enterprise,

- The costs incurred or to be incurred in respect of the transaction can be measured reliably, and

- Collectibility is reasonably assured.

(n) Rental Income

The Company rents gas stations, advertising booths and toll road service districts to lessees. Rental income is measured at the fair value of the consideration receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales tax. Also see Note 13.

F-13

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) Retirement Benefits

Retirement benefits in the form of contributions under defined contribution retirement plans to the relevant authorities are charged to operations as incurred. Retirement benefits amounting to $120,676 and $59,763 were charged to operations for the years ended June 30, 2009 and 2008.

(p) Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Also see Note 14.

(q) Earnings Per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no potentially dilutive securities for the years ended June 30, 2009 and 2008.

F-14

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Foreign Currency Translation

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

	June 30, 2009		June 30, 2008
Years ended RMB: US$ exchange rate		6.8448		6.8718
Average yearly RMB: US$ exchange rate		6.8482		7.2477

(s) Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income should be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of comprehensive income is the foreign currency translation adjustment.

(t) Recent Accounting Pronouncements

In December 2008, the Financial Accounting Standards Board (” FASB”) approved FSP No. FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. These disclosures include how investment allocation decisions are made, information about major categories of plan assets, significant concentrations of risks within plan assets, and fair value measurements of plan assets. Our effective date is June 30, 2009. The adoption of FSP No. FAS 132(R)-1 did not have an impact on the Company’s financial statements.

F-15

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(t) Recent Accounting Pronouncements (continued)

FSP FAS 115-2 and FAS 124-2 amend the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. It did not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. We are required to adopt this FSP for our interim and annual reporting periods ending after June 15, 2009. This FSP does not require disclosures for periods presented for comparative purposes at initial adoption. The adoption of FSP FAS 115-2 and FAS 124-2 did not have an impact on the Company’s financial statements.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). FAS 167 amends FASB 46(R) to require an enterprise to perform an analysis and ongoing reassessments to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity and amends certain guidance for determining whether an entity is a variable interest entity. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009 and for all interim reporting periods after that. and is not anticipated to have any material impact on the Company’s consolidated financial statements. The Company is currently evaluating the impact of the adoption of SFAS 167.

F-16

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F-17

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

3. NOTES RECEIVABLE

Notes receivable is from unrelated companies and consists of the following:

	June 30, 2009		June 30, 2008

Notes receivable from unrelated companies	$	884,677	$	776,936
Less: Provision for doubtful accounts		780,001		-
	$	104,676	$	776,936

On June 20, 2007, the Company loaned to Pingdingshan Traffic Administration $655,403. The note is unsecured and was due December 20, 2007, bearing a 5.85% interest rate per annum. On December 20, 2007, the Company entered into a renewal agreement with Pingdingshan Traffic Administration, whereby the note was extended to December 20, 2008 with a 7.47% interest rate per annum. Considering the aging of the note receivable has exceeded two years and the Company has never received the interest or principal from the note, the Company’s management believes there is uncertainty as to collection of the note. A full provision amounting to $780,001 was provided by the Company as of June 30, 2009.

On January 22, 2009, the Company loaned to Pingdingshan Expressway Construction Co., Ltd. $104,676. The note is unsecured and is due January 21, 2010, and bears a 5.31% interest rate per annum.

Interest income for the years ended June 30, 2009 and 2008 was $2,407 and $46,767, respectively.

4. NOTES RECEIVABLE FROM RELATED PARTIES

	June 30, 2009		June 30, 2008

Tai Ao Expressway Co., Ltd
Principal	$	70,130,050	$	69,854,502
Interest receivable		4,664,700		4,935,189
		74,794,750		74,789,691
Xinyang Expressway Co., Ltd
Principal		69,670,334		70,017,656
Interest receivable		4,650,237		5,261,827
		74,320,571		75,279,483

Henan Ruijia Industry Co., Ltd
Principal		2,191,445		-
Interest receivable		25,535		-
		2,216,980		-

Total notes receivable from related parties	$	151,332,301	$	150,069,174

F-18

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

4. NOTES RECEIVABLE FROM RELATED PARTIES (CONTINUED)

On June 26, 2008, Tai Ao Expressway Co., Ltd (“Tai Ao”) entered into a renewal agreement with the Company. Pursuant to the agreement, the note receivable to Tai Ao was extended to June 29, 2010 with a 7.83% interest rate per annum. Interest is paid annually and the principal is repaid at maturity.

On June 26, 2008, Xinyang Expressway Co., Ltd (“Xinyang”) entered into a renewal agreement with the Company. Pursuant to the agreement, the note receivable to Xinyang was extended to June 29, 2010 with a 7.83% interest rate per annum. Interest is paid annually and the principal is repaid at maturity.

On April 12, 2009, Henan Ruijia Industry Co., Ltd (“Ruijia”) entered into an agreement with the Company. Pursuant to the agreement, the Company provided a note receivable for $2,191,445 to Ruijia. Such note receivable is due April 11, 2010, and bears a 5.31% interest rate per annum. The principal and the interest are repaid at maturity.

The notes receivable were provided to these companies for their construction working capital. The above three companies are related to the Company through a common shareholder of the Company. The notes receivable are interest bearing and unsecured. Interest income was $9,335,849 and $9,668,217 for the years ended June 30, 2009 and 2008, respectively.

Also see Note 17.

5. ADVANCE TO A RELATED PARTY

	June 30, 2009		June 30, 2008


Tai Ao Expressway Co., Ltd	$	32,680,154	$	21,733,471

The Company made advances to suppliers on behalf of Tai Ao Expressway Co., Ltd. for the purchase of construction materials, amounting to approximately $33 million, in order to assist them with their working capital needs. For the year ended June 30, 2009, the net increase in advance to Tai Ao was approximately amounting to $11 million.

The balances of $32,680,154 and $21,733,471 at June 30, 2009 and 2008, respectively, are current, unsecured, interest free and due on demand.

Also see Note 17.

F-19

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

6. TOLL ROAD INFRASTRUCTURES, NET

Toll road infrastructures consist of the following:

	June 30, 2009		June 30, 2008

At cost:	$	456,511,890	$	453,825,417

Less: Accumulated depreciation		19,332,910		10,153,410
Toll road infrastructures, net	$	437,178,980	$	443,672,007

Depreciation expense for the years ended June 30, 2009 and 2008 was $9,932,916 and $4,409,132, respectively. Also see Notes 2(d) and 2(h).

The Company financed its construction of the toll road infrastructures substantially through long-term loans from banks. These bank loans were secured by the toll road operating right owned by the Company. Also see Note 11.

7. PLANT AND EQUIPMENT, NET

Plant and equipment consist of the following:

	June 30, 2009		June 30, 2008

At cost:
Toll station and ancillary facilities	$	10,422,227	$	10,114,007
Communication and monitoring equipment		5,757,340		5,675,065
Motor vehicles		1,466,485		1,460,723
Machinery		297,686		296,516
Office equipment		572,395		429,824
		18,516,133		17,976,135
Less: Accumulated depreciation
Toll station and ancillary facilities		1,136,852		801,811
Communication and monitoring equipment		575,571		388,473
Motor vehicles		804,005		623,733
Machinery		110,376		73,989
Office equipment		227,027		144,678
		2,853,831		2,032,684
Plant and equipment, net	$	15,662,302	$	15,943,451

Depreciation expense for the years ended June 30, 2009 and 2008 was $812,726 and $745,645, respectively.

F-20

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

8. LAND USE RIGHTS

Land use rights consist of the following:

	June 30, 2009		June 30, 2008


Cost	$	53,718,010	$	53,506,947
Less: Accumulated amortization		6,453,558		4,440,555
Land use rights, net	$	47,264,452	$	49,066,392

Amortization expense for the years ended June 30, 2009 and 2008 was $1,994,500 and $1,884,572, respectively.

Amortization expense for the next five years and thereafter is as follows:

June 30, 2010	$	1,994,500
June 30, 2011		1,994,500
June 30, 2012		1,994,500
June 30, 2013		1,994,500
June 30, 2014		1,994,500
Thereafter		37,291,952
Total	$	47,264,452

F-21

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

9. LONG-TERM INVESTMENT

	June 30, 2009					June 30, 2008
	Ownership Interest			Net Book Value		Ownership Interest			Net Book Value

At cost:

Pingdingshan City Credit Corporation		2.39	%	$	1,577,840		3	%	$	1,455,223

The Company invested in Pingdingshan City Credit Corporation (“PCCC”), a commercial banking corporation established in 2005. The Company deposited Rmb20 million (approximately $2.5 million) in December 2005 and then purchased 3% of the total equity interest in PCCC in exchange for Rmb10 million (approximately $1.3 million) in 2007. As a consequence, Rmb10 million (approximately $1.3 million) was refunded to the Company in 2007. As of June 30, 2009 and 2008, the Company does not have more than a 20% interest in the investment and does not exercise significant influence over the investee. The Company accounts for the investment under the cost method. Investment income is recognized by the Company when the investee declares a dividend and the Company believes it is collectible. Dividend income for the fiscal years ended June 30, 2009 and 2008 were $116,819 and $68,988, respectively.

On March 29, 2006, Ping entered into a share purchase agreement with PCCC, a local financial institution. Pursuant to the agreement, the Company obtained 3% of the total equity interest of PCCC with the consideration amounting to Rmb10 million (approximately US$1.3 million). During year 2009, after PCCC increased its share capital, the Company’s share of the total equity interest of the total equity interest in PCCC was diluted to 2.39%. Management of the Company adopted the cost method for the accounting of such investment.

10. SHORT-TERM BANK LOAN

Short-term bank loan as of June 30, 2009 and 2008 consist of the following:

		June 30, 2009				June 30, 2008
Loan from China Minsheng Banking Corp., Ltd., due March 23, 2010, monthly interest only payments at 5.31% per annum, co-secured by Tai Ao Expressway Co., Ltd., the chief executive officer Mr. Li Xipeng and the expressway toll right owned by the Company.		$	7,304,815			$	-

Interest expense for this loan for the years ended June 30, 2009 and 2008 was $103,434 and $0, respectively.

F-22

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

11. LONG-TERM BANK LOANS

Long-term bank loans consist of the following:

	June 30, 2009		June 30, 2008

Loan from National Development Bank of China Henan Branch, due May 20, 2017, bearing a 6.12% interest rate per annum, secured by the toll road operating right owned by the Company. Principal is repaid every 6 months in 20 unequal installments from November 2007, and interest is paid quarterly.	$	93,501,636	$	98,955,150

Loan from Agricultural Bank of China, due November 20, 2011, bearing a 5.94% interest rate per annum, secured by the toll road operating right owned by the Company. Principal is to be repaid every year in 2 equal installments from February 2010, and interest is paid monthly.		29,219,261		29,104,456

Loan from Agricultural Bank of China, due March 20, 2012, bearing a 5.94% interest rate per annum, secured by the toll road operating right owned by the Company. Principal is to be repaid on maturity, and interest is paid monthly.		29,219,261		29,104,456

Loan from Industrial and Commercial Bank of China Pingdingshan Branch, due July 21, 2020, bearing a 7.05% interest rate per annum, secured by the toll road operating right owned by the Company. Principal is repaid every year in 13 unequal installments from November 2007, and interest is paid monthly.		170,316,152		174,504,497

Loan from National Development Bank of China Henan Branch, due November 28, 2022, bearing a 6.12% interest rate per annum, secured by the toll road operating right owned by the Company. Principal is to be repaid every 6 months in 12 unequal installments from May 2017, and interest is paid quarterly.		146,096,308		145,522,279
Total long-term bank loans		468,352,618		477,190,838
Less: current portion		27,767,064		10,678,425

Long-term portion	$	440,585,554	$	466,512,413

F-23

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 AND 2008

11. LONG-TERM BANK LOANS (CONTINUED)

For the years ended June 30, 2009 and 2008, interest expense was $33,499,020 and $32,923,472, respectively. No interest was capitalized as a component of construction costs during the reporting periods.

According to the loan agreements with National Development Bank of China Henan Branch, the bank has the right to demand repayment of the loans in full if the Company provides any guarantee to other third party debt that exceeds 70% of the Company’s total assets. The Company did not provide any guarantees to the third parties as of June 30, 2009 and 2008. The repayment schedule for the long-term bank loans is as follows:

June 30, 2010	$	27,767,064
June 30, 2011		15,597,242
June 30, 2012		39,960,262
June 30, 2013		60,413,745
June 30, 2014		27,284,946
Thereafter		297,329,359
Total	$	468,352,618

12. NOTES PAYABLE

	June 30, 2009		June 30, 2008

Bank acceptance notes	$	3,521,542	$	-

Notes payable were issued to the Company’s contractors through China Minsheng Banking Corp., Ltd.. The notes are interest free and due in six months. Restricted cash of $3,550,761 collateralizes the notes at June 30, 2009.

F-24

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

13. DEFERRED REVENUE

	June 30, 2009			June 30, 2008

Deferred revenue	$	16,040,024		$	16,579,907
Imputed interest discount		(9,459,018	)		(9,952,079	)
Total		6,581,006			6,627,828
Less: current portion		78,803			72,679

Long-term portion	$	6,502,203		$	6,555,149

The Company rents four gas stations to Petro China Company Limited (“PCCL”) Pingdingshan branch from January 1, 2006 for 30 years. The Company received the entire 30 year rental fee net of the business tax of $5,372,708 from PCCL in 2006.

The Company imputed interest on the amount using an 8% discount rate, under the effective interest rate method. The rental income recognized during the years ended June 30, 2009 and 2008 is $604,984 and $571,640 respectively. The imputed interest for the years ended June 30, 2009 and 2008 is $532,054 and $507,834, respectively.

14. INCOME TAX

On March 16, 2007, the National People’s Congress of China approved the Corporate Income Tax Law of the People’s Republic of China (the “new CIT Law”), which was effective on January 1, 2008.Under the new CIT Law, the corporate income tax rate applicable to the Company starting from January 1, 2008 will be 25%. The new CIT Law has an impact on the deferred tax assets and liabilities of the Company. The Company adjusted deferred tax balances as of March 31, 2009 based on their best estimates and will continue to assess the impact of such new law in the future. The effects arising from the enforcement of the new CIT law have been reflected in the accounts.

The Company uses FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"). — AN INTERPRETATION OF FASB STATEMENT NO. 109, ACCOUNTING FOR INCOME TAXES. The Interpretation addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2009, the Company did not have a liability for unrecognized tax benefits.

F-25

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

14. INCOME TAX (CONTINUED)

Income tax expense is summarized as follows:

	Years ended June 30,
	2009		2008
Current	$	239,903	$	941,043
Deferred change		619,509		3,346,864
Income tax expense	$	859,412	$	4,287,907

The Company’s income tax expense differs from the “expected” tax expense (computed by applying the CIT rate of 25% percent to income before income taxes) as follows:

	Years ended June 30,
	2009		2008
Computed “expected” expense	$	767,279	$	4,205,674
Permanent differences		92,133		82,233
Income tax expense	$	859,412	$	4,287,907

F-26

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

14. INCOME TAX (CONTINUED)

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities are as follows:

Current portion:	June 30, 2009			June 30, 2008

G&A expenses	$	349,858		$	286,664
Amortization		-			30,226
Depreciation		-			304,361
Road maintenance costs		438,142			-
Other expenses		125,742			38,710
Net operating loss		413,130			-
Total deferred tax assets		1,326,872			659,961

Sales cut-off		(999,885	)		(1,319,370	)
Depreciation		-			-
Interest income		(7,478,740	)		(7,694,689	)
Interest expense		(533,679	)		-
Accrued expenses		-			(112,208	)
Consulting fees		(124,968	)		(72,761	)
Other expenses		(41,728	)		(17,467	)
Total deferred tax liabilities		(9,179,000	)		(9,216,495	)

Net deferred tax liabilities	$	(7,852,128	)	$	(8,556,534	)

Non-current portion:
Rental income	$	112,064		$	73,232
Capitalized interest		2,234,106			2,225,328
Amortization		1,613,390			1,079,913
Bad debts		2,691,824			2,681,248
Total deferred tax assets		6,651,384			6,059,721

Depreciation		(1,925,734	)		-
Total deferred tax liabilities		(1,925,734	)		-

Net deferred tax assets	$	4,725,650		$	6,059,721

F-27

CHINA INFRASTRUCTURE INVESTMENT CORPORATION

(FORMERLY LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

15. CONTINGENCIES

Litigation:

The Company entered into an agreement to purchase a land use right from Pingdingshan No. 3 Cement Factory for $1,843,646. However, the Company was not informed that such land use right was pledged by the cement factory as collateral for loans from Pingdingshan Suburb Huancheng Credit Corporation (“PSHCC”). Pingdingshan No. 3 Cement Factory went bankrupt and PSHCC who loaned them money then sued the Company for the loss of the collateral. On July 13, 2006, judgment was made by the Henan Pingdingshan Intermediary Court in which the Company was required to pay PSHCC $485,851. The amount was paid in August 2006. The Company appealed the ruling to Henan Pingdingshan Intermediary Court again. Pursuant to the final judgment made on April 25, 2008, the compensating claim from PSHCC was rejected. Currently, the Company is in the progress of pursuing receipt of the amount paid. While during the pursuing progress, PSHCC appealed such final judgment to Henan Higher Court and is waiting for the judgment. No receivable for the contingency was recorded as of June 30, 2009 or 2008.

16. CONTRIBUTED CAPITAL

Contributed capital, included in additional paid-in capital, represents the debt forgiveness from a shareholder of the Company. One of the Company’s shareholders, Long Triumph Investments Limited (“LTII”) paid certain expenses on behalf of the Company. The debt associated with such expenses were forgiven by LTII for the year ended June 30, 2009.

17. SUBSEQUENT EVENTS

On September 27, 2009, the board of directors of the Company approved a share purchase resolution. Pursuant to a letter of intent dated September 27, 2009, the Company will purchase at least 51% of Tai Ao. The consideration will be firstly settled with the credit to Xinyang, then it will be settled with cash for the remaining part. If the Company successfully negotiates with Tai Ao’s shareholders, the consideration will be determined in accordance with the audited net assets of Tai Ao at the purchase date. If the Company finally succeeds in such transaction, Tai Ao should become subsidiary, which means the note and advance to Tai Ao will be eliminated in the consolidated financial statements of the Company. If this transaction is completed, it is expected to be accounted for as an acquisition of a company under common control. Also see Notes 4 and 5.

F-28

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

CIIG Merger Inactive 10-K2009 FY Annual report

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