UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 _____________________
 
 FORM 10-Q
 _____________________
 
 x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the quarterly period ended September 30, 2010
 
 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from ______to______.
 
 Chaolei Marketing and Finance Company
 (Exact name of registrant as specified in the Charter)
 
 Florida

000-50214

65-0968839(State or other jurisdiction of

incorporation or organization)

(Commission File No.)

(IRS Employee Identification No.)
 
 511 NE 94th Street, Miami Shores, FL 33138
 (Address of Principal Executive Offices)
 (Address of Principal Executive Offices)
 
 (305) 759-2444
 (Issuer Telephone number)
 
 Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 Yes o        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 filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
 
 Large accelerated filer
o

Accelerated filer
oNon-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
 
 State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 22, 2010:  59,999,756 shares of common stock.
 
 
   CHAOLEI MARKETING AND FINANCE COMPANY
 
 FORM 10-Q
 
 September 30, 2010
 
 TABLE OF CONTENTS
 
 PART I— FINANCIAL INFORMATIONItem 1.
Financial Statements
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
7Item 3.
Quantitative and Qualitative Disclosures About Market Risk
9Item 4T.
Controls and Procedures
9PART II— OTHER INFORMATIONItem 1.
Legal Proceedings
10Item 1A.
Risk Factors
10Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
10Item 3.
Defaults Upon Senior Securities
10Item 4.
(Removed and Reserved)
10Item 5.
Other Information
10Item 6.
Exhibits
10SIGNATURES
11
 
  
 
 
 PART 1 - FINANCIAL INFORMATION
 
 Item 1.     Financial Statements
 
 CHAOLEI MARKETING AND FINANCE COMPANYBALANCE SHEETSSeptember 30, 2010


December 31, 2009(Unaudited)ASSETSCURRENT ASSETSCash

$
-


$
2,300Other receivable


7,212



-Total current assets


7,212



2,300Intangible asset


-



53,794TOTAL ASSETS

$
7,212


$
56,094LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable and accrued expenses

$
90,912


$
50,380Advances – related party


90,000



60,000Total current liabilities


180,912



110,380COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS’ EQUITY (DEFICIT)Preferred  stock, $0.001 par value, 10,000,000 shares authorized,  none issued and outstanding


-



-Common stock, $0.001 par value, 100,000,000 shares authorized, 59,999,756 shares issued and outstanding, as ofSeptember 30, 2010 and December 31, 2009


60,000



60,000Additional paid in capital


114,416



114,416Accumulated deficit


(348,116
)


(228,702
)Total Stockholders’ Equity (Deficit)


(173,700
)


(54,286
)TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$
7,212


$
56,094
 
 See accompanying notes to financial statements.
 
 1
  CHAOLEI MARKETING AND FINANCE COMPANYSTATEMENTS OF OPERATIONS(UNAUDITED)Three Months Ended


Nine Months EndedSeptember 30, 2010


September 30, 2009


September 30, 2010


September 30, 2009REVENUE

$
-


$
-


$
-


$
15,677OPERATING EXPENSES:General and administrative


9,351



9,588



28,810



29,955Professional fees


3,775



16,731



36,810



81,838Impairment Loss


53,794



-



53,794



-Total operating expenses


66,920



26,319



119,414



111,793Other income (expense)


-



-



-



-NET LOSS BEFORE PROVISION FOR INCOME TAXES


(66,920
)


(26,319
)


(119,414
)


(96,116
)Provision for income taxes


-



-



-



-NET LOSS

$
(66,920
)

$
(26,319
)

$
(119,414
)

$
(96,116
)Net loss per share - basic and diluted


(0.001
)


(0.000
)


(0.002
)


(0.002
)Weighted average number of shares outstanding during the period - basic and diluted


59,999,756



59,999,756



59,999,756



59,999,756
  See accompanying notes to financial statements.
 
 2
   CHAOLEI MARKETING AND FINANCE COMPANYSTATEMENTS OF CASH FLOWS(UNAUDITED)Nine Months EndedSeptember 30, 2010


September 30, 2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(119,414
)

$
(96,116
)Adjustments to reconcile net loss to net cash used in operating activities:Impairment Charge


53,794



-Change in assets and  liabilities(Increase) decrease in accounts and other receivable


(7,212
)


14,308Increase (decrease) accounts payable and accrued expenses


40,532



37,566Net cash used in operating activities


(32,300
)


(44,242
)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from advance-Related Party


30,000



29,985Net cash provided by (used in) financing activities


30,000



29,985NET DECREASE IN CASH


(2,300
)


(14,257
)CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


2,300



14,567CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
-


$
310Supplemental disclosure of cash flow information:Cash paid for income taxes

$
-


$
-Cash paid for interest expense

$
-


$
-
 
 See accompanying notes to financial statements.
 
 3
  NOTE 1 – ORGANIZATION
 
 Organization
 
 Chaolei Marketing and Finance Company (the “Company”) [f/k/a BioTex Holdings, Inc and previously Capital Ventures Group I, Inc.] was incorporated on December 17, 1999 under the laws of the State of Florida to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.
 
 In 2007 the Company changed its name to Chaolei Marketing and Finance Company to act as a sales, marketing and finance agent of Sichuan Chaolei Industry Stock Co, Ltd. (CICO), a company organized in the People’s Republic of China that mines silicon, produces poly- and mono- crystalline silicon ingots and wafers for use in photovoltaic cells and computer chips. Additionally, CICO owns a subsidiary company that produces pipes for hydroelectric projects.
 
 The Company is primarily operated by its officers who were formerly employed by CICO in China. The Company maintains an office in the United States in the offices of its Assistant Secretary located in Miami Shores, Florida.
 
 Interim reporting
 
 The accompanying interim unaudited financial information has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company as of September 30, 2010 and the related operating results and cash flows for the interim period presented have been made. The results of operations of such interim period are not necessarily indicative of the results of the full year. This financial information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
 
 Going Concern
  The financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company is in the development stage with limited operations, and has a stockholders' deficit of $173,700 and working capital deficit of $173,700 and has incurred operating losses since its inception. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use of Estimates
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Because such determination involves subjective judgment, it is at least reasonably possible that the Company’s estimates could change in the near term with respect to this matter.
 
 Revenue Recognition
 
 The Company derives its revenue from commissions received on the sale of products it represents. The Company presents revenue in accordance with FASB ASC 605-10 “Revenue Recognition in Financial Statements”. Under this guidance, revenue is realized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. The Company did not generate any revenues for the nine months ended September 30, 2010.
 
 Accounts Receivable
 
 The Company is required to estimate the collectability of its accounts receivable. The Company's reserve for doubtful accounts is estimated by management based on a review of historic losses and the age of existing receivables from specific customers. The Company had no accounts receivable as of September 30, 2010 and 2009.
   4
 
 Concentration of Credit Risk
 
 During the nine months ended September 30, 2009, one customer accounted for 100% of the Company's revenue. For the nine months ended September 30, 2010 the Company had $0 in revenue.  The Company currently is adding additional costumers to reduce the concentration of credit risk.
 
 Income Taxes
 
 The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes.” Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Due to the net loss incurred in all periods, there is no provision for income taxes provided as a full valuation allowance has been established.
 
 Net Loss Per Share
 
 Basic and diluted net losses per common share are presented in accordance with FASB ASC 260, “Earning Per Share,” for all periods presented.
 
 Stock-Based Compensation
  In December 2004, Financial Accounting Standards Board (FASB) issued FASB ASC 718 (revised 2004), Share-Based Payment, (SFAS No. 123(R)) which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). SFAS No. 123(R) supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, (APB No. 25). SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Additionally, SFAS No. 123(R) amends the presentation of the statement of cash flows and requires additional annual disclosures. SFAS No. 123(R) is effective for public companies beginning with the first interim period that begins after June 15, 2005. In April 2005, the Securities and Exchange Commission adopted a new rule that postponed the effective date for SFAS No. 123(R) to the fiscal year beginning after June 15, 2005. The Company has adopted SFAS No. 123(R) on January 1, 2006, but as the Company does not have an option plan, there will be no effect upon implementation.
 
 Goodwill and Indefinite-Lived Intangible Assets
 
 In accordance with FASB ASC 350, "Goodwill and Other Intangible Assets," goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with FASB ASC 350.
 
 If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. FASB ASC 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value. The Company as of December 31, 2009 had recorded $53,794 as an intangible asset associated with the acquisition of the sales and marketing agreement with CICO. After execution of this agreement CICO was forced to temporarily suspend mining operations due to the collateral impact of a major earthquake in China. CICO through a common officer of the Company, provided additional funding to the Company for continuing operations to reduce the impact of a lack of commission sales. However, based upon information received by the Company during the three month period ending September 30, 2009, the Company no longer has a good faith belief that it will realize any future value under the terms of the marketing agreement with CICO. Accordingly, the Company has provided for an impairment loss equal to the total value of its intangible asset as of September 30, 2010.
 
 Long-Lived Assets
 
 The Company's accounting policy regarding the assessment of the recoverability of the carrying value of long-lived assets, including property and equipment and purchased intangible assets with finite lives, is to review the carrying value of the assets, annually, during the fourth quarter, or whenever events or changes in circumstances indicate that they may be impaired. If this review indicates that the carrying value will not be recoverable, as determined based on the projected undiscounted future cash flows, the carrying value is reduced to its estimated fair value.
 
 
 5
 
 
 NOTE 3 – RECENT ACCOUNTING STANDARDS & PRONOUNCEMENTS
 
 In January 2010, the FASB has published ASU 2010-01 “Equity (Topic 505)- Accounting for Distributions to Shareholders with Components of Stock and Cash—a consensus of the FASB Emerging Issues Task Force,” as codified in ASC 505,. ASU No. 2010-01 clarifies the treatment of certain distributions to shareholders that have both stock and cash components. The stock portion of such distributions is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.  Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements; however, it may affect any future stock distributions.
 
 NOTE 4 – AGREEMENTS
 
 On April 12, 2008, the Company entered in to a 6 month employment agreement with its former Assistant Secretary and was obligated to pay to Assistant Secretary $5,000 on the 15th of every month beginning June 1, 2008 and ending December 31, 2008. On December 9, 2008, the agreement was extended until June 30, 2009. On July 15, 2009, the Company entered into a 12 month employment agreement with its current Assistant Secretary and is obligated to pay him $3,000 on the 15th of every month. As of September 30, 2010, the Company has accrued salary payable of $39,000 to its current Assistant Secretary.
 
 On December 1, 2007 the Company entered into a 12 month consulting agreement with a consulting company to provide regulatory compliance, business development and other ancillary business services. The Company is obligated to pay the Consultant $5,000 per month, beginning December 1, 2007 and ending November 30, 2008. On December 9, 2008, the agreement was extended until June 30, 2009. On July 15, 2009, the Company entered into a 12 month consulting agreement with its current Assistant Secretary who is also a licensed CPA in the State of Florida, and, is obligated to pay his professional firm $3,000 on the 1st day of every month.
 
 The consultant agreements have been extended on a month to month basis through September, 2010. The employment agreement has been extended to July 15, 2011.
  NOTE 5 – RELATED PARTY TRANSACTIONS
 
 A related party to CICO, and a shareholder of the Company, has advanced funds to meet certain obligations of the Company, primarily professional fees and general corporate expenses. As of September 30, 2010 the Company is indebted to this party for $90,000, due on demand without interest.
 
 An officer of the Company is also a principal of a firm which acts as a consultant to the Company. Periodically, the Company has advanced funds on behalf of this individual and his professional firm for product research, marketing development, financial services and other costs. As of September 30, 2010 the Company has a net receivable from the firm of $7,212, which is due on demand without interest
 
 NOTE 6 – SUBSEQUENT EVENTS
 
 Management evaluated all activities of the Company through the issuance date of the Company’s consolidated financial statements and concluded that no subsequent events have occurred that would require adjustments or disclosures into the consolidated financial statements.
 
 
 6
 
  Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operation
 
 The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this 10-Q. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
 
 BUSINESS OVERVIEW
 
 We were incorporated on December 17, 1999 under the laws of the State of Florida to engage in any lawful corporate undertaking. In June, 2005 pursuant to a Stock Purchase Agreement and Share Exchange between the Company and BioTex Corp.(“Corp”), a Florida corporation, whereby the Company purchased all of the outstanding shares of Corp. and Corp. became a wholly owned subsidiary of the Company.  BioTex Corp was established in 2003 to develop and employ technologies from around the world to process biomass (plant derived) waste, extract the usable fractions, and then utilize or sell those extractions in further downstream processes.
 
 On December 30, 2005, pursuant to a Stock Purchase Agreement and Share Exchange by and among the Company, Corp and BTX Holdings, Inc., a Florida corporation (“BTX”), BTX purchased all of the outstanding shares of Corp. Pursuant to the Agreement, the Company transferred all of the outstanding shares of Corp. to BTX and Corp. became a wholly owned subsidiary of BTX. Since the Company had no other assets than Corp. and all of the shares of Corp. were transferred to BTX, the Company became a shell company as defined in Rule 12b-2 of the Exchange Act.
 
 On October 22, 2007, we entered into an Agreement with Sichuan Chaolei Stock Industry Co., Ltd, (“CICO”) a company located in Chengdu, Sichuan Province, People’s Republic of China.  Pursuant to the agreement, we acquired a Sales and Marketing Agreement from CICO for 53,793,990 shares of our common stock which provided for us to become the exclusive sales and marketing agent for CICO.  The acquisition was approved by the unanimous consent of our Board of Directors on October 22, 20007.  Pursuant to the Agreement, we filed an amendment in the State of Florida changing the name of the company to Chaolei Marketing and Finance Company. Pursuant to the Sales and Marketing Agreement, we will receive a commission of 10% of CICO’s worldwide revenues from all sources.  While we have signed supply contracts with 2 major customers during the 4th Quarter of 2007.  There is a question if silicon sales will ever commence. We have been informed that the company is seeking a joint venture Partner or sale of its assets to a new company which would impair future revenues.
 
 During the second quarter of 2008, an earthquake struck Sichuan Province, China.  The effects of this earthquake are still being felt.  Our main supplier, SichauanChaolei Industry Stock Co., Ltd is located in Sichuan province.  As a result of the earthquake, CICO was forced to halt its mining operations. It is seeking new financing or a new joint venture partner to continue its operations.There is a question if silicon sales will ever commence.
 
 We are actively seeking additional companies for representation for marketing. No assurance can be given that such new relationships can be obtained.
 
 Results of Operations for the Three Months Ended September 30, 2010 Compared to the Three Months Ended September 30, 2009 and the Nine Months Ended September 30, 2010 Compared to the nine Months Ended September 30, 2009
 
 The following table presents the statement of operations for the three and nine months ended September 30, 2010 as compared to the three months and nine months ended September 30, 2009. The discussion following the table is based on these results.
 
 For The Three Months Ended September 30,


For The Nine Months Ended September 30,2010

2009


2010


2009REVENUE

$
-


$
-


$
-


$
15,677Total operating expenses


66,920



26,319



119,414



111,793NET INCOME (LOSS)

$
(66,920
)

$
(26,319
)

$
(119,414
)

$
(96,116
)
 
 
 7
  
 Total Revenues
 
 We had revenues of $0 for the three months ended September 30, 2010 and $0 for the three months ended September 30, 2009.  We had revenues of $0 for the nine months ended September 30, 2010 and $15,677 for the nine months ended September 30, 2009.
 
 This decrease in revenue is attributable to the reduced receipt of commissions on sales of Sichuan Chaolei Industry Stock Co, Ltd. pursuant to a Sales and Marketing Agreement entered into by the Companies on October 17, 2007, due to the earthquake in Sichuan Province in May 2008 which slowed the production and sales of silicon products.
 
 Operating Expenses
 
 Operating expenses for the three months ended September 30, 2010 increased to $66,920 from $26,319 for the three months ended September 30, 2009 representing an increase of $40,601.  Operating expenses for the nine months ended September 30, 2010 increased to $119,414 from $111,793 for the Nine months ended September 30, 2009 representing an increase of $7,621.
 
 The increase is attributable to cost involved in the payment of professional fees in the operations of our business pursuant to a Sales and Marketing Agreement entered into by the Company and Sichuan Chaolei Industry Stock Co., Ltd. on October 17, 2007.
 
 Net income (loss)
 
 Net loss was $66,920 for the three months ended September 30, 2010, compared to net loss $26,319 for the same period ended September 30, 2009, an increase of $40,601.  Net loss was $119,414 for the Nine months ended September 30, 2010, compared to net loss $96,116 for the same period ended September 30, 2009, an increase of $23,298.  Our net losses increased because of an increase in compensation to officer and consulting fees. Revenues continue to be effected due to the lingering effects of an earthquake in Sichuan Province, China in May 2008.  This earthquake, in turn, affected the production abilities of Sichuan Chaolei Industry Stock Co, Ltd., our sole source of revenue.  Our expenses increased during this period for the operations of our business pursuant to a Sales and Marketing Agreement entered into by the Company and Sichuan Chaolei Industry Stock Co, Ltd. on October 17, 2007.
 
 Liquidity and Capital Resources
 
 As of September 30, 2010, we have assets of $7,212 consisting of cash and receivables of $7,212 and intangible assets of $0 and total liabilities of $180,912, consisting of accounts payable and accrued expenses of $90,912 of and advances related party $90,000, compared with December 31, 2009 when we had assets of $56,094 consisting of cash of $2,300  and intangible assets of $53,794 and total liabilities of $110,380, consisting of accounts payable  and accrued expenses of $50,380 and advances related party $60,000.
 
 We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our plan of operations.
 
 We intend to hire additional employees for sales, administrative and finance support staff as necessary, though we have no time frame in which we expect to hire such staff. Additional sales staff, when required, will be hired on a commission basis, and administrative and finance support staff will only be hired when revenues are such that the company can support such a staff.   Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goal of profit, revenue and growth.
 
 The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and status of our business plan. In the event we are not successful in reaching our initial revenue targets, additional funds may be required and we would then not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we could incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our business operations to cover our operating expenses.
 
 We anticipate that our operational, and general and administrative expenses for the next 12 months will total approximately $188,200. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
 
   8
 
 Critical Accounting Policies
 
 Our significant accounting policies are summarized in Note 2 of our financial statements included in our annual report on Form 10-K for the year ended December 31, 2009. Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
 
 Recent Accounting Pronouncements
 
 In January 2010, the FASB has published ASU 2010-01 “Equity (Topic 505)- Accounting for Distributions to Shareholders with Components of Stock and Cash—a consensus of the FASB Emerging Issues Task Force,” as codified in ASC 505,. ASU No. 2010-01 clarifies the treatment of certain distributions to shareholders that have both stock and cash components. The stock portion of such distributions is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.  Early adoption is permitted.  The adoption of this standard is not expected to have a material impact (any impact) on the Company’s (consolidated) financial position and results of operations. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements; however, it may affect any future stock distributions.
 
 Off-Balance Sheet Arrangements
 
 We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
 
 Item 3.     Quantitative and Qualitative Disclosures about Market Risks
 
 Not applicable because we are a smaller reporting company.
  Item 4T.     Controls and Procedures
 
 Evaluation of Disclosure Controls and Procedures
 
 Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
 
 Changes in Internal Controls
 
 There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
 9
 PART II - OTHER INFORMATION
 
 Item 1. Legal Proceedings
 
 We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
 
 Item 1A. Risk Factors
 
 Not applicable because we are a smaller reporting company.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 None.
 
 Item 3. Defaults Upon Senior Securities
 
 None.
 
 Item 4. (Removed and Reserved)
 
 None.
 
 Item 5. Other Information
 
 None.
 
 Item 6. Exhibits
 
 31.1 Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer
 32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
 
 10
   SIGNATURES
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 CHAOLEI MARKETING AND FINANCE COMPANYDate: November 22, 2010
By:
/s/ Luo FanLuo FanChairman of the Board of Directors,

Chief Executive Officer,

Chief Financial Officer, Controller,

Principal Accounting Officer
 
 
 11