##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2008
 o
    
    Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period            to
 Commission File Number 000-50550
 
 CHINACAST EDUCATION CORPORATION
  Delaware
(State or Other Jurisdiction ofIncorporation or Organization)
    
    20-0178991
(I.R.S. Employer Identification Number)
 15F Reignwood Center,
8 Yong An Dongli
Jianguo Menwai Avenue,
Beijing, 100022, Peoples Republic of China
 (8610) 6566-7788
 Great Wall Acquisition Corporation
 þ o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ
  o þ




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TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2.Managements Discussion and Analysis or Plan of Operation
    
    
    15Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4.Controls and Procedures
    
    
    21Item 4A.Controls and Procedures
    
    
    21PART II OTHER INFORMATION
    
    
    22Item 1.Legal Proceedings
    
    
    22Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3.Defaults Upon Senior Securities
    
    
    22Item 4.Submission of Matters To a Vote of Security Holders
    
    
    22Item 5.Other Information
    
    
    22Item 6.Exhibits
    
    
    22EX-31.1 CERTIFICATION OF CEO PURSUANT TO SEC 302EX-31.2 CERTIFICATION OF CFO PURSUANT TO SEC 302EX-32.1 CERTIFICATION OF CEO PURSUANT TO SEC 906EX-32.2 CERTIFICATION OF CFO PURSUANT TO SEC 906
  2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CHINACAST EDUCATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share-related data)
 As of
    
    As ofJune 30, 2008
    
    December 31, 2007US$
    
    RMB
    
    RMB(Note 1)AssetsCurrent assets:Cash and cash equivalents
    
    
    2,869
    
    
    
    19,799
    
    
    
    138,610Term deposits
    
    
    54,115
    
    
    
    373,396
    
    
    
    596,768Accounts receivable, net of allowance of RMB148 for both 2008 and 2007
    
    
    5,664
    
    
    
    39,078
    
    
    
    35,316Inventory
    
    
    288
    
    
    
    1,986
    
    
    
    2,015Prepaid expenses and other current assets
    
    
    1,397
    
    
    
    9,644
    
    
    
    7,127Amounts due from related parties
    
    
    303
    
    
    
    2,088
    
    
    
    3,248Total current assets
    
    
    64,636
    
    
    
    445,991
    
    
    
    783,084Non-current deposits
    
    
    195
    
    
    
    1,350
    
    
    
    1,948Property and equipment, net
    
    
    32,893
    
    
    
    226,959
    
    
    
    11,107Land use rights
    
    
    19,780
    
    
    
    136,485
    
    
    
    Acquired intangible assets, net
    
    
    8,775
    
    
    
    60,546
    
    
    
    21,781Long-term investments
    
    
    1,500
    
    
    
    10,349
    
    
    
    11,165Non-current advances to a related party
    
    
    16,123
    
    
    
    111,246
    
    
    
    119,914Goodwill
    
    
    42,184
    
    
    
    291,069
    
    
    
    1,715Total assets
    
    
    186,086
    
    
    
    1,283,995
    
    
    
    950,714Liabilities, minority interest, and shareholders equity
Current liabilities:Accounts payable
    
    
    3,473
    
    
    
    23,965
    
    
    
    13,027Accrued expenses and other current liabilities
    
    
    24,217
    
    
    
    167,099
    
    
    
    53,376Income taxes payable
    
    
    6,576
    
    
    
    45,374
    
    
    
    31,237Other
borrowings
    
    
    1,200
    
    
    
    8,280
    
    
    
    Current
portion of long-term bank loans
    
    
    10,638
    
    
    
    73,400
    
    
    
    Current
portion of capital lease obligation
    
    
    
    
    
    
    
    
    
    
    34Total current liabilities
    
    
    46,104
    
    
    
    318,118
    
    
    
    97,674Non-current liabilities:Long-term
bank loans
    
    
    725
    
    
    
    5,000
    
    
    
    Deferred tax liabilities
    
    
    4,076
    
    
    
    28,123
    
    
    
    Unrecognized tax benefits
    
    
    5,032
    
    
    
    34,723
    
    
    
    27,892Total non-current liabilities
    
    
    9,833
    
    
    
    67,846
    
    
    
    27,892Total liabilities
    
    
    55,937
    
    
    
    385,964
    
    
    
    125,566Minority interest
    
    
    5,783
    
    
    
    39,902
    
    
    
    20,512Commitments
and contingencies (Note 14)Shareholders equity:Ordinary shares (US$0.0001 par value; 100,000,000 shares authorized
in 2008 and 2007; 31,289,742 and 27,292,641 shares issued and
outstanding in 2008 and 2007, respectively)
    
    
    3
    
    
    
    24
    
    
    
    21Subscription receivable
    
    
    (12,706
    )
    
    
    (87,670
    )
    
    
    Additional paid-in capital
    
    
    126,932
    
    
    
    876,724
    
    
    
    768,844Statutory reserve
    
    
    3,118
    
    
    
    21,513
    
    
    
    16,087Accumulated other comprehensive loss
    
    
    (790
    )
    
    
    (5,451
    )
    
    
    (5,205
    )Retained earnings
    
    
    7,809
    
    
    
    52,989
    
    
    
    24,889Total shareholders equity
    
    
    124,366
    
    
    
    858,129
    
    
    
    804,636Total liabilities, minority interest, and shareholders equity
    
    
    186,086
    
    
    
    1,283,995
    
    
    
    950,714
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CHINACAST EDUCATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except share-related data)
 For the three months ended June 30,
    
    For the six months ended June 30,2008
    
    2008
    
    2007
    
    2008
    
    2008
    
    2007US$
    
    RMB
    
    RMB
    
    US$
    
    RMB
    
    RMB(Note 1)
    
    
    
    
    
    
    
    
    
    (Note 1)Revenues:Service
    
    
    10,262
    
    
    
    70,808
    
    
    
    34,487
    
    
    
    16,089
    
    
    
    111,013
    
    
    
    68,022Equipment
    
    
    451
    
    
    
    3,115
    
    
    
    7,786
    
    
    
    3,247
    
    
    
    22,404
    
    
    
    14,10610,713
    
    
    
    73,923
    
    
    
    42,273
    
    
    
    19,336
    
    
    
    133,417
    
    
    
    82,128Cost of revenues:Service
    
    
    (4,419
    )
    
    
    (30,496
    )
    
    
    (10,333
    )
    
    
    (6,156
    )
    
    
    (42,482
    )
    
    
    (21,089
    )Equipment
    
    
    (448
    )
    
    
    (3,090
    )
    
    
    (8,168
    )
    
    
    (3,217
    )
    
    
    (22,195
    )
    
    
    (14,411
    )(4,867
    )
    
    
    (33,586
    )
    
    
    (18,501
    )
    
    
    (9,373
    )
    
    
    (64,677
    )
    
    
    (35,500
    )Gross profit
    
    
    5,846
    
    
    
    40,337
    
    
    
    23,772
    
    
    
    9,963
    
    
    
    68,740
    
    
    
    46,628Operating (expenses) income:Selling and marketing expenses
(including share-based
compensation of RMB1,392 and
RMBnil for the six months ended
June 30 for 2008 and 2007,
respectively, share-based
compensation of RMB111 and
RMBnil for the three months ended
June 30 for 2008 and 2007,
respectively)
    
    
    (128
    )
    
    
    (882
    )
    
    
    (2,086
    )
    
    
    (633
    )
    
    
    (4,369
    )
    
    
    (2,765
    )General and administrative
expenses (including share-based
compensation of RMB9,964 and
RMBnil for the six months ended
June 30 for 2008 and 2007,
respectively, share-based
compensation of RMB2,130 and
RMBnil for the three months ended
June 30 for 2008 and 2007,
respectively)
    
    
    (1,766
    )
    
    
    (12,183
    )
    
    
    (10,930
    )
    
    
    (4,407
    )
    
    
    (30,399
    )
    
    
    (20,998
    )Foreign exchange loss
    
    
    (27
    )
    
    
    (186
    )
    
    
    (2,299
    )
    
    
    (94
    )
    
    
    (651
    )
    
    
    (3,143
    )Management service fee
    
    
    289
    
    
    
    1,993
    
    
    
    7,128
    
    
    
    405
    
    
    
    2,791
    
    
    
    11,829Total operating expenses, net
    
    
    (1,632
    )
    
    
    (11,258
    )
    
    
    (8,187
    )
    
    
    (4,729
    )
    
    
    (32,628
    )
    
    
    (15,077
    )Income from operations
    
    
    4,214
    
    
    
    29,079
    
    
    
    15,585
    
    
    
    5,234
    
    
    
    36,112
    
    
    
    31,551Interest income
    
    
    829
    
    
    
    5,721
    
    
    
    3,917
    
    
    
    1,677
    
    
    
    11,573
    
    
    
    6,822Interest expense
    
    
    (26
    )
    
    
    (182
    )
    
    
    (2
    )
    
    
    (27
    )
    
    
    (186
    )
    
    
    (30
    )Income before provision for
income taxes, earnings in
equity investments, and
minority interest and
discontinued operations
    
    
    5,017
    
    
    
    34,618
    
    
    
    19,500
    
    
    
    6,884
    
    
    
    47,499
    
    
    
    38,343Provision for income taxes
    
    
    (871
    )
    
    
    (6,009
    )
    
    
    (4,540
    )
    
    
    (1,430
    )
    
    
    (9,868
    )
    
    
    (8,032
    )Income before earnings in
equity investments, minority
interest, and discontinued
operations
    
    
    4,146
    
    
    
    28,609
    
    
    
    14,960
    
    
    
    5,454
    
    
    
    37,631
    
    
    
    30,311Loss in equity investments
    
    
    (59
    )
    
    
    (408
    )
    
    
    (240
    )
    
    
    (118
    )
    
    
    (816
    )
    
    
    (479
    )Minority interest
    
    
    (356
    )
    
    
    (2,457
    )
    
    
    (649
    )
    
    
    (412
    )
    
    
    (2,841
    )
    
    
    (2,424
    )Income from continuing
operations
    
    
    3,731
    
    
    
    25,744
    
    
    
    14,071
    
    
    
    4,924
    
    
    
    33,974
    
    
    
    27,408Discontinued operations:Loss from discontinued
operations, net of tax RMBnil
for both 2008 and 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (139
    )Minority interest in
discontinued operations, net of
tax RMBnil for both 2008 and
2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (230
    )Loss on discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (369
    )Net income
    
    
    3,731
    
    
    
    25,744
    
    
    
    14,071
    
    
    
    4,924
    
    
    
    33,974
    
    
    
    27,039Net income per shareBasic
    
    
    0.14
    
    
    
    0.94
    
    
    
    0.52
    
    
    
    0.18
    
    
    
    1.24
    
    
    
    1.05Diluted
    
    
    0.14
    
    
    
    0.94
    
    
    
    0.49
    
    
    
    0.18
    
    
    
    1.22
    
    
    
    0.99Weighted average shares used in
computation:Basic
    
    
    27,385,554
    
    
    
    27,385,554
    
    
    
    26,954,945
    
    
    
    27,341,405
    
    
    
    27,341,405
    
    
    
    25,840,030Diluted
    
    
    27,385,554
    
    
    
    27,385,554
    
    
    
    28,463,653
    
    
    
    27,838,906
    
    
    
    27,838,906
    
    
    
    27,313,016
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CHINACAST EDUCATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
 For the six months ended June 30,2008
    
    2008
    
    2007US$
    
    RMB
    
    RMB(Note 1)Cash flows from operating activities:Net income
    
    
    4,924
    
    
    
    33,974
    
    
    
    27,039Adjustments to reconcile net income to net cash provided
by (used in) operating activities:Minority interest in continuing operations
    
    
    412
    
    
    
    2,841
    
    
    
    2,424Minority interest in discontinued operations
    
    
    
    
    
    
    
    
    
    
    230Depreciation and amortization
    
    
    1,789
    
    
    
    12,348
    
    
    
    2,921Share-based compensation
    
    
    1,646
    
    
    
    11,356
    
    
    
    Loss in equity investments
    
    
    118
    
    
    
    816
    
    
    
    479Changes in assets and liabilities:Accounts receivable
    
    
    (665
    )
    
    
    (4,586
    )
    
    
    (7,698
    )Inventory
    
    
    4
    
    
    
    29
    
    
    
    (145
    )Prepaid expenses and other current assets
    
    
    (322)
    
    
    
    (2,223)
    
    
    
    (2,076
    )Non-current deposits
    
    
    157
    
    
    
    1,081
    
    
    
    Amounts due from related parties
    
    
    168
    
    
    
    1,160
    
    
    
    1,087Accounts payable
    
    
    194
    
    
    
    1,338
    
    
    
    4,717Accrued expenses and other current liabilities
    
    
    (2,052
    )
    
    
    (14,165
    )
    
    
    (46,918
    )Amounts due to related parties
    
    
    
    
    
    
    
    
    
    
    (292
    )Income taxes payable
    
    
    1,117
    
    
    
    7,707
    
    
    
    2,623Deferred taxes assets
    
    
    
    
    
    
    
    
    
    
    86Deferred taxes liabilities
    
    
    (118
    )
    
    
    (816
    )
    
    
    Unrecognised tax benefits
    
    
    (1
    )
    
    
    (6
    )
    
    
    750Net cash provided by (used in) operating activities
    
    
    7,371
    
    
    
    50,854
    
    
    
    (14,773
    )Cash flows from investing activities:Repayment from advance to related parties
    
    
    1,278
    
    
    
    8,817
    
    
    
    1,811Advance to related parties
    
    
    (22
    )
    
    
    (149
    )
    
    
    (1,443
    )Purchase of
subsidiaries, net of cash acquired
    
    
    (59,950
    )
    
    
    (413,657
    )
    
    
    Purchase of property and equipment
    
    
    (513
    )
    
    
    (3,536
    )
    
    
    (1,298
    )Term deposits
    
    
    32,373
    
    
    
    223,372
    
    
    
    41,487Proceeds from disposal of discontinued operations,
net of cash disposed of
    
    
    
    
    
    
    
    
    
    
    (9,113
    )Net cash used in investing activities
    
    
    (26,834
    )
    
    
    (185,153
    )
    
    
    31,444Cash flows from financing activities:Other
borrowings raised
    
    
    243
    
    
    
    1,680
    
    
    
    Exercise of
warrants, net of expense of RMB600
    
    
    2,038
    
    
    
    14,064
    
    
    
    Repayment of capital lease obligation
    
    
    (5
    )
    
    
    (32
    )
    
    
    (76
    )Repayment of advances from related parities
    
    
    
    
    
    
    
    
    
    
    (4,251
    )Net cash provided by (used in) financing activities
    
    
    2,276
    
    
    
    15,712
    
    
    
    (4,327
    )Effect of foreign exchange rate changes
    
    
    (32
    )
    
    
    (224
    )
    
    
    (1,704
    )Net decrease in cash and cash equivalents
    
    
    (17,219
    )
    
    
    (118,811
    )
    
    
    10,640Cash and cash equivalents at beginning of the period
    
    
    20,088
    
    
    
    138,610
    
    
    
    278,067Cash and cash equivalents at end of the period
    
    
    2,869
    
    
    
    19,799
    
    
    
    288,707
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NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(In thousands, except share-related data)
 1.
    
    BASIS OF PREPARATION
 The accompanying unaudited condensed consolidated financial statements of ChinaCast Education
Corporation (CEC, formerly Great Wall Acquisition Corporation (Great Wall)) have been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC)
regarding interim financial reporting. Accordingly, they do not include all of the information
and notes required by accounting principles generally accepted in the United States of America
(US GAAP) for complete financial statements and should be read in conjunction with the audited
financial statements included in CECs Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2007.In the opinion of the management of CEC, the accompanying unaudited condensed consolidated
financial statements are prepared on the same basis as the audited financial statements, and
these unaudited condensed consolidated financial statements reflect all adjustments, consisting
only of normal recurring adjustments necessary for a fair presentation of the results of the
interim periods presented. The results of operations for the interim periods presented are not
necessarily indicative of the operating results expected for any subsequent interim period or
for CECs fiscal year ending December 31, 2008.The accompanying unaudited condensed consolidated financial statements include the accounts of
CEC, its subsidiaries, and variable interest entities (collectively, the Company). All
significant intercompany balances and transactions have been eliminated in consolidation.
 Significant Accounting Policies
 The accompanying unaudited condensed consolidated financial statements have been using the same
accounting policies used in the preparation of the audited financial
statements included in CECs Annual Report on Form 10-KSB
for the fiscal year
ended December 31, 2007, except for the following additional accounting policies adopted in
connection with the acquisition set out in Note 4:Revenues from bachelor degree and diploma program offerings, representing
tuition fees and accommodation and catering service income, are
recognized on a straight-line basis over the service period.Customer relationship acquired is being amortized using
the accelerated amortization method over 41 months based on the estimated progression of the students
through the respective courses, giving consideration to the revenue and cash flow associated.
 Convenience Translation
 Amounts in United States dollars (US$) are presented solely for the convenience of readers and
an exchange rate of RMB6.9 to US$1 was applied as of June 30, 2008. Such transaction should not
be construed to be the amounts that would have been reported under US GAAP.
 The Share Exchange Transaction
 On December 22, 2006, Great Wall consummated the voluntary conditional offer (the Offer) made
in Singapore to acquire all of the outstanding ordinary shares of ChinaCast Communication
Holdings Limited (ChinaCast). Pursuant to the terms of the Offer, ChinaCast shareholders had
the option to receive either shares of CEC or a cash payment for each ChinaCast share tendered.
On January 18, 2007, the closing date of the Offer, total shares acquired were 80.27%. Since
Great Wall was not an operating company and the shareholders of ChinaCast control the combined
company after the above transaction consummated on December 22, 2006 (the Share Exchange
Transaction), the Share Exchange Transaction was accounted for as a recapitalization in which
ChinaCast was the accounting acquirer. The cash consideration paid as part of the Offer was
accounted for as a capital distribution. For purposes of the preparation of the consolidated
financial statements, the consummation date was designed as the effective date when 80.27% of
the outstanding ordinary shares of ChinaCast were acquired by Great Wall and the remaining
outstanding ordinary shares of ChinaCast not acquired by Great Wall were reported as minority
interest for all the periods presented.During the year ended December 31, 2007, CEC acquired additional shares by issuing shares of CEC
and cash amount to RMB5,793 to certain original ChinaCast shareholders and, as of July 11,
2007, CEC increased its holdings to 100% of the outstanding ordinary shares of ChinaCast. The
19.73% of the additional shares acquired were accounted for on the same basis as the Share
Exchange Transaction.
 2.
    
    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 In December 2007, the Financial Accounting Standard Board (FASB) issued Standard of Financial
Accounting Standards (SFAS) No. 141R, Business Combination, to improve reporting creating
greater consistency in the accounting and financial reporting of business combinations. The
standard requires the acquiring entity in a business combination to recognize all (and only) the
assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair
value as the measurement objective
 6




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for all assets acquired and liabilities assumed; and requires the acquirer to disclose to
investors and other users all of the information they need to evaluate and understand the nature
and financial effect of the business combination. SFAS No. 141R applies prospectively to
business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2008. An entity may not apply it
before that date. The Company is currently evaluating whether the adoption of SFAS No. 141R
will have a significant effect on its consolidated financial position, results of operations or
cash flows.In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements to improves the relevance, comparability, and transparency of financial
information provided to investors by requiring all entities to report noncontrolling (minority)
interests in subsidiaries in the same way as required in the consolidated financial statements.
Moreover, SFAS No. 160 eliminates the diversity that currently exists in accounting for
transactions between an entity and noncontrolling interests by requiring they be treated as
equity transaction. SFAS No. 160 is effective for fiscal years, and interim periods within
those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited.
The Company is currently evaluating whether the adoption of SFAS No. 160 will have a significant
effect on its consolidated financial position, results of operations or cash flows.
 3.
    
    DISCONTINUED OPERATIONS
 As of December 31, 2006, the Company had a 50% stake in Beijing Tongfang Digital Education
Technology Limited (Tongfang) and Tongfang had a 51% stake in Beijing Tongfang Chuangxin
Technology Limited (Tongfang Chuangxin). The Company considers Tongfang and Tongfang Chuangxin
as subsidiaries due to the fact that the Company controls the entities by having the majority
voting rights in the board of directors of Tongfang who in turn holds a majority ownership
interest in Tongfang Chuangxin. On February 9, 2007, the Company completed the transaction under
a sale and purchase agreement with Tongfang Co. Limited to dispose all of its shareholding in
Tongfang in return for a 17.85% interest in Tongfang Chuangxin. As part of the consideration for
the sale, the Company offset the RMB6,300 payable to Tongfang Co. Limited against the sale
proceeds. No significant gain or loss was reported as a result of the sale. Tongfang ceased to
be a subsidiary of the Company and the Company has accounted for its investment in Tongfang
Chuangxin amounting to RMB8,936 under the cost method of accounting thereafter.The following was a summary of the assets and liabilities associated with the discontinued
operations as of February 9, 2007:
 As ofFebruary 9, 2007RMBCurrent assets of discontinued operations:Cash and cash equivalents
    
    
    9,113Accounts receivable, net
    
    
    2,715Prepaid expenses and other current assets
    
    
    1,73213,560Non-current assets of discontinued operations:Property and equipment, net
    
    
    1,433Acquired intangible assets, net
    
    
    13,58115,014Current liabilities of discontinued operations:Accounts payable
    
    
    1,355Accrued expenses and other current liabilities
    
    
    6,8848,239Minority interest
    
    
    6,694Attributable goodwill
    
    
    1,595
  For the three months ended June 30,
    
    For the six months ended June 30,2008
    
    2007
    
    2008
    
    2007RMB
    
    RMB
    
    RMB
    
    RMBRevenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,096Loss before provision of
income taxes from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (139
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (230
    )Loss from discontinued
operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (369
    )Reduction in net income
per share of the Company
 basic and diluted
    
    
    
     
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
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4.
    
    ACQUISITION
 On April 11, 2008, Yu Pei Information Technology (Shanghai) Limited, the Companys subsidiary in
the Peoples Republic of China (the PRC), consummated the
acquisition of an 80% interest in Hai Lai Education Technology Limited (Hai
Lai) from Beijing Heng Tai Jufu Investment Limited. Hai Lai holds the entire interest in the
Foreign Trade and Business College of Chongqing Normal University (FTBC) and Hai Yuen
Company Limited (Heng Tai). FTBC is a private college affiliated with Chongqing Normal University. The
consideration for the acquisition was RMB480,000, of which RMB424,000 was paid and the
remaining balance of RMB56,000 was agreed to be paid subsequent to
June 2008. The acquisition was
recorded using the purchase method of accounting and, accordingly, the acquired assets and
liabilities were recorded at their estimated fair market value at the
date of acquisition. The preliminary purchase price allocation, which
was based on managements estimates and assumptions, was as
follows:
 AmortizationRMB
    
    periodCash

    
    
    10,343Other current assets

    
    
    323Non-current
deposits

    
    
    523Property and equipment and land use rights

    
    
    355,450
    
    
    4-50 yearsIntangible assets:Customer
relationship (allocated to the TUG as set out in Note 11)

    
    
    45,049
    
    
    41 monthsGoodwill
(allocated to the TUG as set out in Note 11)

    
    
    289,417Bank and
other borrowings

    
    
    (65,000
    )Other current liabilities

    
    
    (83,779
    )Deferred tax liabilities

    
    
    (28,939
    )Long-term bank loans

    
    
    (20,000
    )Unrecognized tax benefits

    
    
    (6,837
    )Minority interest

    
    
    (16,550
    )Total

    
    
    480,000
 
 The Company believes that the acquisition furthers its
strategy of expanding into the post-secondary bricks and mortar
education market. The combination of these factors is the rationale
for the excess of purchase price over the value of the assets
acquired and liabilities assumed.
 Pro forma
 The following supplemental unaudited pro forma results of operations for the three months
ended June 30, 2008 and 2007 and for the six months ended June 30, 2008 and 2007 presented
the acquisition as if it had occurred on January 1, 2008 and 2007. The unaudited pro forma
results include estimates and assumptions regarding amortization of acquired intangible
assets which the Company believes are reasonable. However, pro forma results are not
necessarily indicative of the results that would have occurred if the acquisition had
occurred on the dates, indicated, or that may result in the future:
 For the three months ended June 30,
    
    For the six months ended June 30,2008
    
    2007
    
    2008
    
    2007RMB
    
    RMB
    
    RMB
    
    RMBNet revenues
    
    
    77,222
    
    
    
    66,920
    
    
    
    163,713
    
    
    
    124,773Net income attributable to
holders of ordinary shares
    
    
    26,220
    
    
    
    16,282
    
    
    
    37,706
    
    
    
    30,916Net income per share  basic
    
    
    0.96
    
    
    
    0.60
    
    
    
    1.38
    
    
    
    1.20Net income per share  diluted
    
    
    0.96
    
    
    
    0.57
    
    
    
    1.35
    
    
    
    1.13
 5.
    
    NON-CURRENT DEPOSITS
 Non-current deposits consisted of the following:
 As of June 30,2008
    
    As of December 31,2007RMB
    
    RMBRental deposits
    
    
    1,350
    
    
    
    1,948
 Rental deposits represented satellite rental deposit for ChinaCast satellite business
operations and office rental deposits for the Companys daily operations. These deposits are
classified into non-current deposits since they will not be refunded within one year.
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6.
    
    COMPREHENSIVE INCOME
  For the three months ended June 30,
    
    For the six months ended June 30,2008
    
    2007
    
    2008
    
    2007RMB
    
    RMB
    
    RMB
    
    RMBNet income
    
    
    25,744
    
    
    
    14,071
    
    
    
    33,974
    
    
    
    27,039Foreign currency translation adjustment
    
    
    (63
    )
    
    
    (1,317
    )
    
    
    (246
    )
    
    
    (2,915
    )Comprehensive income
    
    
    25,681
    
    
    
    12,754
    
    
    
    33,728
    
    
    
    24,124
 7.
    
    ACQUIRED INTANGIBLE ASSET, NET
 Acquired intangible assets, net consisted of the following:
 As
of June 30, 2008
    
    As of December 31, 2007RMB
    
    RMBBrand name usage right
    
    
    22,532
    
    
    
    22,532Customer relationship
    
    
    45,049
    
    
    
    67,581
    
    
    
    22,532Less: accumulated amortization
    
    
    (7,035
    )
    
    
    (751
    )60,546
    
    
    
    21,781
 On August 30, 2007, the Company acquired 100% of the outstanding registered capital of Modern
English Trademark Limited (MET), in exchange for cash of RMB22,532 (US$3,000). MET has no
assets or liabilities except for a 10-year exclusive brand name usage right. The acquisition was
recorded as an intangible asset, which is being amortized on a straight-line basis over 10
years.For the three months and six months ended June 30, 2008, the Company recorded amortization
expense in respect of the brand name usage right amounting to RMB563 and RMB 1,126
respectively. The Company will record amortization expenses in respect of brand name usage
right of RMB1,127, RMB2,253, RMB2,253, RMB2,253, RMB12,769 in 2008, 2009, 2010, 2011 and 2012
and thereafter, respectively.On April 11, 2008, the Company acquired customer relationship through an acquisition (see Note 4).
The customer relationship is being amortized using accelerated amortization method over 41
months based on the estimated progression of the students through the respective courses,
giving consideration to the revenue and cash flow associated.For the three months and six months ended June 30, 2008, the Company recorded amortization
expense in respect of the customer relationship amounting to RMB5,158 and RMB 5,158
respectively. The Company will record amortization expenses in respect of customer relationship
of RMB9,793, RMB15,669, RMB9,793 and RMB4,636 in 2008, 2009, 2010 and 2011,
respectively.
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8.
    
    STOCK COMPENSATION PLAN
 2007 Omnibus Securities and Incentive Plan (2007 Plan)Under the 2007 Plan adopted in May 2007, the Company may grant any awards to eligible
participants, including employees, directors or consultants, to purchase up to 2,500,000 ordinary
shares.On July 11, 2007, the Company granted, under the 2007 Plan, 12,500 ordinary shares to its
employees at no consideration. The per share fair value of ordinary shares as of the grant date
was US$5.65 (RMB42.75).On January 11, 2008, the Company granted, under the 2007 Plan, restricted shares to its three
directors at no consideration. Each of the three directors was granted 100,000 restricted shares
of the Companys common stock. All of the shares of restricted stock granted to the directors
were issued at fair market value based on the closing price on January 11, 2008 of US$6.25
(RMB45.38). For each of the three directors of CEC, 10,000, 30,000 and 60,000 restricted shares
were/will be vested on February 9, 2008, February 9, 2009 and February 9, 2010, respectively. On
January 11, 2008, the Company granted, under the 2007 Plan, 1,200,000 share options on the
Companys common stock to selected employees at no consideration. The exercise price of the
share options granted is US$6.30 and the expiry date is January 11, 2018. A total of 401,000, 401,000
and 398,000 share options were/will be vested on March 31, 2008, March 31, 2009 and March 31,
2010, respectively. Upon exercise of these share options, a total of 1,200,000 common stock will be issued. As of June 30, 2008, no restricted shares or share options have been
forfeited.Management used the Black Scholes Model to estimate the fair value of the share options on the
grant date with the following assumptions:
 Expected price volatility
    
    37.6
    %Risk-free interest rate
    
    4.75
    %Expected life
    
    67 monthsExpected dividends
    
    Fair value of ordinary share at grant date
    
    US$
    6.25
 The fair value of the share option on the grant date was US$2.67 (RMB19.33). In calculating the
fair value of the options using the Black Scholes Model, the following major assumptions were used:
 (1)
    
    Volatility
 The volatility of the underlying ordinary shares during the life of the options was
estimated based on the historical stock prices volatility of listed comparable companies
over a period comparable to the expected term of the options.
 (2)
    
    Risk free interest rate
 Risk free interest rate was estimated based on the yield to maturity of China
international government bonds with a maturity period close to the expected term of the
options.
 (3)
    
    Expected term
 As the Company did not have historical share option exercise experience, it estimated
the expected term as the weighted average between the vesting term of the options and
the original contractual term.
 (4)
    
    Dividend yield
 The dividend yield was estimated by the Company based on their expected dividend policy
over the expected term of the options.
 (5)
    
    Exercise price
 The exercise price of the options was determined by the Companys board of directors.
 (6)
    
    Fair value of underlying ordinary shares
 The estimated fair value of the ordinary shares underlying the options as of the grant
date was determined based on the closing price of the ordinary shares traded in NASDAQ
Global Market as of the grant date.
 As of June 30, 2008, 401,000 share options were exercisable. The following table summarized
information with respect to share options outstanding at June 30, 2008:
 Weighted-averageExercise
    
    Number
    
    Remaining
    
    Intrinsicprice
    
    outstanding
    
    contractual life
    
    valueShare options
    
    US$
    6.3
    
    
    
    1,200,000
    
    
    9.5 years
    
    
    
 The aggregate intrinsic value of share options outstanding and exercisable as of June 30, 2008
was US$nil and US$nil, respectively.Total share-based compensation expenses amounting to RMB2,241and RMBnil were recognized for the
three months ended June 30, 2008 and 2007, respectively. Total share-based compensation expenses
amounting to RMB11,356 and RMBnil were recognized for the six months ended June 30, 2008 and
2007, respectively.There was RMB24,445 of total unrecognized compensation expense related to nonvested restricted
shares and share options as of June 30, 2008.As of June 30, 2008, no other awards have been granted under the 2007 Plan.
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##### Table of Contents



9.
    
    INCOME TAXES
 On March 16, 2007, the National Peoples Congress enacted a new enterprise income tax law, which
takes effect from January 1, 2008. The new law applies a uniform 25% enterprise income tax rate
to both foreign invested enterprises and domestic enterprises. The new law provides a five-year
transition period from its effective date for the entitled enterprises which were established
before the promulgation date of the new tax law and which were entitled to a preferential tax
treatment such as a reduced tax rate or a tax holiday. According to transitional rules published
after the new income tax law, one of the Companys major operating subsidiaries, CCT Shanghai,
which was subject to the preferential tax rate of 15%, is now eligible to the phased-in rates,
which is 18% in 2008, 20% in 2009, 22% in 2210, 24% in 2011, 25% in 2012 and thereafter.On April 11, 2008, the Company consummated the acquisition
of an 80% interest in Hai Lai. Hai Lai
holds the entire interest in FTBC and Hai Yuen. Hai Lai was incorporated in the PRC and is subject to PRC income
tax rate of 25% since 2008. Hai Yuen and FIBC were incorporated in
Chongqing of the PRC and are subject to the
preferential tax rate of 15% in accordance with the western development
preferential policy.The Company considers itself to be permanently reinvested with respect to its investment in its
foreign subsidiaries. Accordingly, no deferred income tax liability related to the unremitted
earnings of its foreign subsidiaries has been included in the Companys provision for income
taxes. Upon distribution of subsidiaries earnings in the form of dividends or otherwise, the
Company would be subject to a
withholding tax calculated based on 10% of the gross amount of distribution. Management has
considered the determination of the amount of unrecognized deferred income tax liability to be
not practicable because of the complexities associated with the hypothetical calculation.The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxes  An Interpretation of FASB Statement No. 109 on January 1, 2007. During
the six months ended June 30, 2008, the unrecognized tax benefits increased from RMB27,892 to
RMB34,723.
 10.
    
    NET INCOME PER SHARE
 Reconciliation of the basic and diluted net income per share is as follows:
 For the three months ended June 30,
    
    
    For the six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator used in basic and diluted
net income per share:Income from continuing operations
    
    RMB
    25,744
    
    
    RMB
    14,071
    
    
    RMB
    33,974
    
    
    RMB
    27,408Loss on discontinued operation
    
    RMB
    
    
    
    RMB
    
    
     
    RMB
   
    
    
    RMB
    (369
    )Income attributable to holders of
ordinary shares
    
    RMB
    25,744
    
    
    RMB
    14,071
    
    
    RMB
    33,974
    
    
    RMB
    27,039Shares (denominator):Weighted average ordinary shares
outstanding used in computing
basic net income per share
    
    
    27,385,554
    
    
    
    26,954,945
    
    
    
    27,341,405
    
    
    
    25,840,030Plus:Incremental ordinary shares from
assumed conversions of stock
options and exercises of
Warrants (Note 12)
    
    
    
    
    
    
    1,508,708
    
    
    
    497,501
    
    
    
    1,472,986Weighted average ordinary shares
outstanding used in computing
diluted net income per share
    
    
    27,385,554
    
    
    
    28,463,653
    
    
    
    27,838,906
    
    
    
    27,313,016Net income per sharebasic:Income from continuing operations
    
    RMB
    0.94
    
    
    RMB
    0.52
    
    
    RMB
    1.24
    
    
    RMB
    1.06Loss on discontinued operations
    
    RMB
    
    
    
    RMB
    
    
    
    RMB
    
    
    
    RMB
    (0.01
)Net income
    
    RMB
    0.94
    
    
    RMB
    0.52
    
    
    RMB
    1.24
    
    
    RMB
    1.05Net income per sharediluted:Income from continuing operations
    
    RMB
    0.94
    
    
    RMB
    0.49
    
    
    RMB
    1.22
    
    
    RMB
    1.00Loss on discontinued operations
    
    RMB
    
    
    
    RMB
    
    
    
    RMB
    
    
    
    RMB
    (0.01
)Net income
    
    RMB
    0.94
    
    
    RMB
    0.49
    
    
    RMB
    1.22
    
    
    RMB
    0.99
 The diluted net income per share calculations have not included the outstanding unit purchase option (the UPO) or the
related warrants (Note 12) since the effect is anti-dilutive.
 11




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11.
    
    SEGMENT INFORMATION
 Since the acquisition of Hai Lai in April 2008, the Company has been organized as two business
segments, the E-learning and training service Group
(ELG), encompassing all the Companys business operations before
the acquisition, and the Traditional University Group (TUG), offering bachelor and diploma
programs to students in the PRC. The Company follows the provisions of SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, which establishes standards for
reporting information about operating segments. Operating segments are defined as components of
an enterprise about which discrete financial information is available that is evaluated
regularly by the chief operating decision maker, or decision making group, in deciding how to
allocate resources and in assessing performance.The Companys chief operating decision maker is the Chief Executive
Officer. The following were details of the Companys reportable segments:
 For the three months ended June 30,
    
    For the six months ended June 30,2008
    
    2007
    
    2008
    
    2007RMB
    
    RMB
    
    RMB
    
    RMBRevenues from external
customers:ELG (Note)
    
    
    48,311
    
    
    
    42,273
    
    
    
    107,805
    
    
    
    82,128TUG
    
    
    25,612
    
    
    
    
    
    
    
    25,612
    
    
    
    73,923
    
    
    
    42,273
    
    
    
    133,417
    
    
    
    82,128Income from operations:ELG
    
    
    22,406
    
    
    
    15,585
    
    
    
    29,439
    
    
    
    31,551TUG
    
    
    6,673
    
    
    
    
    
    
    
    6,673
    
    
    
    29,079
    
    
    
    15,585
    
    
    
    36,112
    
    
    
    31,551Note:Revenues
from ELG:Service
    
    
    45,196
    
    
    
    34,487
    
    
    
    85,401
    
    
    
    68,022Equipment
    
    
    3,115
    
    
    
    7,786
    
    
    
    22,404
    
    
    
    14,10648,311
    
    
    
    42,273
    
    
    
    107,805
    
    
    
    82,128
 As of June
    
    As of December30, 2008
    
    31, 2007Segment assets:629,021
    
    
    
    950,714ELG
    
    
    654,974
    
    
    
    TUG
    
    
    1,283,995
    
    
    
    950,714
 The Companys revenues and net income are substantially
derived from the PRC. Most of the assets and capital expenditure of the Company are
employed in the PRC.There were customers accounting for 10% or more of total net revenues for the three and
six months ended June 30, 2008.Three customers as of June 30, 2008 and two customers as of December 31, 2007 each accounted for
10% or more of the Companys accounts receivable balances, representing an aggregate of 36.9%
and 25.7% of the Companys accounts receivable balance at June 30, 2008 and December 31, 2007,
respectively.
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12.
    
    WARRANTS AND UNIT PURCHASE OPTIONSIn March 2004, Great Wall sold 4,515,975 units in its initial public offering. Each unit consists
of one share of the Companys common stock and two redeemable common stock purchase warrants
(Warrants). Each Warrant will entitle the holder to
purchase from the Company one share of
common stock at an exercise price of US$5 commencing on the consummation of the Share Exchange
Transaction. In no event will the Company be required to net cash settle the warrant exercise.In April 2008, 50,100 Warrants had been exercised at an exercise price of US$5.In June 2008, the
Company entered into agreements with Fir Tree Value Master Fund, L.P. and Fir Tree Capital
Opportunity Master Fund, L.P. (collectively, Fir Tree) and Sherleigh Associates Inc. Profit
Sharing Plan and Sherleigh Associates Inc. Defined Benefit Pension Plan (collectively,
Sherleigh)(Fir Tree and Sherleigh, collectively, the Warrantholders), whereby the Company
agreed to reduce the exercise price of the Warrants held by Fir Tree and Sherleigh from US$5.00
per share to US$4.25 per share. In connection with the reduction in the price of the Warrants, in
June 2008, Fir Tree exercised in full an aggregate of 3,007,200 Warrants and Sherleigh exercised
in full an aggregate of 411,882 Warrants. As additional consideration for the Warrantholders exercising the Warrants in
full as well as for the value of the Warrants, in June 2008 the Company issued 459,925 restricted shares of common stock of the Company to Fir Tree and 62,994 restricted shares of common stock of
the Company to Sherleigh. The additional value to the Warrantholders
as a result of the above arrangement represented a deemed
dividend to the Warrantholders, and it was recognized at the time
when the relevant Warrants were exercised on
June 30, 2008.In connection with the initial public offering, Great Wall issued, for $100, an UPO to the representative of the underwriters to purchase 400,000 units at an exercise
price of US$9.90 per unit. In addition, the warrants (UPO Warrants) underlying such units are
exercisable at US$6.95 per share. In January 2008, the underwriters exercised the UPO to purchase
5,000 units.As of June 30, 2008, there were 395,000 UPO, 10,000 UPO Warrants and 5,562,768 Warrants
outstanding.
 13.
    
    NEW BORROWINGSBank borrowings amounting to RMB78,400
were assumed in connection with the acquisition as set out in
Note 4. Bank borrowings carried interests at the benchmark interest rate announced by
the Peoples Bank of China plus 10% to 20% per annum and will be
repayable within two years. As of June 30, 2008, bank borrowings amounting to RMB73,400
will be due for repayment within one year and were classified as current liabilities.In connection with the acquisition as set out in Note 4,
other borrowings amounting to RMB6,600 were assumed. During the period to
June 30, 2008, a further
amount of other borrowings of RMB1,680 was raised. These borrowings carried interest at 10.125% per
annum and will be repayable within one year.
 14.
    
    CONTINGENCIES
 a)
    
    On March 21, 2006, after obtaining the approval of its shareholders, the Company
amended certificate of incorporation, the effect of which was, among other things, to
eliminate the provision of the certificate of incorporation that
purported to prohibit the amendment of the business combination provisions contained therein and to extend the date
before which the Company must complete a business combination, to avoid being required to
liquidate, from March 23, 2006 to December 31, 2006. Because extending the period during
which the Company could consummate a business combination was not contemplated by the
initial public offering (IPO) prospectus, shareholders may have securities law claims
against the Company for rescission (under which a successful claimant would have the right
to receive the total amount paid for his or her shares, plus interest and less any income
earned on the shares, in exchange for surrender of the shares) or damages (compensation for
loss on an investment caused by alleged material misrepresentations or omissions in the
sale of the security). Such claims might entitle shareholders asserting them to up to
US$6.00 per share of common stock, based on the initial offering price of the public units
comprised of stock and warrants, less any amount received from sale of the original
warrants purchased with them and plus interest from the date of the IPO. A successful
claimant for damages under federal or state law could be awarded an amount to compensate
for the decrease in value of his or her shares caused by the alleged violation (including,
possibly, punitive damages), together with interest, while retaining the shares. The
Company believes the shareholder claims for rescission or damages are remote. As such, the
Company has not recorded a liability for such possible rescission. However, the Company
cannot definitively predict whether shareholders will bring such claims, how many might
bring them or the extent to which they might be successful.b)
    
    The Company may be subject to claims for rescission or other securities law claims
resulting from the failure to disclose that the charter provision purporting to prohibit
certain amendments was possibly inconsistent with Delawares General Corporation Law. The
Company may also be subject to such claims as a result of inaccuracies in other
disclosures, as follows: It may be argued that the IPO prospectus misstated the vote
required by its charter to approve a business combination by providing that [w]e will
proceed with a business combination only if the public shareholders who own at least a
majority of the shares of common stock sold in [that] offering vote in favor [of it] ...,
and that the Exchange Act reports have been inaccurate in describing ChinaCast as a leading
provider of e-learning content (as opposed to being primarily a content carrier). On
November 13, 2006, the Company filed a Current Report on Form 8-K with the SEC regarding
this last item. The Company is unable to predict the likelihood that claims might be made
with regard to the foregoing or estimate any amounts for which it might be liable if any
such claim was made. As such, the Company has not recorded a liability for such possible
rescission.
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15.
    
    SUBSEQUENT EVENTSIn July 2008, the Company entered into agreements with Capela Overseas Ltd (Capela), whereby
the Company agreed to reduce the exercise price of the Warrants held by Capela from US$5.00 per
share to US$4.25 per share. In connection with the reduction in the price of the Warrants, on July
4, 2008, Capela exercised in full an aggregate of 94,117 Warrants. As additional consideration for Capela exercising the
Warrants in full as well as for the value of the Warrants, on July 4, 2008 the Company issued 14,394
restricted shares of common stock of the Company to Capela.
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Item 2. Managements Discussion and Analysis or Plan of Operation.
 Forward
Looking Statement
  Overview
    Critical Accounting Policies
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Results of Operations
   Three
Months Ended June 30, 2008 compared to the three Months Ended
June 30, 2007.
  Three Months ended
    
    Three Months EndedJune 30, 2008
    
    June 30, 2007(millions)
    
    US$
    
    RMB
    
    RMBPost secondary education
distance learning
    
    
    3.5
    
    
    
    24.1
    
    
    
    15.4K-12 and content delivery
    
    
    2.5
    
    
    
    17.4
    
    
    
    17.8Vocational training,
enterprise / government
training and networking
and English training
services
    
    
    1.0
    
    
    
    6.8
    
    
    
    9.1Total ELG revenue
    
    
    7.0
    
    
    
    48.3
    
    
    
    42.3
 Six Months ended
    
    Six Months EndedJune 30, 2008
    
    June 30, 2007(millions)
    
    US$
    
    RMB
    
    RMBPost secondary education
distance learning
    
    
    6.8
    
    
    
    46.8
    
    
    
    30.2K-12 and content delivery
    
    
    4.8
    
    
    
    33.3
    
    
    
    33.5Vocational training,
enterprise / government
training and networking
and English training
services
    
    
    4.0
    
    
    
    27.7
    
    
    
    18.4Total ELG revenue
    
    
    15.6
    
    
    
    107.8
    
    
    
    82.1
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Liquidity and Capital Resources
  As of
    
    As ofJune 30, 2008
    
    December 31, 2007(millions)
    
    RMB
    
    US$
    
    RMBCash and cash equivalents
    
    
    19.8
    
    
    
    2.9
    
    
    
    138.6Term deposits
    
    
    373.4
    
    
    
    54.1
    
    
    
    596.8Subtotal
    
    
    393.2
    
    
    
       57.0
    
    
    
    735.4Accounts receivable
    
    
     39.1
    
    
    
    5.7
    
    
    
    35.3Inventory
    
    
    2.0
    
    
    
    0.3
    
    
    
    2.0Prepaid expenses and other current assets
    
    
    9.6
    
    
    
    1.4
    
    
    
    7.1Total current assets
    
    
    446.0
    
    
    
    64.6
    
    
    
    783.1Non-current advances to a related party
    
    
    111.2
    
    
    
    16.1
    
    
    
    119.9Total assets
    
    
    1,284.0
    
    
    
    186.1
    
    
    
    950.7
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Item 3. Quantitative And Qualitative Disclosures About Market Risk
 Foreign Exchange Risk
       Interest Rate Risk
   Inflation
  
 Item 4. Controls and Procedures.
   
 Item 4A. Controls and Procedures.
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A.
Risk Factors.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters To a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
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SIGNATURES
  CHINACAST EDUCATION CORPORATION
(Registrant)Date: August 11, 2008
    By:
    /s/ Ron Chan Tze NgonName: Ron Chan Tze NgonTitle: Chairman of the Board,Chief Executive Officer (Principal Executive Officer)By:
    /s/ Antonio SenaName: Antonio SenaTitle: Chief Financial Officer andSecretary (Principal Financial Officer) 23