ORGANIZATION AND DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2010

ORGANIZATION AND DESCRIPTION OF BUSINESS

ORGANIZATION AND DESCRIPTION OF BUSINESS

Note 1 - Organization and Description of Business

China Prosperous Clean Energy Corporation (the "Company" or "CHPC") was incorporated in the State of Nevada on March 24, 2006.  On September 30, 2008, the Company entered a share exchange agreement ("Share Exchange Agreement") under which the Company issued 5,865,000 shares of its common stock, par value $ 0.00001, to Oracular Dragon Capital Company, Ltd ("Oracular Dragon"), the sole shareholder of Origin Orbit Green Resource Company, Ltd ("Origin Orbit") in exchange for all the issued and outstanding shares of Origin Orbit (the "Share Exchange").  The Share Exchange is the final part of a series of consecutive transactions including the stock purchase transactions consummated on September 19, 2008 in which the sole shareholder of Origin Orbit purchased 4,524,231 shares of common stock of CHPC from the affiliate and non-affiliate shareholders of CHPC at a total consideration of $ 346,586 (the "Stock Purchase"). Immediately following the Share Exchange and Stock Purchase, Oracular Dragon owned 10,389,231 shares of the common stock of CHPC, representing approximately 86.6% of CHPC's total issued and outstanding share capital. As a result, the Share Exchange has been accounted for as a reverse acquisition using the purchase method of accounting, whereby Origin Orbit is deemed to be the accounting acquirer and CHPC to be the accounting acquiree. The financial statements before the date of Share Exchange are those of Origin Orbit with the results of CHPC being condensed consolidated from the date of Share Exchange. No goodwill has been recorded.

Origin Orbit is a holding company that, on April 4, 2007, acquired 100% of the capital stock of Anyang Prosperous Energy Technology Developing Co., Ltd. ("Anyang Prosperous") and Anyang Top Energy Green Resources Co., Ltd. ("Anyang Top"), both of which were organized under the laws of the People's Republic of China ("PRC").  Anyang Top does not have any subsidiary.  Anyang Prosperous has various ownership interests in a number of companies in PRC.

As a result of these share exchange transaction and acquisitions, CHPC has become the holding company of the group comprising Origin Orbit, Anyang Prosperous and Anyang Top and their subsidiaries. The Company is principally engaged in the wholesale and retail sales of compressed natural gas and liquefied petroleum gas through its subsidiaries in the People's Republic of China ("PRC" or "China").

As of September 30, 2011, details of the subsidiaries of the Company are as follows:

	Place of	Registered and	Percentage of
Subsidiaries' names	operation	paid-up capital	effective ownership	Principal activities
Origin Orbit Green Resource Company, Ltd (Origin Orbit")	British Virgin Islands	US$7,950,000	100% (a)	Holding company of the other subsidiaries
Anyang Prosperous Energy Technology Developing Co., Ltd. (Anyang Prosperous")	PRC	US$5,000,000	100% (b)	Wholesale and retail sales of compressed natural gas and liquefied petroleum gas(LPG")
Anyang Top Energy Green Resources Co., Ltd. (Anyang Top")	PRC	US$2,500,000	100% (b)	Wholesale of compressed natural gas, liquefied petroleum gas and Dimethyl Ether
Jinan Zhenyuan Green Resource Co. Ltd. (Jinan Green Resource")	PRC	RMB10,000,000	99% (c)	Sales of LPG for domestic and vehicles usage and related vehicles components

	Place of	Registered and	Percentage of
Subsidiaries' names	operation	paid-up capital	effective ownership	Principal activities
Henan Prosperous Clean Energy Corporation	PRC	RMB30,000,000	100%(c)	Investing in and constructing gas filling stations and selling compressed natural gas ("CNG"), liquefied petroleum gas ("LPG"), coal-bed methane, dimethyl ether ("DME") and methane.
Handan City Prosperous Car-used Green Resource Co. Ltd. (Handan Green Resource")	PRC	RMB750,000	98% (c)	Sales of LPG, vehicles components, and new energy research and development
Weifang Prosperous Energy Technology Development Co. Ltd. (Weifang Prosperous")	PRC	RMB10,000,000	100% (c)	Energy technology research and development, and sales vehicles components and gas equipment
Hengshui Prosperous Energy Technology Development Co. Ltd. (Hengshui Prosperous")	PRC	RMB2,000,000	100% (c)	Gas energy technology research and development
Heze Prosperous Energy Technology Development Co. Ltd. (Heze Prosperous")	PRC	RMB5,000,000	100% (c)	Construction of LPG and CNG station, and sales of vehicle components LPG and CNG
Shijiazhuang Prosperous Energy Technology Development Co. Ltd. (Shijiazhuang Prosperous")	PRC	RMB10,000,000	100% (c)	Gas energy technology research, development and advisory services, and  sales of gas energy product
Xuchang Zhenyuan Green Resource Technology Development Co. Ltd. (Xuchang Zhenyuan")	PRC	RMB10,000,000	100% (c)	Investment in natural gas business
Yantai Prosperous Energy Technology Development Co. Ltd. (Yantai Prosperous")	PRC	RMB500,000	100% (c)	Gas energy technology research and development, and sales vehicle components and gas energy equipment

	Place of	Registered and	Percentage of
Subsidiaries' names	operation	paid-up capital	effective ownership	Principal activities
Changzhi City Zhenyuan Energy Technology Development Co. Ltd (Changzhi City")	PRC	RMB4,400,000	100% (c)	Sales of crude oil, natural gas, LPG and related vehicle components, and construction of gas stations
Jiaozuo City Prosperous Energy Technology Development Co. Ltd. (Jiaozuo City")	PRC	RMB5,000,000	100% (c)	Sales of natural gas, liquefied petroleum gas and vehicle components, construction and operation of gas stations
Pingdingshan City Zhenyuan Energy Technology Developing Co. Ltd. (Pingdingshan City")	PRC	RMB5,000,000	100% (c)	Energy technology development, sales of natural gas, LPG and vehicle components, and construction and operation of gas stations
Linying Prosperous Energy Technology Development Co. Ltd. (Linyi Prosperous")	PRC	RMB10,000,000	100% (c)	Sales of natural gas and vehicle components.
Jiangsu Hengrun Clean Energy Co., Ltd. ("Jiangsu Hengrun ")	PRC	RMB20,000,000	100% (c)	Research and development of clean energy technology, promotion and application of clean energy technology.

Notes:

(a)   Held directly by CHPC.

(b)   Held indirectly by CHPC through Origin Orbit.

(c)   Held indirectly by CHPC through Origin Orbit and Anyang Prosperous.

(d)   According to the Companies Law of the PRC, at the incorporation of the investee, shareholders are only required to pay up 20% of the capital contribution requirement as a minimum and can make up the remaining payment in two years' time.