10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: September 30, 2014

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

Commission File No. 000-30183

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

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

8/F East Area
Century Golden Resources Business Center
69 Banjing Road
Haidian District
Beijing, People’s Republic of China, 100089
(Address of Principal Executive Offices)

+86-10-884-52568
(Registrant’s Telephone Number, Including Area Code)

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

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

Large accelerated filer [   ]       Accelerated filer [   ]       Non-accelerated filer [   ]       Smaller reporting company [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]

The numbers of shares outstanding of each of the issuer’s classes of common equity, as of November 12, 2014 are as follows:

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

TABLE OF CONTENTS

		Page
	PART I Financial Information
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4	Controls and Procedures	22
	PART II Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23

Part I – FINANCIAL INFORMATION

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

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

2

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

		September 30,			December 31,
ASSETS		2014			2013
Current assets
Cash and cash equivalents	$	10,237		$	20,715
Inventories		397,348			400,924
Account receivalbes		22,508			21,073
Other receivables		8,004			10,160
Deposits and prepayments		27,019			15,869
Total current assets		465,116			468,741
Investment		11,096			11,198
Property, plant and equipment (net)		345,306			377,455
	$	821,518		$	857,394
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	5,626		$	5,706
Accrued liabilities		166,408			167,514
Due to directors		654,763			435,110
Due to related parties		395,444			344,536
Other payables		365,645			310,061
Total current liabilities		1,587,886			1,262,927
Equity
Common stock: par value $.01; 200,000,000 shares authorized;           77,655,862 shares issued and outstanding		776,558			776,558
Additional paid-in capital		28,877,540			28,877,540
Deficit accumulated during the development stage		(30,641,628	)		(30,286,940	)
Accumulated other comprehensive income		175,106			158,216
Total China Longyi stockholders' equity		(812,424	)		(474,626	)
Noncontrolling interest		46,056			69,093
Total Equity		(766,368	)		(405,533	)
	$	821,518		$	857,394

See notes to consolidated financial statements

3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

		Nine months ended						Three months ended						Period from Jun 4,1997
		September 30,						September 30,						(inception) to
		2014			2013			2014			2013			September 30, 2014
Revenues
Sales	$	-		$	11,095		$	-		$	680		$	1,027,204
Cost of sales		-			7,409			-			406		$	1,040,259
Gross margin		-			3,686			-			274		$	(13,055	)
Operating expenses
General and administrative expenses		367,795			366,165			105,066			99,751		$	19,571,638
Goodwill impairment loss		-			-			-			-		$	5,408,584
Write-off inventory and bus licenses		-			-			-			-		$	3,322,712
Research and development costs		-			-			-					$	8,880,206
		367,795			366,165			105,066			99,751		$	37,183,140
Loss from operations		(367,795	)		(362,479	)		(105,066	)		(99,477	)	$	(37,196,195	)
Other income (expense)
Interest income		16			23			9			(8	)	$	325,703
Other income (expense)		5,202			-			1,730			-		$	1,253,413
Transaction exchange gain		(15,900	)		21,404			(14,988	)		1,738		$	1,073,983
Gain on asset disposal		-			-			-			-		$	1,172
Gain on debt settlement		-			-			-			-		$	156,018
Gain on disposal subsidiary		-			-			-			-		$	4,093,455
Interest expense		-			-			-					$	(712,302	)
		(10,682	)		21,427			(13,249	)		1,730		$	6,191,442
Loss before income tax expense and noncontrolling interest		(378,477	)		(341,052	)		(118,315	)		(97,747	)	$	(31,004,753	)
Income tax expense		-			-			-			-		$	-
Net loss		(378,477	)		(341,052	)		(118,315	)		(97,747	)	$	(31,004,753	)
Less: Net loss attributable to noncontrolling interest		23,789			28,912			8,151			(9,563	)	$	363,125
Net loss attributable to China Longyi	$	(354,688	)	$	(312,140	)	$	(110,164	)	$	(107,310	)	$	(30,641,628	)
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of shares outstanding-basic and diluted		77,655,862			77,655,862			77,655,862			77,655,862
Comprehensive loss
Net loss	$	(378,477	)	$	(341,052	)	$	(118,315	)	$	(97,747	)	$	(31,004,753	)
Foreign currency translation adjustment		17,642			(18,465	)		26,938			(1,791	)
Comprehensive loss		(360,835	)		(359,517	)		(91,377	)		(99,538	)
Comprehensive loss attributable to noncontrolling interest		(23,037	)		(29,903	)		(8,151	)		(9,760	)
Comprehensive loss attributable to China Longyi	$	(337,798	)	$	(329,614	)	$	(83,226	)	$	(89,778	)

See notes to consolidated financial statements

4

CHINALONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Nine months ended September 30,						Period from Jun 4, 1997
		2014			2013			(inception) to 09.30, 2014
Cash flows from operating activities:
Net loss	$	(378,477	)	$	(341,052	)	$	(31,004,753	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		28,777			28,583			1,315,591
Loss on sales of property and equipment					-			9,873
Impairment loss for fixed assets		-			-			1,052,950
Write-off goodwill and inventory		-			-			7,101,506
Stock issued for services and debt		-			-			1,869,100
(Gain) loss on disposition in subsidiary		-			-			(3,882,796	)
Research and development expenses recorded in organization		-			-			8,612,730
Reorganization expenses recorded in organization		-			-			455,830
Changes in operating assets and liabilities:
Accounts receivalbes		(1,628	)		165,669			(19,226	)
Other receivables		2,080			(92	)		5,325,578
Due from related parties		-			(4,350	)		31,486
Interest receivable		-			-			17,667
Deposits and prepayment		(11,309	)		35			682,914
Inventory		(47	)		3,936			(822,364	)
Other payables		57,995			87,850			(212,223	)
Due to related parties		53,362			36,597			107,938
Accounts payable and accrued liabilities		(28	)		611			(3,320,211	)
Net cash used in operations		(249,275	)		(22,213	)		(12,678,410	)
Cash flows from investing activities:
Reorganization - net of cash acquired		-			-			(320,579	)
Purchase of subsidiaries		-			-			(1,690,474	)
Redemption of short term investment		-			-			665,092
Purchase of investment		-			-			-
Purchases of intangible assets		-			-			(833,357	)
Purchases of property and equipment		-			(1,512	)		(521,239	)
Purchases of construction in progress		-			-			(169,081	)
Sales of property and equipment		-			-			701,100
Deposit on subsidiary		-			-			(10,922	)
Net cash provided by (used in) investing activities		-			(1,512	)		(2,179,460	)
Cash flows from financing activities:
Addition of short term loans		-			-			1,612
Collecttion from shareholders		-			-			503,171
Payments to stockholders		-			-			(1,634,763	)
Proceeds from issuance of stock		-			-			13,149,845
Proceeds from convertible promissory note		-			-			3,128,225
Dividends paid		-			-			(1,000,000	)
Proceeds to notes payable		-			-			649,492
Payments on notes payable		-			-			(612,582	)
Proceeds (repayments) loans from directors		222,970			45,036			531,616
Net cash provided by financing activities		222,970			45,036			14,716,616
Effect of foreign exchange rate fluctuation		15,827			(21,191	)		151,491
Increase(decrease) in cash and cash equivalents		(10,478	)		120			10,237
Cash and cash equivalents, beginning of period		20,715			11,916			-
Cash and cash equivalents, end of period	$	10,237		$	12,036		$	10,237
Supplemental disclosures of cash flow information:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

See notes to consolidated financial statements

5

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

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

1.	BUSINESS DESCRIPTION AND ORGANIZATION
	BUSINESS
	Overview of Our Business
	We are a holding company that only operates through our indirect Chinese subsidiaries Beijing SOD and Chongqing SOD. Through our Chinese subsidiaries, we develop, manufacture and market our SOD products in China. SOD is a naturally occurring enzyme which may act as a potent antioxidant defense in cells that are exposed to oxygen. Certain research has shown that under certain biological conditions, SOD revitalizes cells and reduces the rate of cell destruction. It neutralizes the most common free radical—superoxide radical—by converting it into hydrogen peroxide and water. Because superoxide is harmful to human cells, and certain forms of SOD exist naturally in most humans, many studies show that SOD is valuable in protecting human cells from the harmful effects of superoxide. SOD is thought to be more powerful than antioxidant vitamins as it activates the body's productions of its own antioxidants. As a result, SOD is referred to as the “enzyme of life.” Commercially, SOD has a wide range of applications and is widely applied in foods, drinks, skin care productions, pharmaceuticals, to combat ailments ranging from sunburn to rheumatoid arthritis.
	History and Corporate Structure
	We are a New York corporation that was incorporated on February 29, 1996, as United Network Technologies, Inc. and we changed our name to Panagra International Corporation on October 2, 1998. From our inception until 2001, we were relatively inactive with limited operations. On August 2, 2001 we changed our name to Minghua Group International Holdings Limited and at that time we also increased the authorized common shares of our common stock from 40,000,000 shares to 200,000,000 shares. On October 16, 2007, we effectuated a 1-for-20 reverse stock split of all our issued and outstanding shares of common stock, or the Reverse Split, and changed our name to China Longyi Group International Holdings Limited.
	Reverse Acquisition
	In June 2001 we formed Minghua Acquisition Corp., a Delaware corporation, and acquired all the equity interests of Minghua Group International Holding (Hong Kong) Limited, or Minghua Hong Kong, a Hong Kong limited company formed on June 4, 1997, for a purchase price of $1,000,000 in cash and 28,000,000 (pre Reverse Split) shares of our common stock. The shares received by the Minghua Hong Kong shareholders equaled 70% of our issued and outstanding shares of common stock, resulting in a change of control to the Minghua Hong Kong shareholders.

6

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

1.	BUSINESS DESCRIPTION AND ORGANIZATION(Continued)
	At that time, the sole asset of Minghua Hong Kong was an 85% equity interest in the Shenzhen Minghua Environmental Protection Vehicle Co., Ltd., or Minghua EPV, a PRC corporation. The remaining 15% equity minority interest in China Minghua EPV was owned by a related party, Asia Key Group Limited, through its wholly-owned subsidiary Minghua Real Estate (Shenzhen) Ltd., formerly known as Minghua Investment Co., Ltd., or Minghua Real Estate. On January 29, 2004, the Company acquired this 15% minority interest held by Minghua Real Estate, in a related party transaction by paying $990,638 in cash and issuing 28,210,000 (prereverse split) shares of our common stock. Through Minghua EPV, our business became the development and commercialization of mass transit, hybrid electric vehicles, primarily buses.
	Acquisition of the Bus Installation Company
	On March 13, 2003, our indirect subsidiary, Ming Hua Environmental Protection Science and Technology Limited, a Hong Kong limited company, or Minghua Science, acquired an 89.8% equity interest in the Guangzhou City View Bus Installation Company, or the Bus Installation Company, through its acquisition of Good View Bus Manufacturing (Holdings) Company Limited, a Hong Kong limited company and Eagle Bus Development Limited, a Hong Kong limited company, which own 23.8% and 66% of the Bus Installation Company, respectively. The Bus Installation Company manufactured motor coaches for domestic sale in China and for export under the “Eagle” brand name. We sold 6 standard diesel buses in 2005 and 5 standard diesel buses in 2004, however, once we sold off the inventory of diesel buses and parts that we acquired along with our acquisition of the Bus Installation Company, we no longer sold or manufactured diesel buses.
	Acquisition of Beijing Cardinal
	On June 16, 2004, Minghua Hong Kong formed a wholly owned subsidiary in the PRC, named Beijing China Cardinal Real Estate Consulting Co., Ltd., or Beijing Cardinal. We intended to use Beijing Cardinal as a vehicle to make future real estate investments in the PRC. However, at December 31, 2006, Beijing Cardinal had not begun significant operations.
	Sale of Environmental Vehicle Business
	Through Minghua Hong Kong, we had been focused on the development and commercialization of mass transit, hybrid electric vehicles, primarily buses. However, although prototype hybrid vehicles and a limited number of other vehicles have been produced, we have not been able to successfully commercialize these vehicles. As a result, on September 28, 2006, we disposed of our entire interests in Minghua Hong Kong and Minghua Science to Messrs. Han Lian Zhong and Niu Rui Cheng for 1 HK$, in exchange for their assumption of Minghua Hong Kong and Minghua Science’s debt. However, we retained our interests in China Cardinal, which were transferred to our subsidiary, Euromax International Investments Limited, or Euromax, and in the Guangzhou City View Bus Installation Company, which was transferred to our subsidiary, Top Team Holdings Limited (BVI), or Top Team.

7

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

1.	BUSINESS DESCRIPTION AND ORGANIZATION(Continued)
	Qiang Long Investment
	On January 29, 2004, we entered into a subscription agreement with Qiang Long Real Estate Development Co., Ltd., or Qiang Long, a PRC company, pursuant to which, as amended and supplemented from time to time, Qiang Long was obligated to purchase 140,000,000 (pre reverse split) shares of our common stock, par value $0.01 at an aggregate purchase price of US$29,400,000, or $0.21 per share. An amount equaling US$653,795 was paid to us as a performance bond and an additional US$632,911 was paid to us in 2006 in exchange for 3,013,862 (pre reverse split) shares. The balance of US$28,113,294 was to be paid in full by June 30, 2007, for the remaining 136,986,138 (pre reverse split) shares. On June 29, 2007, we consummated our obligations under the contract, pursuant to a letter agreement between the Company and Qiang Long. Pursuant to the letter agreement, we acknowledged our receipt of the final payment in cash from Qiang Long as fulfillment of Qiang Long’s investment obligation, and agreed to issue 50,000,000 (pre reverse split) shares to Qiang Long on or before July 23, 2007, and the remaining 86,986,138 (pre reverse split) shares within fifteen (15) business days following the effective date of an amendment to our Certificate of Incorporation to effect a one-for-twenty reverse split of our outstanding common stock, which will be equal to 4,349,307 shares post-reverse split. Accordingly, on August 2, 2007, 50,000,000 shares were issued to Qiang Long.
	As a result of the closing of the investment transaction with Qiang Long, our Chairman, Mr. Changde Li, now beneficially owns and controls 155,000,000 (pre reverse split) shares (7,750,000 shares post-reverse split) or 54.0% of the Company’s issued and outstanding common stock, 15,000,000 (pre reverse split) of which he holds indirectly through Qiang Long, 136,986,137 (pre reverse split) of which he holds indirectly through Qiang Long’s affiliate, Jolly Concept Management Limited, a BVI company, and 3,013,863 (pre reverse split) of which he holds through Qiang Long’s affiliate, Chinese Dragon Heritage Investment Management Limited, a PRC company.
	Acquisition of Top Time
	From the time when we sold the 6 standard diesel buses in the first quarter of 2005 until November 12, 2007 when we completed the acquisition transaction with Daykeen Group Limited, or Daykeen, discussed herein, we had limited operations and did not engage in active business operations other than our search for, and evaluation of, potential business opportunities for acquisition or participation.
	On November 12, 2007, we completed an acquisition transaction with Top Time International Limited, a Hong Kong Company, or Top Time, whereby we paid Daykeen, Top Time’s sole shareholder, a total consideration of $54.9 million (RMB 407 million, based on an exchange ratio of $1=RMB 7.414) in exchange for 100% ownership of Top Time, consisting of $30 million in cash and $24.9 million in shares of our common stock issuable within 90 days of the closing. $30 million of cash was paid to Daykeen by three transactions, Beijing Cardinal, De Qiu Hong, and Mr. Chen Zhiping paid $29 million, $0.4 million, and $0.6 million on behalf of the Company, respectively. As a result, the Company offset the same amounts of balance of the three parties’ current accounts. The equity portion of the purchase price amounts to a total of 62,250,000 (post reverse split) shares of our common stock (based upon $0.02/share, the average of the closing price of the Company’s common stock on the OTCBB for the 365 calendar days prior to May 31, 2007, which was adjusted for our stock split which occurred on October 16, 2007 and resulted an effective purchase price of $0.40 per share). Top Time thereby became our wholly owned subsidiary and Daykeen will become our controlling stockholder upon our issuance to Daykeen of the equity portion of the purchase price in accordance with the Share Purchase Agreement.

8

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

1.	BUSINESS DESCRIPTION AND ORGANIZATION(Continued)
	Top Time was incorporated in Hong Kong in December 2006 and currently has two subsidiaries: Beijing SOD and Chongqing SOD. Beijing SOD was incorporated in China in March 2005 and is 90% owned by Top Time and 10% owned by Ms. Ran Wang.
	For accounting purposes, the acquisition of Top Time was treated as a reorganization of entities under common control. When we refer in this report to business and financial information for periods prior to the consummation of the acquisition, we are referring to the business and financial information of Top Time on a consolidated basis unless the context suggests otherwise.
	Sale of Top Team Subsidiaries
	Through acquisition of Top Time, our business became the development, manufacture and sale of SOD products. As a result, on November 28, 2007, we disposed of five subsidiaries held by Top Team Holdings Limited (BVI): Euromax International Investments Limited, Beijing China Cardinal Real Estate Consulting Co., Ltd, Eagle Bus Development Limited (HK), Good View Bus Manufacturing Company Limited (HK), and Guangzhou City View Bus Installation Company Limited (PRC), to Mr. Zhiping Cheng, for an aggregate sale price of RMB5,000,000 (approximately $715,000).
	The following chart reflects our organizational structure as of the date of this report.

According to all reasonably circumstances facing the company, the management prepared the financial report on the development stage company basis.

9

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

1.	BUSINESS DESCRIPTION AND ORGANIZATION (Continued)
	CAPITAL RESOURCES AND BUSINESS RISKS
	The Company remains in the development stage and only operates through indirect Chinese subsidiaries Beijing SOD and Chongqing SOD. Through Chinese subsidiaries, we develop, manufacture and market our SOD products in China. SOD is a naturally occurring enzyme which may act as a potent antioxidant defense in cells that are exposed to oxygen. All of the company’s future business operations are subject to all of the risks inherent in the establishment of a new business enterprise. The Company has no proven revenue stream from the sales of its products. Additional capital resources through current and future offerings of securities will be needed in order to accomplish the Company's present marketing, development and manufacturing plans. The manufacturing facility and other operations in China, as well as the business financial conditions and results of operations are, to a significant degree, subject to economic, political and social events in China.
	The Company had incurred losses since inception and had working capital deficiency of $1,122,770 as at September 30, 2014 (December 31, 2013: deficiency of $794,186). There exits substantial doubt about the Company’s ability to continue as a going concern, which contemplated the realization of assets and the payment of liabilities in the ordinary course of business. To alleviate the situation, management obtained $28,113,294 in funding through the issuance of additional stock to one of the Company’s shareholders on July 27, 2007. On November 12, 2007, the Company completed an acquisition transaction with Top Time whereby it paid Daykeen, Top Time’s sole shareholder, a total consideration of $54.9 million, in exchange for 100% ownership of Top Time, consisting of $30 million in cash and $24.9 million in shares of our common stock issuable within 90 days of the closing. The equity portion of the purchase price amounts to a total of 62,250,000 post reverse split shares of the Company’s common stock.
	On July 27, 2007, the Company instructed the prior Transfer Agent to issue the 2,500,000 post reverse split shares of common stock deliverable to Qiang Long in the name of Jolly Concept Management Limited, in accordance with Qiang Long’s instructions. On December 14, 2007, the Company instructed present Transfer Agent to issue the replacement certificate showing the new name of the company and the correct number of shares, post reverse-split, and the remaining 4,349,307 shares of common stock issuable to Qiang Long, to Jolly Concept Management Limited and to Zhang, Lifang. The Company also agreed to issue 1,131,026 shares of common stock post-reverse-split to Luck Pond Enterprises Limited or its designee, for its services as finder in connection with the Qiang Long investment. On December 14, 2007, the Company instructed present Transfer Agent to issue the total amount of 62,250,000 shares of the Company’s common stock, post-reverse-split, issuable to Daykeen, to Daykeen Investment Limited.
	As of September 30, 2014 the Company has accumulated deficit from recurring net loss of $30,641,628 and cash and cash equivalent of $10,237. The application of the going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. There is, primarily as a result of the conditions described above, substantial doubt as to the appropriateness of the use of the going concern assumption. The accompanying financial statements have been prepared on a going concern basis notwithstanding these conditions.
	The ability of the Company to continue as a going concern is dependent on its ability to generate sufficient positive cash flows from future operations and the continued funding from the Company’s major shareholders. If the going concern basis were not appropriate for these financial statements, then adjustments would be necessary to the carrying values of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

10

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

1.	BUSINESS DESCRIPTION AND ORGANIZATION (Continued)
	RESTRICTIONS ON TRANSFER OF ASSET OUT OF CHINA
	Dividend payments by the Company’s operating subsidiaries are limited by certain statutory regulations in China. No dividends may be paid by these subsidiaries without first receiving prior approval from the State Administration of Foreign Exchange. Dividend payments are restricted to 85% of profits, after tax. Repayments of loans or advances from subsidiaries to China Longyi, unless certain conditions are met, will be restricted by the Chinese government.
	CONTROL BY PRINCIPAL STOCKHOLDERS
	The directors, executive officers, affiliates and related parties own, beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, if they voted their shares uniformly, directors, executive officers and affiliates would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of China Longyi and the dissolution, merger or sale of the Company's assets.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
	The consolidated financial statements for all periods presented include the financial statements of China Longyi Group International Holdings Limited, and its subsidiaries Top Team Holdings Limited, Full Ample Group Limited (Daykeen Group, BVI), Top Time International Limited (HK), Beijing SOD, and Chongqing SOD. The consolidated financial statements have been prepared in accordance with US GAAP. All significant intercompany accounts and transactions have been eliminated.
	The Company has determined the People’s Republic of China Chinese Yuan Renminbi (“RMB”) to be its functional currency. The accompanying consolidated financial statements are presented in United States (US) dollars. The consolidated financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
	RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation.
	NONCONTROLLING INTEREST IN SUBSIDIARIES
	The Company owns 90% of the equity interests in Beijing SOD, and the remaining 10% is owned by Miss Ran Wang. Therefore, the Company records noncontrolling interest expense to allocate 10% of the loss of the Beijing SOD to Miss Ran Wang, its noncontrolling shareholder.
	The Company owns 81% of the equity interest in Chongqing SOD of which 9% is owned by Miss Ran Wang, and the remaining 10% by Mr. Guoqing Tan. Therefore, the Company records noncontrolling interest charge in the statement of operations to allocate 19% of the results of operations of Chongqing SOD to its noncontrolling shareholders.

11

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	USE OF ESTIMATES
	The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	SIGNIFICANT ESTIMATES
	Several areas require significant management estimates relating to uncertainties for which it is reasonably possible that there will be a material change in the near term. The more significant areas requiring the use of management estimates related to determination of net realizable value of inventory, allowance for doubtful accounts, property and equipment, accrued liabilities, and the useful lives for depreciation.
	REVENUE RECOGNITION
	Revenues are recognized as earned when the following four criteria are met: (1) a customer issues a purchase order or otherwise agrees to purchase products; (2) products are delivered to the customer; (3) pricing is fixed or determined in accordance with the purchase order or agreement; and (4) collectability is reasonably assured.
	PROPERTY AND EQUIPMENT
	Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset, or related groups of assets, may not be recoverable. Under the provisions of SFAS No. 144, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”, the Company recognizes an “impairment charge” when the expected net undiscounted future cash flows from an asset's use and eventual disposition are less than the asset's carrying value and the asset's carrying value exceeds its fair value. Measurement of fair value for an asset or group of assets may be based on appraisal, market values of similar assets or estimated discounted future cash flows resulting from the use and ultimate disposition of the asset or assets.
	Expenditures for maintenance, repairs and betterments, which do not materially extend the normal useful life of an asset, are charged to operations as incurred. Upon sale or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or income (loss) is reflected in income.
	Depreciation and amortization are provided for financial reporting purposes primarily on the straight-line method over the estimated useful lives of the respective assets as follows:

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

12

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	CASH AND CASH EQUIVALENTS
	The Company invests idle cash primarily in money market accounts, certificates of deposits and short-term commercial paper. Money market funds and all highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents.
	INTANGIBLE ASSETS
	The Company adopted the provisions of ASC Topic 350 (formerly SFAS No. 142, Goodwill and Other Intangible Assets), according to which goodwill and indefinite lived intangible assets are not amortized, but are reviewed annually for impairment, or more frequently, if indications of possible impairment exist. The Company has performed the requisite annual transitional impairment tests on intangible assets and made the impairment adjustments as necessary. All goodwill and indefinite lived intangible assets had been written down to zero in the prior years.
	INCOME TAXES
	Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with ASC Topic 740 (formerly SFAS No. 109, “Accounting for income taxes”) these deferred taxes are measured by applying currently enacted tax laws.
	The Company did not provide any current or deferred income tax provision or benefit for any period presented to date because it has experienced operating losses since inception. The benefit of any tax income (loss) carry forwards is fully offset by a valuation allowance, as there is a more than fifty percent chance that the Company will not realize those benefits.
	There are net operating loss carry forwards allowed under the Hong Kong and China Governments’ tax system.
	RESEARCH AND DEVELOPMENT COSTS
	Company sponsored research and development costs, related to both present and future products, are charged to operations when incurred and are included in operating expenses. Expenditures for research and development for the nine months period ended September 30, 2014 and 2013 were both $0 and a cumulative amount of $8,880,206 for the period from June 4, 1997 (inception) to September 30, 2014.
	SHIPPING AND HANDLING
	Costs relating to shipping and handling are part of general and administrative expenses in the consolidated statements of operations and comprehensive loss. Insignificant amount of shipping and handling costs incurred during the nine months ended September 30, 2014 and 2013.

13

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	EARNING (LOSS) PER SHARE
	Basic earning (loss) per common share ("LPS") is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earning (loss) per common share is calculated by adjusting the weighted average outstanding shares, assuming conversion of all potentially dilutive stock options.
	There were no stock options and potentially dilutive securities outstanding at September 30, 2014.
	EQUITY BASED COMPENSATION
	The Company accounts for employee stock options in accordance with ASC Topic 718, (formerly SFAS 123(R), “Share-Based Payment.”) which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, or vesting period. The Company had no such compensation expense for the nine months ended September 30, 2014 and 2013.
	COMPARATIVE FIGURES
	Certain comparative figures have been reclassified in order to conform with the presentation adopted in the current period.
	COMPREHENSIVE INCOME (LOSS)
	The accompanying financial statements are presented in U.S. dollars. The functional currency is the RMB. The financial statements are translated into U.S. dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Currency translation adjustments are presented as other comprehensive income.
	RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation.
3.	LONG TERM INVESTMENT
	On January 5, 2010, the Company invested in Cangshan Duoha Vegetable Food Company (“Duoha”) with 50,000 shares of the Company’s common stock worth $10,000 as $0.2 per share to acquire 20% equity interest in of Duoha. According to the investment agreement, although we own 20% equity of Duoha, we do not have significant influence over Duoha’s operating and financing policies. Therefore, the management of the Company implemented the cost method to account above investment.

14

CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
(A DEVELOPMENT STAGE COMPANY)
Notes to condensed consolidated financial statements (Unaudited)
September 30, 2014

4.	INCOME TAXES
	Net operating loss carry forwards are allowed under the Hong Kong and Chinese governments’ tax systems. In China, the previous five years’ net operating losses are allowed to be carried forward to offset future taxable income. In Hong Kong, net operating losses can be carried forward indefinitely to offset future taxable income. No deferred tax asset has been recognized due to the uncertainty of the Company having future taxable profits.
5.	COMMITMENTS AND CONTINGENCIES
	From time to time, the Company has disputes that arise in the ordinary course of its business. Currently, according to management, there are no material legal proceedings to which the Company is a party to or to which any of their property is subject that will have a material adverse effect on the Company’s financial condition.
6.	SUBSEQUENT EVENTS
	Management has considered all events occurring through November 14, 2014, the date the financial statements have been issued, and has determined that there are no such events that are material to the financial statement.

15

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” relating to the business of China Longyi Group International Holdings Limited and its subsidiary companies. The forward-looking statements include, among others, statements concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These statements are based on assumptions and are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Risks and uncertainties include risks related to new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; any statements of belief or intention; and any of the factors mentioned in the “Risk Factors” section of the Company’s annual report on Form 10-K filed on March 31, 2014. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

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

• “Beijing SOD” are references to Beijing Longyi Biology Technology Co. Ltd., our indirect, 90% owned subsidiary, a PRC company;
• “China” and “PRC” are references to the People’s Republic of China;
• “China Longyi,” “we,” “us,” “our,” or the “Company” are references to the combined business of China Longyi Group International Holdings Limited (formerly known as Minghua Group International Holdings Limited) and/or its consolidated subsidiaries, as the case may be;
• “Chongqing SOD” are references to Chongqing JiuZhou Dismutase Biology Technology Co., Ltd., our indirect, majority-owned subsidiary, a PRC company;
• “Exchange Act” mean the Securities Exchange Act of 1934, as amended;
• “RMB” refer to Renminbi, the legal currency of China;
• “Securities Act” mean the Securities Act of 1933, as amended;
• “Top Time” are references to Top Time International Limited, our indirect wholly-owned subsidiary, a Hong Kong company; and
• “U.S. dollar,” “$” and “US$” are to the legal currency of the United States.

Overview of our Business

We are a holding company that only operates through our indirect Chinese subsidiaries Beijing SOD and Chongqing SOD. Through our Chinese subsidiaries, we develop, manufacture and market our SOD products in China. SOD is a naturally occurring enzyme which may act as a potent antioxidant defense in cells that are exposed to oxygen. Certain research has shown that under certain biological conditions, SOD revitalizes cells and reduces the rate of cell destruction. It neutralizes the most common free radical—superoxide radical—by converting it into hydrogen peroxide and water. Because superoxide is harmful to human cells, and certain forms of SOD exist naturally in most humans, many studies show that SOD is valuable in protecting human cells from the harmful effects of superoxide. SOD is thought to be more powerful than antioxidant vitamins as it activates the body's productions of its own antioxidants. As a result, SOD is referred to as the “enzyme of life.” Commercially, SOD has a wide range of applications and is widely applied in foods, drinks, skin care productions, pharmaceuticals, to combat ailments ranging from sunburn to rheumatoid arthritis.

16

Third Quarter of 2014 Financial Performance Highlights

The following are some financial highlights for the three months ended September 30, 2014:

• Revenue: Revenue decreased $680, to $0 for the three months ended September 30, 2014, from $680 for the same period in 2013.

• Expense from operations: Expense from operations increased $5,315, or 5.33%, to $105,066 for the three months ended September 30, 2014, from $99,751 for the same period in 2013.

• Net loss: Net loss increased $20,568, or 21%, to $(118,315) for the three months ended September 30, 2014, from $(97,747) for the same period in 2013.

• Fully diluted net income per share: Fully diluted net loss per share was $0 for the three months ended September 30, 2014, as compared to $0 for the same period in 2013.

Provision for Income Taxes

•	United States: China Longyi Group International Holding Limited is subject to United States tax at a tax rate of 34%. No provision for income taxes in the United States has been made as China Longyi Group International Holding Limited had no income subject to United States taxation in the third quarter of 2014.
•	British Virgin Islands: Our wholly owned subsidiary Top Team Holdings Limited was incorporated in the British Virgin Islands, or the BVI, and, under the current laws of the BVI, is not subject to income taxes.
•	China: Before the implementation of the enterprise income tax, or EIT, Foreign Invested Enterprises or FIEs, established in the PRC were generally subject to an EIT rate of 33.0%, which includes a 30.0% state income tax and a 3.0% local income tax. On March 16, 2007, the National People’s Congress of China passed the new Corporate Income Tax Law, or EIT Law, and on November 28, 2007, the State Council of China passed the Implementing Rules for the EIT Law, or Implementing Rules, which took effect on January 1, 2008. The EIT Law and Implementing Rules impose a unified EIT of 25.0% on all domestic- invested enterprises and FIEs, unless they qualify under certain limited exceptions. Therefore, nearly all FIEs are subject to the new tax rate alongside other domestic businesses rather than benefiting from the old tax laws applicable to FIEs, and its associated preferential tax treatments, beginning January 1, 2008.
	Despite these pending changes, the EIT Law gives the FIEs established before March 16, 2007, or Old FIEs, such as our subsidiaries Beijing SOD and Chongqing SOD, a five-year grandfather period during which they can continue to enjoy their existing preferential tax treatments. During this five-year grandfather period, the Old FIEs which enjoyed tax rates lower than 25% under the original EIT Law shall gradually increase their EIT rate by 2% per year until the tax rate reaches 25%. In addition, the Old FIEs that are eligible for the “two-year exemption and three-year half reduction” or “five-year exemption and five-year half-reduction” under the original EIT Law, are allowed to remain to enjoy their preference until these holidays expire. The discontinuation of any such special or preferential tax treatment or other incentives would have an adverse effect on any organization’s business, fiscal condition and current operations in China.
	In addition to the changes to the current tax structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to a EIT of 25.0% on its global income. The Implementing Rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our consolidated global income will be subject to PRC income tax of 25.0% .

17

We incurred no income taxes in either the three months ended September 30, 2014 or the three months ended September 30, 2013.

Results of Operations

Three Months Ended September 30, 2014 Compared to Three Months ended September 30, 2013

The following table summarizes the results of our operations for the three months ended September 30, 2014 and 2013 and provides information regarding the dollar and percentage increase or (decrease) from the three months ended September 30, 2013 to the same period of 2014.

		Three Months Ended
		September 30,						Increase		% Increase
Item		2014			2013			(Decrease)		(% Decrease)
Revenue	$	0		$	680		$	(680	)	(100%	)
Cost of Revenue		0			406			(406	)	(100%	)
Gross Profit		0			274			(274	)	(100%	)
Operating Expenses		105,066			99,751			5,315		5.33%
Other Income		(13,249	)		1,730			(14,979	)	(865.84%	)
Provision for Taxes		-			-			-		-
Net loss attributable to China Longyi	$	(110,164	)	$	(107,310	)	$	2,854		2.66%

Revenues. Our revenues were historically derived primarily from sales of our SOD products. Revenues decreased $680, to $0 for the three months ended September 30, 2014, from $680 for the same period in 2013 as we did not sell any SOD products and our operating subsidiary, Chongqing SOD, ceased production and was in the process of the relocation.

Cost of Revenues. Our cost of revenues is primarily comprised of the costs of our raw materials, labor and overhead. Our cost of revenues decreased $406, to $0 for the three months ended September 30, 2014, from $406 during the same period in 2013 as we did not have any sales in this period.

Gross Profit. Since we did not have any sales for the three months ended September 31, 2014, our gross profit decreased by $274, to $0 for the three months ended September 30, 2014 from $274 during the same period in 2013.

Operating Expenses. Our total operating expenses for the three months ended September 30, 2014 increased $5,315, or 5.33%, to $105,066, from $99,751 for the same period in 2013. This increase was mainly because of the increased fees for professional services.

Other Income (expense). Other income was $(13,249) during the three months ended September 30, 2014, a decrease of $14,979 from $1,730 during a same period in 2013. Such decrease mainly came from the transaction exchange gain.

Net Loss attributable to China Longyi. As a result of above facts, our net loss increased by $2,854, or 2.66%, to $(110,164) for the three months ended September 30, 2014, from $(107,310) for the same period in 2013.

18

Nine Months Ended September 30, 2014 Compared to Nine Months ended September 30, 2013

The following table summarizes the results of our operations for the nine months ended September 30, 2014 and 2013 and provides information regarding the dollar and percentage increase or (decrease) from the nine months ended September 30, 2013 to the same period of 2014.

		Nine Months Ended
		September 30,						Increase		% Increase
Item		2014			2013			(Decrease)		(% Decrease)
Revenue	$	0		$	11,095		$	(11,095	)	(100%	)
Cost of Revenue		0			7,409			(7,409	)	(100%	)
Gross Profit		0			3,686			(3,686	)	(100%	)
Operating Expenses		367,795			366,165			1,630		0.45%
Other Income		(10,682	)		21,427			(32,109	)	(149.85%	)
Provision for Taxes		-			-			-		-
Net loss attributable to China Longyi	$	(354,688	)	$	(312,140	)	$	42,548		13.63%

Revenues. Revenues decreased $11,095, to $0 for the nine months ended September 30, 2014, from $11,095 for the same period in 2013 as we did not sell any SOD products and our operating subsidiary, Chongqing SOD, ceased production and was in the process of the relocation.

Cost of Revenues. Our cost of revenues decreased $7,409, to $0 for the nine months ended September 30, 2014, from $7,409 during the same period in 2013 as we did not have any sales in this period.

Gross Profit. Since we did not have any sales in current period, our gross profit decreased by $3,686, to $0 for the nine months ended September 30, 2014 from $3,686 during the same period in 2013.

Operating Expenses. Our total operating expenses for the nine months ended September 30, 2014 increased $1,630, or 0.45%, to $367,795, from $366,165 for the same period in 2013. This increase was mainly due to the increase in professional fees paid to third parties.

Other Income (expense). Other income was $(10,682) during the nine months ended September 30, 2014, a decrease of $32,109 from $21,427 during a same period in 2013. Such decrease mainly came from the reduction of transaction exchange gains.

Net Loss attributable to China Longyi. As a result of above facts, our net loss increased by $42,548, or 13.63%, to $(354,688) for the nine months ended September 30, 2014, from $(312,140) for the same period in 2013.

Liquidity and Capital Resources

We had $10,237 in cash and cash equivalents as of September 30, 2014. As of such date, we also had total current assets of $465,116 and total assets of $821,518. We had total current liabilities (consisting of accounts payable, accrued liabilities, due to directors and other payables) in the amount of $1,587,886. Our stockholders’ equity as of September 30, 2014 was $(766,368). Since inception, we have accumulated a net loss of $30,641,628.

The following table summarizes the statements of cash flows from the financial statements for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013:

19

		Nine Months Ended
		September 30,
		2014			2013
Net Cash Provided By (Used In) Operating Activities	$	(249,275	)	$	(22,213	)
Net Cash Provided By (Used In) Investing Activities		0			(1,512	)
Net Cash Provided By (Used In) Financing Activities		222,970			45,036
Effect of foreign exchange rate fluctuation		15,827			(21,191	)
Net increase (decrease) in Cash and Cash Equivalents		(10,478	)		120
Cash and Cash Equivalents - Beginning of Period		20,715			11,916
Cash and Cash Equivalents – End of Period		10,237			12,036

Operating Activities

Net cash used in operating activities was $249,275 for the nine-month period ended September 30, 2014, which is an increase of $227,062 from $22,213 of net cash used in the operating activities for the same period of 2013. The increase of the cash used in operating activities was mainly attributed to the fact that there was a change of accounts receivables. Cash provided from accounts receivables was $165,669 for the nine months ended September 30, 2013, while the cash provided from accounts receivable was $(1,628) for the nine months ended September 30, 2014.

Investing Activities

Net cash used in investing activities for the nine-month period ended September 30, 2014 was $0, which is a decrease of approximately $1,512 from net cash used in investing activities of $1,512 for the same period of 2013.

Financing Activities

Net cash provided by financing activities for the nine-month period ended September 30, 2014 was $222,970 as compared to $45,036 provided by financing activities for the same period in 2013. We received $222,970 as the loan from one of our directors for the nine months ended September 30, 2014.

The Company did not have any bank loans as of September 30, 2014.

We expect that our directors will continue to provide cash as loans to the company. However, we may in the future require additional cash resources due to changed business conditions, implementation of our strategy to expand our production capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Critical Accounting Policies

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

20

Foreign Currencies

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

	September 30,				December 31,
	2014		2013		2013
	RMB	HK$	RMB	HK$	RMB	HK$
Balance sheet items, except for equity accounts	6.1525	7.7638	6.1480	7.7541	6.0969	7.7546
Items in the statements of income and comprehensive income, and the statements of cash flows	6.1442	7.7541	6.2172	7.7577	6.1929	7.7532

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

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

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

Revenue Recognition
The Company recognizes revenue in accordance with Staff Accounting Bulletin No.104 “Revenue recognition” (“ASC Topic 605”). Revenues are recognized as earned when the following four criteria are met: (1) a customer issues purchase orders or otherwise agrees to purchase products; (2) products are delivered to the customer; (3) pricing is fixed or determined in accordance with the purchase order or agreement; and (4) collectability is reasonably assured.

Inflation

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

Seasonality

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

Off-Balance Sheet Arrangements

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

21

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEMS 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures’

Our management, with the participation of our chief executive officer and chief financial officer, Ms. Jie Chen and Mr. Xinmin Pan, respectively, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, Ms. Jie Chen and Mr. Xinmin Pan concluded that as of September 30, 2014, our disclosure controls and procedures were effective at the reasonable assurance level.

Internal Controls Over Financial Reporting

During the quarter ended September 30, 2014, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

Not applicable.

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

We have not sold any equity securities during the fiscal quarter ended September 30, 2014 that were not previously disclosed in a current report on Form 8-K that was filed during that period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit
Number	Description
31.1	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from The China Longyi Group International Holdings Limited's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (ii) Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2014 and 2013, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013, and (iv) the Notes to Consolidated Financial Statements.

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SIGNATURES

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

	CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED
DATED: November 14, 2014
	By: /s/ Jie Chen
	-------------------------------------
	Jie Chen
	Chief Executive Officer
	(Principal Executive Officer)
DATED: November 14, 2014	By: /s/ Xinmin Pan
	-------------------------------------
	Xinmin Pan
	Chief Financial Officer
	(Principal Financial Officer and Accounting Officer)

24

EXHIBIT INDEX

Exhibit
Number	Description
31.1	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from The China Longyi Group International Holdings Limited's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (ii) Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2014 and 2013, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013, and (iv) the Notes to Consolidated Financial Statements.

25

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jie Chen, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of China Longyi Group International Holdings Limited, a New York corporation (the “Company”);

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

     4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

5.	The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 14, 2014

/s/ Jie Chen

Jie Chen

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Xinmin Pan, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of China Longyi Group International Holdings Limited, a New York corporation (the “Company”);

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

     4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

5.	The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 14, 2014

/s/Xinmin Pan

Xinmin Pan

Chief Financial Officer

(Principal Financial and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

            The undersigned, Jie Chen, the Chief Executive Officer of CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED (the “Company”), DOES HEREBY CERTIFY that:

            1. The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

            2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

            IN WITNESS WHEREOF, each of the undersigned has executed this statement this 14^th day of November 2014.

/s/ Jie Chen

Jie Chen

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to China Longyi Group International Holdings Limited and will be retained by China Longyi Group International Holdings Limited and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

            The undersigned, Xinmin Pan, Chief Financial Officer of CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LIMITED (the “Company”), DOES HEREBY CERTIFY that:

            1. The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

            2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

            IN WITNESS WHEREOF, each of the undersigned has executed this statement this 14^th day of November 2014.

/s/ Xinmin Pan

Xinmin Pan

Chief Financial Officer

(Principal Financial Officer and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to China Longyi Group International Holdings Limited and will be retained by China Longyi Group International Holdings Limited and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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INCOME TAXES

9 Months Ended

Sep. 30, 2014

INCOME TAXES [Text Block]

4.

INCOME TAXES

Net operating loss carry forwards are allowed under the Hong Kong and Chinese governments’ tax systems. In China, the previous five years’ net operating losses are allowed to be carried forward to offset future taxable income. In Hong Kong, net operating losses can be carried forward indefinitely to offset future taxable income. No deferred tax asset has been recognized due to the uncertainty of the Company having future taxable profits.

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LONG TERM INVESTMENT

9 Months Ended

Sep. 30, 2014

LONG TERM INVESTMENT [Text Block]

3.

LONG TERM INVESTMENT

On January 5, 2010, the Company invested in Cangshan Duoha Vegetable Food Company (“Duoha”) with 50,000 shares of the Company’s common stock worth $10,000 as $0.2 per share to acquire 20% equity interest in of Duoha. According to the investment agreement, although we own 20% equity of Duoha, we do not have significant influence over Duoha’s operating and financing policies. Therefore, the management of the Company implemented the cost method to account above investment.

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 10,237	$ 20,715
Inventories	397,348	400,924
Account receivalbes	22,508	21,073
Other receivables	8,004	10,160
Deposits and prepayments	27,019	15,869
Total current assets	465,116	468,741
Investment	11,096	11,198
Property, plant and equipment (net)	345,306	377,455
Total Assets	821,518	857,394
Current liabilities
Accounts payable	5,626	5,706
Accrued liabilities	166,408	167,514
Due to directors	654,763	435,110
Due to related parties	395,444	344,536
Other payables	365,645	310,061
Total current liabilities	1,587,886	1,262,927
Equity
Common stock: par value $.01; 200,000,000 shares authorized; 77,655,862 shares issued and outstanding	776,558	776,558
Additional paid-in capital	28,877,540	28,877,540
Deficit accumulated during the development stage	(30,641,628)	(30,286,940)
Accumulated other comprehensive income	175,106	158,216
Total China Longyi stockholders' equity	(812,424)	(474,626)
Noncontrolling interest	46,056	69,093
Total Equity	(766,368)	(405,533)
Total Liabilities and Stockholders Equity	$ 821,518	$ 857,394

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BUSINESS DESCRIPTION AND ORGANIZATION

9 Months Ended

Sep. 30, 2014

BUSINESS DESCRIPTION AND ORGANIZATION [Text Block]

1.	BUSINESS DESCRIPTION AND ORGANIZATION
	BUSINESS
	Overview of Our Business
	We are a holding company that only operates through our indirect Chinese subsidiaries Beijing SOD and Chongqing SOD. Through our Chinese subsidiaries, we develop, manufacture and market our SOD products in China. SOD is a naturally occurring enzyme which may act as a potent antioxidant defense in cells that are exposed to oxygen. Certain research has shown that under certain biological conditions, SOD revitalizes cells and reduces the rate of cell destruction. It neutralizes the most common free radical—superoxide radical—by converting it into hydrogen peroxide and water. Because superoxide is harmful to human cells, and certain forms of SOD exist naturally in most humans, many studies show that SOD is valuable in protecting human cells from the harmful effects of superoxide. SOD is thought to be more powerful than antioxidant vitamins as it activates the body's productions of its own antioxidants. As a result, SOD is referred to as the “enzyme of life.” Commercially, SOD has a wide range of applications and is widely applied in foods, drinks, skin care productions, pharmaceuticals, to combat ailments ranging from sunburn to rheumatoid arthritis.
	History and Corporate Structure
	We are a New York corporation that was incorporated on February 29, 1996, as United Network Technologies, Inc. and we changed our name to Panagra International Corporation on October 2, 1998. From our inception until 2001, we were relatively inactive with limited operations. On August 2, 2001 we changed our name to Minghua Group International Holdings Limited and at that time we also increased the authorized common shares of our common stock from 40,000,000 shares to 200,000,000 shares. On October 16, 2007, we effectuated a 1 -for- 20 reverse stock split of all our issued and outstanding shares of common stock, or the Reverse Split, and changed our name to China Longyi Group International Holdings Limited.
	Reverse Acquisition
	In June 2001 we formed Minghua Acquisition Corp., a Delaware corporation, and acquired all the equity interests of Minghua Group International Holding (Hong Kong) Limited, or Minghua Hong Kong, a Hong Kong limited company formed on June 4, 1997, for a purchase price of $1,000,000 in cash and 28,000,000 (pre Reverse Split) shares of our common stock. The shares received by the Minghua Hong Kong shareholders equaled 70% of our issued and outstanding shares of common stock, resulting in a change of control to the Minghua Hong Kong shareholders.

At that time, the sole asset of Minghua Hong Kong was an 85% equity interest in the Shenzhen Minghua Environmental Protection Vehicle Co., Ltd., or Minghua EPV, a PRC corporation. The remaining 15% equity minority interest in China Minghua EPV was owned by a related party, Asia Key Group Limited, through its wholly-owned subsidiary Minghua Real Estate (Shenzhen) Ltd., formerly known as Minghua Investment Co., Ltd., or Minghua Real Estate. On January 29, 2004, the Company acquired this 15% minority interest held by Minghua Real Estate, in a related party transaction by paying $990,638 in cash and issuing 28,210,000 (prereverse split) shares of our common stock. Through Minghua EPV, our business became the development and commercialization of mass transit, hybrid electric vehicles, primarily buses.

Acquisition of the Bus Installation Company

On March 13, 2003, our indirect subsidiary, Ming Hua Environmental Protection Science and Technology Limited, a Hong Kong limited company, or Minghua Science, acquired an 89.8% equity interest in the Guangzhou City View Bus Installation Company, or the Bus Installation Company, through its acquisition of Good View Bus Manufacturing (Holdings) Company Limited, a Hong Kong limited company and Eagle Bus Development Limited, a Hong Kong limited company, which own 23.8% and 66% of the Bus Installation Company, respectively. The Bus Installation Company manufactured motor coaches for domestic sale in China and for export under the “Eagle” brand name. We sold 6 standard diesel buses in 2005 and 5 standard diesel buses in 2004, however, once we sold off the inventory of diesel buses and parts that we acquired along with our acquisition of the Bus Installation Company, we no longer sold or manufactured diesel buses.

Acquisition of Beijing Cardinal

On June 16, 2004, Minghua Hong Kong formed a wholly owned subsidiary in the PRC, named Beijing China Cardinal Real Estate Consulting Co., Ltd., or Beijing Cardinal. We intended to use Beijing Cardinal as a vehicle to make future real estate investments in the PRC. However, at December 31, 2006, Beijing Cardinal had not begun significant operations.

Sale of Environmental Vehicle Business

Through Minghua Hong Kong, we had been focused on the development and commercialization of mass transit, hybrid electric vehicles, primarily buses. However, although prototype hybrid vehicles and a limited number of other vehicles have been produced, we have not been able to successfully commercialize these vehicles. As a result, on September 28, 2006, we disposed of our entire interests in Minghua Hong Kong and Minghua Science to Messrs. Han Lian Zhong and Niu Rui Cheng for 1 HK$, in exchange for their assumption of Minghua Hong Kong and Minghua Science’s debt. However, we retained our interests in China Cardinal, which were transferred to our subsidiary, Euromax International Investments Limited, or Euromax, and in the Guangzhou City View Bus Installation Company, which was transferred to our subsidiary, Top Team Holdings Limited (BVI), or Top Team.

Qiang Long Investment

On January 29, 2004, we entered into a subscription agreement with Qiang Long Real Estate Development Co., Ltd., or Qiang Long, a PRC company, pursuant to which, as amended and supplemented from time to time, Qiang Long was obligated to purchase 140,000,000 (pre reverse split) shares of our common stock, par value $0.01 at an aggregate purchase price of US$29,400,000, or $0.21 per share. An amount equaling US$653,795 was paid to us as a performance bond and an additional US$632,911 was paid to us in 2006 in exchange for 3,013,862 (pre reverse split) shares. The balance of US$28,113,294 was to be paid in full by June 30, 2007, for the remaining 136,986,138 (pre reverse split) shares. On June 29, 2007, we consummated our obligations under the contract, pursuant to a letter agreement between the Company and Qiang Long. Pursuant to the letter agreement, we acknowledged our receipt of the final payment in cash from Qiang Long as fulfillment of Qiang Long’s investment obligation, and agreed to issue 50,000,000 (pre reverse split) shares to Qiang Long on or before July 23, 2007, and the remaining 86,986,138 (pre reverse split) shares within fifteen (15) business days following the effective date of an amendment to our Certificate of Incorporation to effect a one-for-twenty reverse split of our outstanding common stock, which will be equal to 4,349,307 shares post-reverse split. Accordingly, on August 2, 2007, 50,000,000 shares were issued to Qiang Long.

As a result of the closing of the investment transaction with Qiang Long, our Chairman, Mr. Changde Li, now beneficially owns and controls 155,000,000 (pre reverse split) shares ( 7,750,000 shares post-reverse split) or 54.0% of the Company’s issued and outstanding common stock, 15,000,000 (pre reverse split) of which he holds indirectly through Qiang Long, 136,986,137 (pre reverse split) of which he holds indirectly through Qiang Long’s affiliate, Jolly Concept Management Limited, a BVI company, and 3,013,863 (pre reverse split) of which he holds through Qiang Long’s affiliate, Chinese Dragon Heritage Investment Management Limited, a PRC company.

Acquisition of Top Time

From the time when we sold the 6 standard diesel buses in the first quarter of 2005 until November 12, 2007 when we completed the acquisition transaction with Daykeen Group Limited, or Daykeen, discussed herein, we had limited operations and did not engage in active business operations other than our search for, and evaluation of, potential business opportunities for acquisition or participation.

On November 12, 2007, we completed an acquisition transaction with Top Time International Limited, a Hong Kong Company, or Top Time, whereby we paid Daykeen, Top Time’s sole shareholder, a total consideration of $54.9 million (RMB407 million, based on an exchange ratio of $1 =RMB7.414) in exchange for 100% ownership of Top Time, consisting of $30 million in cash and $24.9 million in shares of our common stock issuable within 90 days of the closing. $30 million of cash was paid to Daykeen by three transactions, Beijing Cardinal, De Qiu Hong, and Mr. Chen Zhiping paid $29 million, $0.4 million, and $0.6 million on behalf of the Company, respectively. As a result, the Company offset the same amounts of balance of the three parties’ current accounts. The equity portion of the purchase price amounts to a total of 62,250,000 (post reverse split) shares of our common stock (based upon $0.02 /share, the average of the closing price of the Company’s common stock on the OTCBB for the 365 calendar days prior to May 31, 2007, which was adjusted for our stock split which occurred on October 16, 2007 and resulted an effective purchase price of $0.40 per share). Top Time thereby became our wholly owned subsidiary and Daykeen will become our controlling stockholder upon our issuance to Daykeen of the equity portion of the purchase price in accordance with the Share Purchase Agreement.

Top Time was incorporated in Hong Kong in December 2006 and currently has two subsidiaries: Beijing SOD and Chongqing SOD. Beijing SOD was incorporated in China in March 2005 and is 90% owned by Top Time and 10% owned by Ms. Ran Wang.

For accounting purposes, the acquisition of Top Time was treated as a reorganization of entities under common control. When we refer in this report to business and financial information for periods prior to the consummation of the acquisition, we are referring to the business and financial information of Top Time on a consolidated basis unless the context suggests otherwise.

Sale of Top Team Subsidiaries

Through acquisition of Top Time, our business became the development, manufacture and sale of SOD products. As a result, on November 28, 2007, we disposed of five subsidiaries held by Top Team Holdings Limited (BVI): Euromax International Investments Limited, Beijing China Cardinal Real Estate Consulting Co., Ltd, Eagle Bus Development Limited (HK), Good View Bus Manufacturing Company Limited (HK), and Guangzhou City View Bus Installation Company Limited (PRC), to Mr. Zhiping Cheng, for an aggregate sale price of RMB5,000,000 (approximately $715,000).

The following chart reflects our organizational structure as of the date of this report.

***PLEASE SEE HTML FOR ORGANIZATIONAL STRUCTURE***

According to all reasonably circumstances facing the company, the management prepared the financial report on the development stage company basis.

CAPITAL RESOURCES AND BUSINESS RISKS

The Company remains in the development stage and only operates through indirect Chinese subsidiaries Beijing SOD and Chongqing SOD. Through Chinese subsidiaries, we develop, manufacture and market our SOD products in China. SOD is a naturally occurring enzyme which may act as a potent antioxidant defense in cells that are exposed to oxygen. All of the company’s future business operations are subject to all of the risks inherent in the establishment of a new business enterprise. The Company has no proven revenue stream from the sales of its products. Additional capital resources through current and future offerings of securities will be needed in order to accomplish the Company's present marketing, development and manufacturing plans. The manufacturing facility and other operations in China, as well as the business financial conditions and results of operations are, to a significant degree, subject to economic, political and social events in China.

The Company had incurred losses since inception and had working capital deficiency of $1,122,770 as at September 30, 2014 (December 31, 2013: deficiency of $794,186). There exits substantial doubt about the Company’s ability to continue as a going concern, which contemplated the realization of assets and the payment of liabilities in the ordinary course of business. To alleviate the situation, management obtained $28,113,294 in funding through the issuance of additional stock to one of the Company’s shareholders on July 27, 2007. On November 12, 2007, the Company completed an acquisition transaction with Top Time whereby it paid Daykeen, Top Time’s sole shareholder, a total consideration of $54.9 million, in exchange for 100% ownership of Top Time, consisting of $30 million in cash and $24.9 million in shares of our common stock issuable within 90 days of the closing. The equity portion of the purchase price amounts to a total of 62,250,000 post reverse split shares of the Company’s common stock.

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

As of September 30, 2014 the Company has accumulated deficit from recurring net loss of $30,641,628 and cash and cash equivalent of $10,237. The application of the going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. There is, primarily as a result of the conditions described above, substantial doubt as to the appropriateness of the use of the going concern assumption. The accompanying financial statements have been prepared on a going concern basis notwithstanding these conditions.

The ability of the Company to continue as a going concern is dependent on its ability to generate sufficient positive cash flows from future operations and the continued funding from the Company’s major shareholders. If the going concern basis were not appropriate for these financial statements, then adjustments would be necessary to the carrying values of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

RESTRICTIONS ON TRANSFER OF ASSET OUT OF CHINA

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

CONTROL BY PRINCIPAL STOCKHOLDERS

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

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

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

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

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

NONCONTROLLING INTEREST IN SUBSIDIARIES

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

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

USE OF ESTIMATES

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

SIGNIFICANT ESTIMATES

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

REVENUE RECOGNITION

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

PROPERTY AND EQUIPMENT

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

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

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

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

CASH AND CASH EQUIVALENTS

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

INTANGIBLE ASSETS

The Company adopted the provisions of ASC Topic 350 (formerly SFAS No. 142, Goodwill and Other Intangible Assets), according to which goodwill and indefinite lived intangible assets are not amortized, but are reviewed annually for impairment, or more frequently, if indications of possible impairment exist. The Company has performed the requisite annual transitional impairment tests on intangible assets and made the impairment adjustments as necessary. All goodwill and indefinite lived intangible assets had been written down to zero in the prior years.

INCOME TAXES

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with ASC Topic 740 (formerly SFAS No. 109, “Accounting for income taxes”) these deferred taxes are measured by applying currently enacted tax laws.

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

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

RESEARCH AND DEVELOPMENT COSTS

Company sponsored research and development costs, related to both present and future products, are charged to operations when incurred and are included in operating expenses. Expenditures for research and development for the nine months period ended September 30, 2014 and 2013 were both $0 and a cumulative amount of $8,880,206 for the period from June 4, 1997 (inception) to September 30, 2014.

SHIPPING AND HANDLING

Costs relating to shipping and handling are part of general and administrative expenses in the consolidated statements of operations and comprehensive loss. Insignificant amount of shipping and handling costs incurred during the nine months ended September 30, 2014 and 2013.

EARNING (LOSS) PER SHARE

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

There were no stock options and potentially dilutive securities outstanding at September 30, 2014.

EQUITY BASED COMPENSATION

The Company accounts for employee stock options in accordance with ASC Topic 718, (formerly SFAS 123(R), “Share-Based Payment.”) which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, or vesting period. The Company had no such compensation expense for the nine months ended September 30, 2014 and 2013.

COMPARATIVE FIGURES

Certain comparative figures have been reclassified in order to conform with the presentation adopted in the current period.

COMPREHENSIVE INCOME (LOSS)

The accompanying financial statements are presented in U.S. dollars. The functional currency is the RMB. The financial statements are translated into U.S. dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Currency translation adjustments are presented as other comprehensive income.

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

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Common Stock, Par Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	77,655,862	77,655,862
Common Stock, Shares, Outstanding	77,655,862	77,655,862

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Schedule of Property, Plant and Equipment (Details)	9 Months Ended
	Sep. 30, 2014 Y
Summary Of Significant Accounting Policies Schedule Of Property, Plant And Equipment 1	5
Summary Of Significant Accounting Policies Schedule Of Property, Plant And Equipment 2	5
Summary Of Significant Accounting Policies Schedule Of Property, Plant And Equipment 3	5
Summary Of Significant Accounting Policies Schedule Of Property, Plant And Equipment 4	10
Summary Of Significant Accounting Policies Schedule Of Property, Plant And Equipment 5	20

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 12, 2014
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Trading Symbol	cgyg
Entity Registrant Name	CHINA LONGYI GROUP INTERNATIONAL HOLDINGS LTD
Entity Central Index Key	0001010566
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		77,655,862
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	3 Months Ended		9 Months Ended		208 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014
Revenues
Sales	$ 0	$ 680	$ 0	$ 11,095	$ 1,027,204
Cost of sales	0	406	0	7,409	1,040,259
Gross margin	0	274	0	3,686	(13,055)
Operating expenses
General and administrative expenses	105,066	99,751	367,795	366,165	19,571,638
Goodwill impairment loss	0	0	0	0	5,408,584
Write-off inventory and bus licenses	0	0	0	0	3,322,712
Research and development costs	0	0	0	0	8,880,206
Total Operating Expenses	105,066	99,751	367,795	366,165	37,183,140
Loss from operations	(105,066)	(99,477)	(367,795)	(362,479)	(37,196,195)
Other income (expense)
Interest income	9	(8)	16	23	325,703
Other income (expense)	1,730	0	5,202	0	1,253,413
Transaction exchange gain	(14,988)	1,738	(15,900)	21,404	1,073,983
Gain on asset disposal	0	0	0	0	1,172
Gain on debt settlement	0	0	0	0	156,018
Gain on disposal subsidiary	0	0	0	0	4,093,455
Interest expense	0	0	0	0	(712,302)
Total Other Income (Expense)	(13,249)	1,730	(10,682)	21,427	6,191,442
Loss before income tax expense and noncontrolling interest	(118,315)	(97,747)	(378,477)	(341,052)	(31,004,753)
Income tax expense	0	0	0	0	0
Net loss	(118,315)	(97,747)	(378,477)	(341,052)	(31,004,753)
Less: Net loss attributable to noncontrolling interest	8,151	(9,563)	23,789	28,912	363,125
Net loss attributable to China Longyi	(110,164)	(107,310)	(354,688)	(312,140)	(30,641,628)
Basic and diluted loss per share	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average number of shares outstanding-basic and diluted	77,655,862	77,655,862	77,655,862	77,655,862
Comprehensive loss
Net loss	(118,315)	(97,747)	(378,477)	(341,052)	(31,004,753)
Foreign currency translation adjustment	26,938	(1,791)	17,642	(18,465)	0
Comprehensive loss	(91,377)	(99,538)	(360,835)	(359,517)	0
Comprehensive loss attributable to noncontrolling interest	(8,151)	(9,760)	(23,037)	(29,903)	0
Comprehensive loss attributable to China Longyi	$ (83,226)	$ (89,778)	$ (337,798)	$ (329,614)	$ 0

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION [Policy Text Block]

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

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

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

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

NONCONTROLLING INTEREST IN SUBSIDIARIES [Policy Text Block]

NONCONTROLLING INTEREST IN SUBSIDIARIES

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

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

USE OF ESTIMATES [Policy Text Block]

USE OF ESTIMATES

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

SIGNIFICANT ESTIMATES [Policy Text Block]

SIGNIFICANT ESTIMATES

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

REVENUE RECOGNITION [Policy Text Block]

REVENUE RECOGNITION

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

PROPERTY AND EQUIPMENT [Policy Text Block]

PROPERTY AND EQUIPMENT

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

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

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

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

CASH AND CASH EQUIVALENTS [Policy Text Block]

CASH AND CASH EQUIVALENTS

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

INTANGIBLE ASSETS [Policy Text Block]

INTANGIBLE ASSETS

The Company adopted the provisions of ASC Topic 350 (formerly SFAS No. 142, Goodwill and Other Intangible Assets), according to which goodwill and indefinite lived intangible assets are not amortized, but are reviewed annually for impairment, or more frequently, if indications of possible impairment exist. The Company has performed the requisite annual transitional impairment tests on intangible assets and made the impairment adjustments as necessary. All goodwill and indefinite lived intangible assets had been written down to zero in the prior years.

INCOME TAXES [Policy Text Block]

INCOME TAXES

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with ASC Topic 740 (formerly SFAS No. 109, “Accounting for income taxes”) these deferred taxes are measured by applying currently enacted tax laws.

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

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

RESEARCH AND DEVELOPMENT COSTS [Policy Text Block]

RESEARCH AND DEVELOPMENT COSTS

Company sponsored research and development costs, related to both present and future products, are charged to operations when incurred and are included in operating expenses. Expenditures for research and development for the nine months period ended September 30, 2014 and 2013 were both $0 and a cumulative amount of $8,880,206 for the period from June 4, 1997 (inception) to September 30, 2014.

SHIPPING AND HANDLING [Policy Text Block]

SHIPPING AND HANDLING

Costs relating to shipping and handling are part of general and administrative expenses in the consolidated statements of operations and comprehensive loss. Insignificant amount of shipping and handling costs incurred during the nine months ended September 30, 2014 and 2013.

EARNINGS (LOSS) PER SHARE [Policy Text Block]

EARNING (LOSS) PER SHARE

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

There were no stock options and potentially dilutive securities outstanding at September 30, 2014.

EQUITY BASED COMPENSATION [Policy Text Block]

EQUITY BASED COMPENSATION

The Company accounts for employee stock options in accordance with ASC Topic 718, (formerly SFAS 123(R), “Share-Based Payment.”) which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, or vesting period. The Company had no such compensation expense for the nine months ended September 30, 2014 and 2013.

COMPARATIVE FIGURES [Policy Text Block]

COMPARATIVE FIGURES

Certain comparative figures have been reclassified in order to conform with the presentation adopted in the current period.

COMPREHENSIVE INCOME (LOSS) [Policy Text Block]

COMPREHENSIVE INCOME (LOSS)

The accompanying financial statements are presented in U.S. dollars. The functional currency is the RMB. The financial statements are translated into U.S. dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Currency translation adjustments are presented as other comprehensive income.

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

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2014

SUBSEQUENT EVENTS [Text Block]

6.	SUBSEQUENT EVENTS
	Management has considered all events occurring through November 14, 2014, the date the financial statements have been issued, and has determined that there are no such events that are material to the financial statement.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Summary Of Significant Accounting Policies 1	90.00%
Summary Of Significant Accounting Policies 2	10.00%
Summary Of Significant Accounting Policies 3	10.00%
Summary Of Significant Accounting Policies 4	81.00%
Summary Of Significant Accounting Policies 5	9.00%
Summary Of Significant Accounting Policies 6	10.00%
Summary Of Significant Accounting Policies 7	19.00%
Summary Of Significant Accounting Policies 8	$ 0
Summary Of Significant Accounting Policies 9	$ 8,880,206

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Property, Plant and Equipment [Table Text Block]

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

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BUSINESS DESCRIPTION AND ORGANIZATION (Narrative) (Details)	9 Months Ended
	Sep. 30, 2014 USD ($) D	Sep. 30, 2014 CNY
Business Description And Organization 1	40,000,000	40,000,000
Business Description And Organization 2	200,000,000	200,000,000
Business Description And Organization 3	1	1
Business Description And Organization 4	20	20
Business Description And Organization 5	$ 1,000,000
Business Description And Organization 6	28,000,000	28,000,000
Business Description And Organization 7	70.00%	70.00%
Business Description And Organization 8	85.00%	85.00%
Business Description And Organization 9	15.00%	15.00%
Business Description And Organization 10	15.00%	15.00%
Business Description And Organization 11	990,638
Business Description And Organization 12	28,210,000	28,210,000
Business Description And Organization 13	89.80%	89.80%
Business Description And Organization 14	23.80%	23.80%
Business Description And Organization 15	66.00%	66.00%
Business Description And Organization 16	6	6
Business Description And Organization 17	5	5
Business Description And Organization 18	1	1
Business Description And Organization 19	140,000,000	140,000,000
Business Description And Organization 20	0.01
Business Description And Organization 21	29,400,000
Business Description And Organization 22	$ 0.21
Business Description And Organization 23	653,795
Business Description And Organization 24	632,911
Business Description And Organization 25	3,013,862	3,013,862
Business Description And Organization 26	28,113,294
Business Description And Organization 27	136,986,138	136,986,138
Business Description And Organization 28	50,000,000	50,000,000
Business Description And Organization 29	86,986,138	86,986,138
Business Description And Organization 30	4,349,307	4,349,307
Business Description And Organization 31	50,000,000	50,000,000
Business Description And Organization 32	155,000,000	155,000,000
Business Description And Organization 33	7,750,000	7,750,000
Business Description And Organization 34	54.00%	54.00%
Business Description And Organization 35	15,000,000	15,000,000
Business Description And Organization 36	136,986,137	136,986,137
Business Description And Organization 37	3,013,863	3,013,863
Business Description And Organization 38	6	6
Business Description And Organization 39	54,900,000
Business Description And Organization 40		407,000,000
Business Description And Organization 41	1
Business Description And Organization 42		7.414
Business Description And Organization 43	100.00%	100.00%
Business Description And Organization 44	30,000,000
Business Description And Organization 45	24,900,000
Business Description And Organization 46	90	90
Business Description And Organization 47	30,000,000
Business Description And Organization 48	29,000,000
Business Description And Organization 49	400,000
Business Description And Organization 50	600,000
Business Description And Organization 51	62,250,000	62,250,000
Business Description And Organization 52	0.02
Business Description And Organization 53	365	365
Business Description And Organization 54	$ 0.40
Business Description And Organization 55	90.00%	90.00%
Business Description And Organization 56	10.00%	10.00%
Business Description And Organization 57		5,000,000
Business Description And Organization 58	715,000
Business Description And Organization 59	1,122,770
Business Description And Organization 60	794,186
Business Description And Organization 61	28,113,294
Business Description And Organization 62	54,900,000
Business Description And Organization 63	100.00%	100.00%
Business Description And Organization 64	30,000,000
Business Description And Organization 65	24,900,000
Business Description And Organization 66	90	90
Business Description And Organization 67	62,250,000	62,250,000
Business Description And Organization 68	2,500,000	2,500,000
Business Description And Organization 69	4,349,307	4,349,307
Business Description And Organization 70	1,131,026	1,131,026
Business Description And Organization 71	62,250,000	62,250,000
Business Description And Organization 72	30,641,628
Business Description And Organization 73	$ 10,237
Business Description And Organization 74	85.00%	85.00%

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LONG TERM INVESTMENT (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Long Term Investment 1	50,000
Long Term Investment 2	$ 10,000
Long Term Investment 3	$ 0.2
Long Term Investment 4	20.00%
Long Term Investment 5	20.00%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended		208 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (378,477)	$ (341,052)	$ (31,004,753)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization	28,777	28,583	1,315,591
Loss on sales of property and equipment	0	0	9,873
Impairment loss for fixed assets	0	0	1,052,950
Write-off goodwill and inventory	0	0	7,101,506
Stock issued for services and debt	0	0	1,869,100
(Gain) loss on disposition in subsidiary	0	0	(3,882,796)
Research and development expenses recorded in organization	0	0	8,612,730
Reorganization expenses recorded in organization	0	0	455,830
Changes in operating assets and liabilities:
Accounts receivalbes	(1,628)	165,669	(19,226)
Other receivables	2,080	(92)	5,325,578
Due from related parties	0	(4,350)	31,486
Interest receivable	0	0	17,667
Deposits and prepayment	(11,309)	35	682,914
Inventory	(47)	3,936	(822,364)
Other payables	57,995	87,850	(212,223)
Due to related parties	53,362	36,597	107,938
Accounts payable and accrued liabilities	(28)	611	(3,320,211)
Net cash used in operations	(249,275)	(22,213)	(12,678,410)
Cash flows from investing activities:
Reorganization - net of cash acquired	0	0	(320,579)
Purchase of subsidiaries	0	0	(1,690,474)
Redemption of short term investment	0	0	665,092
Purchase of investment	0	0	0
Purchases of intangible assets	0	0	(833,357)
Purchases of property and equipment	0	(1,512)	(521,239)
Purchases of construction in progress	0	0	(169,081)
Sales of property and equipment	0	0	701,100
Deposit on subsidiary	0	0	(10,922)
Net cash provided by (used in) investing activities	0	(1,512)	(2,179,460)
Cash flows from financing activities:
Addition of short term loans	0	0	1,612
Collecttion from shareholders	0	0	503,171
Payments to stockholders	0	0	(1,634,763)
Proceeds from issuance of stock	0	0	13,149,845
Proceeds from convertible promissory note	0	0	3,128,225
Dividends paid	0	0	(1,000,000)
Proceeds to notes payable	0	0	649,492
Payments on notes payable	0	0	(612,582)
Proceeds (repayments) loans from directors	222,970	45,036	531,616
Net cash provided by financing activities	222,970	45,036	14,716,616
Effect of foreign exchange rate fluctuation	15,827	(21,191)	151,491
Increase(decrease) in cash and cash equivalents	(10,478)	120	10,237
Cash and cash equivalents, beginning of period	20,715	11,916	0
Cash and cash equivalents, end of period	10,237	12,036	10,237
Supplemental disclosures of cash flow information:
Cash paid for interest	0	0	0
Cash paid for income taxes	$ 0	$ 0	$ 0

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2014

COMMITMENTS AND CONTINGENCIES [Text Block]

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