10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
x	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
Commission file number 000-53224

CHINA PROSPEROUS CLEAN ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

West Side, Public Transportation Gas Filling Center,

Angang Avenue-Middle Part, Yindu District,

Anyang, Henan Province,

Postal code: 455000

The People’s Republic of China

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

 86-372-3166864

(telephone number, including area code)

Copy of Communication to:

Bernard & Yam, LLP

Attention: Bin Zhou, Esq.

401 Broadway Suite 1708

New York, NY 10013

Phone: 212-219-7783

Facsimile: 212-219-3604

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.  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 large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelrated filer      ¨	Accelerated filer                         ¨
Non-accelerated filer       ¨	Smaller reporting company      x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨  NO x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 125,000 as of August 11, 2011.

On this Form 10Q quarterly report, the registrant, China Prosperous Clean Energy Corporation, is hereinafter referred as "we", or "Company", or "CHPC".

1

Explanatory Note

The purpose of this Amendment to China Prosperous Clean Energy Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed with the Securities and Exchange Commission on August 12, 2011, is solely to furnish Exhibit 101 to the Form 10-Q and make conforming changes to Item 6. Exhibits.

Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). No other substantive changes have been made to the Form 10-Q. This Amendment does not reflect events that may have occurred subsequent to the original filing date.

ITEM 6. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.	Description
3.1	Articles of Incorporation (1)
3.2	Bylaws (1)
10.1	Affiliate Stock Purchase Agreement between Walter Brenner and Oracular Dragon Capital Company, Ltd. (2)
10.2	Affiliate Stock Purchase Agreement between Horst Balthes and Oracular Dragon Capital Company, Ltd.(2)

10.3	Non-Affiliate Stock Purchase Agreement (2)
10.4	Share Exchange Agreement, dated June 30, 2008, between Company and Oracular Dragon Capital Company, Ltd.(3)
10.5	Consulting Agreement between Company and Zhijun Liu (4)
31.1	Section 302 Certificate of Chief Executive Officer (5)
31.2	Section 302 Certificate of Chief Financial Officer (6)
32.1	Section 906 Certificate of Chief Executive Officer (7)
32.2	Section 906 Certificate of Chief Financial Officer (8)
101	Interactive data files pursuant to Rule 405 of Regulation S-T.

* filed herewith

(1) Incorporated by reference to the Form SB-2 registration statement filed on June 29, 2007.

(2) Incorporated by reference to the Report on Form 8-K as filed on June 20, 2008

(3) Incorporated by reference to the Report on Form 8-K as filed on June 30, 2008.

(4) Incorporated by reference to the Report on Form 8-K as filed on December 07, 2010

(5) Incorporated by reference to the Exhibit 31.1 of the Form 10Q filed on August 12, 2011.

(6) Incorporated by reference to the Exhibit 31.2 of the Form 10Q filed on August 12, 2011.

(7) Incorporated by reference to the Exhibit 32.1 of the Form 10Q filed on August 12, 2011.

(8) Incorporated by reference to the Exhibit 32.2 of the Form 10Q filed on August 12, 2011.

SIGNATURES

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

Date: September 9, 2011	CHINA PROSPEROUS CLEAN ENERGY CORPORATION
	/s/Hongjie Zhou
	Hongjie Zhou
	Acting Chief Financial Officer

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Consolidated Balance Sheets Parentheticals (USD $)	Jun. 30, 2011	Dec. 31, 2010
Common Stock, par or stated value	$ 0.001	$ 0.001
Common Stock, shares authorized	75,000,000	75,000,000
Common Stock, shares issued	125,000	125,000
Common Stock, shares outstanding	125,000	125,000

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Sales	$ 7,120,591	$ 5,311,443	$ 16,399,552	$ 9,984,439
Cost of sales	5,780,571	4,674,824	14,038,138	8,654,492
Gross profit	1,340,020	636,619	2,361,414	1,329,947
Selling expenses	628,145	391,739	1,368,546	811,889
General and administrative expenses:	255,135	170,349	561,780	351,954
Total operating expenses	883,280	562,088	1,930,326	1,163,843
Income from operations	456,740	74,531	431,088	166,104
Investment income	82,372	78,464	165,862	156,885
Interest expense	(59,533)	(217)	(93,595)	(32,231)
Other expenses	(3,713)	(7,625)	(2,245)	(103,786)
Total other income	19,126	70,622	70,022	20,868
Income before provision for income taxes	475,866	145,153	501,110	186,972
Provision for income taxes	101,879	39,704	120,394	58,410
Net income	373,987	105,449	380,716	128,562
Less: Net loss attributable to noncontrolling interest	(171)	(1,333)	(3,646)	(1,395)
Net income attributable to CHPC	$ 374,158	$ 106,782	$ 384,362	$ 129,957
Weighted average number of shares - Basic and diluted	125,000	120,000	125,000	120,000
Earnings per share - Basic and diluted	$ 2.99	$ 0.88	$ 3.07	$ 1.08

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SHARE - BASED PAYMENTS

3 Months Ended

Jun. 30, 2011

SHARE - BASED PAYMENTS

SHARE - BASED PAYMENTS

Note 17 – Share – Based Payments

On December 3, 2010, the board of directors approved to issue 500,000 shares of the Company’s common stock to Mr. Zhijun Liu, the consultant of the Company for one year consultant service fee. The fair value on December 3, 2010 was $50,000 based on the quoted price of the Company’s common stock on that day. Total share-based payments recognized in income statement for the six months ended June 30, 2011 and 2010 were $25,000 and $-0-, respectively.

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Document and Entity Information	3 Months Ended
	Jun. 30, 2011	Aug. 11, 2011
Document and Entity Information
Entity Registrant Name	CHINA PROSPEROUS CLEAN ENERGY Corp
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Entity Central Index Key	0001402159
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		125,000
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2

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CONCENTRATION OF CREDIT RISK

3 Months Ended

Jun. 30, 2011

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK

Note 20 – Concentration of Credit Risk

As of June 30, 2011 and December 31, 2010, 100% of the Company’s cash included cash on hand and deposits in accounts maintained within the PRC where there is currently no rule or regulation in place for obligatory insurance to cover bank deposits in the event of bank failure. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

For the six months ended June 30, 2011 and Dec 31, 2010, all of the Company’s sales arose in the PRC. In addition, all accounts receivable as of June 30, 2011 and December 31, 2010 were due from customers located in the PRC.

As of June 30, 2011 and December 31, 2010, no single customer accounted for more than 10% of the company’s accounts receivable.

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DIVIDEND RECEIVABLE

3 Months Ended

Jun. 30, 2011

DIVIDEND RECEIVABLE

DIVIDEND RECEIVABLE

Note 6 – Dividend Receivable

Dividend receivable as of June 30, 2011 and December 31, 2010 were $371,650 and $524,400, respectively, representing income receivable from Anyang Petro China and Ancai exhibited in Note 10.

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SUPPLEMENTAL CASH FLOW DISCLOSURES

3 Months Ended

Jun. 30, 2011

SUPPLEMENTAL CASH FLOW DISCLOSURES

SUPPLEMENTAL CASH FLOW DISCLOSURES

Note 21 – Supplemental Cash Flow Disclosures

The following is supplemental information relating to the consolidated statements of cash flows:

	For the six months ended June 30,
	2011		2010
Cash paid for interest	$	93,595	$	32,231
Cash paid for income taxes	$	120,394	$	58,410

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RISK FACTORS

3 Months Ended

Jun. 30, 2011

RISK FACTORS

RISK FACTORS

Note 19 – Risk Factors

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

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INVESTMENTS IN NON-CONSOLIDATED ENTITIES

3 Months Ended

Jun. 30, 2011

INVESTMENTS IN NON-CONSOLIDATED ENTITIES

INVESTMENTS IN NON-CONSOLIDATED ENTITIES

Note 11 – Investments in Non-consolidated Entities

As of June 30, 2011, available-for-sale securities consist of the following:

Name of investee	Place of operation	Percentage of ownership	Principal activities
Anyang Dingran Gas Co., Ltd	PRC	38%	Natural gas pipeline, investment and management in CNG filling station
Anyang PetroChina Marketing Company Limited (“Anyang PetroChina”)	PRC	34%	Sales of crude oil and refined oil and LPG
Ancai Energy Corporation	PRC	15%	Long distance pipe network, LPG pipeline, operation of CNG filling station

As the above company is a private company whose shares are not quoted or traded in an active market, management has determined that it is not practicable to estimate their fair value reliably. Therefore, the investment in the above company is stated at cost less any impairment losses. No events or changes in circumstances have been identified that potentially would have a significant adverse effect on the fair value of investment in the above company. As of June 30, 2011, there was no allowance for impairment loss.

Anyang Dingran Gas Co., Ltd was incorporated on July 12, 2010, with a registered capital of $8 million, which was invested by Ancai Hi-tec Corporation, Antai Investment Co., Ltd., and Anyang Prosperous. Anyang Prosperous invested $3.04 million for its 38% equity interest in Anyang Dingran. It mainly engaged in the investment and operation in CNG and LNG stations. Through the CNG pipeline of branch of Henan, which can support 0.21billion M3 CNG per year, it will construct mother stations and standard stations, and now it was operated by the above three parties. Therefore, Anyang Dingran has been accounted for using the cost method instead of the equity method. For the six months ended June 30, 2011 and 2010, no dividend income was distributed from Anyang Dingran.

Although the Company held 34% ownership interest in Anyang PetroChina, the Company did not have significant influence over Anyang PetroChina. According to an agreement between the Company and the other shareholder of Anyang PetroChina, namely China National Petroleum Corporation (“China National Petroleum”), the Company has assigned the full power and right of management of Anyang PetroChina to China National Petroleum for the period until December 31, 2009. In return, the Company has been entitled to 10% of the cost of its investment in Anyang PetroChina in the form of a fixed “dividend” each year regardless of the actual performance of Anyang PetroChina for the period until December 31, 2009. Therefore, Anyang PetroChina has been accounted for using the cost method instead of the equity method. For the six months ended June 30, 2011 and 2010, dividend income of $163,750 and $156,885, respectively, from Anyang Petro China was included in other income.

The Company acquired 15% of the shares of Ancai Energy Co., Ltd (“Ancai”), which was established on April 18, 2008 and was registered with capital of approximate $1.17million. Ancai is mainly engaged in the investment in the construction of long-distance pipeline and delivery networks for natural gas, and pipeline LPG and CNG filling stations. The Jiaozuo-Anyang branch of the West-East natural gas transmission project had been built and put into operation in December 2003, which supplies natural gas to users in the cities of Jiaozuo, Xinxiang, Hebi, Anyang as well as industrial users. The project is not just an industrial project, but also a state key infrastructural project for clean energy. Almost 15 million people in Northern Henan can benefit from the project, which plays an important role in local industry and ecological environment. The investment made on Ancai will provide steady and qualified natural gas for the network of CNG filling stations that belong to the company and Henan Transport Authority, developing a stable market of filling stations which takes Ancai mother station as its center. Ancai has been accounted for using the cost method instead of the equity method. For the six months ended June 30, 2011 and 2010, dividend of $2,112 and $-0- respectively, from Ancai was included in other income.

As of June 30, 2011, Ancai Group Inc, the 70% shareholder of Ancai, is responsible for the management of Ancai.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2– Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements include the accounts of its controlled subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from June 30, 2011 through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

Interim Financial Statements

These interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2010 and 2009, as not all disclosures required by GAAP for annual consolidated financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the years ended December 31, 2010 and 2009.

Reclassification

Certain amounts as of December 31, 2010 and June 30, 2011 were reclassified for presentation purposes.

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PROPERTY AND EQUIPMENT

3 Months Ended

Jun. 30, 2011

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Note 8 – Property and Equipment

Property and equipment consist of the following:

	June 30, 2011			December 31, 2010
Buildings	$	2,455,584		$	1,144,422
Machinery		3,938,961			3,129,046
Machinery – capital lease		320,659			-
Office equipment		95,743			75,363
Gas storage vehicles and motor vehicles		129,869			127,350
Construction in progress		547,354			1,731,539
		7,488,170			6,207,720
Less: Accumulated depreciation		(1,675,211	)		(1,475,882	)
Total	$	5,812,959		$	4,731,838

Depreciation expense for three months ended June 30, 2011 and 2010 was $125,125 and $92,040 respectively. Depreciation expense for the six months ended June 30, 2011 and 2010 was $168,394 and $109,940, respectively. For the six months ended June 30, 2011 and 2010, amortization of equipment under capital lease included in depreciation expense was $2,671 and $-0-, respectively.

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SHORT TERM BANK LOANS

3 Months Ended

Jun. 30, 2011

SHORT TERM BANK LOANS

SHORT TERM BANK LOANS

Note 13– Short Term Bank Loans

Short-term bank loans consist of the following:

	June 30,		December 31,
	2011		2010
6.372% one-year term loan from Bank of China, signed on October 8, 2010, which is to be repaid in full by October 8, 2011. The loan is guaranteed by real estate of Anyang Century Plaza Century Real Estate Development Co., Ltd. I nterest was paid quarterly.	$	464,100	$	455,100
6.672% one-year term loan from Bank of China, signed on November 9, 2010, which is to be repaid in full by November 9, 2011. The loan is guaranteed by real estate of Anyang Century Plaza Century Real Estate Development Co., Ltd. Interest was paid quarterly.		309,400		303,400
6.1160% one-year term loan from Zhengzhou Branch of Shanghai Pudong Development Bank, signed on November 18, 2010, which is to be repaid in full by November 18, 2011. The loan is guaranteed by 70% of the paid-up capital of $500 and rights to use land of Henan Small & Medium Enterprises Investment Guaranty Co., Ltd. Interest was paid monthly.		773,500		758,500
Total	$	1,547,000	$	1,517,000

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CAPITAL LEASES - FUTURE MINIMUM LEASE PAYMENTS

3 Months Ended

Jun. 30, 2011

CAPITAL LEASES - FUTURE MINIMUM LEASE PAYMENTS

CAPITAL LEASES - FUTURE MINIMUM LEASE PAYMENTS

Note 9 – Capital Leases – Future Minimum Lease Payments

The Company leases certain machineries under agreements that are classified as capital leases. The cost of equipment under capital leases is included in the property and equipment and was $320,659 and $-0- as of June 30, 2011 and December 31, 2010, respectively. Accumulated amortization of the leased machinery as of June 30, 2011 and 2010 was $2,671 and $-0-, respectively. Amortization of assets under capital leases is included in depreciation expense.

The future minimum lease payments required under the capital leases and the present values of the net minimum lease payments as of June 30, 2011 are as follows:

Year Ending December 31,	Amount
2011	$ 101,979
2012	127,114
2013	127,114
Total minimum lease payments	$ 356,207
Less: Current maturities of capital
lease obligations	(123,351)
Long-term capital lease obligations	$ 232,856

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LOANS TO THIRD PARTIES

3 Months Ended

Jun. 30, 2011

LOANS TO THIRD PARTIES

LOANS TO THIRD PARTIES

Note 7 – Loans to Third Parties

Loans to third parties primarily consist of goodfaith non-interest bearing advances given to third parties and payable on demand. Loan to third parties outstanding as of June 30, 2011 and December 31, 2010 were $4,123,422 and $3,224,210, respectively.

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 380,716	$ 128,562
Depreciation	168,394	109,940
Share-based payments	25,000	0
Accounts receivable	172,426	35,970
Inventories	247,412	(234,965)
Advance payments	(126,214)	1,401,028
Dividend receivable	161,444	156,899
Other current assets	(409,564)	(1,708,566)
Other non-current assets	1,561	909
Accounts payable and accrued expenses	(261,463)	(53,010)
Trade notes payable	5,205,740	0
Customer advances	(1,204,182)	593,522
Other current liabilities	243,914	160,201
Total adjustments	4,224,468	461,928
Net cash provided by operating activities:	4,605,184	590,490
Acquisition of property and equipment	(1,145,788)	(183,496)
Advance payments for purchase of fixed assets	0	(785,898)
Loans to third parties	(826,863)	0
Investment in non-consolidated entities	0	(8,576)
Net cash used in investing activities:	(1,972,651)	(977,970)
Restricted cash	(3,206,014)	(639)
Repayment of short-term bank loans	0	(439,800)
Proceeds from (repayment of) third party loans	(640,409)	1,012,371
Repayment of long-term bank loan	0	(146,600)
Net cash provided by (used in) financing activities:	(3,846,423)	425,332
Effect of foreign currency translation on cash	136,533	(4,713)
Net increase (decrease) in cash and cash equivalents	(1,077,357)	33,139
Cash and cash equivalents – beginning	3,806,939	694,620
Cash and cash equivalents – ending	2,729,582	727,759
Advance payments for investment in non-consolidated entity	$ 0	$ 5,478,442

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RESTRICTED CASH

3 Months Ended

Jun. 30, 2011

RESTRICTED CASH

RESTRICTED CASH

Note 3– Restricted Cash

As of June 30, 2011 and December 31, 2010, the Company had restricted cash of $3,549,869 and $304,540, respectively. These restricted cash balances are reserved for settlement of trade notes payable in connection with inventory purchases. The cash held in custody by bank issuing the trade notes payable is restricted as to withdrawal or use, and is currently earning interest.

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INVENTORIES

3 Months Ended

Jun. 30, 2011

INVENTORIES

INVENTORIES

Note 4 – Inventories

Inventories by major categories are summarized as follows:

	June 30, 2011		December 31, 2010
Compressed natural gas	$	137,485	$	199,569
Liquefied petroleum gas		299,566		578,264
Dimethyl ether		24,138		97,452
Vehicle modification components and other		329,931		145,627
Total	$	791,120	$	1,020,912

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jun. 30, 2011

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Note 22 – Commitments and Contingencies

Lease commitments

The Company has entered into several tenancy agreements for the lease of land and equipment for the purpose of its gas stations. The Company’s commitments for minimum lease payments under these operating leases for the next five years and thereafter as of June 30, 2011 are as follows:

Period ended December 31,
2011	$	271,294
2012		246,206
2013		153,482
2014		145,334
2015		112,149
Thereafter		487,739
Total	$	1,416,204

Guaranty contingency

On May 18th, 2011, Anyang Top Energy Green Resources Co., Ltd (“Anyang Top”) signed a Guaranty Agreement (the “Guaranty”) with Zhengzhou Hengrun Energy Co, Ltd (“Zhengzhou Hengrun”), an unrelated party, to become the guarantor with respect to a RMB 25.9 million (approximately $3.98 million) capital lease. The lessor is Zhongji Vehicle leasing Co., Ltd. (“Zhongji”). According to the Guaranty, Zhengzhou Hengrun will start to lease the equipment from August 24th 2011, if Zhengzhou Hengrun fails to pay the monthly rent RMB 719,847.2 (approximately $111,360) by the 25th of each month from September 2011 to August 2014, Anyang Top is obligated under the Guaranty to make the required monthly payments. The maximum potential amount of future payments that Anyang Top would be required to make under the Guaranty is RMB 21,6 million (approximately $3.34 million). There are no recourse provisions that would enable the Company to recover from third parties and no assets held as collateral by the Company or by third parties that, upon the occurrence of a triggering event or condition under the Guaranty, the Company can obtain and liquidate to recover all or a portion of any amounts paid by Anyang Top under the Guaranty.

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Jun. 30, 2011

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Note 12 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of June 30, 2011 and December 31, 2010 consist of the following:

	June 30, 2011		December 31, 2010
Accounts payable	$	1,261,258	$	1,509,024
Accrued expenses		27,710		14,003
Total	$	1,288,968	$	1,523,027

The carrying values of accounts payable and accrued expenses approximate their fair values due to the short-term nature of these obligations.

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ADVANCE PAYMENTS

3 Months Ended

Jun. 30, 2011

ADVANCE PAYMENTS

ADVANCE PAYMENTS

Note 5 – Advance Payments

Advance payments as of June 30, 2011 and December 31, 2010 consist of the following:

	June 30, 2011		December 31, 2010
Inventories	$	9,676,383	$	9,363,683
Property and equipment		3,534,075		3,465,541
Total	$	13,210,458	$	12,829,224

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LOANS FROM THIRD PARTIES

3 Months Ended

Jun. 30, 2011

LOANS FROM THIRD PARTIES

LOANS FROM THIRD PARTIES

Note 15 – Loans From Third Parties

Loans from third parties as of June 30, 2011 and December 31, 2010 consist of the following:

	June 30, 2011		December 31, 2010
Anyang Zhenyuan Group	$	16,758,770	$	17,417,588
Beijing Prosperous Energy Technology Developing Co., Ltd		1, 485,120		1,456,320
Total	$	18,243,890	$	18,873,908

The proceeds of these loans were utilized as working capital. These loans are good-faith, unsecured, and non-interest bearing.

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SEGMENT INFORMATION

3 Months Ended

Jun. 30, 2011

SEGMENT INFORMATION

SEGMENT INFORMATION

Note 23 – Segment Information

ASC 280-10 (formerly SFAS 131), “Disclosure about Segments of an Enterprise and Related Information” requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.

The Company has re-evaluated the structure of its organization and has determined, based on the requirements of SFAS 131, that the Company has the following three reportable segments, identified based on the nature of products, the type or class of customers, and the methods used to distribute the Company’s products:

?   Retail sales of Compressed Natural Gas (“CNG”) through operation of CNG filling stations;

?   Retail sales of Liquefied Petroleum Gas (“LPG”) through operation of LPG filling stations; and

?   Wholesale of CNG and LPG

During the ended June 30, 2011, all of the Company’s operations were carried out in one geographical segment – China.

The following table sets out the Company’s segment information. The “Unallocated” column in the following table contains the reconciliation between the amounts for reportable segments and the consolidated amounts, which consists primarily of corporate items not allocated to the operating segments, intersegment eliminations. Intersegment sales are accounted for at fair value as if sales were to third parties.

	For the Six Months Ended June 30,
Sales from external customers	2011		2010
CNG retail	$	4,239,396	$	2,762,495
LPG retail		145,262		297,955
CNG and LPG wholesale		8,837,943		5,066,256
Unallocated		3,176,951		1,857,733
Consolidated	$	16,399,552	$	9,984,439

	For the Six Months Ended June 30,
Net income attributable to CHPC	2011			2010
CNG retail	$	404,292		$	259,124
LPG retail		(12,760	)		(24,121	)
CNG and LPG wholesale		(58,407	)		(301,974	)
Unallocated		51,237			196,928
Consolidated	$	384,362		$	129,957

	For the Six Months Ended June 30,
Investment income from non-consolidated entities	2011		2010
Consolidated	$	165,862	$	156,885

	For the Six Months Ended June 30,
Interest expenses	2011			2010
Consolidated	$	(93,595	)	$	(32,231	)

	For the Six Months Ended June 30,
Income before noncontrolling interest and income taxes	2011		2010
Consolidated	$	501,110	$	186,972

Segment assets	June 30, 2011		December 31, 2010
CNG retail	$	4,640,804	$	2,507,361
LPG retail		82,610		67,582
CNG and LPG wholesale		2,895,443		1,390,697
Unallocated		34,428,878		33,537,570
Consolidated	$	42,047,735	$	37,503,210

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Consolidated Statements of Comprehensive Income (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 373,987	$ 105,449	$ 380,716	$ 128,562
Foreign currency translation adjustment	108,164	34,721	268,006	34,730
Total other comprehensive income	108,164	34,721	268,006	34,730
Comprehensive income	482,151	140,170	648,722	163,292
Less: Comprehensive income attributable to the noncontrolling interest	(407)	(1,341)	(200)	(1,341)
Comprehensive income attributable to CHPC	$ 482,558	$ 141,511	$ 648,922	$ 164,633

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INCOME TAXES

3 Months Ended

Jun. 30, 2011

INCOME TAXES

INCOME TAXES

Note 16 – Income Taxes

The Company being incorporated in the State of Nevada is not subject to any income tax according to the rules and regulations of the State of Nevada. Before January 1, 2008, the Company’s subsidiaries in the PRC were generally subject to PRC enterprise income tax at 33%. On March 16, 2007, the PRC government promulgated a new tax law, China’s Unified Corporate Income Tax Law (“New CIT Law”), which took effect from January 1, 2008. Under the New CIT Law, foreign-owned enterprises as well as domestic companies are subject to a unified tax rate of 25%. Accordingly, the Company’s subsidiaries in the PRC have been subject to the PRC corporate income tax at a rate of 25% on their taxable income arising in the PRC commencing from January 1, 2008. Meanwhile, according to Rule 28 of New CIT Law, income tax of small low-profit enterprises is subject to the reduced rate of 20%. Changzhi Company as one of the Company’s subsidiaries meets the conditions of small low-profit enterprises, so Changzhi Company’s income tax rate of 20% in 2009.The effect of this change in tax rate has been reflected in the calculation of deferred income tax assets as of December 31, 2007 and thereafter.

The Company’s provision for income taxes consists of:

	For the six months ended June 30,
	2011		2010
Current	$	120,394	$	58,410
Deferred		-		-
Total provision for income taxes	$	120,394	$	58,410

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EARNINGS PER SHARE

3 Months Ended

Jun. 30, 2011

EARNINGS PER SHARE

EARNINGS PER SHARE

Note 18 – Earnings Per Share

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding. Diluted earnings per share have been computed by dividing net earnings plus convertible preferred dividends and interest expense (after-tax) on convertible debt by the weighted average number of common shares outstanding including the dilutive effect of equity securities. The weighted average number of common shares calculated for diluted EPS excludes the potential common stock that would be exercised under the options and warrants granted to officers because the inclusion of the potential shares from these options and warrants would cause an anti-dilutive effect by increasing the net earnings per share.

On February 22, 2011, the Company effectuated a 1 for 100 reverse stock split of its common stocks. All references to number of shares, except shares authorized, and to per share information in the consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis.

	Three Months Ended June 30,
	2011		2010
Net income attributable to CHPC	$	374,158	$	106,782
Weighted average common shares		125,000		120,000
(denominator for basic income per share)
Effect of dilutive securities		-		-
Weighted average common shares		125,000		120,000
(denominator for diluted income per share)
Basic earnings per share	$	2.99	$	0.88
Diluted earnings per share	$	2.99	$	0.88

	Six Months Ended June 30,
	2011		2010
Net income attributable to CHPC	$	384,362	$	129,957
Weighted average common shares		125,000		120,000
(denominator for basic income per share)
Effect of dilutive securities		-		-
Weighted average common shares		125,000		120,000
(denominator for diluted income per share)
Basic earnings per share	$	3.07	$	1.08
Diluted earnings per share	$	3.07	$	1.08

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ORGANIZATION AND DESCRIPTION OF BUSINESS

3 Months Ended

Jun. 30, 2011

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 June 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 June 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 June 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.

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DEFERRED INCOME TAXES

3 Months Ended

Jun. 30, 2011

DEFERRED INCOME TAXES

DEFERRED INCOME TAXES

Note 10 – Deferred Income Taxes

Deferred income tax asset of $53,145 and $52,114 as of June 30, 2011 and December 31, 2010 arose from unused tax loss carry-forwards that management considers more likely than not that it will be realized through future operations. The tax loss carry-forwards are available for offset against future taxable income over the next five years.

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DUE TO FORMER SHAREHOLDERS

3 Months Ended

Jun. 30, 2011

DUE TO FORMER SHAREHOLDERS

DUE TO FORMER SHAREHOLDERS

Note 14 – Due to Former Shareholders

Balances of due to the former shareholders are mainly a result of a series of mergers and acquisitions of the Company in 2008. As of June 30, 2011 and December 31, 2010, the outstanding balance due to the former shareholders was $1,666,833 and $1,634,509.

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Consolidated Balance Sheets (USD $)	Jun. 30, 2011	Dec. 31, 2010
Cash and cash equivalents	$ 2,729,582	$ 3,806,939
Restricted cash	3,549,869	304,540
Accounts receivable	378,307	541,809
Inventories	791,120	1,020,912
Advance payments	9,676,383	9,363,683
Loans to third parties	4,123,422	3,224,210
Dividend receivable	371,650	524,400
Other current assets	1,360,605	986,519
Total current assets	22,980,938	19,773,012
Property and equipment, net	5,812,959	4,731,838
Advance payments-non current	3,534,075	3,465,541
Deferred income taxes	53,145	52,114
Goodwill	63,620	62,386
Investment in non-consolidated entity	9,569,524	9,383,948
Other non-current assets	33,474	34,371
Total other assets	13,253,838	12,998,360
Total assets	42,047,735	37,503,210
Accounts payable and accrued expenses	1,288,968	1,523,027
Short-term bank loans	1,547,000	1,517,000
Trade notes payable	5,878,600	606,800
Customer advances	29,718	1,222,234
Current maturities of capital lease obligations	123,351	0
Due to former shareholders	1,666,833	1,634,509
Income taxes payable	4,234	178,643
Loans from third parties	18,243,890	18,873,908
Other current liabilities	1,047,528	611,054
Total current liabilities	29,830,122	26,167,175
Long- term capital lease obligations	232,856	0
Total liabilities	30,062,978	26,167,175
Commitments and contingencies	0	0
Common stock, $0.001 par value, 75,000,000 shares authorized,125,000 shares issued andoutstanding at June 30, 2011 and December 31, 2010.	125	125
Additional paid-in capital	8,105,257	8,105,257
Retained earnings	2,546,401	2,162,039
Statutory reserve	283,119	283,119
Accumulated other comprehensive income	1,037,726	773,166
Total stockholders' equity	11,972,628	11,323,706
Noncontrolling interest	12,129	12,329
Total equity	11,984,757	11,336,035
Total liabilities and equity	$ 42,047,735	$ 37,503,210