Environment Ecology Holding Co Of China 10Q 2009 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934:

For the Quarterly Period ended December 31, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from __________________ to __________________

Commission File Number: 000-51818

ENVIRONMENT ECOLOGY HOLDING COMPANY OF CHINA

(Exact name of small business issuer as specified in its charter)

Florida

20-4200300

(State or other jurisdiction of
incorporation or organization)

(IRS Employer

Identification No.)

391 Hua Yu Lane, Dong Xin Street

Xi'an, Shaanxi Province, P.R.China
(Address of principal executive offices)

(8629) 8826-5109
(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YESx •NO ¨

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,” “non-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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 33,162,114 shares issued and outstanding as of February 19, 2009 and additional 50,000,000 shares issued and held in an escrow account as collateral for the investment transaction between the issuer and Trafalgar Capital Specialized Investment Fund, Luxembourg.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

The discussion contained in this 10-Q under the Securities Exchange Act of 1934, as amended, contains forward-looking statements that involve risks and uncertainties. The issuer's actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the Company believes," "management believes" and similar language, including those set forth in the discussions under "Notes to Consolidated Financial Statements" and "Management's Discussion and Analysis or Plan of Operation" as well as those discussed elsewhere in this Form 10-Q. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are subject to the "safe harbor" created by the Private Securities Litigation Reform Act of 1995.

On this Form 10Q quarterly report, the registrant, Environment Ecology Holding Company of China, is hereinafter referred as "we", or "Company", or "EVEH".

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A.RISK FACTORS

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURES

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

ENVIRONMENT ECOLOGY HOLDING COMPANY OF CHINA

(Unaudited and Unreviewed)
Condensed Consolidated Financial Statements
For The Six Months Ended December 31, 2008

ENVIRONMENT ECOLOGY HOLDING COMPANY OF CHINA

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Condensed Consolidated Balance Sheets as of December 31, 2008 and June 30, 2008

Condensed Consolidated Statements of Operations And Comprehensive Income for the Six Months ended December 31, 2008

Condensed Consolidated

Condensed Consolidated Statements of Cash Flows for the Six Months ended December 31, 2008

Notes to Condensed Consolidated financial Statements

Environment Ecology Holding Company of China
Condensed Consolidated Balance Sheet (Unaudited and Unreviewed)
*As of December 31, 2008 and June 30, 2008*
*(Expresed in US Dollars, except for number of shares)*
				December 31, 2008		June 30, 2008
ASSETS				(Unaudited)		(Audited)
CURRENT ASSETS
	Cash and cash equivalents		$	2,390,163	$	6,420,881
	Billed accounts receivable			1,395,125		1,533,342
	Unbilled accounts receivable			2,409,680		1,568,800
	Other receivables and prepayments			-		41,667
		TOTAL CURRENT ASSETS		6,194,968		9,564,690

FIXED ASSET
	Proporty, plant & machinery			399,681		442,322
	Investment deposit			4,376,878		-
	Investment in plantation			1,321,934		-
	Technical knowhow			154,650		162,985
		TOTAL NON-CURRENT ASSETS		6,253,143		605,307

		TOTAL ASSETS	$	12,448,111	$	$ 10,169,997

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
	Accounts payable		$	-	$	-
	Income tax payable			119,970		132,827
	Deferred tax liabilities			918,600		810,684
	Amount due to stockholders			93,267		34,836
	Other payables and accrued liabilities			1,533,364		651,968
		TOTAL CURRENT LIABILITIES		2,665,201		1,630,315

NON-CURRENT LIABILITIES
	Redeemable debenture			1,012,236		1,186,737

TOTAL LIABILILITES				3,677,437		2,817,052

MINORITY INTEREST				468,519		360,081

STOCKHOLDERS' EQUITY

	Perferred stock, $0.001 par value; 100,000 shares authorized; 100,000 shares issued and outstanding			100		100
	Common stock, $0.001 par value; 100,000,000 shares authorized; 30,662,114 and 28,662,114 shares issued and outstanding respectively			33,162		33,162
	Additional paid-in capital			2,736,549		2,736,549
	Deferred compensation			-		-
	Subscription receivable
	Accumulated other comprehensive income			648,932		630,329
	Statutory reserve			431,332		278,606
	Retained earnings			4,452,080		3,314,118
		TOTAL STOCKHOLDERS' EQUITY		8,302,155		6,992,864

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,448,111	$	$ 10,169,997

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

Environment Ecology Holding Company of China
Condensed Consolidated Statement of Operations and Comprehensive Income (Unaudited and Unreviewed)
*For The Three And Six Months Ended December 31, 2008 AND 2007*
*(Expresed in US Dollars, except for number of shares)*

				3 months ended December 31,				6 months ended December 31,
				2008		2007		2008		2007

REVENUES:				5,466,052		2,030,058		10,512,416		3,186,022

COST OF REVENUES:				3,527,252		1,379,544		7,437,280		2,141,361

		GROSS PROFIT		1,938,800		650,514		3,075,136		1,044,661

OPERATING EXPENSES:
	Consulting and professional fees			-		91,357		-		317,969
	Research and development			-		93,180		-		93,180
	(Reversal of) allowance for doubtful accounts			-		(106,116)		-		(106,116)
	General and administrative			511,494		35,827		643,865		177,968
		TOTAL OPERATING EXPENSES		511,494		114,248		643,865		483,001

		INCOME FROM OPERATIONS		1,427,306		536,266		2,431,271		561,660

OTHER INCOME:(expenses)
	Other income			-		-		-		-
	Interest expense			(207,678)		-		(419,359)
	Interest income			831		782		1,578		819
		TOTAL OTHER INCOME (EXPENSES)		(206,847)		782		(417,781)		819

INCOME FROM OPERATIONS				1,220,459		537,048		2,013,490		562,479

Income tax expense				(345,559)		(101,230)		(614,936)		(192,644)
Minority interest				(59,801)		(33,949)		(107,866)		(45,141)

		NET INCOME	$	815,099	$	401,869	$	$ 1,290,688	$	324,694

Other comprehensive income:
Foreign currency translation gain				134		85,578		18,603		121,405

Comprehensive income			$	815,233	$	487,447	$	1,309,291	$	446,099

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

Environment Ecology Holding Company of China

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED AND UNREVIEWED)

FOR THE PERIODS ENDED DECEMBER 31, 2008

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	Series “A”									Accumulated
	Preferred Stock			Common stock				Additional		other
	No. of			No. of				paid-in		comprehensive		Statutory		Retained		Total
	share		Amount	share		Amount		capital		income		reserve		earnings		equity

Balance as of
June 30, 2008	100,000	$	100	33,162,114	$	33,162	$	2,736,549	$	630,329	$	278,606	$	3,314,118	$	6,992,864


Net income
for the period	--		--	--		--		--		--		--		1,290,688		1,290,688


Provision of
statutory
reserve	--		--	--		--		--		--		152,726		152,726		--


Foreign
currency
adjustment	--		--	--		--		--		18,603		--		--		18,603


Balance as of
December 31, 2008	100,000	$	100	33,162,114	$	33,162	$	2,736,549	$	648,932	$	431,332	$	4,452,080	$	8,302,155

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

	Environment Ecology Holding Company of China Condensed Consolidated Statement of Cash Flows (Unaudited and Unreviewed) *For The Six Months Period* *Ended December 31, 2008*
						*6 months ended* *December 31, 2008*
						Total
						USD

Cash Balance, Beginning of Year						6,420,881.25

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income					1,290,687.65
	Adjustments to reconcile net income to net
	cash provided by (used in) operating activities:
		Depreciation				45,577.00
		Amortization				8,756.00
		Discount of finance cost				244,440.00
		Stock-based compensation				-
		Rental expenses, non-cash				-
		Deferred tax (benefit) expenses				105,851.00
		Minority interest				107,866.00
		Changes in operating assets and liabilities
				Billed accounts receivable		142,179.00
				Inventory		-
				Unbilled accounts receivable		(836,998.00)
				Income tax credit		-
				Other receivables and prepayments		-
				Prepayment		41,667.00
				Receipt in advance		(61,542.00)
				Income tax payable		(13,198.00)
				Other payables and accrued liabilities		941,482.57
			NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			2,016,768.22

CASH FLOWS FROM INVESTING ACTIVITIES
		Payments to investment deposit				(4,377,645.00)
		Expenditure in plantation investment				(1,322,165.00)
		Purchase of property, plant and equipment				(1,792.00)
			NET CASH (USED IN) INVESTING ACTIVITIES			(5,701,602.00)

CASH FLOWS FROM FINANCING ACTIVITIES
		Repayment of debenture				(418,940.66)
		Advance from stockholders				58,389.31
		Amount due from stockholders				-
		Amount due from inter-co				-
		Amount due to inter-co				-

			NET CASH PROVIDED BY FINANCING ACTIVITIES			(360,551.35)

Foreign currency translation adjustment						14,666.88

			NET INCREASE IN CASH AND CASH EQUIVALENTS			(4,030,718.25)

CASH AND CASH EQUIVALENTS:
			End of period		$	2,390,163.00
						0.00
Supplemental disclosures of cash flow information:

Cash paid for interest					$	60,764
Cash paid for income taxes					$	628,134

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

NOTE - 1 BASIS OF PRESENTATION

The accompanying unaudited and unreviewed condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, the consolidated balance sheet as of June 30, 2008 which has been derived from audited financial statements and these unaudited and unreviewed condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended December 31, 2008 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2009 or for any future period.

These unaudited and unreviewed condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2008.

NOTE - 2 ORGANIZATION AND BUSINESS BACKGROUND

Environment Ecology Holding Company of China (the “Company”) was incorporated under the laws of the State of Florida on September 14, 1989 as “First New York Investments, Inc.” On November 25, 1996, the Company changed its name to “Computer Access International, Inc.” On March 31, 2005, the Company changed its name to “Dispatch Auto Parts, Inc.” On November 2, 2007, the Company further changed its name to “Environment Ecology Holding Company of China.”

The Company, through its subsidiaries, mainly engages in the provision of landscape engineering service in the PRC.

On November 8, 2006, the Company entered a stock exchange transaction with Shaanxi Lv Bao Environmental Eco Industry Management Ltd. (“Lv Bao”) and the transaction was effectively completed on February 6, 2007. Lv Bao was registered as a limited liability company in the People’s Republic of China (the “PRC”) on August 11, 2006 with its principal place of business in Xian City, Shaanxi Province, the PRC. Its registered capital is Renminbi Yuan (“RMB”) 5,000,000 (equivalent to $628,773). Its principal activity was investment holding in Shaanxi Li Bao Sheng Tai Ke Ji Gu Fen You Xian Gong Si (“Li Bao”). Upon completion of the plan of exchange, Lv Bao became a wholly-owned subsidiary of the Company.

On August 30, 2006, the owners of Lv Bao entered into an exchange agreement with the owners of Li Bao. This exchange transaction involved that Li Bao’ s equity owners transferred the aggregate equity interest of 93.57% of the registered capital of Li Bao ( equivalent to RMB65,500,000) to Lv Bao . The transaction was an exchange of shares and no cash or other assets were exchanged in the transaction was taken place. Following the completion of the equity transfer, Li Bao became an operating subsidiary of Lv Bao with 93.57% controlling interest.

The above two consecutive transactions have been accounted for as a reverse acquisition and recapitalization of the Company, through a wholly-owned subsidiary, Lv Bao, whereby Li Bao is deemed to be the ultimate accounting acquirer (legal acquiree) and the Company to be the ultimate accounting acquiree (legal acquirer). The accompanying consolidated financial statements are in substance those of Li Bao, with the assets and liabilities, and revenues and expenses, of the Company being included effective from the date of stock exchange transaction. The Company is deemed to be a continuation of the business of Li Bao, through its immediate holding company, Lv Bao.

Starting from January 1, 2008, the Company has commenced in the operation in Walnut plantation.

EVEH, Lv Bao and Li Bao are hereinafter referred to as (the “Company”).

NOTE - 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amount of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

Basis of consolidation

The consolidated financial statements include the financial statements of EVEH and its subsidiaries.

All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectibility is probable. The Company assesses collectibility based upon our clients’ financial condition and prior payment history, as well as our performance under the contract. The Company recognizes these revenues in the period that the service is provided.

(a) Contract revenue

The Company applies the percentage-of-completion method under SOP 81-1 “Accounting for Performance of Construction-Type and Production-Type Contracts”, to recognize revenues for landscape design and engineering projects that require significant modification or customization subject to the customers. The Company records a provision in those instances in which the Company believe a contract will probably generate a net loss and the Company can reasonably estimate this loss. If the Company cannot reasonably estimate the loss, the Company limits the amount of revenue that the Company recognizes to the costs the Company has incurred, until the Company can estimate the total loss. Advance payments from customers and amounts billed to clients in excess of revenue recognized are recorded as receipt in advance.

(b)

Sale of products

The Company derives revenues from the sales and production of walnut products. The Company recognizes its revenues net of value added taxes (“VAT”). The Company is subject to VAT at the rate of 6% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales while input VAT is not allowed for deduction from the invoiced value of purchases.

(c)

Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

Cost of revenue

Cost of revenue primarily includes purchase of raw materials for landscape design and engineering projects, manufacturing cost of walnut products, sub-contracting charges and direct overhead.

Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of Six Months or less as of the purchase date of such investments.

Billed and unbilled accounts receivable and allowance for doubtful accounts

The Company generally bills its customers under its long term contracts pursuant to billing schedules contained in the contracts or, upon completion of agreed milestones or deliveries, with each milestone or delivery typically having a value specified in the contract. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. As of December 31, 2008, an allowance for doubtful accounts was is not required.

Unbilled accounts receivable comprise principally amounts of revenue recognized on contracts for which invoices have not been issued. It is expected that all unbilled accounts receivable balances will be billed in the next twelve months.

Walnut plantation

Walnut plantation, which includes purchase cost of leasehold land, land improvement cost and saplings, is stated at acquisition cost less accumulated amortization of leasehold land and includes no estimated future reforestation cost. The cost of walnut plantation harvested is based on the volume of walnut harvested in relation to the estimated volume of walnut recoverable. Leasehold land is amortized using the straight-line method over the terms of lease due 2039. The Company estimates its walnut inventory using statistical information and data obtained from physical measurements and other information gathering techniques. The cost of walnut saplings purchased and reforestation costs are capitalized at the time of acquisition. Walnut plantation carrying costs are expensed as incurred. The value of the walnut plantation will be reviewed each reporting period and should be tested for impairment.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

	Depreciable life	Residual value
Leasehold improvement	10 years	5%
Plant and machinery	10 years	5%
Motor vehicles	10 years	5%
Office equipment	5 years	5%

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

Depreciation expense for the Six Months ended December 31, 2008 and 2007 were $22,694 and $26,051, respectively.

Intangible asset

Intangible asset refers to the purchased technical know-how in the Walnut plantation technology acquired from the Research Center in the PRC, an independent third party at its historical cost. Purchased technical know-how includes secret formulas, manufacturing processes, technical and procedural manuals to operate the walnut plantation business. Amortization is calculated on the straight-line basis over the expected useful life of 10 years.

Amortization expense for the Six Months ended December 31, 2008 and 2007 were $4,372 and $0, respectively.

Valuation of long-lived assets

Long-lived assets primarily include property, plant and equipment, walnut plantation and intangible asset. In accordance with Statement of Financial Accounting Standard ("SFAS") SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company periodically reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. Determining the fair value of long-lived assets includes significant judgment by management, and different judgments could yield different results. There has been no impairment as of December 31, 2008 or 2007.

Research and development

Research and development costs are expensed as incurred in the development of new processes including significant improvements and refinements of existing products. Such costs mainly relate to labor and material cost. The Company incurred $498,604 and $0 of such costs during the Six Months ended December 31, 2008 and 2007.

Comprehensive income

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during the period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statement of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Income taxes

The Company accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”, which requires the asset and liability approach for financial accounting and reporting for income taxes. Under this approach, deferred income taxes are provided for the estimated future tax effects attributable to temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from loss carry-forwards and provisions, if any. Deferred tax assets and liabilities are measured using the enacted tax rates expected in the years of recovery or reversal and the effect from a change in tax rates is recognized in the consolidated statement of operations and comprehensive income in the period of enactment. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

The Company also adopts Financial Accounting Standards Board ("FASB") Interpretation No. (FIN) 48, "Accounting for Uncertainty in Income Taxes" and FSP FIN 48-1, which amended certain provisions of FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

In connection with the adoption of FIN 48, the Company analyzed the filing positions in all of the federal, state and foreign jurisdictions where the Company and its subsidiaries are required to file income tax returns, as well as all open tax years in these jurisdictions. The Company adopted the policy of recognizing interest and penalties, if any, related to unrecognized tax positions as income tax expense. The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial condition or results of operations for the Six Months ended December 31, 2008.

The Company conducts major businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local and foreign tax authority.

Net income per share

The Company calculates net income per share in accordance with SFAS No. 128, “Earnings per Share”. Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income 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 stock equivalents had been issued and if the additional common shares were dilutive.

Foreign currencies translation

The reporting currency of the Company is the United States dollars ("US$"). The Company's subsidiaries in the PRC maintain their books and records in its local currency, Renminbi Yuan ("RMB"), which is functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with SFAS No. 52, “Foreign Currency Translation”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period:

	December 31, 2008	June 30, 2008

Month-end RMB:US$ exchange rate	6.855	7.496
Average monthly RMB:US$ exchange rate	6.864	7.560

Stock-based compensation

The Company adopts SFAS No. 123(R), “Share-Based Payment” using the fair value method. Under SFAS No. 123(R), the stock-based compensation is measured using the Black-Scholes Option-Pricing model on the date of grant. The fair value of stock-based compensation that is expected to vest is recognized using the straight-line method over the requisite service period.

The Company also applies Emerging Issues Task Force No. 96-18 “Accounting for Equity Instruments that are Issued to other than Employees for Acquiring, or in conjunction with selling, goods or services” (“EIFT 96-18”), with respect to options and warrants issued to non-employees.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Segment reporting

SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. Commencing from January 1, 2008, the Company operates two reportable segments: Landscape Business and Plantation Business.

Fair value of financial instruments

The Company values its financial instruments as required by SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”. The estimated fair value amounts have been determined by the Company, using available market information and appropriate valuation methodologies. The estimates presented herein are not necessarily indicative of amounts that the Company could realize in a current market exchange.

The Company’s financial instruments primarily include cash and cash equivalents, billed and unbilled accounts receivable, amount due to a stockholder, other receivables and prepayments, income tax payable and other payables and accrued liabilities.

As of the balance sheet date, the estimated fair values of financial instruments were not materially different from their carrying values as presented due to short maturities of these instruments.

Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations" ("SFAS No. 141R"). SFAS No. 141R will change the accounting for business combinations. Under SFAS No. 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141R will change the accounting treatment and disclosure for certain specific items in a business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations the Company engages in will be recorded and disclosed following existing GAAP until January 1, 2009. The Company believes that SFAS 141R should not have a material impact on the consolidated financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No. 160" ("SFAS No. 160"). SFAS No. 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. The Company believes that SFAS No. 160 should not have a material impact on the consolidated financial position or results of operations.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS No. 161"). SFAS No. 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations.

In May, 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles," ("SFAS No. 162"). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). SFAS No. 162 will be effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board's amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The FASB has stated that it does not expect SFAS No. 162 will result in a change in current practice. The application of SFAS No. 162 will have no effect on the Company's financial position, results of operations or cash flows.

Also in May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts--an interpretation of FASB Statement No. 60" ("SFAS No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS No. 163 on its financial statements but does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In May 2008, the FASB issued FSP APB 14-1, "Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to convertible debt securities that, upon conversion, may be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years after December 15, 2008, and must be applied on a retrospective basis. Early adoption is not permitted. The Company is assessing the potential impact of this FSP on the convertible debt issuances.

In June 2008, the FASB issued FASB Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. The Company is assessing the potential impact of this FSP on the earnings per share calculation.

In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF 07-5"). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. The Company is assessing the potential impact of this EITF 07-5 on the financial condition and results of operations.

NOTE - 4 FACILITIES OPERATING RIGHT

In August 2008, the Company entered the agreement to purchase the operating rights of 38 public restroom facilities for a cash consideration of $4,376,304 (equivalent to RMB30,000,000). These public restroom facilities are located in Xi’An City, Shaanxi Province, the PRC, in which the Company has exclusive rights to operate and manage these facilities for a certain period of time.

For the Six Months ended December 31, 2008, no revenue was generated from the operating rights since the Company has not completed the transfer of the legal titles and it is expected to be commenced the operation in the next quarter.

NOTE - 5 WALNUT PLANTATION

Walnut plantation consisted of the following:

		December 31, 2008	June 30, 2008

Leasehold land and improvement cost	$	1,156,659	$	--
Saplings		21,006		--

Walnut plantation	$	1,177,665	$	--

In September 2008, the Company acquired a number of leasehold farmland in Yangling City, Shaanxi Province, the PRC and commenced the walnut plantation business.

NOTE - 6 AMOUNT DUE TO A STOCKHOLDER

The amount due to a stockholder, Mr. Liu, Sheng Li represented unsecured advances which was interest-free and repayable in next twelve months. The imputed interest on the amount due to a stockholder was not significant.

NOTE - 7 LITIGATION

On February 09, 2009, Trafalgar Capital Specialized Investment Fund (the “Trafalgar”) filed a civil lawsuit against Company in the Circuit Court of the 17^th Judicial Circuit in Broward County, Florida. In its Complaint, Trafalgar asserted that Company “has defaulted on a debenture and a security agreement” and asked the court to allow Trafalgar to foreclose on Company’s assets and properties.

NOTE - 8 SUBSEQUENT EVENTS

On February 09, 2009, Trafalgar Capital Specialized Investment Fund (the “Trafalgar”) filed a civil lawsuit against Company in the Circuit Court of the 17^th Judicial Circuit in Broward County, Florida. On February 13, 2009, Company received the service of process of this lawsuit. In its Complaint, Trafalgar asserted that Company “has defaulted on a debenture and a security agreement” and asked the court to allow Trafalgar to foreclose on Company’s assets and properties.

On February 09, 2009, Zhong Yi (Hong Kong) CPA Company Limited (“Zhong Yi) resigned as the Company’s certifying accounting firm. As of the date of this Form 10Q quarterly report, Company is still looking to engage a new certifying accounting firm. Since Company has not engaged a new certifying accounting firm, the financial statements contained in this Form 10Q quarterly report were not reviewed by an independent registered public accounting firm.

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

As used herein the terms "we", "us", "our," the “Registrant,” “EVEH” and the "Company" means, Environment Ecology Holding Company Of China, f/k/a Dispatch Auto Parts Inc., a Florida corporation. These terms also refer to our subsidiary corporations, Shaanxi Lv Bao Environmental Eco Industry Management Ltd. ("Lv Bao"), and Shaanxi Li Bao Sheng Tai Ke Ji Gu Fen You Xian Gong Si (“Li Bao”), both of which organized and existing under the laws of the Peoples’ Republic of China acquired in February 2007.

GENERAL DESCRIPTION OF BUSINESS

We were incorporated on September 14, 1989 under the name First New York Investment, Inc. On November 25, 1996, we filed an amendment to the Articles of Incorporation with the Secretary of State of Florida to change the corporate name to Computer Access International, Inc. On or about March 4, 2005, we formed a wholly-owned subsidiary, Dispatch Auto Parts II, Inc. ("Dispatch II") and invested $6,000 to pay for Dispatch II's organizational expenses and funding of the initial operations of Dispatch II. After the incorporation, we changed our corporate name to Dispatch Auto Parts, Inc. and began the wholesale business for automotive parts and accessories. Dispatch II was disposed on February 14, 2007 pursuant to the agreement between us, Dispatch II and Daniel Slocum, our former president. On May 8, 2007, we filed an amendment to the Articles of Incorporation with the Secretary of State of Florida to change the corporate name to Environment Ecology Holding Company of China for more accurate description of our current operations and to be consistent with our marketing efforts in the landscaping construction and design industry.

On November 8, 2006, EVEH (accounting acquiree) executed a Plan of Exchange with Lv Bao (accounting acquirer), the shareholders of Lv Bao and the Majority Shareholder of the EVEH, pursuant to which EVEH issued the new 26,000,000 investment shares of Common Stock and 100,000 shares of our Preferred Stock to the Lv Bao shareholders pursuant to Regulation S under the Securities Act of 1933, as amended, in exchange for all of their shares of registered capital of Lv Bao. As a result, Lv Bao, and its 93.57&percnt;-owned subsidiary, Li Bao, became the subsidiaries of EVEH. The transaction was treated for accounting purposes as a capital transaction and recapitalization by the accounting acquirer and as a re-organization by the accounting acquiree.

Since the completion of the Plan of Exchange, which was on February 6, 2007, we have continued operations of Li Bao. The Company is experienced in urban landscaping industry. The landscaping projects include landscape construction and maintenance for public parks, communities, schools, memorials, convention centers, squares, hotels, highway's side view, and so on, some of which were granted as landmarks in the local cities. The detailed services cover:

•	gardeners
•	landscape contractors
•	landscape architects
•	irrigation experts
•	pest management professionals/applicators
•	arborists
•	sod growers
•	golf course maintenance staff and suppliers
•	groundskeepers
•	botanical gardens

Before the commencement of the landscape construction, the Company provides the clients with floor plans, effect layout, and construction blueprint, and gets the approval for their design from the clients. The Company has its own designers experienced in landscaping. The effects from humanism, history and local climate will be integrated in the design. The Company also has self-owned equipment for landscape construction and maintenance projects, including five large tractors, two lawn mowers, three automatic sprinkling irrigators, one compactor, two watering trucks, two separating-sowing machines, drilling machines and various trucks for different functions.

In September 2007, the Company acquired the technical training for Walnut Plantation Technology from an independent party, the Research Center in the PRC.

CRITICAL ACCOUNTING POLICIES

Use of estimates

Basis of consolidation

Revenue recognition

(a) Contract revenue

(d)

Sale of products

(e)

Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

Cost of revenue

Cost of revenue primarily includes purchase of raw materials for landscape design and engineering projects, manufacturing cost of walnut products, sub-contracting charges and direct overhead.

Cash and cash equivalents

Billed and unbilled accounts receivable and allowance for doubtful accounts

Walnut plantation

Property, plant and equipment

	Depreciable life	Residual value
Leasehold improvement	10 years	5%
Plant and machinery	10 years	5%
Motor vehicles	10 years	5%
Office equipment	5 years	5%

Intangible asset

Valuation of long-lived assets

Research and development

Comprehensive income

Income taxes

Net income per share

Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

The reporting currency of the Company is the United States dollars ("US$"). The Company's subsidiaries in the PRC maintain their books and records in its local currency, Renminbi Yuan ("RMB"), which is functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with SFAS No. 52, “Foreign Currency Translation”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period:

	December 31, 2008	June 30, 2008

Month-end RMB:US$ exchange rate	6.855	7.496
Average monthly RMB:US$ exchange rate	6.864	7.560

Stock-based compensation

Related parties

Segment reporting

Fair value of financial instruments

Recently issued accounting standards

Also in May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts--an interpretation of FASB Statement No. 60" ("SFAS No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS No. 163 on its financial statements but does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In May 2008, the FASB issued FSP APB 14-1, "Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to convertible debt securities that, upon conversion, may be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years after December 15, 2008, and must be applied on a retrospective basis. Early adoption is not permitted. The Company is assessing the potential impact of this FSP on the convertible debt issuances.

In June 2008, the FASB issued FASB Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. The Company is assessing the potential impact of this FSP on the earnings per share calculation.

In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF 07-5"). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. The Company is assessing the potential impact of this EITF 07-5 on the financial condition and results of operations.

Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements included in this report and is qualified in its entirety by the foregoing.

FORWARD LOOKING STATEMENTS

Certain statements in this report, including statements of our expectations, intentions, plans and beliefs, including those contained in or implied by "Management's Discussion and Analysis" and the Notes to Consolidated Financial Statements, are "forward-looking statements", within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are subject to certain events, risks and uncertainties that may be outside our control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “will”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements. These forward-looking statements include statements of management's plans and objectives for our future operations and statements of future economic performance, information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital requirements, the availability of funds and our ability to meet future capital needs, the realization of our deferred tax assets, and the assumptions described in this report underlying such forward-looking statements. Actual results and developments could differ materially from those expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context of such forward-looking statements.

				3 months ended December 31,
				2008		2007

REVENUES:			$	5,466,052	$	2,030,058

COST OF REVENUES:				3,527,252		1,379,544

		GROSS PROFIT		1,938,800		650,514

OPERATING EXPENSES:
	Consulting and professional fees			-		91,357
	Research and development			-		93,180
	(Reversal of) allowance for doubtful accounts			-		(106,116)
	General and administrative			511,494		35,827
		TOTAL OPERATING EXPENSES		511,494		114,248

		INCOME FROM OPERATIONS		1,427,306		536,266

OTHER INCOME:(expenses)
	Other income			-		-
	Interest expense			(207,678)		-
	Interest income			831		782
		TOTAL OTHER INCOME (EXPENSES)		(206,847)		782

INCOME FROM OPERATIONS				1,220,459		537,048

Income tax expense				(345,559)		(101,230)
Minority interest				(59,801)		(33,949)

		NET INCOME	$	815,099	$	401,869

Other comprehensive income:
Foreign currency translation gain				134		85,578

Comprehensive income			$	815,233	$	$ 487,447

Revenues

Revenue for the quarter ended December 31, 2008 was $ 5,466,052 as compared to $ 2,030,058 for the quarter ended December 31, 2007, representing an increase of $ 3,435,994 or 169.26 %. The increase was mainly due to the growth of our main business operations.

Cost of Revenue

Cost of revenue for the quarter ended December 31, 2008 was $ 3,527,252 as compared to $ 1,379,544 for the quarter ended December 31, 2007, representing an increase of $ 2,147,708 or 155.68%. The increase was mainly due to the growth of our main business operation and the accordingly increase of cost of revenues accompanying the increase of revenues.

Gross Profit

Gross Profit for the quarter ended December 31, 2008 was $ 1,938,800 as compared to $ 650,514 for the quarter ended December 31, 2007, representing an increase of $ 1,288,286 or 198.04%. The increase was mainly due to the growth of our main business operations.

General and Administrative Expenses

General and administrative expenses for the quarter ended December 31, 2008 were $ 511,494 as compared to $ 114,248 for the quarter ended December 31, 2007, representing an increase of $ 397,246 or 347.70 %. The increase was mainly due to the growth of our main business operation and the accordingly increase of cost and expenses accompanying the growth.

Net Income

Net income for the quarter ended December 31, 2008 was $ 815,099. For the quarter ended December 31, 2007, we recorded a net income of $ 401,869. The substantial increase of net income was mainly due to the growth of our main business operations and increase of revenue.

Impact of Inflation

We believe that inflation has had a negligible effect on operations during these periods. We believe that we can offset inflationary increases in the cost of revenue by increasing revenue and improving operating efficiencies.

Liquidity and Capital Resources

Net cash flow provided by operating activities was $ 2,016,768 in the Six Months ended December 31, 2008. Net cash flow used in investing activities was $ 5,701,602 for the Six Months ended December 31, 2008. Net cash flow used in financing activities was $ 360,551 for the Six Months ended December 31, 2008.

We believe we have sufficient cash to continue our current business throughout the 2009 fiscal year.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements. 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 any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

Changes in Internal Controls

We have also evaluated our internal controls for financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On February 09, 2009, Trafalgar Capital Specialized Investment Fund, FIS (“Trafalgar”) filed a civil lawsuit against Company in the Circuit Court of the 17^th Judicial Circuit in Broward County, Florida. On February 13, 2009, Company received the service of process of this lawsuit. In its Complaint, Trafalgar asserted that Company “has defaulted on a debenture and a security agreement” and asked the court to allow Trafalgar to foreclose on Company’s assets and properties.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the quarter ended September 30, 3008, there was no unregistered sale of equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

In the quarter ended September 30, 3008, there was no default upon senior securities.

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

10.1 Agreement with Shaanxi Jintao Chengji Investment Management Company, Ltd (Incorporated by

reference in the Current Report on Form 8-K filed on February 11, 2009)

14.1 Code of Ethics (Incorporated by reference in the Annual Report on Form 10-KSB for fiscal year ended June 30, 2007 filed on October 15, 2007).

31.1 Certification of principal executive officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of principal financial officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of principal executive officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of principal financial officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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

Date: February 19, 2009	Environment Ecology Holding Company of China

	/s/Sheng Li Liu
	Sheng Li Liu
	President

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	8th grade Bad

Environment Ecology Holding Co Of China (EVEH) Inactive 10-Q2009 Q2 Quarterly report

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