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, 2012

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

For the transition period from ____________ to _____________

Commission File Number: 000-54086

CHINA EXECUTIVE EDUCATION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	75-3268300
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Hangzhou MYL Business Administration Consulting Co. Ltd.

Room 307, Hualong Business Building

110 Moganshan Road, Hangzhou 310005

People’s Republic of China

(Address of principal executive offices, Zip Code)

(+86) 0571-8880-8109

(Registrant’s telephone number, including area code)

_____________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (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  o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o

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

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  ¨ (Do not check if a smaller reporting company)   o	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  o  No x

The number of shares outstanding of each of the issuer’s classes of common stock, as of August 13, 2012 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.001 par value	22,834,100

TABLE OF CONTENTS

	Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	33
Item 4. Controls and Procedures.	33
PART II OTHER INFORMATION
Item 1. Legal Proceedings.	34
Item 1A. Risks Factors.	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	34
Item 3. Defaults Upon Senior Securities.	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information.	34
Item 6. Exhibits.	34

2

CHINA EXECUTIVE EDUCATION CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

AS AT SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

(Stated in US Dollars)

		September 30, 2012			December 31, 2011
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents-Unrestricted (including cash and cash equivalents-Unrestricted of the consolidated VIE without recourse to China Executive Education Corp of US$1,057,868 and US$294,841 as of September 30, 2012 and December 31, 2011, respectively)		$	1,175,633		$	3,570,740
Cash and cash equivalents-Restricted cash (including cash and cash equivalents-Restricted cash of the consolidated VIE without recourse to China Executive Education Corp of US$316,506 and US$317,178 as of September 30, 2012 and December 31, 2011, respectively)			316,506			317,178
Advance to vendors (including advance to vendors of the consolidated VIE without recourse to China Executive Education Corp of US$297,459 and nil as of September 30, 2012 and December 31, 2011, respectively)			843,062			602,685
Receivables from shareholder (including receivables from shareholder of the consolidated VIE without recourse to China Executive Education Corp of nil and nil as of September 30, 2012 and December 31, 2011, respectively)			1,752,650			1,914,964
Other receivables (including other receivables of the consolidated VIE without recourse to China Executive Education Corp of US$5,941,856 and US$3,749,545 as of September 30, 2012 and December 31, 2011, respectively)			4,082,951			2,934,815
Total current assets			8,170,802			9,340,382
Property, plant and equipment, net (including property, plant and equipment, netof the consolidated VIE without recourse to China Executive Education Corp of US$3,179  and US$458 as of September 30, 2012 and December 31, 2011, respectively)			843,673			1,128,447
Total Assets		$	9,014,475		$	10,468,829
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Customer deposits (including customer depositsof the consolidated VIE without recourse to China Executive Education Corp of US$4,625,593 and US$2,605,864 as of September 30, 2012 and December 31, 2011, respectively)		$	4,639,523		$	2,605,864
Accrued expenses (including accrued expensesof the consolidated VIE without recourse to China Executive Education Corp of nil and US$205,666 as of September 30, 2012 and December 31, 2011, respectively)			-			352,655
Deferred revenue (including deferred revenueof the consolidated VIE without recourse to China Executive Education Corp of US$4,611,948 and US$7,188,008  as of September 30, 2012 and December 31, 2011, respectively)			4,611,948			7,188,008
Other payables (including other payablesof the consolidated VIE without recourse to China Executive Education Corp of US$3,923,864  and US$842,546 as of September 30, 2012 and December 31, 2011, respectively)			57,606			523,411
Taxes payable (including taxes payableof the consolidated VIE without recourse to China Executive Education Corp of nil and nil as of September 30, 2012 and December 31, 2011, respectively)			-			-
Total current liabilities			9,309,077			10,669,938
Deferred revenue- noncurrent (including deferred revenue- noncurrentof the consolidated VIE without recourse to China Executive Education Corp of 18,893,853 and 16,464, 222 as of September 30, 2012 and December 31, 2011, respectively)		$	18,893,853		$	16,464, 222
Total  liabilities			28, 202,930			27,134,160
Commitments
Stockholders’ Deficiency
Common stock, $0.001 par value, 70,000,000 shares authorized, 22,834,100 shares  issued and outstanding at  September 30, 2012 and December 31, 2011, respectively		$	22,834		$	22,834
Additional paid-in capital			1,775,842			1,775,842
Accumulated deficits			(20,038,816	)		(17,466,892	)
Accumulated other comprehensive loss			(948,315	)		(997,115	)
Total stockholders’ deficiency			(19,188,455	)		(16,665,331	)
Total Liabilities and Stockholder's Equity		$	9,014,475		$	10,468,829

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

3

CHINA EXECUTIVE EDUCATION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Stated in US Dollars)

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	2,112,657		$	2,787,621		$	4,589,149		$	5,663, 276
Cost of revenue		852,759			2,046,316			1,918,540			5,445,817
Gross profit (loss)		1, 259,898			741,305			2,670,609			217,459
Operating expenses
Selling expenses		974,953			493,646			2,731,808			2,530,630
General and administrative expense		1,071,061			859,194			3,005,456			2,392,160
Total operating expenses		2,046,014			1,352,840			5,737, 264			4,922,790
Income (loss) from operations		(786,116	)		(611,535	)		(3,066,655	)		(4,705,331	)
Other income (expenses)
Interest income		70			26,497			23, 209			86,197
Other income		59,914			(21,394	)		526,349			155,391
Other expenses		(20,323	)		-			(54,827	)		-
Total other income(expenses)		39,661			5,103			494,731			241,588
Loss before income taxes		(746,455	)		(606,432	)		(2,571,924	)		(4,463,743	)
Provision for income taxes		-			2,092			-			329,264
Net loss		(746,455	)		(608,524	)		(2,571,924	)		(4,793,007	)
Comprehensive loss
Net loss		(746,455)			(608,524)			(2,571,924	)		(4,793,007	)
Foreign currency translation loss		(97,476)			(172,601	)		48,800			（478,568	)
Total comprehensive loss	$	(843,931	)	$	(781,125	)	$	(2,523,124	)	$	(5, 271,575)
	$
Basic and diluted loss per common share	$	(0.03	)	$	(0.03	)	$	(0.11	)	$	(0.21	)
Basic and diluted weighted average common shares outstanding	$	22,834,100		$	22,834,100		$	22,834,100		$	22,834,100
Cash dividends per common share	$	-			-			-			-

See accompanying notes to consolidated financial statements

4

CHINA EXECUTIVE EDUCATION CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Stated in US Dollars)

		For the nine months ended September 30,
		2012				2011
		(Unaudited)				(Unaudited)
Cash flows from operating activities
Net loss			$	(2,571,924	)		$	(4,793,007	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization				283,756				153,347
Changes in assets and liabilities:
(Increase) decrease in -
Other receivables				(1,156, 281	)			55,382
Advance to vendors				(242,058	)			(778,156	)
Increase (decrease) in -
Other payable				(385,917	)			(78,981	)
Customer deposits				2,042,579				(215,644	)
Accrued expenses				(352,492	)			(383,999	)
Tax payable				-				(1,357,312	)
Deferred revenue				(96,433)				4,037,794
Net cash used in operating activities				(2,478,770	)			(3,360,576	)
Cash flows from investing activities
Acquisition of property and equipment				(905)				(610,887	)
Net cash generated from (used in) investing activities				(905)				(610,887	)
Cash flows from financing activities
Cash receive from shareholder				158,516				-
Net cash generated from financing activities				158,516				-
Effect of exchange rate changes on cash and cash equivalents				(73,948	)			(551,371	)
Net decrease in cash and cash equivalents				(2,395,107	)			(4,522,834	)
Cash and cash equivalents, beginning of periods				3,570,740				10,272,391
Cash and cash equivalents, end of periods			$	1,175,633			$	5,749,557
Supplemental disclosures of cash flow information:
Interest paid			$	-			$	-
Income taxes paid			$	-			$	1,636,867

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

5

1.ORGANIZATION AND PRINCIPAL ACTIVITIES

China Executive Education Corp (the “Company”), formerly known as On Demand Heavy Duty Corp, is a corporation organized under the laws of the State of Nevada.

On February 12, 2010, the Company acquired all of the outstanding capital stock of Surmounting Limit Marketing Adviser Limited (“SLM”), a Hong Kong Corporation,  through China Executive Education Corp., a Nevada corporation (the “Merger Sub”) wholly owned by the Company. SLM is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Hangzhou MYL Business Administration Consulting Co., Ltd. (“MYL Business”), a limited liability company organized under the laws of the People’s Republic of China (“PRC”). Substantially all of SLM's operations are conducted in China through MYL Business, and through contractual arrangements with several of MYL Business’s affiliated entities in China, including Hangzhou MYL Commercial Services Co., Ltd. (“MYL Commercial”) and its subsidiaries. MYL Commercial is a fast-growing executive education company with dominant operation in Shanghai, the commercial center of China, providing comprehensive consulting services such as business administration, marketing strategy, designing of enterprise image, corporate investment and commerce, business conference as well as professional training programs designed to fit the needs of Chinese entrepreneurs to improve their leadership, management and marketing skills.

In connection with the acquisition, the Merger Sub issued 20 shares of the common stock of the Merger Sub which constituted no more than 10% ownership interest in the Merger Sub to the shareholders of SLM, in exchange for all the shares of the capital stock of SLM (the “Share Exchange” or “Merger”). The 20 shares of the common stock of the Merger Sub were converted into approximately 21,560,000 shares of the common stock of the Company so that upon completion of the Merger, the shareholders of SLM own approximately 98% of the common stock of the Company.

As part of the Merger, pursuant to a stock purchase agreement (the “Stock Purchase Agreement”), the Company transferred all of the outstanding capital of its subsidiary, On Demand Heavy Duty Holdings, Inc. (“Holdings”) to certain of its shareholders in exchange for the cancellation of  3,000,000 shares of the Company’s common stock (the “Split Off Transaction”). In addition, an aggregate of 3,070,000 shares were returned to the transfer agent for cancelation by other shareholders of Holdings. Following the Merger and the Split Off Transaction, the Company discontinued its former business and is now engaged in the executive education business.

Upon completion of the Merger, there were 22,000,000 shares of the Company’s common stock issued and outstanding.

As a result of these transactions, persons affiliated with the SLM and MYL Business owned securities that in the aggregate represented approximately 98% of the equity in the Company. In addition, in connection with the change of control contemplated by the Share Exchange, the directors and officers of the Company resigned from their positions and new directors and officers affiliated with MYL Business controlled the Board of Directors.

Consequently, the Company’s name was changed from “On Demand Heavy Duty Corp.” to the Merger Sub’s name “China Executive Education Corp.” in order to more effectively reflect the Company’s business and communicate the Company’s brand identity to customers.

6

1.ORGANIZATION AND PRINCIPAL ACTIVITIES (continued)

The above mentioned merger transaction has been accounted for as a reverse merger under the purchase method of accounting since there was a change of control. Accordingly, SLM is treated as the continuing entity for accounting purposes. SLM did not commence business operations until April 2009.

SLM does not conduct any substantive operations of its own. Instead, through its subsidiary, MYL Business, it had entered into certain exclusive contractual agreements with Hangzhou MYL Commercial Services Co., Ltd.  (“MYL Commercial”), a company incorporated in Hangzhou City, Zhejiang Province, People’s Republic of China (“PRC”) on March 25, 2009.  Pursuant to these agreements, SLM is obligated to absorb a majority of the risk of loss from MYL Commercial’s activities and entitled it to receive a majority of its expected residual returns. In addition, MYL Commercial’s shareholders have pledged their equity interest in MYL Commercial to SLM, irrevocably granted SLM an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in MYL Commercial and agreed to entrust all the rights to exercise their voting power to the persons appointed by MYL Commercial. Through these contractual arrangements, the Company and SLM hold all the variable interests of MYL Commercial. Therefore, the Company is the primary beneficiary of MYL Commercial.

Based on these contractual arrangements, management believes that MYL Commercial should be considered as a Variable Interest Entity (“VIE”) under ASC 510 “Consolidation of Variable Interest Entities, and Interpretation of ARB No. 51”, because the Company is the primary beneficiary. Accordingly, the Company consolidates MYL Commercial and its subsidiary’s results, assets and liabilities

2. UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.

As of September 30, 2012 and December 31, 2011, the Company has incurred accumulated deficits totaling $20,038,816 and $17,466,892, with stockholder’s deficiency totaling $19,188,455 and $16,665,331, and its current liabilities exceed its current assets by $1,138,275 and $1,329,556, respectively. For the three months ended September 30, 2012 and 2011, the Company has suffered from net loss of $746,455 and $608,524, respectively. For the nine months ended September 30, 2012 and 2011, the Company has suffered from net loss of $2,571,924 and $4,793,007, respectively. These unaudited consolidated financial statements do not include any adjustments relating to the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.

7

3.   RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

The Company has restated its consolidated financial statements for the years ended December 31, 2010 and 2009, as previously disclosed in Form 10-K/A for 2010 filed on March 27, 2012. As a result, certain line items have changes and caused the restatement of the interim financial statement for the quarter ended September 30, 2011.

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)   Method of accounting

The Company’s interim consolidated financial statements have been prepared in accordance with US GAAP.

The interim results of operations are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2012. The Company’s consolidated balance sheet as of December 31, 2011 has been taken from the Company’s audited consolidated balance sheet (restated) as of the date. All other consolidated financial statements contained herein are unaudited and, in the opinion of management, contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the period presented. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements (restated) and notes thereto.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company’s principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC, the accounting standards used in the places of their domicile. The accompanying interim consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.

(b)   Principles of consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary.  All significant inter-company balances and transactions are eliminated in consolidation.

8

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company owned its subsidiaries and variable interest entity (“VIE”) soon after its inception and continued to own the equity’s interests through September 30, 2012.  The following table depicts the identity of the subsidiaries and VIE:

Name of the entity	Place of Incorporation	Ownership Percentage
Surmounting Limit Marketing Advisor Limited ("SLM")	Hong Kong, China	100%
Hangzhou MYL Business Administration Co., Ltd. ("MYL Business")	Hangzhou, China	100%
Shanghai MYL Consulting Co., Ltd. ("MYL Consulting")	Shanghai, China	100%
Hangzhou MYL Commercial Service., Ltd. ("MYL Commercial")	Hangzhou, China	VIE
Hangzhou Gongshu MYL Training school ("MYL Training School ")	Hangzhou, China	VIE

(c)   Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates. 

(d)   Economic and political risks

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

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

9

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(e)   Cash and concentration of risk

Cash includes cash on hand, cash in banks and demand deposits in accounts maintained within the PRC and Hong Kong.  The Company has not experienced any losses in such accounts and believes it is not exposed to any risk on its cash in bank accounts.

(f)   Accounting for the impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360, “Property, Plant and Equipment”. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting periods, there was no impairment loss.

(g)   Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in the Hong Kong. The subsidiaries of the Company maintain bank accounts in Hong Kong and the PRC. 

(h)   Retirement benefits

The employees of the Company are members of a state-managed retirement benefit plan operated by the government of the PRC. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Company with respect to the retirement benefit plan is to make the specified contributions.

(i)   Property, plant and equipment

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

Buildings	20 years
Computer and electronic equipment	3-5 years
Leasehold improvement	3 years
Motor vehicles	5 years

10

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

(j)   Foreign currency translation

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

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2011
balance sheet	RMB 6.3843  to US$1.00
Statements of income and comprehensive income	RMB 6.4967  to US$1.00
	September 30, 2012
balance sheet	RMB 6.3190  to US$1.00
Statements of income and comprehensive income	RMB 6.3085  to US$1.00

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.  In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.

(k)   Accounts receivable

Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. Bad debts are written off as incurred.  As of September 30, 2012 and December 31, 2011, there were no bad debts.

Outstanding accounts balances are reviewed individually for collectability. The Company does not charge any interest income on trade receivables. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as it has yet to exhaust all means of collection.

11

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(l)   Statutory reserves

As stipulated by the PRC’s Company Law and as provided in the company Articles of Association, company’s net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i.   Making up cumulative prior years’ losses, if any;

ii.   Allocations to the “Statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital, which is restricted for set off against losses, expansion of production and operation or increase in registered capital;

iii.   Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's “Statutory common welfare fund”, which is restricted for capital expenditure for the collective benefits of the Company's employees; and

iv.   Allocations to the discretionary surplus reserve, if approved in the shareholders’ general meeting.

(m)   Revenue recognition

The Company records all tuition as deferred revenue when students enroll a course. At the beginning of each course, revenue is recognized on a pro rata basis over the quantity of classes attended by the students. This results in the Company’s balance sheet including future revenues that have not yet been earned as deferred revenue for courses that are not yet attended.

Refund policy permits students who apply for a refund for the portion of the course they did not attend. The Company may refund a portion of fees after negotiated. In the past practice, there are seldom cases that the students apply for refund, and it has no significant impact on revenue recognition of the Company based on the best estimation of the management Refunds result in a reduction in deferred revenue during the period that a student drops or withdraws from a class because associated tuition revenue is recognized pro rata over the quantity of classes are delivered.

Generally, net revenue varies from period to period based on several factors, including the aggregate number of students attending classes, the number of classes held during the period, and the tuition price.

The Company’s revenue is principally derived from tuition and fees associated with two kinds of educational programs to the students: proprietary training courses and comprehensive training courses.

Proprietary training courses, which normally take several days to complete, primarily consisted of featured lectures. These courses are provided on a roll-over basis over the year. Based on the courses attendance record, the revenue is recognized at the delivered courses to the students.

Comprehensive training courses, which are composed of sixteen individual courses with systematic training in leadership development, i.e. decision making skills, negotiation skills, presentation skills and people skills. Based on the contracts, the students are eligible to enroll the courses within three years period. The revenue is recognized on pro rata basis over the quantity of classes attended.

12

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(n)   Operating lease rental

The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental payments included in general and administrative expenses for the three months ended September 30, 2012 and 2011 were $278,011 and $294,060, respectively. Operating lease rental payments included in general and administrative expenses for the nine months ended September 30, 2012 and 2011 were $798,379 and $667,465, respectively.

(o)   Income taxes

The Company accounts for income taxes using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

The Company is operating in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the enterprise income tax rate for the three and nine months ended September 30, 2012 and 2011 were 25%.

(p)   Comprehensive income

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

(q)   Recently implemented standard

In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is adopted for fiscal years, and interim periods beginning after December 15, 2011 for public entities with retrospective application. There is no material impact on the consolidated financial statements upon adoption.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”. This ASU amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective for public entities for annual periods beginning after December 15, 2011, and should be applied prospectively. Early adoption is permitted; the Company currently expects to adopt this standard in the first quarter of 2012. The Company is currently reviewing the effect this new pronouncement will have on the consolidated financial statements.

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4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, Intangibles — Goodwill and Other (Topic 350). This Accounting Standards Update amends FASB ASC 350. This amendment specifies the change in method for determining the potential impairment of goodwill. It includes examples of circumstances and events that the entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of the provisions in ASU 2011-08 will have a significant impact on the Company’s consolidated financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210)—Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The update requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments.  The ASU is effective for annual periods beginning on or after January 1, 2013 and interim periods therein. The Company is currently evaluating the impact this update will have on our consolidated financial statements.

In December 2011, FASB issued Accounting Standards Update No. 2011−12, Comprehensive Income (“ASU 2011−12”). Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.  Among the new provisions in ASU 2011-05 was a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented (for both interim and annual financial statements); however this reclassification requirement is indefinitely deferred by ASU 2011-12 and will be further deliberated by the FASB at a future date.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities -- Refundable Advance Fees. This ASU clarifies that an entity should classify an advance fee as deferred revenue when a continuing care retirement community has a resident contract that provides for payment of the refundable advance fee upon reoccupancy by a subsequent resident, which is limited to the proceeds of reoccupancy. Refundable advance fees that are contingent upon reoccupancy by a subsequent resident but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability. For public entities (including conduit bond obligors), the amendments in ASU No. 2012-01 are effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments to the codification in the ASU are effective for fiscal periods beginning after December 15, 2013. Early adoption is permitted. The amendments in ASU No. 2012-01 should be applied retrospectively by recording a cumulative-effect adjustment to opening retained earnings (or unrestricted net assets) as of the beginning of the earliest period presented.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles--Goodwill and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.

14

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-05, Statement of Cash Flows (Topic 230). This ASU addresses how cash receipts arising from the sale of certain donated financial assets, such as securities, should be classified in the statement of cash flows of not-for-profit entities (NFPs). Some NFPs classify those cash receipts as investing cash inflows, while other entities classify them as either operating cash inflows or financing cash inflows, consistent with their treatment of inflows arising from cash contributions. The objective of this Update is for an NFP to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without the NFP imposing any limitations for sale and were converted nearly immediately into cash. The amendments in the ASU are effective prospectively for fiscal years, and interim fiscal periods within those years, beginning after June 15, 2013. Retrospective application to all periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. This ASU addresses the diversity in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-07, Entertainment--Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs. This ASU eliminates the rebuttable presumption that the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet date. The amendments also eliminate the requirement that an entity incorporate into fair value measurements used in the impairment tests the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would not have been considered by market participants at the measurement date. or SEC filers, the amendments are effective for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013. The amendments resulting from this ASU should be applied prospectively. Earlier application is permitted, including for impairment assessments performed as of a date before October 24, 2012, if, for SEC filers, the entity’s financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not yet been made available for issuance.

 

15

5.CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments that potentially expose the company to concentrations of credit risk, consists of cash and accounts receivable as of September 30, 2012 and December 31, 2011. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure sound collections and minimize credit losses exposure.

As of September 30, 2012 and December 31, 2011, all the Company’s bank deposits were conducted with banks in the PRC where there is currently no rule or regulation mandated on obligatory insurance of bank accounts.

For the three and nine months ended September 30, 2012 and 2011, all of the Company’s sales were generated from the PRC. In addition, all accounts receivable as of September 30, 2012 and December 31, 2011 also arose in the PRC.

The maximum amount of loss exposure due to credit risk that the Company would bear if the counter parties of the financial instruments failed to perform represents the carrying amount of each financial asset on the balance sheet.

Normally, the Company does not require collateral from customers or debtors.

6.VARIABLE INTEREST ENTITY

PRC laws and regulations currently require any foreign entity that invests in the education business in China to be an educational institution with relevant experience in providing educational services outside China. The Company are not educational institutions and do not provide educational services outside China. The Company conducts substantially all of its education business in China through MYL Commercial.

On May 1, 2009 MYL Business entered into a series of exclusive contractual arrangements (the “Contractual Arrangements”) with MYL Commercial and its shareholders, which enable the Company to (1) have power to direct the activities that most significantly affect the economic performance of MYL Commercial, and (2) receive the economic benefits of MYL Commercial that could be significant to MYL Commercial. Accordingly, the Company is considered the primary beneficiary of MYL Commercial and has consolidated MYL Commercial’s financial results of operations, assets and liabilities in the Company’s consolidated financial statements. These agreements are summarized in the following paragraphs.

Exclusive Services Agreement. Pursuant to an exclusive services agreement by and among MYL Business and MYL Commercial, dated May 1, 2009, MYL Commercial irrevocably entrusted to MYL Business the management and operation of MYL Commercial and the responsibilities and authorities of its shareholders and directors. The service fee to be paid by MYL Commercial is equal to 95% of its total income which can be waived by MYL Business from time to time in its sole discretion.

16

6.VARIABLE INTEREST ENTITY (continued)

Call Option Agreement. Pursuant to a call option agreement by and among MYL Business, MYL Commercial and MYL Commercial’s shareholders, dated as of May 1, 2009, each of MYL Commercial and MYL Commercial’s shareholders have granted MYL Business or its designee an exclusive option to purchase all or part of their equity interests in MYL Commercial, or all or part of the assets of MYL Commercial, in each case, at any time determined by MYL Business and to the extent permitted by PRC law.

Voting Rights Proxy Agreement. Pursuant to a voting rights proxy agreement by and among MYL Business, MYL Commercial and MYL Commercial’s shareholders, dated as of May 1, 2009, the shareholders of MYL Commercial have granted the personnel designated by MYL Business the right to appoint directors and senior management of MYL Commercial and to exercise all of their other voting rights as shareholders of MYL Commercial, as provided under the articles of association of such entity. Under the voting rights proxy agreement, there are no restrictions on the number, to the extent allowed under the respective articles of association of MYL Commercial, or identity of those persons we can appoint as directors and officers.

Equity Pledge Agreement. Pursuant to an equity pledge agreement by and among MYL Business, MYL Commercial and MYL Commercial’s shareholders, dated as of May 1, 2009, each of the shareholders has pledged all his equity interest in MYL Commercial to MYL Business to secure their obligations under the relevant contractual control agreements to which each is a party, including but not limited to, the obligations of MYL Commercial under the exclusive services agreement, call option agreement and voting rights proxy agreement. Under this equity pledge agreement, the shareholders have agreed not to transfer, assign, pledge or otherwise dispose of their interest in MYL Commercial, as the case may be, without the prior written consent of MYL Business. Each equity pledge is to be registered with the local Administration for Industry and Commerce (the “AIC”).

Pursuant to the equity pledge agreement between MYL Business and MYL Commercial, the shareholders of MYL Commercial pledged all of their equity of MYL Commercial (RMB500,000 or approximately $78,651) to MYL Business.  

As a result of the Contractual Arrangement, MYL Business was granted with unconstrained decision making rights and power over key operational functions within MYL Commercial. Therefore, MYL Business will bear all of MYL Commercial’s operating costs in exchange for 100% of the net income MYL Commercial. There is not any income or loss of MYL Commercial attributed to other parties. MYL Business does not have any equity interest in MYL Commercial, but instead has the right to enjoy economic benefits similar to equity ownership through its contractual arrangements with MYL Commercial.

These contractual arrangements may not be as effective in providing MYL Business with control over the MYL Commercial as direct ownership. Due to its VIE structure, MYL Business has to rely on contractual rights to effect control and management of the MYL Commercial, which exposes MYL Business to the risk of potential breach of contract by the shareholders of MYL Commercial.

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In addition, as all of these Contractual Arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these contractual arrangements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these contractual arrangements, it may not be able to exert effective control over the VIEs, and its ability to conduct its business may be materially and adversely affected. At present, the equity interest pledge agreement has not been registered with the PRC regulator.

None of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets. 

	As of
	September 30,		December 31,
	2012		2011
	(Unaudited)
Total assets	$	7,616,868		$	4,362,026
Total liabilities	$	32,055,258		$	27,306,306

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012			2011
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net Revenues	$	2,112,657	$	2,787,621		$	4,589,149	$	5,663,276
Net Loss(Income)		1,545,334		(2,033,306	)		183,960		3,359,606

	Nine months ended September 30,
	2012				2011
	(Unaudited)				(Unaudited)
Net cash provided by operating activities	$	715,671		$	(1,674,852)
Net cash used in investing activities		(898)			(82)
Net cash used in financing activities			-		-
Effect of exchange rate changes on cash and cash equivalents		48,254			(718,335)
Net decrease in cash and cash equivalents		763,027			(2,393,302)

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7.PROPERTY, PLANT AND EQUIPMENT, NET

Details of property, plant and equipment are as follows:

	As of
	September 30,			December 31,
	2012			2011
At cost	(Unaudited)
Buildings	$	98,879		$	99,089
Computer and electronic equipment		224,088			223,659
Leasehold improvement		491,227			492,271
Motor vehicles		634,412			635,760
Less: accumulated depreciation		(604,933	)		(322,332	)
	$	843,673		$	1,128,447

Depreciation expense included in the general and administrative expenses for the nine months ended September 30, 2012 and 2011 was $283,756 and $153,347, respectively.

8.OTHER RECEIVABLES

Other receivables were comprised of the following:

	As of
	September 30,		December 31,
	2012		2011
	(Unaudited)
Disbursement and advances to employees	$	2,505,739	$	1,586,178
Business tax prepaid		696,729		844,757
Deposits paid		876,605		503,880
Others		3,878		-
	$	4,082,951	$	2,934,815

9.OTHER PAYABLES

Other payables were comprised of the following:

	As of
	September 30,			December 31,
	2012			2011
	(Unaudited)
Payables to outside service providers		$	15,826		$	335,575
Sundry PRC taxes payables			22,038			29,240
Deposits received and credit guarantees			950			11,100
Business taxes payable			18,792			147,496
		$	57,606		$	523,411

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10.DEFERRED REVENUE

Deferred revenue represents the tuition fees from enrolled students for courses not delivered. As of September 30, 2012 and December 31, 2011, deferred revenue included in current liabilities amounted to $4,611,948 and $7,188,008, respectively. Included in non-current liabilities amounted to $18,893,853 and $16,464,222, respectively.

11.RELATED PARTY TRANSACTION

On July 2, 2010, the Company declared dividends in the total amount of RMB12,075,000 (equivalent to $1,784,088) out of the retained earnings balance of Hangzhou MYL for the fiscal year ended December 31, 2009 to its sole shareholder, Surmounting Limit Marketing Adviser Limited(“SLM”). On the same date, SLM also made a resolution to distribute the net tax amount of such dividend that SLM receives to Magic Dream Enterprises Ltd., a company incorporated under the laws of British Virgin Island. And Mr. Kaien Liang, a shareholder of the Company and Magic Dream Enterprises Ltd received the dividend payment. However, as at December 31, 2010, the Company’s Board of Directors adopted a resolution to declare that the dividend previously declared was invalid, and that the Company should collect back the payment from Mr. Kaien Liang. As of September 30, 2012, receivable from Mr. Kaien Liang amounted to $1,752,651.

The Company has several rental arrangements providing residential units to house key employees, including the Chief Executive Officer Mr. Kaien Liang, Chief Operating Officer Mr. Pokai Hsu, and Chief Strategy Officer Mr. Tingyuan Chen.  For the nine months ended September 30, 2012 and 2011, housing benefit provided to these officers totaled $174,640 and $169,580, respectively.

12.BASIC AND DILUTED LOSSES PER SHARE

In accordance with ASC 260 Earnings per Share, basic losses per common share is computed by using net losses divided by the weighted average number of shares of common stock outstanding for the periods presented. Diluted losses per share reflect the potential dilution of securities that could share in the losses of the Company. Potential common stock shares consist of shares that may arise from outstanding dilutive common stock options and warrants (the number of which is computed using the “treasury stock method”). The calculation of diluted losses per common share assumes that outstanding common shares were increased by shares issuable upon exercise of those stock warrants for which the market price exceeds the exercise price, less shares that could have been purchased by the Company with related proceeds.

	For nine months ended  September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Net losses	$	(2,571,924	)	$	(4,793,007	)
Weighted average number of common shares outstanding – basic and diluted		22,834,100			22,834,100
Losses per share – basic and diluted	$	(0.11	)	$	(0.21	)

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13.PROVISION FOR INCOME TAXES

United States

China Executive Education Corp. is subject to United States tax at a tax rate of 35%. No provision for income tax in the United States has been made as China Executive Education Corp. had no U.S. taxable income for the three and nine months ended September 30, 2012 and 2011.

Hong Kong

Incorporated in Hong Kong, SLM is governed by the income tax law of Hong Kong. According to current Hong Kong income tax law, the applicable income tax rate for SLM is 16.5%. No provision for income tax in the Hong Kong has been made as SLM had no Hong Kong taxable income for the three and nine months ended September 30, 2012 and 2011.

PRC

In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to state and local income taxes within the PRC at the applicable tax rate on the taxable income. On March 16, 2007, the National People’s Congress of the PRC enacted a new Enterprise Income Tax Law (“Enterprise Income Tax Law”) under which foreign invested enterprises and domestic companies would be subject to Enterprise Income Tax Law at a uniform rate of 25%.  The Enterprise Income Tax Law became effective on January 1, 2008.

The Company’s PRC subsidiaries are subject to income tax at a rate of 25% for the three and nine months ended September 30, 2012 and 2011.

The following table reconciles the Company’s effective tax for the years presented:

	Nine months ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Loss before income taxes benefits	$	(2,571,924	)	$	(4,463,743	)
PRC statutory income tax rate		25	%		25	%
Income tax at statutory tax rate		(624,981	)		(1,115,936	)
Permanent differences		624,981			1,445,200
Expected enterprise income tax expense	$	-		$	329,264

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13.PROVISION FOR INCOME TAXES (continued)

The significant components of income tax components are as follows:

	Nine months ended September 30,
	2012		2011
	(Unaudited)		(Unaudited)
Current:
Provision for PRC Enterprise Income Tax	$	-	$	329,264
Deferred:
Provision for PRC Enterprise Income Tax		-		-
Income tax expenses (benefits)	$	-	$	329,264

Deferred tax assets reflect the tax effects of temporary differences due to deferred revenue and between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose.

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities as of September 30, 2012 and December 31, 2011 are summarized as follows:

	As of
	September 30,			December 31,
	2012			2011
	(Unaudited)
Deferred tax assets:
Loss carried forward	$	5,876,450		$	5,913,058
Valuation allowance		(5,876,450	)		(5,913,058	)
Net deferred tax assets	$	-		$	-

14.COMMITMENTS AND CONTINGENCIES

The Company did not have any significant capital commitment as of September 30, 2012 and December 31, 2011.

From time to time, the Company leases office spaces in Shanghai and Hangzhou in China to conduct its normal business activities, such as business administration, recruiting students, holding the business conferences and providing professional training courses or featured lectures to students. The Company also has several rental arrangements which provide residential units to house key employees. These lease agreements will expire before April 30, 2014.

Rent expenses for the above rental arrangements total $278,011 and $294,060 for the three months ended September 30, 2012 and 2011, respectively.  Rent expenses for the above rental arrangements total $798,379 and $667,465 for the nine months ended September 30, 2012 and 2011, respectively.

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14.COMMITMENTS AND CONTINGENCIES (continued)

The minimum obligations under such commitments (unless otherwise stated) for the years ending December 31 until their expiration are summarized below:

Year	Amount
2012	$	172,899
2013		658,120
2014		210,828
Total	$	1,041,847

The Company did not record any contingencies as of September 30, 2012 and December 31, 2011.

15.SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements

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

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of 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; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2011, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except where the context otherwise requires and for the purposes of this report only:

● “Company,” “we,” “us,” and “our” refer to the combined business of China Executive Education Corp., a Nevada corporation, and its consolidated subsidiaries and variable interest entity;

● “SLM” refers to our subsidiary Surmounting Limit Marketing Adviser Limited, a Hong Kong limited company;

● “MYL Business” refers to our indirect subsidiary Hangzhou MYL Business Administration Consulting Co., Ltd., a PRC limited company;

● “Shanghai MYL” refers to our indirect subsidiary Shanghai MYL Business Administration Consulting Co. Ltd., a PRC limited company;

● “MYL Commercial” refers to our variable interest entity Hangzhou MYL Commercial Services Co., Ltd., a PRC limited company;

● “MYL Training School” refers to MYL Commercial’s subsidiary Hangzhou Gongshu MYL Training School;

● “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

● “PRC” and “China” are to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan;

● “SEC” are to the Securities and Exchange Commission;

● “Securities Act” are to the Securities Act of 1933, as amended;

● “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

● “Renminbi” and “RMB” are to the legal currency of China; and

● “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.

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Overview of our Business

We are a fast-growing executive education company with operations in Hangzhou and Shanghai, China. We operate comprehensive business training programs that are designed to fit the needs of Chinese entrepreneurs and to improve their leadership, management and marketing skills, as well as bottom-line results. Our comprehensive business training initiatives integrate research-based, proprietary content with processes that are specifically connected to the critical business issues that most private Chinese companies are facing. Our programs enable the trainees to better achieve their potential and better align their individual goals and competencies with the organizational objectives of their employers or business.

Our open-enrollment training programs include our proprietary training courses and comprehensive training courses. Our comprehensive training courses include one package of 16 courses for CEO and C-Level managers, as well as 23 leadership and personal development courses, focusing on management skills, negotiation skills, leadership skills and public speaking skills, among others. Proprietary training courses, delivered to large audiences, are presented by experts or well-known speakers in each relevant field. In 2011, we organized 4,613 such lectures in Shanghai. We believe that our network of speaking professionals is a leading platform for inspiring audiences to new levels of motivation and commitment.

We market our training programs directly to business executives through promotional seminars. Our websites are www.magicyourlife101.com and www.myl101.com. 

Our principal executive offices are located at c/o Hangzhou MYL Business Administration Consulting Co. Ltd., Room 307, Hualong Business Building, 110 Moganshan Road, Hangzhou 310005, People’s Republic of China, and our telephone number is (86) 0571-8880-8109.

Restatement of Previously Issued Financial Statements

The Company has restated its consolidated financial statements for the years ended December 31, 2010 and 2009, as previously disclosed in Form 10-K/A for 2010 filed on March 27, 2012. As a result, certain line items have changes and caused the restatement of the interim financial statement for the three and nine months ended September 30, 2011.

Third Quarter Financial Performance Highlights

The following summarizes certain key financial information for the third quarter of 2012:

· Revenues: Revenues were $2,112,657 for the three months ended September 30, 2012, a decrease of $674,964, or 24%, from $2,787,621 for the same period of last year.

· Gross profit and margin: Gross profit was $1,259,898 for the three months ended September 30, 2012, an increase of $518,593, or 70%, from $741,305 for the same period of last year. Gross margin was 60% for the three months ended September 30, 2012, which represents a 33% increase, as compared to 27% for the same period of last year.

· Net loss attributable to the Company: Net loss attributable to the Company was $746,454 for the three months ended September 30, 2012, an increase of $137,929, or 23%, from a net loss of $608,524 for the same period of last year.

· Fully diluted net loss per share: Fully diluted net loss per share for the three months ended September 30, 2012 was $0.03, which was equal that of the same period of last year.

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Results of Operations

Comparison of Three Months Ended September 30, 2012 and September 30, 2011

The following table sets forth key components of our results of operations for the periods indicated.

		For the three months ended September 30,
		2012				2011					Increase (Decrease)
						(Restated)					$			%
Revenues			$	2,112,657			$	2,787,621			$	(674,964)		24%
Cost of revenue				852,759				2,046,316				(1,193,557)		58%	%
Gross profit				1,259,898				741,305				518,593		70%
Operating expenses
Selling expenses				974,953				493,646				481,307		98%
General and administrative expenses				1,071,061				859,194				211,867		25%
Total operating expenses				2,046,014				1,352,840				693,172		51%
Loss from operations				(786,116)				(611,535	)			(174,581)		29%
Other income (expenses)
Interest income				70				26,497				(26,427)		(99%)
Other income (expenses)				39,591				(21,394	)			60,985		(285%)
Total Other income(expenses)				39,661				5,103				34,558		677%
Loss before income taxes				(746,455)	)			(606,432	)			(140,023)		23%
Provision for income taxes				-				2,092				(2,092)	)	(100	%)
Net loss				(746,455)				(608,524	)			(137,929)		23	%

Revenues.  We provide two kinds of training programs to students: (i) proprietary training courses; and (ii) comprehensive training courses.  Proprietary training courses, which normally take several days to complete, primarily consist of featured lectures. These proprietary training courses are provided on a roll-over basis over the year. Our comprehensive training course package includes sixteen courses (covering over 41 main topics) delivered to students by both Chinese and foreign lecturers. The comprehensive training courses normally take a more extended time frame to complete. For the three months ended September 30, 2012, 1,073 students attended our training courses (732 students participated in the proprietary training courses while 341 students participated in the comprehensive training programs). For the three months ended September 30, 2011, 2,300 students attended our training courses (1,962 students participated in the proprietary training courses while 338 students participated in the comprehensive training programs). The following table provides a breakdown of our revenues for the three months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,								Increase
	2012				2011				(Decrease)
	$		%		$		%		$		%
Proprietary Training Courses	$	1,467,467	69	%	$	1,107,363	40	%	$	360,104	33%
Comprehensive Training Courses		645,190	31	%		1,680,258	60	%		(1,035,068)	(62%)
Total Revenues	$	2,112,657	100	%	$	2,787,621	100	%	$	(674,964)	(24%)

Our total revenues decreased by $674,964, or 24%, to $2,112,657 for the three months ended September 30, 2012, from $2,787,621  for the same period of 2011. The decrease in our revenue was primarily attributable to the substantial decrease of revenue derived from comprehensive training programs.

26

Revenue from comprehensive training programs decreased from $1,680,258 for the quarter ended September 30, 2011 to $645,190 for the quarter ended September 30, 2012, which represents a decrease of $1,035,068, or 62%. Our comprehensive training programs include 16 courses, among which 10 courses are taught by Chinese lecturers within several months and the remaining 6 courses taught by foreign lecturers delivered over an extended period of time. Because the schedules for the foreign lecturers’ courses are generally not fixed and the students have the discretion to decide which course to attend based on his or her schedules, revenues derived from comprehensive training programs are deferred and recognized on a pro-rata basis as the courses are delivered across the comprehensive training programs. The decrease of the revenue derived from comprehensive training programs is primarily due to lower enrollment, as well as decreased average tuition per enrollment. For the three months ended September 30, 2012, 453 courses were delivered to 341 students, with an average tuition of $1,424 per enrollment; In comparison, for the three months ended September 30, 2011, 1,002 courses were delivered to 338 students, with an average tuition of $1,677 per enrollment. Average tuition decreased by $253 or 15% for the quarter ended September 30, 2012.  Such substantial decrease was partially offset by the factor discussed below.

Revenues from proprietary training courses increased by $360,104 or 33% for the quarter ended September 30, 2012 as compared to the same period last year, primarily due to the increased average tuition per enrollment. The average tuition per enrollment increases from $564 per course in the three months ended September 30, 2011 to $2,005 per course in the three months ended September 30,2012. For the same period of 2011, we focused on offering promotional courses aiming to attract more students to enroll in our training courses, which charge much lower tuition than courses offered in our ordinary course of business. 1,962 students have attended the promotional courses with average tuition of $564 per course. Our marketing efforts through the promotional courses in the third quarter of 2011 have contributed to our revenue increase in the third quarter of 2012.

Cost of revenue. Our costs of revenue primarily include expenditures incurred in connection with providing educational services to students, such as renting conference rooms, booking hotels, compensation for lecturers, renting training equipment and materials as well as other direct labor costs incurred. For the three months ended September 30, 2012, cost of revenue decreased by approximately $1.19 million, or 58%, as compared to the three months ended September 30, 2011. The following table summarizes the cost of revenue for the three months ended September 30, 2011 and 2012, respectively:

			Three Months Ended September 30,												Increase
			2012						2011						(Decrease)
			$		%				$		%				$		%
Cost of lecturer's compensation		$	110,481		13	%		$	61,981		3	%		$	48,500		78%
Hotel and conference-room			591,200		69	%			1,678,411		82	%			(1,087,211)		(65%	)
Educational facility costs			983		1	%			28,903		1	%			(27,920)		(97%)
Administrative support			26,724		3	%			139,617		7	%			(112,893)		(81%)
Other cost			8,902		1	%			1,920		1	%			6,982		364%
Business tax			114,469		13	%			135,484		6	%			(21,015)		(16%)
Total cost of revenue		$	852,759		100	%		$	2,046,316		100	%		$	(1,193,557)		(58%)

The decrease in cost of revenue was attributable to the cumulative effect of the following factors:

First, the cost of hotel and conference rooms for the three months ended September 30, 2012 decreased by $1,087,211, or 65%, as compared to the same period of last year. The decrease in hotel and conference room costs was primarily attributable to lower student enrollment for the three months ended September 30, 2012 as compared to the same period of 2011. In addition, hotel and conference room expense was relatively high in 2011 because we held a training conference for our students in Australia named “Anthony Robin dating the life” in August 2011 and we assumed all the expenses associated with hotel accommodation and the conference.

Second, the cost of administrative support decreased by $112,893, or 81%, to $26,724, or 3% of the total cost of revenue, for the three months ended September 30, 2012, as compared to $139,617, or 7% of the total cost of revenue, for the same period in 2011. The decrease was primarily due to our successful outsourcing of the organizational tasks to local recruiting agents, who helped to organize and coordinate trainings and promotional seminars. As a result, we incurred less administrative support costs in 2012.

Third, business sales taxes decreased by $21,015, or 16%, to $114,469 for the three months ended September 30, 2012, as compared to $135,484 for the same period in 2011.  We are subject to a 5% business sales tax calculated based on the invoiced amount upon student registration, not based on actual revenue recognized for the period indicated. The decrease in sales tax for the three months ended September 30, 2012 was primarily due to less invoiced amount, compared with the same period of 2011. 

However, the decrease caused by the factors discussed above was partially offset by the increased cost of lecturers’ compensation. Cost of lecturer’s compensation amounted to $110,481, or 13% of the total cost of revenue for the three months ended September 30, 2012, representing a $48,500 increase as compared to the corresponding period of 2011.  The increase in lecturer’s compensation cost for the three months ended September 30, 2012 was due to increased compensation paid to external lecturers. For the three months ended September 30, 2011, we did not invite any external lecturers to provide lectures to our students.

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Gross profit and gross margin. Our gross profit is equal to the difference between our revenues and our cost of revenues. Our gross profit increased by $518,593, or 70%, to $1,259,898 for the three months ended September 30, 2012, as compared to $741,305 for the same period in 2011. Our gross profit as a percentage of revenue (gross margin) also increased to 60% for the three months ended September 30, 2012, compared to 27% during the third quarter of 2011. The increase in our gross profit and gross margin was primarily due to the decreased costs of revenue as discussed above.

Selling expenses. Our selling expenses mainly consist of advertising expense, sales commission paid to local agents for student enrollment and salaries paid to our sales forces. Selling expenses increased by $481,306, or 98%, in the three months ended September 30, 2012, compared with the three months ended September 30, 2011. The increase was primarily attributable to increased sales commission paid to external recruiting agents in order to help us recruit students and coordinate the localized trainings. The outsourcing strategy enabled us to focus on course design and training organization.  As a result of the foregoing reasons, selling expenses were higher in the third quarter of 2012 than the same period of 2011. We expect our selling and marketing expense to remain relatively stable in the near future as we continue to use outsourced sales agents to help promote our training courses and undertake part of the student enrollment tasks.

General and administrative expenses. Our general and administrative expenses consist of staff salaries and benefits, traveling and entertainment expenses, professional fees (including consulting, audit and legal fees), rent expenses and other associated fees. Our general administrative expenses increased by $211,867, or 25%, for the three months ended September 30, 2012, as compared with the three months ended September 30, 2011. The increase in our general and administrative expense for the quarter ended September 30, 2012 was primarily due to increased professional and consulting fee paid to maintain our public status in the United States and restructure our organization.  In addition, our operating lease expense for renting our office space and executive housing also slightly increased for the three months ended September 30, 2012 due to inflation, compared to the same period of 2011.

Provision for income taxes. Our  variable interest entities are governed by the income tax laws of the PRC and are subject to a statutory rate of 25% on income reported in their financial statements after appropriate tax adjustments. Due to the net operating loss, no income tax expense was necessary for the three months ended September 30, 2012.  For the three months ended September 30, 2011, we incurred income taxes of $2,092.

Net income (loss). As a result of the cumulative effect of the foregoing factors, we reported a net loss of $746,455 for the three months ended September 30, 2012, as compared to a net loss of $608,524 for the same period of 2011, which represents an increase of $137,929, or 23%.  The increase in our net loss was due to decreased sales and increased operating expenses as discussed above.

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Comparison of Nine Months Ended September 30, 2012 and September 30, 2011

The following table sets forth key components of our results of operations for the periods indicated.

	For the nine months ended September 30,
		2012				2011				Increase (Decrease)
						(Restated)				$				%
Revenues		$	4,589,149			$	5,663,276				(1,074,127	)		(19	%)
Cost of revenue			1,918,540				5,445,817				(3,527,277	)		65	%
Gross profit			2,670,609				217,459				2,453,150			1128	%
Operating expenses
Selling expenses			2,731,808				2,530,630				201,178			8	%
General and administrative expenses			3,005,456				2,392,160				613,296			26	%
Total operating expenses			5,737,264				4,922,790				814,474			17	%
Income from operations			(3,066,655	)			(4,705,331	)			1,638,676			(35	%)
Other income (expenses)
Interest income			23,209				86,197				(62,988	)		(73	%)
Other income (expenses)			471,522				155,391				316,131			203	%
Total Other income(expenses)			494,731				241,588				253,143			104	%
Loss before income taxes			(2,571,924	)			(4,463,743	)			1,891,819			(42	%)
Provision for income taxes			-				329,264				(329,264	)		(100	%)
Net loss			(2,571,924	)			(4,793,007	)			2,221,083			(46	%)

Revenues. For the nine months ended September 30, 2012, 3,332 students attended our training courses or featured lectures (2,606 students participated in the proprietary training courses and another 726 students participated in the comprehensive training programs). For the nine months ended September 30, 2011, 4,813 students attended our training courses or featured lectures (4,073 students participated in the proprietary training courses and another 740 students participated in the comprehensive training programs). Our total revenues decreased by $1,074,127, or 19%, to $4,589,149 for the nine months ended September 30, 2012, from $5,663,276 during the same period of 2011. The following table provides a breakdown of our revenues for the nine months ended September 30, 2012 and 2011, respectively:

	Nine Months Ended September 30,
	2012				2011				Increase (Decrease)
	$		%		$		%		$		%
Proprietary Training Courses	$	3,214,260	70	%	$	2,500,713	44	%	$	713,547	29%
Comprehensive Training Courses		1,374,889	30	%		3,162,563	56	%		(1,787,674)	(57%)
Total Revenues	$	4,589,149	100	%	$	5,663,276	100	%	$	(1,074,127)	(19%)

The decrease in our revenue for the nine months ended September 30, 2012, as compared to the same period of last year was primarily attributable to the substantial decrease of the number of students enrolling in the comprehensive training programs, partially offset by the increase of revenue derived from the proprietary training courses.

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Revenue from comprehensive training programs decreased from $3,162,563 for the nine months ended September 30, 2011 to $1,374,889 for the nine months ended September 30, 2012, which represents a decrease of $1,787,674, or 57%. The decrease was primarily attributable to lower enrollment of students in the comprehensive training programs for the nine months ended September 30, 2012. For the nine months ended September 30, 2011, 2,566 courses were delivered to 740 students, with an average tuition of $1,232 per enrollment. In contrast, for the nine months ended September 30, 2012, 974 courses were delivered to only 726 individual students, with an average tuition of $1,412 per enrollment. 

Revenue from proprietary training courses increased by $713,547, or 29%, for the nine months ended September 30, 2012, as compared to the same period of last year, primarily due to the increased average tuition from $614 per enrollment in the nine months ended September 30, 2011 to $1,233 per enrollment in the nine months ended September 30, 2012. The Company focused on promotional courses during the nine months ended September 30, 2011 aiming to enroll more students for the proprietary training courses.  As a result of our marketing efforts through the promotional courses, 4,073 students attended the proprietary trainings for the nine months ended September 30, 2011, while only 2,606 students attended the routine proprietary training courses in the nine months ended September 30, 2012. However, the tuition charged for promotional courses was much lower than the Company’s routine course offerings. The increase in average tuition was partially offset by the decreased student attendance during the nine months ended September 30, 2012.

Cost of revenue. Our cost of revenue decreased by approximately $3.5 million, or 65%, for the nine months ended September 30, 2012, as compared to the same period in 2011. The following table summarizes the cost of revenue for the nine months ended September 30, 2012 and 2011, respectively:

	Nine Months Ended September 30,
	2012				2011				Increase (Decrease)
	$		%		$		%		$			%
Cost of lecturer's compensation	$	320,224	16	%	$	1,493,620	27	%	$	(1,173,396)		(79%)
Hotel and conference-room		1,226,394	64	%		2,904,157	53	%		(1,677,763)		(58%)
Educational facility costs		18,632	1	%		65,434	1	%		(46,802)		(72%)
Administrative support		80,038	4	%		317,499	6	%		(237,461)	)	(75%)
Other cost		5,270	1	%		11,079	1	%		(5,809	)	(52%)
Business tax		267,982	14	%		654,028	12	%		(386,046)		(59%)
Total cost of revenue	$	1,918,540	100	%	$	5,445,817	100	%	$	(3,527,277)		(65%)

The decrease in our cost of sales was primarily due to the following reasons: 

First, the costs of lecturer’s compensation amounted to $320,224, or 16% of the total cost of revenue for the nine months ended September 30, 2012, representing a $1,173,396 decrease as compared to the corresponding period of 2011. The decrease in lecturer’s compensation was in line with the decreased student attendance. As discussed above, a total of 4,813 students attended the trainings during the nine months ended September 30, 2011, while 3,332 students attended the trainings for the nine months ended September 30, 2012. As fewer students attended the trainings, less lecturers' compensation was paid accordingly.

Second, the costs for hotel accommodation and conference rooms for the nine months ended September 30, 2012 decreased by $1,667,763, or 58%, as compared to same period of last year. The decrease in costs for hotel accommodation and conference room was primarily due to lower student enrollment as discussed above. In addition, in August 2011, we held a training conference in Australia named “Anthony Robin dating the life” which involved relatively expensive expenses associated with hotel accommodation and conferences. In addition,  in order to create a more comfortable educational environment for student trainings, we raised the hotel and conference room selection standards which led to higher hotel and conference room costs.

Third, the costs of administrative support decreased by $237,461, or 75%, to $80,038, or 4% of total cost of revenue, for the nine months ended September 30, 2012, as compared to $317,499, or 6% of total cost of revenue for the same period in 2011. The decrease was due to the fact that many organizational tasks have been undertaken by our local student enrollment agents who helped to organize and coordinate trainings and promotional seminars. As a result, we incurred less administrative support costs in 2012.

Fourth, business sales taxes decreased by $386,046, or 59%, to $267,982 for the nine months ended September 30, 2012, as compared to $654,028 for the same period in 2011. We are subject to a 5% business sales tax calculated based on the invoiced amount upon student registration, not based on actual revenue recognized for the period indicated. The decrease in sales tax for the nine months ended September 30, 2012 was due to the fact that the invoiced amount was less than in the same period of 2011. 

30

Gross profit and gross margin. Our gross profit increased by $2.45 million, or 1,128%, to $2.67 million for the nine months ended September 30, 2012, as compared with $0.21 million for the same period in 2011, due to decreased cost of revenue as discussed above. Our gross profit as a percentage of revenue increased to 58% for the nine months ended September 30, 2012, as compared to 4% in the comparative period of the prior year for the same reasons.

Selling expenses. Our selling expenses mainly include advertising expense, sales commission paid to external agents for student recruiting and salaries paid to our own sales forces. Selling expenses increased by $201,178, or 8%, during the nine months ended September 30, 2012, compared with the selling expenses for the nine months ended September 30, 2011. The increase in our selling expenses  was primarily attributable to the increased sales commission paid to external recruiting agents who help us enroll students and coordinate the localized trainings. Such sales commission amounted to approximately $2.1 million, or 77% of our total selling expense for the nine months ended September 30, 2012. This outsourcing strategy enabled us to focus more on course design and training organization and arrangements rather than sales promotion.  As a result, selling expense was higher in 2012  than in 2011. We expect our selling and marketing expenses to remain relatively stable  in the near future as we continue to use outsourced sales agent to help promote our training courses and conduct part of the student recruiting tasks.

General and administrative expenses.  Our general administrative expense increased by $613,296, or 26%, for the nine months ended September 30, 2012 as compared to the same period of last year. The increase was mainly due to the following reasons: (i) our employee salary expense increased because more well-trained personnel have been hired; (ii) we paid increased professional fees in connection with maintaining our public company status in the United States as well as restructuring our organization for the nine months ended September 30, 2012; (iii) our operating lease expense for renting our office space and executive housing also increased for the nine months ended September 30, 2012 due to inflation as compared to the same period of 2011.

We expect that our general and administrative expenses will continue to increase as we expand our business and operations

Provision for income tax. Our variable interest entities are governed by the income tax laws of the PRC and are subject to a statutory tax rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.  Due to the net operating loss, no income tax expense was necessary for the nine months ended September 30, 2012.  For the nine months ended September 30, 2011, we incurred income taxes of $329,264. 

Net income (loss). As a result of the cumulative effect of the foregoing factors, we reported a net loss of $2.57 million for the nine months ended September 30, 2012, as compared to a net loss of $4.79 million for the same period of 2011, a decrease of $2.22 million, or 46%. The decrease in our net loss was due to decreased costs of revenue, offset by increased operating expense for the period indicated. 

Liquidity and Capital Resources

As of September 30, 2012, we had cash and cash equivalents of $1.17 million. To date, we have financed our operations primarily through cash flows from operations. Based on our current operating plan, we believe that existing cash and cash equivalents will be sufficient to meet our working capital requirements for our current operations.

31

The following table sets forth a summary of our cash flows for the periods indicated:

Cash Flow

(all amounts in U.S. dollars)

	Nine Months Ended September 30,
	2012			2011 (Restated)
Net cash used in  operating activities	$	(2,478,770	)	$	(3,360,576	)
Net cash used in investing activities		(905	)		(610,887	)
Net cash provided by  financing activities		158,516			-
Effect of exchange rate changes on cash and cash equivalents		(73,949	)		(551,371	)
Net decrease in cash and cash equivalents		(2,395,107	)		(4,522,834	)
Cash and cash equivalents at beginning of the period		3,570,740			10,272,391
Cash and cash equivalent at end of the period	$	1,175,633		$	5,749,557

Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2012 was $2,478,770 which mainly consisted of net loss of $2,571,924, offset by net changes in operating assets and liabilities due to our operating activities, including an increase in other receivable of $1,156,281 primarily related to increase in the hotel deposits and advance to employees and external agents for student enrollment purposes, an increase in customer deposits of  $2,042,579 representing amounts received in advance from students for tuition paid to attend our professional training courses and featured lectures.

Net cash used in operating activities during the nine months ended September 30, 2011 was $3,564,383 which mainly consisted of our net loss of $3,987,366, offset by net changes in operating assets and liabilities due to our operating activities, including a deferred tax benefit of $1,009,448 resulting from a net operating loss carry-forward. In addition, our advance to vendors increased by $778,156, which mainly represents our payments made to foreign lecturers. Our deferred revenue increased $4,037,794 which represents amounts received in advance from students for tuition paid to attend our professional training courses and featured lectures.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2012 and 2011 amounted to $905 and $610,887 for capital expenditures, respectively, principally related to acquisition of property and equipment.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2012 was $158,516, representing the repayment of a shareholder loan to our Company.

There were no financing activities for the nine months ended September 30, 2011.

As a result of the factors discussed above, as of September 30, 2012, we have $1.17 million available cash on hand. We expect to use our cash on hand to continue to expand and enhance marketing and sales in fiscal year 2012 and beyond.  Part of this strategy involves increasing and improving marketing and sales activities to enhance our market share and brand recognition of our key course offerings. Management also plans to selectively pursue strategic acquisition opportunities to further diversify our resources and expand our market coverage.

Obligations Under Material Contracts

We have no material obligations to pay cash or deliver cash to any other party.

Seasonality

Our operating results and operating cash flows historically have not been subject to seasonal variations.

32

Inflation

Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in the Chinese economy and our industry and continually maintain effective cost controls in operations.

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, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management.  Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions.  There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Recent Accounting Pronouncements

See Note 2 to our unaudited consolidated financial statements included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer, Mr. Kaien Liang, and Chief Financial Officer, Mr. Zhiwei Huang, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2012. Based upon, and as of the date of this evaluation, Messieurs. Liang and Huang determined that, because of the material weakness described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2011, which we are still in the process of remediating as of September 30, 2012, our disclosure controls and procedures were not effective. Investors are directed to Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2011 for the description of this weakness.

Changes in Internal Control over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

During its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2011, our management identified a material weakness related to our lack of sufficient accounting personnel with an appropriate understanding of United States generally accepted accounting principles and SEC reporting requirements. As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, our management has identified the steps necessary to address the material weakness, and in the third quarter of 2012, we continued to implement these remedial procedures.

Other than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over financial reporting during the third quarter of 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

33

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS.

If MYL Training School is liquidated, we will not be entitled to receive any amount in excess of the amount MYL Commercial originally injected into the school.

As the sponsor of Hangzhou Gongshu MYL Training School (“MYL Training School”), Hangzhou MYL Commercial Services Co., Ltd. (“MYL Commercial”) injected capital in the amount of RMB500,000 into MYL Training School. Under the Implementation Rules for the Law for Promoting Private Education, a PRC private school is a “non-profit undertaking” of which no individual or entity may claim ownership.  A sponsor of a PRC private school may not claim ownership of assets of the school because such assets are owned by the private school itself.  Therefore, if MYL Training School is liquidated, we will not be entitled to receive any amount in excess of the amount that MYL Commercial originally injected into the school and any increase in the value of MYL Training School would not be realized by us upon its liquidation.

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

We have not sold any equity securities during the third quarter of 2012 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during third quarter.

No repurchases of our common stock were made during the third quarter of 2012.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the third quarter of 2012, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

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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.

Date: November 19, 2012	CHINA EXECUTIVE EDUCATION CORP.
	By:	/s/ Kaien Liang
		Kaien Liang, Chief Executive Officer
		(Principal Executive Officer)

By:	/s/ Zhiwei Huang
	Zhiwei Huang, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

35

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications 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	Certifications 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	Interactive data files pursuant to Rule 405 of Regulation S-T (furnished herewith).

36

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Kaien Liang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Executive Education Corp.;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’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 registrant 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 registrant, 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date: November 19, 2012

/s/ Kaien Liang

Kaien Liang

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Zhiwei Huang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Executive Education Corp.;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’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 registrant 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 registrant, 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date: November 19, 2012

/s/ Zhiwei Huang

Zhiwei Huang

Chief Financial Officer

(Principal Financial and 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, Kaien Liang, the Chief Executive Officer of CHINA EXECUTIVE EDUCATION CORP. (the “Company”), DOES HEREBY CERTIFY that:

1.      The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 (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 19th day of  November, 2012.

/s/ Kaien Liang   

Kaien Liang

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to China Executive Education Corp. and will be retained by China Executive Education Corp. 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, Zhiwei Huang, the Chief Financial Officer of CHINA EXECUTIVE EDUCATION CORP. (the “Company”), DOES HEREBY CERTIFY that:

1.      The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 (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 19th day of November, 2012.

/s/ Zhiwei Huang    

Zhiwei Huang

Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to China Executive Education Corp. and will be retained by China Executive Education Corp. 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.

XML

BASIC AND DILUTED LOSSES PER SHARE (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
BASIC AND DILUTED LOSSES PER SHARE [Abstract]
Net loss	$ (746,455)	$ (608,524)	$ (2,571,924)	$ (4,793,007)
Weighted average number of common shares outstanding - basic and diluted	22,834,100	22,834,100	22,834,100	22,834,100
Losses per share - basic and diluted	$ (0.03)	$ (0.03)	$ (0.11)	$ (0.21)

XML

VARIABLE INTEREST ENTITY (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 CNY	Dec. 31, 2011 USD ($)
VARIABLE INTEREST ENTITY [Abstract]
The percentage of total income to be paid by MYL Commercial and its subsidiaries to MYL Business, for service fees as stipulated in exclusive services agreement	95.00%		95.00%
The percentage of net income MYL Business is obligated to receive from all other Variable Interest Entities, as stipulated under contractual arrangements	100.00%		100.00%
Amount of equity pledged by MYL Commercial to MYL Business pursuant to equity pledge agreement	$ 78,651		$ 78,651		500,000
Financial statement amounts and balances of Variable Interest Entities
Total assets	7,616,868		7,616,868			4,362,026
Total liabilities	32,055,258		32,055,258			27,306,306
Net Revenues	2,112,657	2,787,621	4,589,149	5,663,276
Net Loss (Income)	1,545,334	(2,033,306)	183,960	3,359,606
Net cash provided by operating activities			715,671	(1,674,852)
Net cash used in investing activities			(898)	(82)
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents			48,254	(718,335)
Net decrease in cash and cash equivalents			$ 763,027	$ (2,393,302)

XML

OTHER RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2012

OTHER RECEIVABLES [Abstract]

Schedule of Other Receivables

	As of
	September 30,		December 31,
	2012		2011
	(Unaudited)
Disbursement and advances to employees	$	2,505,739	$	1,586,178
Business tax prepaid		696,729		844,757
Deposits paid		876,605		503,880
Others		3,878		-
	$	4,082,951	$	2,934,815

XML

DEFERRED REVENUE (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
DEFERRED REVENUE [Abstract]
Deferred revenue - current	$ 4,611,948	$ 7,188,008
Deferred revenue - noncurrent	$ 18,893,853	$ 16,464,222

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Method of accounting

The Company's interim consolidated financial statements have been prepared in accordance with US GAAP.

The interim results of operations are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2012. The Company's consolidated balance sheet as of December 31, 2011 has been taken from the Company's audited consolidated balance sheet (restated) as of the date. All other consolidated financial statements contained herein are unaudited and, in the opinion of management, contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the period presented. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements (restated) and notes thereto.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company's principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC, the accounting standards used in the places of their domicile. The accompanying interim consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.

(b) Principles of consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions are eliminated in consolidation.

The Company owned its subsidiaries and variable interest entity ("VIE") soon after its inception and continued to own the equity's interests through September 30, 2012. The following table depicts the identity of the subsidiaries and VIE:

Name of the entity	Place of Incorporation	Ownership Percentage
Surmounting Limit Marketing Advisor Limited ("SLM")	Hong Kong, China	100%
Hangzhou MYL Business Administration Co., Ltd. ("MYL Business")	Hangzhou, China	100%
Shanghai MYL Consulting Co., Ltd. ("MYL Consulting")	Shanghai, China	100%
Hangzhou MYL Commercial Service., Ltd. ("MYL Commercial")	Hangzhou, China	VIE
Hangzhou Gongshu MYL Training school ("MYL Training School ")	Hangzhou, China	VIE

(c) Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

(d) Economic and political risks

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

The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(e) Cash and concentration of risk

Cash includes cash on hand, cash in banks and demand deposits in accounts maintained within the PRC and Hong Kong. The Company has not experienced any losses in such accounts and believes it is not exposed to any risk on its cash in bank accounts.

(f) Accounting for the impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360, "Property, Plant and Equipment". The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting periods, there was no impairment loss.

(g) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in the Hong Kong. The subsidiaries of the Company maintain bank accounts in Hong Kong and the PRC.

(h) Retirement benefits

The employees of the Company are members of a state-managed retirement benefit plan operated by the government of the PRC. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Company with respect to the retirement benefit plan is to make the specified contributions.

(i) Property, plant and equipment

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

Buildings	20 years
Computer and electronic equipment	3-5 years
Leasehold improvement	3 years
Motor vehicles	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

(j) Foreign currency translation

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

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2011
balance sheet	RMB 6.3843 to US$1.00
Statements of income and comprehensive income	RMB 6.4967 to US$1.00
	September 30, 2012
balance sheet	RMB 6.3190 to US$1.00
Statements of income and comprehensive income	RMB 6.3085 to US$1.00

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.

(k) Accounts receivable

Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. Bad debts are written off as incurred. As of September 30, 2012 and December 31, 2011, there were no bad debts.

Outstanding accounts balances are reviewed individually for collectability. The Company does not charge any interest income on trade receivables. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as it has yet to exhaust all means of collection.

(l) Statutory reserves

As stipulated by the PRC's Company Law and as provided in the company Articles of Association, company's net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i. Making up cumulative prior years' losses, if any;

ii. Allocations to the "Statutory surplus reserve" of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital, which is restricted for set off against losses, expansion of production and operation or increase in registered capital;

iii. Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's "Statutory common welfare fund", which is restricted for capital expenditure for the collective benefits of the Company's employees; and

iv. Allocations to the discretionary surplus reserve, if approved in the shareholders' general meeting.

(m) Revenue recognition

The Company records all tuition as deferred revenue when students enroll a course. At the beginning of each course, revenue is recognized on a pro rata basis over the quantity of classes attended by the students. This results in the Company's balance sheet including future revenues that have not yet been earned as deferred revenue for courses that are not yet attended.

Refund policy permits students who apply for a refund for the portion of the course they did not attend. The Company may refund a portion of fees after negotiated. In the past practice, there are seldom cases that the students apply for refund, and it has no significant impact on revenue recognition of the Company based on the best estimation of the management Refunds result in a reduction in deferred revenue during the period that a student drops or withdraws from a class because associated tuition revenue is recognized pro rata over the quantity of classes are delivered.

Generally, net revenue varies from period to period based on several factors, including the aggregate number of students attending classes, the number of classes held during the period, and the tuition price.

The Company's revenue is principally derived from tuition and fees associated with two kinds of educational programs to the students: proprietary training courses and comprehensive training courses.

Proprietary training courses, which normally take several days to complete, primarily consisted of featured lectures. These courses are provided on a roll-over basis over the year. Based on the courses attendance record, the revenue is recognized at the delivered courses to the students.

Comprehensive training courses, which are composed of sixteen individual courses with systematic training in leadership development, i.e. decision making skills, negotiation skills, presentation skills and people skills. Based on the contracts, the students are eligible to enroll the courses within three years period. The revenue is recognized on pro rata basis over the quantity of classes attended.

(n) Operating lease rental

The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental payments included in general and administrative expenses for the three months ended September 30, 2012 and 2011 were $278,011 and $294,060, respectively. Operating lease rental payments included in general and administrative expenses for the nine months ended September 30, 2012 and 2011 were $798,379 and $667,465, respectively.

(o) Income taxes

The Company accounts for income taxes using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

The Company is operating in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the enterprise income tax rate for the three and nine months ended September 30, 2012 and 2011 were 25%.

(p) Comprehensive income

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

(q) Recently implemented standard

In May 2011, the FASB issued ASU No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs", which is adopted for fiscal years, and interim periods beginning after December 15, 2011 for public entities with retrospective application. There is no material impact on the consolidated financial statements upon adoption.

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income". This ASU amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective for public entities for annual periods beginning after December 15, 2011, and should be applied prospectively. Early adoption is permitted; the Company currently expects to adopt this standard in the first quarter of 2012. The Company is currently reviewing the effect this new pronouncement will have on the consolidated financial statements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, Intangibles - Goodwill and Other (Topic 350). This Accounting Standards Update amends FASB ASC 350. This amendment specifies the change in method for determining the potential impairment of goodwill. It includes examples of circumstances and events that the entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of the provisions in ASU 2011-08 will have a significant impact on the Company's consolidated financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210)-Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The update requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments. The ASU is effective for annual periods beginning on or after January 1, 2013 and interim periods therein. The Company is currently evaluating the impact this update will have on our consolidated financial statements.

In December 2011, FASB issued Accounting Standards Update No. 2011−12, Comprehensive Income ("ASU 2011−12"). Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Among the new provisions in ASU 2011-05 was a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented (for both interim and annual financial statements); however this reclassification requirement is indefinitely deferred by ASU 2011-12 and will be further deliberated by the FASB at a future date.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities -- Refundable Advance Fees. This ASU clarifies that an entity should classify an advance fee as deferred revenue when a continuing care retirement community has a resident contract that provides for payment of the refundable advance fee upon reoccupancy by a subsequent resident, which is limited to the proceeds of reoccupancy. Refundable advance fees that are contingent upon reoccupancy by a subsequent resident but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability. For public entities (including conduit bond obligors), the amendments in ASU No. 2012-01 are effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments to the codification in the ASU are effective for fiscal periods beginning after December 15, 2013. Early adoption is permitted. The amendments in ASU No. 2012-01 should be applied retrospectively by recording a cumulative-effect adjustment to opening retained earnings (or unrestricted net assets) as of the beginning of the earliest period presented.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles--Goodwill and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.

In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-05, Statement of Cash Flows (Topic 230). This ASU addresses how cash receipts arising from the sale of certain donated financial assets, such as securities, should be classified in the statement of cash flows of not-for-profit entities (NFPs). Some NFPs classify those cash receipts as investing cash inflows, while other entities classify them as either operating cash inflows or financing cash inflows, consistent with their treatment of inflows arising from cash contributions. The objective of this Update is for an NFP to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without the NFP imposing any limitations for sale and were converted nearly immediately into cash. The amendments in the ASU are effective prospectively for fiscal years, and interim fiscal periods within those years, beginning after June 15, 2013. Retrospective application to all periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. This ASU addresses the diversity in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-07, Entertainment--Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs. This ASU eliminates the rebuttable presumption that the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet date. The amendments also eliminate the requirement that an entity incorporate into fair value measurements used in the impairment tests the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would not have been considered by market participants at the measurement date. or SEC filers, the amendments are effective for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013. The amendments resulting from this ASU should be applied prospectively. Earlier application is permitted, including for impairment assessments performed as of a date before October 24, 2012, if, for SEC filers, the entity's financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not yet been made available for issuance.

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

Schedule of Future Minimum Operating Lease Obligations

Year	Amount
2012	$	172,899
2013		658,120
2014		210,828
Total	$	1,041,847

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PROVISION FOR INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2012

PROVISION FOR INCOME TAXES [Abstract]

Schedule of the Reconciliation of Company's Effective Tax Rate

Nine months ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Loss before income taxes benefits	$	(2,571,924	)	$	(4,463,743	)
PRC statutory income tax rate		25	%		25	%
Income tax at statutory tax rate		(624,981	)		(1,115,936	)
Permanent differences		624,981			1,445,200
Expected enterprise income tax expense	$	-		$	329,264

Schedule of Components of Income Tax Expense (Benefits)

Nine months ended September 30,
	2012		2011
	(Unaudited)		(Unaudited)
Current:
Provision for PRC Enterprise Income Tax	$	-	$	329,264
Deferred:
Provision for PRC Enterprise Income Tax		-		-
Income tax expenses (benefits)	$	-	$	329,264

Schedule of Deferred Tax Assets

As of
	September 30,			December 31,
	2012			2011
	(Unaudited)
Deferred tax assets:
Loss carried forward	$	5,876,450		$	5,913,058
Valuation allowance		(5,876,450	)		(5,913,058	)
Net deferred tax assets	$	-		$	-

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ORGANIZATION AND PRINCIPAL ACTIVITIES (Details)	1 Months Ended
	Feb. 28, 2010	Sep. 30, 2012	Dec. 31, 2011	Feb. 12, 2010
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract]
Original number of shares issued for business acquisition	20
The total number of shares as a result of converting the original shares of common stock in business acquisition				21,560,000
The ownership percentage represented by the original equity issuance in the business acquisition				10.00%
The ownership percentage of common stock subsequent to the conversion of original equity issuance				98.00%
Number of shares cancelled pursuant to merger agreement				3,000,000
Number of shares returned to transfer agent for cancellation				3,070,000
Common stock, shares issued		22,834,100	22,834,100	22,000,000
Common stock, shares outstanding		22,834,100	22,834,100	22,000,000

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UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
UNCERTAINTY OF ABILITY TO CONTINUE AS GOING CONCERN [Abstract]
Accumulated deficit	$ 20,038,816		$ 20,038,816		$ 17,466,892
Stockholders' deficiency	19,188,455		19,188,455		16,665,331
Amount current liabilities exceeded current assets for the period	1,138,275		1,138,275		1,329,556
Net loss	$ 746,455	$ 608,524	$ 2,571,924	$ 4,793,007

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RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2012

RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

3. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

The Company has restated its consolidated financial statements for the years ended December 31, 2010 and 2009, as previously disclosed in Form 10-K/A for 2010 filed on March 27, 2012. As a result, certain line items have changes and caused the restatement of the interim financial statement for the quarter ended September 30, 2011.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		9 Months Ended						9 Months Ended
	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2012 Balance Sheet [Member] CNY	Sep. 30, 2011 Balance Sheet [Member] CNY	Sep. 30, 2012 Statements of income and comprehensive income [Member] CNY	Sep. 30, 2011 Statements of income and comprehensive income [Member] CNY	Sep. 30, 2012 Buildings [Member]	Sep. 30, 2012 Computer and electronic equipments [Member]	Sep. 30, 2012 Leasehold improvement [Member]	Sep. 30, 2012 Motor vehicles [Member]	Sep. 30, 2012 Surmounting Limit Marketing Advisor Limited ('SLM') Member	Sep. 30, 2012 Hangzhou MYL Business Administration Co., Ltd. ('MYL Business') [Member]	Sep. 30, 2012 Shanghai MYL Consulting Co., Ltd. ('MYL Consulting') [Member]
Ownership in Subsidiaries
Ownership percentage													100.00%	100.00%	100.00%
Property, plant and equipment
Estimated useful life									20
Estimated useful life, minimum										3	3	5
Estimated useful life, maximum										5
Reconciliation of Effective Tax Rate
PRC statutory income tax rate	25.00%	25.00%	25.00%	25.00%
Statutory Reserves
The minimum appropriation that must be made to the 'Statutory Surplus Reserve', (expressed as a percentage of income after tax), before any dividends can be distributed by the company	10.00%		10.00%
The minimum appropriation that must be made to the 'Statutory Common Welfare Fund', (expressed as a percentage of income after tax), before any dividends can be distributed	5.00%		5.00%
The maximum appropriation that must be made to the 'Statutory Common Welfare Fund', (expressed as a percentage of income after tax), before any dividends can be distributed	10.00%		10.00%
Operating leases
Operating lease rental payments included in general and administrative expenses	$ 278,011	$ 294,060	$ 798,379	$ 667,465
Foreign Currency Exchange Rates
Foreign currency exchange rate, per one U.S. dollar					6.319	6.3843	6.3085	6.4967

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PROVISION FOR INCOME TAXES (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Income Tax Disclosure [Line Items]
Income tax rate of taxing authority	25.00%	25.00%	25.00%	25.00%
Reconciliation of Effective Tax Rate
Loss before income taxes benefits	$ (746,455)	$ (606,432)	$ (2,571,924)	$ (4,463,743)
Income tax at statutory tax rate			(624,981)	(1,115,936)
Permanent differences			624,981	1,445,200
Expected enterprise income tax benefits at statutory tax rate				329,264
Current:
Provision for PRC Enterprise Income Tax				329,264
Income tax expenses (benefits)		2,092		329,264
Deferred tax assets:
Loss carried forward	5,876,450		5,876,450		5,913,058
Valuation allowance	(5,876,450)		(5,876,450)		(5,913,058)
Net deferred tax assets
United States Tax Authority [Member]
Income Tax Disclosure [Line Items]
Income tax rate of taxing authority			35.00%
Hong Kong Tax Authority [Member]
Income Tax Disclosure [Line Items]
Income tax rate of taxing authority			16.50%
Peoples Republic of China Tax Authority [Member]
Income Tax Disclosure [Line Items]
Income tax rate of taxing authority			25.00%

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CONSOLIDATED BALANCE SHEET (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents-Unrestricted (including cash and cash equivalents-Unrestricted of the consolidated VIE without recourse to China Executive Education Corp of US$1,057,868 and US$294,841 as of September 30,2012 and December 31,2011, respectively)	$ 1,175,633	$ 3,570,740
Cash and cash equivalents-Restricted cash (including cash and cash equivalents-Restricted cash of the consolidated VIE without recourse to China Executive Education Corp of US$316,506 and US$317,178 as of September 30,2012 and December 31,2011, respectively)	316,506	317,178
Advance to vendors (including advance to vendors of the consolidated VIE without recourse to China Executive Education Corp of US$297,459 and nil as of September 30,2012 and December 31,2011, respectively)	843,062	602,685
Receivables from shareholder (including receivables from shareholder of the consolidated VIE without recourse to China Executive Education Corp of nil and nil as of September 30,2012 and December 31,2011, respectively)	1,752,650	1,914,964
Other receivables (including other receivables of the consolidated VIE without recourse to China Executive Education Corp of US$5,941,856 and US$3,749,545 as of September 30,2012 and December 31,2011, respectively)	4,082,951	2,934,815
Total current assets	8,170,802	9,340,382
Property, plant and equipment, net (including property, plant and equipment, net of the consolidated VIE without recourse to China Executive Education Corp of US$3,179 and US$458 as of September 30,2012 and December 31,2011, respectively)	843,673	1,128,447
Total Assets	9,014,475	10,468,829
Current liabilities:
Customer deposits (including customer deposits of the consolidated VIE without recourse to China Executive Education Corp of US$4,625,593 and US$2,605,864 as of September 30,2012 and December 31,2011, respectively)	4,639,523	2,605,864
Accrued expenses (including accrued expenses of the consolidated VIE without recourse to China Executive Education Corp of nil and US$205,666 as of September 30,2012 and December 31,2011, respectively)		352,655
Deferred revenue (including deferred revenue of the consolidated VIE without recourse to China Executive Education Corp of US$4,611,948 and US$7,188,008 as of September 30,2012 and December 31,2011, respectively)	4,611,948	7,188,008
Other payables (including other payables of the consolidated VIE without recourse to China Executive Education Corp of US$3,923,864 and US$842,546 as of September 30,2012 and December 31,2011, respectively)	57,606	523,411
Taxes payable (including taxes payable of the consolidated VIE without recourse to China Executive Education Corp of nil and nil as of September 30,2012 and December 31,2011, respectively)
Total current liabilities	9,309,077	10,669,938
Deferred revenue- noncurrent (including deferred revenue- noncurrent of the consolidated VIE without recourse to China Executive Education Corp of 18,893,853 and 16,464,222 as of September 30,2012 and December 31,2011, respectively)	18,893,853	16,464,222
Total liabilities	28,202,930	27,134,160
Commitments
Stockholders' deficiency
Common stock, $0.001 par value, 70,000,000 shares authorized, 22,834,100 shares issued and outstanding at September 30,2012 and December 31,2011, respectively	22,834	22,834
Additional paid-in capital	1,775,842	1,775,842
Accumulated deficits	(20,038,816)	(17,466,892)
Accumulated other comprehensive loss	(948,315)	(997,115)
Total stockholders' deficiency	(19,188,455)	(16,665,331)
Total Liabilities and Stockholders' Equity	$ 9,014,475	$ 10,468,829

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ORGANIZATION AND PRINCIPAL ACTIVITIES

9 Months Ended

Sep. 30, 2012

ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract]

ORGANIZATION AND PRINCIPAL ACTIVITIES

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

China Executive Education Corp (the "Company"), formerly known as On Demand Heavy Duty Corp, is a corporation organized under the laws of the State of Nevada.

On February 12, 2010, the Company acquired all of the outstanding capital stock of Surmounting Limit Marketing Adviser Limited ("SLM"), a Hong Kong Corporation, through China Executive Education Corp., a Nevada corporation (the "Merger Sub") wholly owned by the Company. SLM is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Hangzhou MYL Business Administration Consulting Co., Ltd. ("MYL Business"), a limited liability company organized under the laws of the People's Republic of China ("PRC"). Substantially all of SLM's operations are conducted in China through MYL Business, and through contractual arrangements with several of MYL Business's affiliated entities in China, including Hangzhou MYL Commercial Services Co., Ltd. ("MYL Commercial") and its subsidiaries. MYL Commercial is a fast-growing executive education company with dominant operation in Shanghai, the commercial center of China, providing comprehensive consulting services such as business administration, marketing strategy, designing of enterprise image, corporate investment and commerce, business conference as well as professional training programs designed to fit the needs of Chinese entrepreneurs to improve their leadership, management and marketing skills.

In connection with the acquisition, the Merger Sub issued 20 shares of the common stock of the Merger Sub which constituted no more than 10% ownership interest in the Merger Sub to the shareholders of SLM, in exchange for all the shares of the capital stock of SLM (the "Share Exchange" or "Merger"). The 20 shares of the common stock of the Merger Sub were converted into approximately 21,560,000 shares of the common stock of the Company so that upon completion of the Merger, the shareholders of SLM own approximately 98% of the common stock of the Company.

As part of the Merger, pursuant to a stock purchase agreement (the "Stock Purchase Agreement"), the Company transferred all of the outstanding capital of its subsidiary, On Demand Heavy Duty Holdings, Inc. ("Holdings") to certain of its shareholders in exchange for the cancellation of 3,000,000 shares of the Company's common stock (the "Split Off Transaction"). In addition, an aggregate of 3,070,000 shares were returned to the transfer agent for cancelation by other shareholders of Holdings. Following the Merger and the Split Off Transaction, the Company discontinued its former business and is now engaged in the executive education business.

Upon completion of the Merger, there were 22,000,000 shares of the Company's common stock issued and outstanding.

As a result of these transactions, persons affiliated with the SLM and MYL Business owned securities that in the aggregate represented approximately 98% of the equity in the Company. In addition, in connection with the change of control contemplated by the Share Exchange, the directors and officers of the Company resigned from their positions and new directors and officers affiliated with MYL Business controlled the Board of Directors.

Consequently, the Company's name was changed from "On Demand Heavy Duty Corp." to the Merger Sub's name "China Executive Education Corp." in order to more effectively reflect the Company's business and communicate the Company's brand identity to customers.

The above mentioned merger transaction has been accounted for as a reverse merger under the purchase method of accounting since there was a change of control. Accordingly, SLM is treated as the continuing entity for accounting purposes. SLM did not commence business operations until April 2009.

SLM does not conduct any substantive operations of its own. Instead, through its subsidiary, MYL Business, it had entered into certain exclusive contractual agreements with Hangzhou MYL Commercial Services Co., Ltd. ("MYL Commercial"), a company incorporated in Hangzhou City, Zhejiang Province, People's Republic of China ("PRC") on March 25, 2009. Pursuant to these agreements, SLM is obligated to absorb a majority of the risk of loss from MYL Commercial's activities and entitled it to receive a majority of its expected residual returns. In addition, MYL Commercial's shareholders have pledged their equity interest in MYL Commercial to SLM, irrevocably granted SLM an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in MYL Commercial and agreed to entrust all the rights to exercise their voting power to the persons appointed by MYL Commercial. Through these contractual arrangements, the Company and SLM hold all the variable interests of MYL Commercial. Therefore, the Company is the primary beneficiary of MYL Commercial.

Based on these contractual arrangements, management believes that MYL Commercial should be considered as a Variable Interest Entity ("VIE") under ASC 510 "Consolidation of Variable Interest Entities, and Interpretation of ARB No. 51", because the Company is the primary beneficiary. Accordingly, the Company consolidates MYL Commercial and its subsidiary's results, assets and liabilities

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OTHER RECEIVABLES (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
OTHER RECEIVABLES [Abstract]
Disbursement and advances to employees	$ 2,505,739	$ 1,586,178
Business tax prepaid	696,729	844,757
Deposits paid	876,605	503,880
Others	3,878
Total other receivables	$ 4,082,951	$ 2,934,815

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Schedule of Subsidiaries and Variable Interest Entities

Name of the entity	Place of Incorporation	Ownership Percentage
Surmounting Limit Marketing Advisor Limited ("SLM")	Hong Kong, China	100%
Hangzhou MYL Business Administration Co., Ltd. ("MYL Business")	Hangzhou, China	100%
Shanghai MYL Consulting Co., Ltd. ("MYL Consulting")	Shanghai, China	100%
Hangzhou MYL Commercial Service., Ltd. ("MYL Commercial")	Hangzhou, China	VIE
Hangzhou Gongshu MYL Training school ("MYL Training School ")	Hangzhou, China	VIE

Schedule of Estimated Useful Lives of Property, Plant and Equipment

Buildings	20 years
Computer and electronic equipment	3-5 years
Leasehold improvement	3 years
Motor vehicles	5 years

Schedule of Foreign Currency Exchange Rates

September 30, 2011
balance sheet	RMB 6.3843 to US$1.00
Statements of income and comprehensive income	RMB 6.4967 to US$1.00
	September 30, 2012
balance sheet	RMB 6.3190 to US$1.00
Statements of income and comprehensive income	RMB 6.3085 to US$1.00

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OTHER PAYABLES (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
OTHER PAYABLES [Abstract]
Payables to outside service providers	$ 15,826	$ 335,575
Sundry PRC taxes payables	22,038	29,240
Deposits received and credit guarantees	950	11,100
Business taxes payable	18,792	147,496
Sundries
Total other payables	$ 57,606	$ 523,411

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PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2012

PROPERTY, PLANT AND EQUIPMENT, NET [Abstract]

Schedule of Property, Plant and Equipment

As of
	September 30,			December 31,
	2012			2011
At cost	(Unaudited)
Buildings	$	98,879		$	99,089
Computer and electronic equipment		224,088			223,659
Leasehold improvement		491,227			492,271
Motor vehicles		634,412			635,760
Less: accumulated depreciation		(604,933	)		(322,332	)
	$	843,673		$	1,128,447

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UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

9 Months Ended

Sep. 30, 2012

UNCERTAINTY OF ABILITY TO CONTINUE AS GOING CONCERN [Abstract]

UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

2. UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.

As of September 30, 2012 and December 31, 2011, the Company has incurred accumulated deficits totaling $20,038,816 and $17,466,892, with stockholder's deficiency totaling $19,188,455 and $16,665,331, and its current liabilities exceed its current assets by $1,138,275 and $1,329,556, respectively. For the three months ended September 30, 2012 and 2011, the Company has suffered from net loss of $746,455 and $608,524, respectively. For the nine months ended September 30, 2012 and 2011, the Company has suffered from net loss of $2,571,924 and $4,793,007, respectively. These unaudited consolidated financial statements do not include any adjustments relating to the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.

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CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Variable Interest Entity [Line Items]
Cash and cash equivalents-Unrestricted	$ 1,175,633	$ 3,570,740
Cash and cash equivalents-Restricted cash	316,506	317,178
Advance to vendors	843,062	602,685
Receivables from shareholder	1,752,650	1,914,964
Other receivables	4,082,951	2,934,815
Property, plant and equipment, net	843,673	1,128,447
Customer deposits	4,639,523	2,605,864
Accrued expenses		352,655
Deferred revenue - current	4,611,948	7,188,008
Other payables	57,606	523,411
Taxes payable
Deferred revenue - noncurrent	18,893,853	16,464,222
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	22,834,100	22,834,100
Common stock, shares outstanding	22,834,100	22,834,100
Hangzhou MYL Business Administration Co., Ltd. [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents-Unrestricted	1,057,868	294,841
Cash and cash equivalents-Restricted cash	316,506	317,178
Advance to vendors	297,459
Receivables from shareholder
Other receivables	5,941,856	3,749,545
Property, plant and equipment, net	3,179	458
Customer deposits	4,625,593	2,605,864
Accrued expenses		205,666
Deferred revenue - current	4,611,948	7,188,008
Other payables	3,923,864	842,546
Taxes payable
Deferred revenue - noncurrent	$ 18,893,853	$ 16,464,222

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BASIC AND DILUTED LOSSES PER SHARE

9 Months Ended

Sep. 30, 2012

BASIC AND DILUTED LOSSES PER SHARE [Abstract]

BASIC AND DILUTED LOSSES PER SHARE

12. BASIC AND DILUTED LOSSES PER SHARE

In accordance with ASC 260 Earnings per Share, basic losses per common share is computed by using net losses divided by the weighted average number of shares of common stock outstanding for the periods presented. Diluted losses per share reflect the potential dilution of securities that could share in the losses of the Company. Potential common stock shares consist of shares that may arise from outstanding dilutive common stock options and warrants (the number of which is computed using the "treasury stock method"). The calculation of diluted losses per common share assumes that outstanding common shares were increased by shares issuable upon exercise of those stock warrants for which the market price exceeds the exercise price, less shares that could have been purchased by the Company with related proceeds.

	For nine months ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Net losses	$	(2,571,924	)	$	(4,793,007	)
Weighted average number of common shares outstanding - basic and diluted		22,834,100			22,834,100
Losses per share - basic and diluted	$	(0.11	)	$	(0.21	)

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Aug. 13, 2012
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Entity Registrant Name	CHINA EXECUTIVE EDUCATION CORP.
Entity Central Index Key	0001464305
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		22,834,100

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PROVISION FOR INCOME TAXES

9 Months Ended

Sep. 30, 2012

PROVISION FOR INCOME TAXES [Abstract]

PROVISION FOR INCOME TAXES

13. PROVISION FOR INCOME TAXES

United States

China Executive Education Corp. is subject to United States tax at a tax rate of 35%. No provision for income tax in the United States has been made as China Executive Education Corp. had no U.S. taxable income for the three and nine months ended September 30, 2012 and 2011.

Hong Kong

Incorporated in Hong Kong, SLM is governed by the income tax law of Hong Kong. According to current Hong Kong income tax law, the applicable income tax rate for SLM is 16.5%. No provision for income tax in the Hong Kong has been made as SLM had no Hong Kong taxable income for the three and nine months ended September 30, 2012 and 2011.

PRC

In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to state and local income taxes within the PRC at the applicable tax rate on the taxable income. On March 16, 2007, the National People's Congress of the PRC enacted a new Enterprise Income Tax Law ("Enterprise Income Tax Law") under which foreign invested enterprises and domestic companies would be subject to Enterprise Income Tax Law at a uniform rate of 25%. The Enterprise Income Tax Law became effective on January 1, 2008.

The Company's PRC subsidiaries are subject to income tax at a rate of 25% for the three and nine months ended September 30, 2012 and 2011.

The following table reconciles the Company's effective tax for the years presented:

	Nine months ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Loss before income taxes benefits	$	(2,571,924	)	$	(4,463,743	)
PRC statutory income tax rate		25	%		25	%
Income tax at statutory tax rate		(624,981	)		(1,115,936	)
Permanent differences		624,981			1,445,200
Expected enterprise income tax expense	$	-		$	329,264

The significant components of income tax components are as follows:

	Nine months ended September 30,
	2012		2011
	(Unaudited)		(Unaudited)
Current:
Provision for PRC Enterprise Income Tax	$	-	$	329,264
Deferred:
Provision for PRC Enterprise Income Tax		-		-
Income tax expenses (benefits)	$	-	$	329,264

Deferred tax assets reflect the tax effects of temporary differences due to deferred revenue and between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose.

The tax effects of temporary differences that give rise to the Company's net deferred tax assets and liabilities as of September 30, 2012 and December 31, 2011 are summarized as follows:

	As of
	September 30,			December 31,
	2012			2011
	(Unaudited)
Deferred tax assets:
Loss carried forward	$	5,876,450		$	5,913,058
Valuation allowance		(5,876,450	)		(5,913,058	)
Net deferred tax assets	$	-		$	-

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS [Abstract]
Revenues	$ 2,112,657	$ 2,787,621	$ 4,589,149	$ 5,663,276
Cost of revenue	852,759	2,046,316	1,918,540	5,445,817
Gross profit (loss)	1,259,898	741,305	2,670,609	217,459
Operating expenses
Selling expenses	974,953	493,646	2,731,808	2,530,630
General and administrative expense	1,071,061	859,194	3,005,456	2,392,160
Total operating expenses	2,046,014	1,352,840	5,737,264	4,922,790
Income (loss) from operations	(786,116)	(611,535)	(3,066,655)	(4,705,331)
Other income (expenses)
Interest income	70	26,497	23,209	86,197
Other income	59,914	(21,394)	526,349	155,391
Other expenses	(20,323)		(54,827)
Total other income (expenses)	39,661	5,103	494,731	241,588
Loss before income taxes	(746,455)	(606,432)	(2,571,924)	(4,463,743)
Provision for income taxes		2,092		329,264
Net loss	(746,455)	(608,524)	(2,571,924)	(4,793,007)
Comprehensive loss
Foreign currency translation loss	(97,476)	(172,601)	48,800	(478,568)
Total comprehensive loss	$ (843,931)	$ (781,125)	$ (2,523,124)	$ (5,271,575)
Basic and diluted loss per common share	$ (0.03)	$ (0.03)	$ (0.11)	$ (0.21)
Basic and diluted weighted average common shares outstanding	22,834,100	22,834,100	22,834,100	22,834,100
Cash dividends per common share

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PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2012

PROPERTY, PLANT AND EQUIPMENT, NET [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

7. PROPERTY, PLANT AND EQUIPMENT, NET

Details of property, plant and equipment are as follows:

	As of
	September 30,			December 31,
	2012			2011
At cost	(Unaudited)
Buildings	$	98,879		$	99,089
Computer and electronic equipment		224,088			223,659
Leasehold improvement		491,227			492,271
Motor vehicles		634,412			635,760
Less: accumulated depreciation		(604,933	)		(322,332	)
	$	843,673		$	1,128,447

Depreciation expense included in the general and administrative expenses for the nine months ended September 30, 2012 and 2011 was $283,756 and $153,347, respectively.

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VARIABLE INTEREST ENTITY

9 Months Ended

Sep. 30, 2012

VARIABLE INTEREST ENTITY [Abstract]

VARIABLE INTEREST ENTITY

6. VARIABLE INTEREST ENTITY

PRC laws and regulations currently require any foreign entity that invests in the education business in China to be an educational institution with relevant experience in providing educational services outside China. The Company are not educational institutions and do not provide educational services outside China. The Company conducts substantially all of its education business in China through MYL Commercial.

On May 1, 2009 MYL Business entered into a series of exclusive contractual arrangements (the "Contractual Arrangements") with MYL Commercial and its shareholders, which enable the Company to (1) have power to direct the activities that most significantly affect the economic performance of MYL Commercial, and (2) receive the economic benefits of MYL Commercial that could be significant to MYL Commercial. Accordingly, the Company is considered the primary beneficiary of MYL Commercial and has consolidated MYL Commercial's financial results of operations, assets and liabilities in the Company's consolidated financial statements. These agreements are summarized in the following paragraphs.

Exclusive Services Agreement. Pursuant to an exclusive services agreement by and among MYL Business and MYL Commercial, dated May 1, 2009, MYL Commercial irrevocably entrusted to MYL Business the management and operation of MYL Commercial and the responsibilities and authorities of its shareholders and directors. The service fee to be paid by MYL Commercial is equal to 95% of its total income which can be waived by MYL Business from time to time in its sole discretion.

Call Option Agreement. Pursuant to a call option agreement by and among MYL Business, MYL Commercial and MYL Commercial's shareholders, dated as of May 1, 2009, each of MYL Commercial and MYL Commercial's shareholders have granted MYL Business or its designee an exclusive option to purchase all or part of their equity interests in MYL Commercial, or all or part of the assets of MYL Commercial, in each case, at any time determined by MYL Business and to the extent permitted by PRC law.

Voting Rights Proxy Agreement. Pursuant to a voting rights proxy agreement by and among MYL Business, MYL Commercial and MYL Commercial's shareholders, dated as of May 1, 2009, the shareholders of MYL Commercial have granted the personnel designated by MYL Business the right to appoint directors and senior management of MYL Commercial and to exercise all of their other voting rights as shareholders of MYL Commercial, as provided under the articles of association of such entity. Under the voting rights proxy agreement, there are no restrictions on the number, to the extent allowed under the respective articles of association of MYL Commercial, or identity of those persons we can appoint as directors and officers.

Equity Pledge Agreement. Pursuant to an equity pledge agreement by and among MYL Business, MYL Commercial and MYL Commercial's shareholders, dated as of May 1, 2009, each of the shareholders has pledged all his equity interest in MYL Commercial to MYL Business to secure their obligations under the relevant contractual control agreements to which each is a party, including but not limited to, the obligations of MYL Commercial under the exclusive services agreement, call option agreement and voting rights proxy agreement. Under this equity pledge agreement, the shareholders have agreed not to transfer, assign, pledge or otherwise dispose of their interest in MYL Commercial, as the case may be, without the prior written consent of MYL Business. Each equity pledge is to be registered with the local Administration for Industry and Commerce (the "AIC").

Pursuant to the equity pledge agreement between MYL Business and MYL Commercial, the shareholders of MYL Commercial pledged all of their equity of MYL Commercial (RMB500,000 or approximately $78,651) to MYL Business.

As a result of the Contractual Arrangement, MYL Business was granted with unconstrained decision making rights and power over key operational functions within MYL Commercial. Therefore, MYL Business will bear all of MYL Commercial's operating costs in exchange for 100% of the net income MYL Commercial. There is not any income or loss of MYL Commercial attributed to other parties. MYL Business does not have any equity interest in MYL Commercial, but instead has the right to enjoy economic benefits similar to equity ownership through its contractual arrangements with MYL Commercial.

These contractual arrangements may not be as effective in providing MYL Business with control over the MYL Commercial as direct ownership. Due to its VIE structure, MYL Business has to rely on contractual rights to effect control and management of the MYL Commercial, which exposes MYL Business to the risk of potential breach of contract by the shareholders of MYL Commercial.

In addition, as all of these Contractual Arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company's ability to enforce these contractual arrangements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these contractual arrangements, it may not be able to exert effective control over the VIEs, and its ability to conduct its business may be materially and adversely affected. At present, the equity interest pledge agreement has not been registered with the PRC regulator.

None of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company's general assets.

	As of
	September 30,		December 31
	2012		2011
	(Unaudited)
Total assets	$	7,616,868		$	4,362,026
Total liabilities	$	32,055,258		$	27,306,306

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012			2011
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net Revenues	$	2,112,657	$	2,787,621		$	4,589,149	$	5,663,276
Net Loss(Income)		1,545,334		(2,033,306	)		183,960		3,359,606

	Nine months ended September 30,
	2012				2011
	(Unaudited)				(Unaudited)
Net cash provided by operating activities	$	715,671		$	(1,674,852)
Net cash used in investing activities		(898)			(82)
Net cash used in financing activities			-		-
Effect of exchange rate changes on cash and cash equivalents		48,254			(718,335)
Net decrease in cash and cash equivalents		763,027			(2,393,302)

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VARIABLE INTEREST ENTITY (Tables)

9 Months Ended

Sep. 30, 2012

VARIABLE INTEREST ENTITY [Abstract]

Schedule of Amounts Reported in Financial Statements for Variable Interest Entities

	As of
	September 30,		December 31
	2012		2011
	(Unaudited)
Total assets	$	7,616,868		$	4,362,026
Total liabilities	$	32,055,258		$	27,306,306

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012			2011
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net Revenues	$	2,112,657	$	2,787,621		$	4,589,149	$	5,663,276
Net Loss(Income)		1,545,334		(2,033,306	)		183,960		3,359,606

	Nine months ended September 30,
	2012				2011
	(Unaudited)				(Unaudited)
Net cash provided by operating activities	$	715,671		$	(1,674,852)
Net cash used in investing activities		(898)			(82)
Net cash used in financing activities			-		-
Effect of exchange rate changes on cash and cash equivalents		48,254			(718,335)
Net decrease in cash and cash equivalents		763,027			(2,393,302)

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2012

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES

The Company did not have any significant capital commitment as of September 30, 2012 and December 31, 2011.

From time to time, the Company leases office spaces in Shanghai and Hangzhou in China to conduct its normal business activities, such as business administration, recruiting students, holding the business conferences and providing professional training courses or featured lectures to students. The Company also has several rental arrangements which provide residential units to house key employees. These lease agreements will expire before April 30, 2014.

Rent expenses for the above rental arrangements total $278,011 and $294,060 for the three months ended September 30, 2012 and 2011, respectively. Rent expenses for the above rental arrangements total $798,379 and $667,465 for the nine months ended September 30, 2012 and 2011, respectively.

The minimum obligations under such commitments (unless otherwise stated) for the years ending December 31 until their expiration are summarized below:

Year	Amount
2012	$	172,899
2013		658,120
2014		210,828
Total	$	1,041,847

The Company did not record any contingencies as of September 30, 2012 and December 31, 2011.

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DEFERRED REVENUE

9 Months Ended

Sep. 30, 2012

DEFERRED REVENUE [Abstract]

DEFERRED REVENUE

10. DEFERRED REVENUE

Deferred revenue represents the tuition fees from enrolled students for courses not delivered. As of September 30, 2012 and December 31, 2011, deferred revenue included in current liabilities amounted to $4,611,948 and $7,188,008, respectively. Included in non-current liabilities amounted to $18,893,853 and $16,464,222, respectively.

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OTHER RECEIVABLES

9 Months Ended

Sep. 30, 2012

OTHER RECEIVABLES [Abstract]

OTHER RECEIVABLES

8. OTHER RECEIVABLES

Other receivables were comprised of the following:

	As of
	September 30,		December 31,
	2012		2011
	(Unaudited)
Disbursement and advances to employees	$	2,505,739	$	1,586,178
Business tax prepaid		696,729		844,757
Deposits paid		876,605		503,880
Others		3,878		-
	$	4,082,951	$	2,934,815

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OTHER PAYABLES

9 Months Ended

Sep. 30, 2012

OTHER PAYABLES [Abstract]

OTHER PAYABLES

9. OTHER PAYABLES

Other payables were comprised of the following:

	As of
	September 30, 2012			December 31, 2011
	(Unaudited)
Payables to outside service providers		$	15,826		$	335,575
Sundry PRC taxes payables			22,038			29,240
Deposits received and credit guarantees			950			11,100
Business taxes payable			18,792			147,496
		$	57,606		$	523,411

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RELATED PARTY TRANSACTION

9 Months Ended

Sep. 30, 2012

RELATED PARTY TRANSACTION [Abstract]

RELATED PARTY TRANSACTION

11. RELATED PARTY TRANSACTION

On July 2, 2010, the Company declared dividends in the total amount of RMB12,075,000 (equivalent to $1,784,088) out of the retained earnings balance of Hangzhou MYL for the fiscal year ended December 31, 2009 to its sole shareholder, Surmounting Limit Marketing Adviser Limited("SLM"). On the same date, SLM also made a resolution to distribute the net tax amount of such dividend that SLM receives to Magic Dream Enterprises Ltd., a company incorporated under the laws of British Virgin Island. And Mr. Kaien Liang, a shareholder of the Company and Magic Dream Enterprises Ltd received the dividend payment. However, as at December 31, 2010, the Company's Board of Directors adopted a resolution to declare that the dividend previously declared was invalid, and that the Company should collect back the payment from Mr. Kaien Liang. As of September 30, 2012, receivable from Mr. Kaien Liang amounted to $1,752,651.

The Company has several rental arrangements providing residential units to house key employees, including the Chief Executive Officer Mr. Kaien Liang, Chief Operating Officer Mr. Pokai Hsu, and Chief Strategy Officer Mr. Tingyuan Chen. For the nine months ended September 30, 2012 and 2011, housing benefit provided to these officers totaled $174,640 and $169,580, respectively.

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PROPERTY, PLANT AND EQUIPMENT, NET (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (604,933)		$ (322,332)
Property, plant and equipment, net	843,673		1,128,447
Depreciation expense	283,756	153,347
Buildings [Member]
Property, Plant and Equipment [Line Items]
Cost	98,879		99,089
Computer and electronic equipments [Member]
Property, Plant and Equipment [Line Items]
Cost	224,088		223,659
Leasehold improvement [Member]
Property, Plant and Equipment [Line Items]
Cost	491,227		492,271
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Cost	$ 634,412		$ 635,760

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)

9 Months Ended

Sep. 30, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Method of accounting

(a) Method of accounting

The Company's interim consolidated financial statements have been prepared in accordance with US GAAP.

The interim results of operations are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2012. The Company's consolidated balance sheet as of December 31, 2011 has been taken from the Company's audited consolidated balance sheet (restated) as of the date. All other consolidated financial statements contained herein are unaudited and, in the opinion of management, contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the period presented. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements (restated) and notes thereto.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company's principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC, the accounting standards used in the places of their domicile. The accompanying interim consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.

Principles of consolidation

(b) Principles of consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions are eliminated in consolidation.

The Company owned its subsidiaries and variable interest entity ("VIE") soon after its inception and continued to own the equity's interests through September 30, 2012. The following table depicts the identity of the subsidiaries and VIE:

Name of the entity	Place of Incorporation	Ownership Percentage
Surmounting Limit Marketing Advisor Limited ("SLM")	Hong Kong, China	100%
Hangzhou MYL Business Administration Co., Ltd. ("MYL Business")	Hangzhou, China	100%
Shanghai MYL Consulting Co., Ltd. ("MYL Consulting")	Shanghai, China	100%
Hangzhou MYL Commercial Service., Ltd. ("MYL Commercial")	Hangzhou, China	VIE
Hangzhou Gongshu MYL Training school ("MYL Training School ")	Hangzhou, China	VIE

Use of estimates

(c) Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

Economic and political risks

(d) Economic and political risks

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

The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

Cash and concentration of risk

(e) Cash and concentration of risk

Cash includes cash on hand, cash in banks and demand deposits in accounts maintained within the PRC and Hong Kong. The Company has not experienced any losses in such accounts and believes it is not exposed to any risk on its cash in bank accounts.

Accounting for the impairment of long-lived assets

(f) Accounting for the impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360, "Property, Plant and Equipment". The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting periods, there was no impairment loss.

Cash and cash equivalents

(g) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in the Hong Kong. The subsidiaries of the Company maintain bank accounts in Hong Kong and the PRC.

Retirement benefits

(h) Retirement benefits

The employees of the Company are members of a state-managed retirement benefit plan operated by the government of the PRC. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Company with respect to the retirement benefit plan is to make the specified contributions.

Property, plant and equipment

(i) Property, plant and equipment

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

Buildings	20 years
Computer and electronic equipment	3-5 years
Leasehold improvement	3 years
Motor vehicles	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

Foreign currency translation

(j) Foreign currency translation

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

The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2011
balance sheet	RMB 6.3843 to US$1.00
Statements of income and comprehensive income	RMB 6.4967 to US$1.00
	September 30, 2012
balance sheet	RMB 6.3190 to US$1.00
Statements of income and comprehensive income	RMB 6.3085 to US$1.00

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.

Accounts receivable

(k) Accounts receivable

Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. Bad debts are written off as incurred. As of September 30, 2012 and December 31, 2011, there were no bad debts.

Outstanding accounts balances are reviewed individually for collectability. The Company does not charge any interest income on trade receivables. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as it has yet to exhaust all means of collection.

Statutory reserves

(l) Statutory reserves

As stipulated by the PRC's Company Law and as provided in the company Articles of Association, company's net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i. Making up cumulative prior years' losses, if any;

ii. Allocations to the "Statutory surplus reserve" of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital, which is restricted for set off against losses, expansion of production and operation or increase in registered capital;

iii. Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's "Statutory common welfare fund", which is restricted for capital expenditure for the collective benefits of the Company's employees; and

iv. Allocations to the discretionary surplus reserve, if approved in the shareholders' general meeting.

Revenue recognition

(m) Revenue recognition

The Company records all tuition as deferred revenue when students enroll a course. At the beginning of each course, revenue is recognized on a pro rata basis over the quantity of classes attended by the students. This results in the Company's balance sheet including future revenues that have not yet been earned as deferred revenue for courses that are not yet attended.

Refund policy permits students who apply for a refund for the portion of the course they did not attend. The Company may refund a portion of fees after negotiated. In the past practice, there are seldom cases that the students apply for refund, and it has no significant impact on revenue recognition of the Company based on the best estimation of the management Refunds result in a reduction in deferred revenue during the period that a student drops or withdraws from a class because associated tuition revenue is recognized pro rata over the quantity of classes are delivered.

Generally, net revenue varies from period to period based on several factors, including the aggregate number of students attending classes, the number of classes held during the period, and the tuition price.

The Company's revenue is principally derived from tuition and fees associated with two kinds of educational programs to the students: proprietary training courses and comprehensive training courses.

Proprietary training courses, which normally take several days to complete, primarily consisted of featured lectures. These courses are provided on a roll-over basis over the year. Based on the courses attendance record, the revenue is recognized at the delivered courses to the students.

Comprehensive training courses, which are composed of sixteen individual courses with systematic training in leadership development, i.e. decision making skills, negotiation skills, presentation skills and people skills. Based on the contracts, the students are eligible to enroll the courses within three years period. The revenue is recognized on pro rata basis over the quantity of classes attended.

Operating lease rental

(n) Operating lease rental

The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental payments included in general and administrative expenses for the three months ended September 30, 2012 and 2011 were $278,011 and $294,060, respectively. Operating lease rental payments included in general and administrative expenses for the nine months ended September 30, 2012 and 2011 were $798,379 and $667,465, respectively.

Income taxes

(o) Income taxes

The Company accounts for income taxes using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

The Company is operating in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the enterprise income tax rate for the three and nine months ended September 30, 2012 and 2011 were 25%.

Comprehensive income

(p) Comprehensive income

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

Recently implemented standard

(q) Recently implemented standard

In May 2011, the FASB issued ASU No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs", which is adopted for fiscal years, and interim periods beginning after December 15, 2011 for public entities with retrospective application. There is no material impact on the consolidated financial statements upon adoption.

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income". This ASU amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective for public entities for annual periods beginning after December 15, 2011, and should be applied prospectively. Early adoption is permitted; the Company currently expects to adopt this standard in the first quarter of 2012. The Company is currently reviewing the effect this new pronouncement will have on the consolidated financial statements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, Intangibles - Goodwill and Other (Topic 350). This Accounting Standards Update amends FASB ASC 350. This amendment specifies the change in method for determining the potential impairment of goodwill. It includes examples of circumstances and events that the entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of the provisions in ASU 2011-08 will have a significant impact on the Company's consolidated financial statements.

In December 2011, the FASB issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210)-Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The update requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments. The ASU is effective for annual periods beginning on or after January 1, 2013 and interim periods therein. The Company is currently evaluating the impact this update will have on our consolidated financial statements.

In December 2011, FASB issued Accounting Standards Update No. 2011−12, Comprehensive Income ("ASU 2011−12"). Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Among the new provisions in ASU 2011-05 was a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented (for both interim and annual financial statements); however this reclassification requirement is indefinitely deferred by ASU 2011-12 and will be further deliberated by the FASB at a future date.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities -- Refundable Advance Fees. This ASU clarifies that an entity should classify an advance fee as deferred revenue when a continuing care retirement community has a resident contract that provides for payment of the refundable advance fee upon reoccupancy by a subsequent resident, which is limited to the proceeds of reoccupancy. Refundable advance fees that are contingent upon reoccupancy by a subsequent resident but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability. For public entities (including conduit bond obligors), the amendments in ASU No. 2012-01 are effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments to the codification in the ASU are effective for fiscal periods beginning after December 15, 2013. Early adoption is permitted. The amendments in ASU No. 2012-01 should be applied retrospectively by recording a cumulative-effect adjustment to opening retained earnings (or unrestricted net assets) as of the beginning of the earliest period presented.

In July 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles--Goodwill and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.

In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-05, Statement of Cash Flows (Topic 230). This ASU addresses how cash receipts arising from the sale of certain donated financial assets, such as securities, should be classified in the statement of cash flows of not-for-profit entities (NFPs). Some NFPs classify those cash receipts as investing cash inflows, while other entities classify them as either operating cash inflows or financing cash inflows, consistent with their treatment of inflows arising from cash contributions. The objective of this Update is for an NFP to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without the NFP imposing any limitations for sale and were converted nearly immediately into cash. The amendments in the ASU are effective prospectively for fiscal years, and interim fiscal periods within those years, beginning after June 15, 2013. Retrospective application to all periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. This ASU addresses the diversity in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution.

In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-07, Entertainment--Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs. This ASU eliminates the rebuttable presumption that the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet date. The amendments also eliminate the requirement that an entity incorporate into fair value measurements used in the impairment tests the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would not have been considered by market participants at the measurement date. or SEC filers, the amendments are effective for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013. The amendments resulting from this ASU should be applied prospectively. Earlier application is permitted, including for impairment assessments performed as of a date before October 24, 2012, if, for SEC filers, the entity's financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not yet been made available for issuance.

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OTHER PAYABLES (Tables)

9 Months Ended

Sep. 30, 2012

OTHER PAYABLES [Abstract]

Schedule of Other Payables

As of
	September 30, 2012			December 31, 2011
	(Unaudited)
Payables to outside service providers		$	15,826		$	335,575
Sundry PRC taxes payables			22,038			29,240
Deposits received and credit guarantees			950			11,100
Business taxes payable			18,792			147,496
		$	57,606		$	523,411

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
COMMITMENTS AND CONTINGENCIES [Abstract]
Rent expense	$ 278,011	$ 294,060	$ 798,379	$ 667,465
Future minimum rental payments under operating leases
Due in 2012	172,899		172,899
Due in 2013	658,120		658,120
Due in 2014	210,828		210,828
Total minimum rental payments under operating leases	$ 1,041,847		$ 1,041,847

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities
Net loss	$ (2,571,924)	$ (4,793,007)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	283,756	153,347
(Increase) decrease in Other receivables	(1,156,281)	55,382
(Increase) decrease in Advance to vendors	(242,058)	(778,156)
Increase (decrease) in Other payable	(385,917)	(78,981)
Increase (decrease) in Customer deposits	2,042,579	(215,644)
Increase (decrease) in Accrued expenses	(352,492)	(383,999)
Increase (decrease) in Tax payable		(1,357,312)
Increase (decrease) in Deferred revenue	(96,433)	4,037,794
Net cash used in operating activities	(2,478,770)	(3,360,576)
Cash flows used in investing activities
Acquisition of property and equipment	(905)	(610,887)
Net cash generated from (used in) investing activities	(905)	(610,887)
Cash flows from financing activities
Cash receive from shareholder	158,516
Net cash generated from financing activities	158,516
Effect on exchange rate changes on cash and cash equivalents	(73,948)	(551,371)
Net decrease in cash and cash equivalents	(2,395,107)	(4,522,834)
Cash and cash equivalents, beginning of periods	3,570,740	10,272,391
Cash and cash equivalents, end of periods	1,175,633	5,749,557
Supplemental disclosures of cash flow information:
Interest paid
Income taxes paid		$ 1,636,867

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CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

9 Months Ended

Sep. 30, 2012

CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS [Abstract]

CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

5. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments that potentially expose the company to concentrations of credit risk, consists of cash and accounts receivable as of September 30, 2012 and December 31, 2011. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure sound collections and minimize credit losses exposure.

As of September 30, 2012 and December 31, 2011, all the Company's bank deposits were conducted with banks in the PRC where there is currently no rule or regulation mandated on obligatory insurance of bank accounts.

For the three and nine months ended September 30, 2012 and 2011, all of the Company's sales were generated from the PRC. In addition, all accounts receivable as of September 30, 2012 and December 31, 2011 also arose in the PRC.

The maximum amount of loss exposure due to credit risk that the Company would bear if the counter parties of the financial instruments failed to perform represents the carrying amount of each financial asset on the balance sheet.

Normally, the Company does not require collateral from customers or debtors.

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BASIC AND DILUTED LOSSES PER SHARE (Tables)

9 Months Ended

Sep. 30, 2012

BASIC AND DILUTED LOSSES PER SHARE [Abstract]

Schedule of Basic and Diluted Loss Per Share

For nine months ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
Net losses	$	(2,571,924	)	$	(4,793,007	)
Weighted average number of common shares outstanding - basic and diluted		22,834,100			22,834,100
Losses per share - basic and diluted	$	(0.11	)	$	(0.21	)

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RELATED PARTY TRANSACTION (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)	Jul. 02, 2010 USD ($)	Jul. 02, 2010 CNY
RELATED PARTY TRANSACTION [Abstract]
Cash dividend declared to related party, declaration date	Jul. 02, 2010
Amount of dividend declared to related party					$ 1,784,088	12,075,000
Receivables from shareholder		1,752,650		1,914,964
Housing benefit provided to company officers		$ 174,640	$ 169,580

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2012

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

The Company has evaluated all other subsequent events and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements