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


OR





 ̈ 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) 000-51263




NORTH
CHINA HORTICULTURE, INC.


(Exact
Name of Registrant As Specified in Its Charter)


Nevada
              
              20-4650531(State
      or Other Jurisdiction of
                Incorporation)
              
              (IRS
      Employer
                Identification
      No.)




LongSheng
Village, Tangshan Town, Zhengan District


Dandong
City, Liaoning, P.R.China


(Address
of Principal Executive Offices)


Not
Applicable


(Zip
Code)





86-0415-8176321


(Registrant’s
Telephone Number, Including Area Code)





iDcentrix,
inc.


Rm 1903,
19/F, Hing Yip COMM Centre,


No. 272
Des Voeux Rd, Central, Hong Kong


(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
at least the past 90 days. Yes xNo  ̈





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 that the registrant
was required to submit and post such files). Yes  ̈ No  ̈





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





Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈   (Do
      not check if a smaller reporting company)
              Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈ No x





The
number of shares of common stock, par value $0.001 per share, outstanding as of
November 8, 2010 was 50,000,139.










NORTH
CHINA HORTICULTURE, INC.


FORM
10-Q


Quarterly
Period Ended September 30, 2010





INDEX


PagePART
      I. FINANCIAL INFORMATION
              3Item
      1.
              Financial
      Statements
              3Condensed
      Consolidated Balance Sheets as of September 30, 2010 (Unaudited) andDecember
      31, 2009
              3Unaudited
      Condensed Consolidated Statements of Operations and Comprehensive Income
      for the three and nine months ended September 30, 2010 and
      2009
              4Unaudited
      Condensed Consolidated Statement of Changes in Shareholders’ Equity for
      the nine months ended September 30, 2010
              5Unaudited
      Condensed Consolidated Statements of Cash Flows for the nine months endedSeptember
      30, 2010 and 2009
              6Notes
      to Condensed Consolidated Financial Statements (Unaudited)
              7Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              14Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk.
              20Item
      4.
              Controls
      and Procedures
              20PART
      II. OTHER INFORMATION
              21Item
      1.
              Legal
      Proceedings
              21Item
      1A.
              Risk
      Factors
              21Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              21Item
      3.
              Defaults
      Upon Senior Securities
              21Item
      5.
              Other
      Information
              21Item
      6.
              Exhibits
              21




2




PART
I.FINANCIAL INFORMATION


Item
1. Financial Statements





NORTH
CHINA HORTICULTURE, INC


(FORMERLY
IDCENTRIX, INC.)


CONDENSED
CONSOLIDATED BALANCE SHEETS


September 30,
                    
                    
                    December 31,2010
                    
                    
                    2009(Unaudited)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                    
                    $
                    274,047
                    
                    
                    $
                    11,300Accounts
      receivable, net
                    
                    
                    1,836,691
                    
                    
                    
                    3,677,797Inventories,
      net
                    
                    
                    937,740
                    
                    
                    
                    616,134Prepaid
      rent and other current assets
                    
                    
                    153,569
                    
                    
                    
                    120,198Deposits
      and advances to suppliers
                    
                    
                    601,121
                    
                    
                    
                    3,861Total
      Current Assets
                    
                    
                    3,803,168
                    
                    
                    
                    4,429,290LOANS
      TO OUTSIDE PARTIES
                    
                    
                    3,446,928
                    
                    
                    
                    -PROPERTY
      AND EQUIPMENT, NET
                    
                    
                    133,787
                    
                    
                    
                    36,882TOTAL
      ASSETS
                    
                    $
                    7,383,883
                    
                    
                    $
                    4,466,172LIABILITIES AND SHAREHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                    
                    $
                    564,170
                    
                    
                    $
                    158,541Other
      payables and accrued expenses
                    
                    
                    131,056
                    
                    
                    
                    50,217Due
      to related parties
                    
                    
                    -
                    
                    
                    
                    411,833Due
      to outside parties
                    
                    
                    153,070
                    
                    
                    
                    117,007Total
      Current Liabilities
                    
                    
                    848,296
                    
                    
                    
                    737,598COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS'
      EQUITYCommon
      stock, $0.00001 par value;50,000,139
      and 49,870,814 shares issued and outstanding at September 30, 2010 and
      December 31, 2009, respectively
                    
                    
                    500
                    
                    
                    
                    499Additional
      paid-in capital
                    
                    
                    14,850
                    
                    
                    
                    13,560Accumulated
      other comprehensive income
                    
                    
                    176,911
                    
                    
                    
                    55,790Retained
      earnings
                    
                    
                    6,343,326
                    
                    
                    
                    3,658,725Total
      Shareholders' equity
                    
                    
                    6,535,587
                    
                    
                    
                    3,728,574TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY
                    
                    $
                    7,383,883
                    
                    
                    $
                    4,466,172




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


3





NORTH
CHINA HORTICULTURE, INC


(FORMERLY
IDCENTRIX, INC.)


UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009







For the three months ended
                        September 30,
                      
                      
                      For the nine months ended
                        September 30,2010
                      
                      
                      2009
                      
                      
                      2010
                      
                      
                      2009NET
      SALES
                      
                      $
                      1,398,403
                      
                      
                      
                      1,700,509
                      
                      
                      $
                      5,051,948
                      
                      
                      $
                      3,941,098COST
      OF SALES
                      
                      
                      (304,621
                      )
                      
                      
                      (453,062
                      )
                      
                      
                      (1,019,162
                      )
                      
                      
                      (1,020,239
                      )GROSS
      PROFIT
                      
                      
                      1,093,782
                      
                      
                      
                      1,247,447
                      
                      
                      
                      4,032,786
                      
                      
                      
                      2,920,859OPERATING
      EXPENSESSelling,
      general and administrative expenses
                      
                      
                      333,567
                      
                      
                      
                      16,701
                      
                      
                      
                      401,367
                      
                      
                      
                      56,464Loss
      from flood
                      
                      
                      446,818
                      
                      
                      
                      -
                      
                      
                      
                      446,818
                      
                      
                      
                      -Total
      operating expenses
                      
                      
                      780,385
                      
                      
                      
                      16,701
                      
                      
                      
                      848,185
                      
                      
                      
                      56,464INCOME
      FROM OPERATIONS
                      
                      
                      313,397
                      
                      
                      
                      1,230,746
                      
                      
                      
                      3,184,601
                      
                      
                      
                      2,864,395OTHER
      INCOME (EXPENSE)Interest
      income
                      
                      
                      -
                      
                      
                      
                      66
                      
                      
                      
                      -
                      
                      
                      
                      97Merger
      related expenses
                      
                      
                      (500,000
                      )
                      
                      
                      -
                      
                      
                      
                      (500,000
                      )
                      
                      
                      -Other
      expenses
                      
                      
                      -
                      
                      
                      
                      (104
                      )
                      
                      
                      -
                      
                      
                      
                      (496
                      )Total
      other income (expense)
                      
                      
                      (
      500,000
                      )
                      
                      
                      (38
                      )
                      
                      
                      (500,000
                      )
                      
                      
                      (399
                      )NET
      INCOME (LOSS)
                      
                      
                      (186,603
                      )
                      
                      
                      1,230,708
                      
                      
                      
                      2,684,601
                      
                      
                      
                      2,863,996Other
      comprehensive income (loss)Foreign
      currency translation gain (loss)
                      
                      
                      149,684
                      
                      
                      
                      (39,246
                      )
                      
                      
                      121,121
                      
                      
                      
                      (43,088
                      )Comprehensive
      income (loss)
                      
                      $
                      (36,919
                      )
                      
                      $
                      1,191,462
                      
                      
                      $
                      2,805,722
                      
                      
                      $
                      2,820,908Net
      income (loss) per share-basic and diluted
                      
                      $
                      (0.00
                      )
                      
                      $
                      0.02
                      
                      
                      $
                      0.05
                      
                      
                      $
                      0.06Weighted
      average number of sharesoutstanding
      during the period-
      basic and diluted
                      
                      
                      49,935,477
                      
                      
                      
                      49,870,814
                      
                      
                      
                      49,892,844
                      
                      
                      
                      49,870,814




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




4




NORTH
CHINA HORTICULTURE, INC


(FORMERLY
IDCENTRIX, INC.)


UNAUDITED
CONDENSED CONSOLIDATED STATEMENT CHANGES IN SHAREHOLDERS EQUITY


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010





AccumulatedotherCommonstock
                      
                      
                      Additional
                      
                      
                      comprehensive
                      
                      
                      RetainedShares
                      
                      
                      Amount
                      
                      
                      paidincapital
                      
                      
                      income
                      
                      
                      earnings
                      
                      
                      TotalBalance,
      January 1, 2010
                      
                      
                      49,870,814
                      
                      
                      $
                      499
                      
                      
                      $
                      13,560
                      
                      
                      $
                      55,790
                      
                      
                      $
                      3,658,725
                      
                      
                      $
                      3,728,574Effect
      of reverse merger
                      
                      
                      129,325
                      
                      
                      
                      1
                      
                      
                      
                      (1
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Capital
      contribution
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,291
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,291Foreign
      currency translation gain
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      121,121
                      
                      
                      
                      -
                      
                      
                      
                      121,121Net
      income
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      2,684,601
                      
                      
                      
                      2,684,601Balance,
      September 30, 2010
                      
                      
                      50,000,139
                      
                      
                      $
                      500
                      
                      
                      $
                      14,850
                      
                      
                      $
                      176,911
                      
                      
                      $
                      6,343,326
                      
                      
                      $
                      6,535,587




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




5





NORTH
CHINA HORTICULTURE, INC


(FORMERLY
IDCENTRIX, INC.)


UNAUDITED
CONDENSED  CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009




For the nine months endedSeptember 30,2010
                              
                              
                              2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income
                              
                              $
                              2,684,601
                              
                              
                              $
                              2,863,996Adjustments
      to reconcile net income to cash provided byoperating
      activities:Depreciation
                              
                              
                              14,457
                              
                              
                              
                              3,646Allowance
      for doubtful accounts
                              
                              
                              180,223
                              
                              
                              
                              -Changes
      in operating assets and liabilities:Accounts
      receivable
                              
                              
                              1,703,981
                              
                              
                              
                              754,648Inventories
                              
                              
                              (303,452
                              )
                              
                              
                              90,829Prepaid
      rent and other current assets
                              
                              
                              (30,075
                              )
                              
                              
                              (2,720,045
                              )Deposits
      and advances to suppliers
                              
                              
                              (585,320
                              )
                              
                              
                              -Accounts
      payable
                              
                              
                              391,248
                              
                              
                              
                              (424,957
                              )Other
      payables and accrued expenses
                              
                              
                              80,839
                              
                              
                              
                              73,188Advance
      from customers
                              
                              
                              -
                              
                              
                              
                              704,408Due
      to outside parties
                              
                              
                              36,063
                              
                              
                              
                              -Net
      cash provided by operating activities
                              
                              
                              4,172,565
                              
                              
                              
                              1,345,713CASH
      FLOWS FROM INVESTING ACTIVITIESLoans
      to outside parties
                              
                              
                              (3,525,752
                              )
                              
                              
                              (241,398
                              )Purchase
      of property and equipment
                              
                              
                              (108,929
                              )
                              
                              
                              (519
                              )Net
      cash used in investing activities
                              
                              
                              (3,634,681
                              )
                              
                              
                              (241,917
                              )CASH
      FLOWS FROM FINANCING ACTIVITIESDue
      to related parties
                              
                              
                              (413,089
                              )
                              
                              
                              (1,573,977
                              )Contribution
      by stockholders
                              
                              
                              1,291
                              
                              
                              
                              -Net
      cash used in financing activities
                              
                              
                              (411,798
                              )
                              
                              
                              (1,573,977
                              )Effect
      of exchange rate charges on cash
                              
                              
                              136,661
                              
                              
                              
                              828Net
      increase (decrease) in cash and cash equivalents
                              
                              
                              262,747
                              
                              
                              
                              (469,353
                              )Cash
      and cash equivalents at beginning of period
                              
                              
                              11,300
                              
                              
                              
                              479,902Cash
      and cash equivalents at end of period
                              
                              $
                              274,047
                              
                              
                              $
                              10,549SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATIONCash
      paid for interest expenses
                              
                              $
                              -
                              
                              
                              $Cash
      paid for income tax
                              
                              $
                              -
                              
                              
                              $







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






6





NORTH
CHINA HORTICULTURE, INC AND SUBSIDIARIES (FORMERLY
IDCENTRIX, INC.)


NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010 (UNAUDITED)


NOTE
1   BASIS OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and pursuant to the
rules and regulations of the United States Securities and Exchange Commission
(“SEC”). Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.





In the
opinion of management, the unaudited condensed consolidated financial statements
contain all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included.  The consolidated
results for the three months and nine months ended September 30, 2010 are not
necessarily indicative of the results to be expected for a full year. These
financial statements should be read in conjunction with the audited financial
statements and footnotes of Dandong Longsheng Horticulture Technology Co.,
Ltd.  (“Dandong Longsheng”), for the years ended December 31, 2009 and
2008 originally filed on Form 8-K with the SEC on July 16, 2010.





NOTE
2 ORGANIZATION





North
China Horticulture, Inc. (the “Company”), formerly known as iDcentrix, Inc., was
incorporated in the State of Nevada on January 26, 2004. The Company, along
with its subsidiary and VIE, is engaged in the cultivation and sales of
blueberry seedlings.  Our offices and facilities are located in and
around the city of Dandong in Liaoning Province, People’s Republic
of China (“PRC”).  Our products consist of a number of blueberry
seedling varietals.  Currently, we have the capacity to grow seven million
seedlings per year in our 34 greenhouses on five acres of growing
facilities.  We sell our seedlings to a number of agricultural enterprises
throughout northern China, who then replant them and cultivate them to maturity
in blueberry farms.




On July
16, 2010, the Company completed a share exchange transaction with Honour Bond
Limited ("Honour Bond") and its shareholders, whereby the Company acquired 100%
of the issued and outstanding capital stock of Honour Bond in exchange for
49,870,814 shares of our common stock which constituted 99.74% of our issued and
outstanding capital stock as of and immediately after the consummation of the
share exchange transaction.  As a result of the share exchange transaction,
Honour Bond became our wholly-owned subsidiary and the former shareholders of
Honour Bond became our controlling stockholders.





For
accounting purposes, the share exchange transaction is accounted for as a
recapitalization (reverse merger), with Honour Bond treated as the accounting
acquirer and iDcentrix treated as the legal acquirer.  This transaction is
being accounted for at historical cost in a manner similar to that in pooling of
interests method since the former stockholders of Honour Bond acquired a
majority of the outstanding shares of the Company.


Honour
Bond is a corporation organized under the laws of Hong Kong Special
Administrative Region in January 2010 with registered capital of HKD 10,000
(approximately $1,291).  The registered capital amount was contributed by
Honour Bonds shareholder.  Honour Bond’s only asset is its investment in
its wholly owned subsidiary, Shenzhen ZhihaoDongbo Technology Co., Ltd.
(“Zhihao”), a limited liability company organized under the laws of the People’s
Republic of China (“PRC”) in March 2010.  Honour Bond does not conduct any
substantive operations of its own, but conducts its primary business operations
through Zhihao’s variable interest entity (“VIE”), Dandong Longsheng
Horticulture Technology Co., Ltd.  (“Dandong Longsheng”). Dandong Longsheng
was incorporated under the laws of the PRC in March 2008.




Honour
Bond, through Zhihao, has entered into certain exclusive agreements with Dandong
Longsheng, which obligate the Company to absorb a majority of the risk of loss
from Dandong Longsheng’s activities and entitle it to receive a majority of its
residual returns. In addition, Dandong Longsheng’s shareholders have pledged
their equity interest in Dandong Longsheng to Zhihao, irrevocably granted Zhihao
an exclusive option to purchase, to the extent permitted under PRC law, all or
part of the equity interests in Dandong Longsheng and agreed to entrust all the
rights to exercise their voting power to the person(s) appointed by Zhihao.
Through these contractual arrangements, the Company is deemed to be the primary
beneficiary of Dandong Longsheng.




Based on
these contractual arrangements, the Company believes that Dandong Longsheng
should be considered as a VIE  under authoritative guidance issued by the
Financial Accounting Standards Board (“FASB”) on consolidation. As the Company
through Zhihao is deemed to be the primary beneficiary of Dandong Longsheng, the
Company consolidates the assets, liabilities, and results of operations of
Dandong Longsheng.





7


NOTE
3    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles of
consolidation





The
accompanying consolidated financial statements include the financial statements
of North China, its wholly owned subsidiaries, Honour Bond and Zhihao and
Zhihao’s VIE, Dandong Longsheng.   Inter-company balances and
transactions have been eliminated in consolidation.





Use of
estimates





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 disclosure of contingent assets and
liabilities at the dates of the consolidated financial statements and the
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
results.





Foreign currency
translation





The
accompanying consolidated financial statements are presented in United States
dollars. The functional currency of the Company is the Renminbi (RMB). Capital
accounts of the consolidated financial statements are translated into United
States dollars from RMB at their historical exchange rates when the capital
transactions occurred. Assets and liabilities are translated at the exchange
rates as of balance sheet date. Income and expenses are translated at the
average exchange rate for the periods presented.




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 US
dollars at the rates used in translation.





Cash and cash
equivalents





The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.





Accounts
receivable





Accounts
receivables are recorded at net realizable value consisting of the carrying
amount less an allowance for uncollectible amounts, as
needed.





The
Company uses the aging method to estimate the valuation allowance for
anticipated uncollectible receivable balances. Under the aging method, bad debt
percentages determined by management based on historical experience as well as
current economic climate are applied to customers’ balances categorized by the
number of months the underlying invoices have remained outstanding. The
valuation allowance balance is adjusted to the amount computed as a result of
the aging method. When facts subsequently become available to indicate that the
allowance provided requires an adjustment, then the adjustment will be
classified as a change in estimate. The allowances for uncollectible amounts for
the nine months ended September 30, 2010 was $180,223 and nil for the year ended
December 31, 2009.





Inventories





Inventories
are stated at the lower of cost (determined on a weighted average basis) or
market. The management compares the cost of inventories with the fair market
value and an allowance is made for writing down the inventories to fair market
value, if lower than the cost. As of September 30, 2010 and December 31,
2009, there were no reserves for obsolete inventory.





Property, plant and
equipment





Property,
plant and equipment are recorded at cost.  Gains or losses on disposals, if
any, are reflected as gain or loss in the year of disposal.  The cost
of improvements that extend the life of plant, property, and equipment are
capitalized.  These capitalized costs may include structural improvements,
equipment, and fixtures.  All ordinary repair and maintenance costs are
expensed as incurred. Depreciation for financial reporting purposes is
provided using the straight-line method over the estimated useful lives of the
assets, which ranges from three to ten years.





8


Impairment of long-lived
assets





Long-lived
assets, which include property, plant and equipment, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of long-lived assets to be held
and used is measured by a comparison of the carrying amount of an asset to the
estimated undiscounted future cash flows expected to be generated by the assets.
If the carrying amount of an asset exceeds its estimated undiscounted future
cash flows, an impairment charge is recognized by the amount by which the
carrying amount of the asset exceeds the fair value of the assets. Fair value is
generally determined using the asset’s expected future discounted cash flows or
market value, if readily determinable.





There was
no impairment loss recorded for the nine months ended September 30, 2010 and
2009.





Revenue
recognition





The
Company recognizes sales in accordance with the United States Securities and
Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue
Recognition”. The Company recognizes revenue when the following fundamental
criteria are met: (i) persuasive evidence of an arrangement exists, (ii)
delivery has occurred or services have been rendered, (iii) the price to the
customer is fixed or determinable and (iv) collection of the resulting
receivable is reasonably assured. Revenue is not recognized until title and risk
of loss is transferred to the customer, which occurs upon delivery of goods, and
objective evidence exists that customer acceptance provisions have been met.
Deposits or advance payments from customers prior to delivery of goods and
passage of title of goods are recorded as advance from
customers.





Earnings(loss)per
share





Earnings
(loss) per share are calculated in accordance with the authoritative guidance
issued by the FASB on earnings per share.  Basic net earnings (loss) per
share are based upon the weighted average number of common shares outstanding,
but excluding shares issued as compensation that have not yet vested. Diluted
net earnings (loss) per share are based on the assumption that all dilutive
convertible shares and stock options were converted or exercised, and that all
unvested shares have vested.  Dilution is computed by applying the treasury
stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock at the
average market price during the period.  At September 30, 2010 and 2009,
the Company did not have any dilutive convertible shares or stock options
outstanding.





Income
taxes





The
Company uses asset and liability approach for financial accounting and reporting
for income taxes that allows recognition and measurement of deferred tax assets
based upon the likelihood of realization of 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 deductibility is
uncertain.





Fair values of financial
instruments





Fair
value measurements are determined using authoritative guidance issued by the
FASB, with the exception of the application of the guidance to non-recurring,
non-financial assets and liabilities as permitted. Fair value is defined in the
authoritative guidance as the price that would be received to sell an asset or
paid to transfer a liability in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants at
the measurement date. A fair value hierarchy was established, which prioritizes
the inputs used in measuring fair value into three broad levels as
follows:




Level 1—Quoted
prices in active markets for identical assets or liabilities.





Level 2—Inputs,
other than the quoted prices in active markets, are observable either directly
or indirectly.





Level 3—Unobservable
inputs based on the Company's assumptions.





The
Company is required to use observable market data if available without undue
cost and effort.





9


The
Company’s financial instruments include cash and cash equivalents, accounts
receivable, advances to suppliers, other receivables, prepaid expenses, accounts
payable, accrued expenses, and other loans payable.  Management has
estimated that the carrying amounts approximate their fair value due to the
short-term nature.





Concentrations





Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist principally of cash and unsecured trade accounts
receivable.





Cash
denominated in RMB with a US dollar equivalent of $274,047 and $11,300 at
September 30, 2010 and December 31, 2009, respectively, was held in accounts at
financial institutions located in the PRC.  The Company and its
subsidiaries have not experienced any losses in such accounts and do not believe
the cash is exposed to any significant risk.





For the
nine months ended September 30, 2010, five customers accounted for 70% of sales
(23%,14%,12%,11%, and 10% respectively) and at September 30, 2010, accounted for
66%,of accounts receivable (19%,18%, 15%, and 14% respectively).  At
September 30, 2010, two other customers accounted for 25% of accounts receivable
(14% and 11% respectively).  For the nine months ended September 30, 2009,
four customers accounted for 95% of sales (48%, 18%, 16%, and 13%). 
 For the nine months ended September 30, 2010 or 2009, there were no other
customers that accounted for over 10% of sales, respectively.





For the
three months ended September 30, 2010, four customers accounted for 89% of sales
(27%, 25%, 21%, and 16%).  For the three months ended September 30, 2009,
one customer accounted for 98% of sales.  For the three months ended
September 30, 2010 or 2009, there were no other customers for that accounted for
over 10% of sales, respectively.





For the
nine months ended September 30, 2010, three vendors accounted for 100% of total
purchases (53%, 28%, and 19% respectively).  For the nine months ended
September 30, 2009, four vendors accounted for 100% of total purchases (34%,
28%, 26% and 12%, respectively).





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 environments in the PRC, and by the general state
of the PRC's economy.





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





Recent Accounting
Pronouncements





In
April 2010, the FASB issued new accounting guidance in applying the
milestone method of revenue recognition to research or development arrangements.
Under this guidance management may recognize revenue contingent upon the
achievement of a milestone in its entirety, in the period in which the milestone
is achieved, only if the milestone meets all the criteria within the guidance to
be considered substantive. This standard is effective on a prospective basis for
research and development milestones achieved in fiscal years, beginning on or
after June 15, 2010. Early adoption is permitted; however, adoption of this
guidance as of a date other than January 1, 2011 will require the Company
to apply this guidance retrospectively effective as of January 1, 2010 and
will require disclosure of the effect of this guidance as applied to all
previously reported interim periods in the fiscal year of adoption. As the
Company plans to implement this standard prospectively, the effect of this
guidance will be limited to future transactions. The Company does not expect
adoption of this standard to have a material impact on its financial position or
results of operations as it has no material research and development
arrangements which will be accounted for under the milestone
method.





In April
2010, the FASB issued new accounting guidance to clarify that an employee
share-based payment award with an exercise price denominated in the currency of
a market in which a substantial portion of the entity's equity securities trades
should not be considered to contain a condition that is not a market,
performance, or service condition. Therefore, an entity would not classify such
an award as a liability if it otherwise qualifies as equity. The amendments are
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2010. The Company does not expect
adoption of this standard will have a material impact on its consolidated
financial statements.





10


In
January 2010, the FASB issued new accounting guidance which requires new
disclosures regarding transfers in and out of Level 1 and Level 2 fair value
measurements, as well as requiring presentation on a gross basis of information
about purchases, sales, issuances and settlements in Level 3 fair value
measurements. The guidance also clarifies existing disclosures regarding level
of disaggregation, inputs and valuation techniques. The new guidance is
effective for interim and annual reporting periods beginning after
December 15, 2009.  Disclosures about purchases, sales, issuances and
settlements in the roll forward of activity in Level 3 fair value measurements
are effective for fiscal years beginning after December 15, 2010.  As
this guidance requires only additional disclosure, there should be no impact on
the consolidated financial statements of the Company upon adoption.





In
October 2009, a new accounting consensus was issued for
multiple-deliverable revenue arrangements. This consensus amends existing
revenue recognition accounting standards. This consensus provides accounting
principles and application guidance on whether multiple deliverables exist, how
the arrangement should be separated and the consideration allocated. This
guidance eliminates the requirement to establish the fair value of undelivered
products and services and instead provides for separate revenue recognition
based upon management’s estimate of the selling price for an undelivered item
when there is no other means to determine the fair value of that undelivered
item. Previously the existing accounting consensus required that the fair value
of the undelivered item be the price of the item either sold in a separate
transaction between unrelated third parties or the price charged for each item
when the item is sold separately by the vendor. Under the existing accounting
consensus, if the fair value of all of the elements in the arrangement was not
determinable, then revenue was deferred until all of the items were delivered or
fair value was determined. This new approach is effective prospectively for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010. The Company is in the process of
evaluating whether the adoption of this standard will have a material effect on
its financial position, results of operations or cash flows.





In June
2009, the FASB issued authoritative guidance on consolidation of variable
interest entities.  The new guidance is intended to improve financial
reporting by requiring additional disclosures about a company’s involvement in
variable interest entities.  This new guidance is effective for fiscal
years and interim periods beginning after November 15, 2009.  The Company
adopted this guidance effective January 1, 2010, and it had no impact on the
consolidated financial statements of the Company.





Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the Securities Exchange Commission (the
"SEC") did not or are not believed by management to have a material impact on
the Company's present or future consolidated financial statements.





NOTE
4 ACCOUNTS RECEIVABLE





Accounts
receivable consists of trade receivables resulting from sales of products during
the normal course of business. Accounts receivable has the following
breakdown between affiliated Company and non-affiliated
Company:





September30,2010
                  
                  
                  December31,2009(unaudited)Accounts
      receivable from affiliated companies
                  
                  $
                  -
                  
                  
                  $
                  3,670,409Accounts
      receivable from non-affiliated companies
                  
                  
                  2,016,914
                  
                  
                  
                  7,388Less:
      Allowance for doubtful accounts
                  
                  
                  (180,223
                  )
                  
                  
                  -Accounts
      receivable, net
                  
                  $
                  1,836,691
                  
                  
                  $
                  3,677,797





NOTE 5 
 INVENTORIES


Inventories consist of the following as of:


September 30,2010
                    
                    
                    December 31,2009INVENTORIES
                    
                    (unaudited)Raw
      materials
                    
                    $
                    84,707
                    
                    
                    $
                    8,732Work-in-progress
                    
                    
                    303,097
                    
                    
                    
                    174,077Finished
      goods
                    
                    
                    549,936
                    
                    
                    
                    433,325Less:
      provision for obsolescence
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    937,740
                    
                    
                    $
                    616,134





11


No
allowance for inventories was made as of September 30, 2010 and December 31,
2009.





NOTE
6 DEPOSITS AND ADVANCES TO SUPPLIERS





At
September 30, 2010, deposits and advances to suppliers included $597,185 paid to
an unrelated consultant for developing the northern China and Southeast Asia
markets and for promotion of blueberry seedlings.  If certain milestones in
the Company’s sales, as defined, are met, the $597,185 will be paid to the
consultant by January 10, 2010.  If the milestones are not met, the
$597,185 will be returned to the Company without interest.  As of September
30, 2010, the marketing and promotion work by the consultant had not begun in
earnest and the Company determined the measurement of any milestone or
recognition of any related expense was not practically
measurable.





NOTE
7  LOANS TO OUTSIDE PARTIES





Loans to
outside parties consist of various cash advances to unrelated companies and
individuals.  The loans are generally due one year from date issued,
unsecured, and non-interest bearing.  At September 30, 2010, three loans
totaling $3,446,928 were outstanding.





On July
1, 2010, two loans aggregating $3,006,500 were issued to borrowers for potential
investment in coal and bio energy projects.  The loan periods are for 1
year, and if the projects meet certain profit targets, the loans will
automatically convert into equity investments in the projects.  As of
September 30, 2010, the projects have not begun substantial
operations.





Also on
July 1, 2010, a loan for $440,428 was made to an unrelated third party. 
The loan is unsecured, due December 31, 2010, and non-interest
bearing.





Loans to
outside parties are reviewed periodically as to whether their carrying value has
become impaired.  The Company considers the assets to be impaired if the
collectability of the balances becomes doubtful.  At September 30, 2010,
there was no allowance for uncollectible loans.  At December 31, 2009,
there were no loans issued to outside parties.





NOTE
8 PROPERTY AND EQUIPMENT





Property,
plant and equipment consist of the following at:





PROPERTY AND
                          
                          September30,2010
                          
                          
                          December31,2009EQUIPMENT
                          
                          (unaudited)Plant
      and machinery
                          
                          $
                          13,893
                          
                          
                          $
                          13,611Motor
      vehicles
                          
                          
                          25,082
                          
                          
                          
                          24,571Office
      and computers
                          
                          
                          117,920
                          
                          
                          
                          6,924156,895
                          
                          
                          
                          45,106Less:
      Accumulated depreciation
                          
                          
                          (23,108
                          )
                          
                          
                          (8,224
                          )Property
      and equipment, net
                          
                          $
                          133,787
                          
                          
                          $
                          36,882





Depreciation
expense for the nine months ended September 30, 2010 and 2009 was $14,457 and
$3,646, respectively.  Depreciation expense for the three months ended
September 30, 2010 and 2009 was $10,511 and $1,230,
respectively.





NOTE 
9   RELATED PARTY TRANSACTION





At
September 30, 2010, $35,714 of advances to a director for business development
activities is included in prepaid rent and other current assets on the
accompanying condensed consolidated balance sheet.





NOTE 
10    INCOME TAXES





The
Company is subject to income taxes on an entity basis on income arising in or
derived from the tax jurisdiction in which each entity is
domiciled.




12




Companies
in the PRC are generally subject to PRC Enterprise Income Tax at a uniform tax
rate of 25% under the China's Unified Enterprise Income Tax Law ("New EIT Law"),
which took effect from January 1, 2008.  Dandong Longsheng is exempt
from both income tax and value-added tax because it operates its business in the
agriculture industry, which the Chinese government encourages and offers special
incentives. We benefited from the tax exemptions in both 2010 and
2009.




Honour is
a Hong Kong company.  Honour’s operations are conducted through its wholly
owned subsidiary Zhihao and its VIE Dandong Longsheng, and Honour has no
operations or income in Hong Kong.  Accordingly no income tax provision is
recorded for Hong Kong.




North
China Horticulture, Inc. is incorporated in the state of Nevada and has no
operations in the United States of America.  Accordingly, the Company has
not recorded a provision for U.S. federal income tax for the three and nine
month periods ended September 30, 2010 and 2009. The Company has a net operating
loss carry forward in the United States of America which begins to expire in
2028. The deferred tax asset created by the net operating loss has been offset
by a 100% valuation allowance.





The
following table reconciles the U.S. Statutory rate to the Company’s effective
tax rate for the three and nine months ended September 30:





2010
                  
                  
                  2009US
      statutory rate
                  
                  
                  34
                  %
                  
                  
                  34
                  %Tax
      rate difference
                  
                  
                  (9
                  )%
                  
                  
                  (9
                  )%Effect
      of tax exemption
                  
                  
                  (25
                  )%
                  
                  
                  (25
                  )%Effective
      tax rate
                  
                  
                  0
                  %
                  
                  
                  0
                  %





Effective
January 1, 2007, the Company adopted authoritative guidance issued by the
FASB for uncertainty in income taxes. The Interpretation addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under the authoritative
guidance, we may recognize the tax benefit from an uncertain tax position only
if it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent likelihood of being realized upon ultimate settlement. The
authoritative guidance also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures. At the date of adoption, and as of September 30,
2010, the Company does not have a liability for unrecognized tax uncertainties
except as described below. The Company’s Chinese subsidiaries have never been
subject to a tax examination and all years are open to examination by the tax
authorities.




NOTE
11   STOCKHOLDERS’ EQUITY





On
January 31, 2010, the Company had 68,176,300 (pre-split) shares of common stock
outstanding.  On June 1, 2010 the Company effected a one for two hundred
eighty-four (1:284) reverse stock split resulting in the Company having
240,269 (post-split) shares of common stock outstanding after the reverse
stock split.





On July
17, 2010, the Company issued 49,870,814 shares of its common stock, in exchange
for all the shares of the capital stock of Honour Bond (see Note 2).  Upon
completion of the share exchange transaction, the shareholders of Honour owned
approximately 99.74% of the common stock of the Company.





NOTE
12  LEASE COMMITMENTS





The
Company has entered into operating leases for rental of greenhouses for
production and office space, which expire on different dates. The minimum future
payments under these commitments for the next five years are as
follows:





2010
                      
                      $
                      29,5282011
                      
                      
                      99,8692012
                      
                      
                      84,7222013
                      
                      
                      22,0062014
                      
                      
                      17,605Total
                      
                      $
                      253,730




13




Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations





The
following discussion and analysis should be read in conjunction with our
unaudited condensed consolidated financial statements and notes thereto included
in this Quarterly Report on Form 10-Q and our audited consolidated financial
statements and notes thereto included in our Current Report on Form 8-K filed
with the SEC on July 16, 2010.





Forward-Looking
Statements





This
quarterly report on Form 10-Q contains forward-looking statements within the
meaning of the federal securities laws. These statements relate to future events
or our future financial performance and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as “may,” “likely,”
“will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “continue” or the negative of these terms or other
comparable terminology. These forward-looking statements are subject to a number
of risks that could cause them to differ from our expectations. These include,
but are not limited to, risks relating to:





·
              Continued
      growth of the Chinese
economy;





·
              Chinese
      consumers’ continued movement up the value chain to consume higher-end
      agricultural products, namely
blueberries;





·
              Our
      ability to obtain additional capital in future years to fund our planned
      expansion;





·
              Negative
      changes in the industries in which our products are
  sold;





·
              Decrease
      in the availability, or increase in the cost, of raw materials and
      energy;





·
              Economic,
      political, regulatory, legal and foreign exchange risks associated with
      our operations; or





·
              The
      loss of key members of our senior management and our qualified sales
      personnel.





You
should not place undue reliance on these forward-looking statements, which are
based on our current views and assumptions. In evaluating these statements, you
should specifically consider various factors, including the foregoing risks and
those outlined under “Risk Factors” in our Form 8-K as filed with the SEC on
July 16, 2010. Many of these factors are beyond our control. Our forward-looking
statements represent estimates and assumptions only as of the date of this
quarterly report on Form 10-Q. Except as required by law, we undertake no
obligation to update any forward-looking statement to reflect events or
circumstances occurring after the date of this quarterly report on Form
10-Q.





Business
Overview and Basis of Presentation





On July
16, 2010, we completed a reverse acquisition transaction through a share
exchange with Honour Bond Limited, a Hong Kong limited company (“Honour Bond”)
and its shareholders (“Honour Bond Shareholders”), whereby we acquired 100% of
the issued and outstanding capital stock of Honour Bond in exchange for
49,870,814 shares of our common stock which constituted 99.74% of our issued and
outstanding capital stock as of and immediately after the consummation of the
reverse acquisition.  As a result of the reverse acquisition, Honour Bond
became our wholly-owned subsidiary and the Honour Bond Shareholders became our
controlling stockholders.  The share exchange transaction with Honour Bond
and the Honour Bond Shareholders was treated as a reverse acquisition, with
Honour Bond as the acquirer and iDcentrix, Inc. as the acquired party. 
Unless the context suggests otherwise, when we refer in this report to business
and financial information for periods prior to the consummation of the reverse
acquisition, we are referring to the business and financial information of
Honour Bond and its consolidated subsidiaries and replace the historical
financial results of iDcentrix, Inc. pre-acquisition.  iDcentrix, Inc. and
its subsidiaries and controlled affiliates are referred to collectively as “we,”
“us,” and the “Company.”





Upon the
closing of the reverse acquisition, TsoiTik Man, our former President, Secretary
and a director, submitted a resignation letter pursuant to which he resigned
from all offices that he held effective immediately and from his position as our
director that became effective on August 7, 2010.  In addition, our board
of directors on July 16, 2010, appointed Guang Zhao to fill the vacancy created
by such resignation, which appointment became effective on August 7,
2010.  In addition, our executive officer was replaced by Guang Zhao upon
the closing of the reverse acquisition.





14


As a
result of our acquisition of Honour Bond, we now own all of the issued and
outstanding capital stock of Honour Bond, which in turn owns all of the issued
and outstanding capital stock of Dongbo Consulting ShengzhengZhihaoDongbo
Technology Ltd., a Chinese limited company (“Zhihao”).  In addition, we
effectively and substantially control Dandong LongSheng Horticulture Technology
Co., Ltd., a Chinese limited company (“Dandong LongSheng”), through a series of
captive agreements with Zhihao.  Dandong LongSheng is principally engaged
in the production of blueberry seedlings in the PRC.





Honour
Bond was established in Hong Kong on January 5, 2010 to serve as an intermediate
holding company.  Zhihao was established in China on March 4, 2010.





Dandong
LongSheng was founded in March of 2008 in the People’s Republic of China to meet
the strict supply chain demands of the food and beverage industry for quality
high-end agricultural products.  Our offices and growing facilities are
located in and around the city of Dandong in Liaoning Province.  Our
products consist of a number of blueberry seedling varietals.  Currently,
we have the capacity to grow seven million seedlings per year in our 34
greenhouses on five acres of growing facilities.  We sell our seedlings to
a number of agricultural enterprises throughout northern China, who then replant
them and cultivate them to maturity in blueberry farms.




Our
unique cultivation techniques allow us to produce multiple semi-mature blueberry
plants from seedlings at far higher efficiencies, survival rates and in shorter
periods of time than many of our competitors, contributing to our strong gross
margins.  We currently employ approximately 155 individuals.





Contractual
Arrangements with our Controlled Affiliate and its Shareholder




On March
10, 2010, prior to the reverse acquisition transaction, Dongbo Consulting and
Dandong LongSheng and its sole shareholder Guang Zhao entered into a series of
agreements known as variable interest agreements (the “VIE Agreements”) pursuant
to which Dandong LongSheng became Dongbo Consulting’s contractually controlled
affiliate.  The use of VIE agreements is a common structure used to acquire
PRC corporations, particularly in certain industries in which foreign investment
is restricted or forbidden by the PRC government.  The VIE Agreements
included:





(1)       an Exclusive Technical Consulting and
Service Agreement between Dongbo Consulting and Dandong LongSheng pursuant to
which Dongbo Consulting is to provide technical support and consulting services
to Dandong LongSheng in exchange for all of the net income after taxes of
Dandong LongSheng.





(2)       a Call Option and Cooperation Agreement
among Guang Zhao, Dandong LongSheng and Dongbo Consulting under which the sole
shareholder of Dandong LongSheng has granted to Dongbo Consulting the
irrevocable right and option to acquire all of his equity interests in Dandong
LongSheng to the extent permitted by PRC law.  If PRC law limits the
percentage of Dandong LongSheng that Dongbo Consulting may purchase at any time,
then Dongbo Consulting may repeatedly exercise its option in such increments as
may be allowed by PRC law.  The exercise price of the option is the net
asset value of Dandong LongSheng at the time of exercise, or the percentage of
such net asset value which corresponds to any incremental exercise of the
option, or any higher price required by PRC law.  Any such difference
between such net asset value and such higher price required by PRC law is,
subject to all applicable laws and regulations, to be paid over to Dandong
LongSheng.  Dandong LongSheng and its owner agree to refrain from taking
certain actions which might harm the value of Dandong LongSheng or Dongbo
Consulting’s option, and Dongbo Consulting undertakes to offer necessary
financial support to Dandong LongSheng with respect to any losses or capital
requirements to the extent permitted by law;





(3)       a Power of Attorney by Guang Zhao
pursuant to which Mr. Zhao authorizes Dongbo Consulting to designate someone to
exercise all of his shareholder decision rights with respect to Dandong
LongSheng, provided that Dandong LongSheng consents to such authorization;
and





(4)     
an Equity Pledge Agreement
between Guang Zhao and Dongbo Consulting under which the sole shareholder of
Dandong LongSheng has pledged all of his equity in Dandong LongSheng to Dongbo
Consulting to guarantee Dandong LongSheng’s and Guang Zhao’s performance of
their obligations under the Exclusive Technical Consulting and Service
Agreement, the Call Option and Cooperation Agreement and the Equity Pledge
Agreement.





The VIE
Agreements with our Chinese affiliate and its shareholder, which relate to
critical aspects of our operations, may not be as effective in providing
operational control as direct ownership.  In addition, these arrangements
may be difficult and costly to enforce under PRC law.  Furthermore, our
failure to perform our obligations under the VIE Agreements could give Dandong
LongSheng the right to cease performance under or terminate the VIE Agreements
and thereby deprive us of the economic benefit of the VIE Agreements from which
we derive all of our revenues.  See “Risk Factors - Risks Relating to the
VIE Agreements” in the Company’s Current Report on Form 8-K filed with the SEC
on July 16, 2010.





15


Because
of the common control between Honour Bond, Dongbo Consulting and Dandong
LongSheng, for accounting purposes, the acquisition of these entities has been
treated as a recapitalization with no adjustment to the historical basis of
their assets and liabilities.  The restructuring has been accounted for
using the “as if” pooling method of accounting and the operations were
consolidated as if the restructuring had occurred as of the beginning of the
earliest period presented in our consolidated financial statements and the
current corporate structure had been in existence throughout the periods covered
by our consolidated financial statements.




Principal
Factors Affecting Our Financial Performance




Our
operating results are primarily affected by the following factors:





·
            Growth
      in the Chinese Economy -We operate our agricultural
      facilities in China and derive the majority of our revenues from sales to
      customers in China. Economic conditions in China, therefore, affect
      virtually all aspects of our operations, including the demand for our
      products, the availability and prices of our raw materials and our other
      expenses. China has experienced significant economic growth, achieving a
      compound annual growth rate of over 10% in gross domestic product from
      1996 through 2008. Concurrent with this growth, domestic demand for our
      products has also increased. China is expected to experience continued
      growth in all areas of investment and consumption, even in the face of a
      global economic recession.





·
            Growth
      of Demand in the Agricultural Products Market –We believe that China’s recent
      rise in consumption of fruit has been due to China’s economic growth and
      increased health and wellness consciousness. Management believes that
      along with increases in disposable income, Chinese consumers will elect to
      purchase more health foods and fresh fruits, which will benefit our
      sales.





·
            Fluctuations
      in Raw Material Supply, Prices and Demand for our Products -Our Company’s production costs
      depend largely on readily available supply price of necessary raw
      materials which include seedlings, fertilizer, and other growing
      equipment. Increases in the price of oil directly impact fertilizer
      prices. Blueberry demand impacts both our raw material costs as well as
      our sales price. We set our prices according to local market prices for
      seedlings, which is determined by supply and demand factors in Northern
      China.





·
            PRC
      Government Policy Promoting the Development of the Agricultural Industry
      -As part of the
      PRC’s eleventh five-year plan, local and federal authorities have offered
      assistance in the form of a variety of subsidies and tax incentives to
      farmers and agricultural producers with the goal of modernizing China’s
      agriculture industry and promoting rural
  affluence.





Management's
Discussion and Analysis of Financial Condition and Results of
Operations





Comparison of Nine and Three
Months Ended September 30, 2010 and 2009 (Unaudited)





The
following tables set forth key components of our results of operations during
the nine and three months periods ended September 30, 2010 and 2009, both in
dollars and as a percentage of our net sales.


16




Nine Months Ended
                      September 30, 2010
                    
                    
                    Nine Months Ended
                      September 30, 2009Amount
                    
                    
                    % of
                      Net Sales
                    
                    
                    Amount
                    
                    
                    % of
                      Net SalesNet
      Sales
                    
                    
                    5,051,948
                    
                    
                    
                    100
                    %
                    
                    
                    3,941,098
                    
                    
                    
                    100
                    %Cost
      of Sales
                    
                    
                    1,019,162
                    
                    
                    
                    -20
                    %
                    
                    
                    (1,020,239
                    )
                    
                    
                    -26
                    %Gross
      Proft
                    
                    
                    4,032,786
                    
                    
                    
                    80
                    %
                    
                    
                    2,920,859
                    
                    
                    
                    74
                    %Selling,
      General and Administrative Expenses
                    
                    
                    401,367
                    
                    
                    
                    8
                    %
                    
                    
                    56,464
                    
                    
                    
                    1
                    %Loss
      from flood
                    
                    
                    446,818
                    
                    
                    
                    9
                    %
                    
                    
                    -
                    
                    
                    
                    -Operating
      income
                    
                    
                    3,184,601
                    
                    
                    
                    63
                    %
                    
                    
                    2,864,395
                    
                    
                    
                    73
                    %Other
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    97
                    
                    
                    
                    0
                    %Other
      Expenses
                    
                    
                    (500,000
                    )
                    
                    
                    -10
                    %
                    
                    
                    (496
                    )
                    
                    
                    0
                    %Income
      Before Income Taxes
                    
                    
                    2,684,604
                    
                    
                    
                    53
                    %
                    
                    
                    2,863,996
                    
                    
                    
                    73
                    %Income
      Taxes
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      Income
                    
                    
                    2,684,604
                    
                    
                    
                    53
                    %
                    
                    
                    2,863,996
                    
                    
                    
                    73
                    %





Three Months Ended
                      September 30, 2010
                    
                    
                    Three Months Ended
                      September 30, 2009Amount
                    
                    
                    % of
                      Net Sales
                    
                    
                    Amount
                    
                    
                    % of
                      Net SalesNet
      Sales
                    
                    
                    1,398,403
                    
                    
                    
                    100
                    %
                    
                    
                    1,700,509
                    
                    
                    
                    100
                    %Cost
      of Sales
                    
                    
                    (304,621
                    )
                    
                    
                    -22
                    %
                    
                    
                    (453,062
                    )
                    
                    
                    -27
                    %Gross
      Proft
                    
                    
                    1,093,782
                    
                    
                    
                    78
                    %
                    
                    
                    1,247,447
                    
                    
                    
                    73
                    %Selling,
      General and Administrative Expenses
                    
                    
                    333,567
                    
                    
                    
                    24
                    %
                    
                    
                    16,701
                    
                    
                    
                    1
                    %Loss
      from flood
                    
                    
                    446,818
                    
                    
                    
                    32
                    %
                    
                    
                    -
                    
                    
                    
                    -Operating
      income
                    
                    
                    313,397
                    
                    
                    
                    22
                    %
                    
                    
                    1,230,746
                    
                    
                    
                    72
                    %Other
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    66
                    
                    
                    
                    0
                    %Other
      Expenses
                    
                    
                    (500,000
                    )
                    
                    
                    -36
                    %
                    
                    
                    (104
                    )
                    
                    
                    0
                    %Income
      (loss) Before Income Taxes
                    
                    
                    (186,603
                    )
                    
                    
                    -13
                    %
                    
                    
                    1,230,708
                    
                    
                    
                    72
                    %Income
      Taxes
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      (loss) Income
                    
                    
                    (186,603
                    )
                    
                    
                    -13
                    %
                    
                    
                    1,230,708
                    
                    
                    
                    72
                    %




Net Sales and Cost of
Sales





Our net
sales increased 28.2% to $5,051,948 in the nine months ended September 30, 2010
from $3,941,098 in the same period in 2009. Our net sales decreased 17.8% from
$1,700,509 in the three months ended September 30, 2009 to $1,398,403 in the
same period in 2010.  The quarterly decline was caused by the serious flood
disaster in North-East China in the three months ended September 20, 2010. The
cost of goods sold per sales ratio changed from 26% to 20% in the nine months
ended September 30, 2010.





Gross Profit and Gross
Margin





Our gross
profit increased 38.1% to $4,032,786 in the nine months ended September 30, 2010
from $2,920,859 in the same period in 2009. Gross profit decreased 12.3% to
$1,093,782 in the three months ended September 30, 2010 from $1,247,447 in the
three months ended September 30, 2009.  Gross profit as a percentage of net
revenue was 80% and 74% for the nine months ended September 30, 2010 and 2009,
respectively. The percentage increased from 73% to 78% for the three months
ended September 30, 2009 and 2010.





Selling, General and
Administrative Expenses





Our
selling, general and administration expenses increased  633% to $401,367
and 1,897% to $333,567 in the nine and three months ended September 30, 2010
from $56,464 and $16,701 in the same periods in 2009. This increase was mainly
due to consulting fees in the third quarter in 2010.





17


Lossfrom Flood




A serious
flood raged in North-East China in the third quarter 2010 destroying
hundreds of thousands of people’s homes and led to the destruction of millions
of dollars’ worth of crops.




Other
expenses


Our other
expenses increased drastically from $104 and $496 in the three and nine months
ended September 30, 2009 to $500,000 and $500,000 in the same period in 2010 due
to $500,000 merger related expenses during the third quarter of
2010.





Income before Income
Taxes





Our
income before income taxes decreased 6.3% to $2,684,601 in the nine months ended
September 30, 2010 from $2,863,996 in the same period in 2009. Our income (loss)
before taxes decreased 115.2% to ($186,603) in the three months ended September
30, 2010 from $1,230,708 in the three months ended September 30, 2009. 
This decrease was mainly attributable to the flood losses in the third
quarter.





Income
Taxes





As all of
our operations are conducted in China, according to the PRC’s new Enterprise
Income Tax, we are exempt from paying income taxes because we operate our
business in the agriculture industry, which the government encourages and offers
special incentives. We benefited from the tax exemption in both 2010 and
2009.





Liquidity and Capital
Resources





As of
September 30, 2010, we had cash and cash equivalents of $274,047, primarily
consisting of cash on hand and demand deposits. The following table provides
detailed information about our net cash flow for all financial statement periods
presented in this report. To date, we have financed our operations primarily
through cash flows from operations and equity contributions by our
shareholders.





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





For the nine months ended
                      September 302010
                    
                    
                    2009Net
      Cash Provided by Operating Activities
                    
                    $
                    4,172,565
                    
                    
                    $
                    1,345,713Net
      Cash Used in Investing Activities
                    
                    
                    (3,634,681
                    )
                    
                    
                    (241,917
                    )Net
      Cash Used in Financing Activities
                    
                    
                    (411,798
                    )
                    
                    
                    (1,573,977
                    )Effect
      of Exchange Rates on Cash
                    
                    
                    136,661
                    
                    
                    
                    828Net
      Increase (Decrease) in Cash and Cash Equivalents
                    
                    
                    262,747
                    
                    
                    
                    (469,353
                    )Cash
      and Cash Equivalents at the Beginning of Year
                    
                    
                    11,300
                    
                    
                    
                    479,902Cash
      and Cash Equivalents at the End of Year
                    
                    
                    274,047
                    
                    
                    
                    10,549




Operating
activities





Net cash
provided by operating activities was $4,172,565 for the nine months ended
September 30, 2010, as compared to $1,345,713 for the same period in 2009. The
change is attributable to the increase of net income for current
period.





Investing
activities





Net cash
used in investing activities for the nine months ended September 30, 2010 was
$(3,634,681), as compared to $(241,917) during the same period of 2009. The change is attributable to Company issuing loans to
third parties, totaling $3,446,928 as of September 30, 2010.





Financing
activities





Net cash
used in financing activities for the nine months ended September 30, 2010 was
$411,798 due to the repayment of amounts due to related parties compared to
$1,573,977 paid to related parties in 2009.





Outstanding loans to third
parties





Loans to
outside parties consist of various cash advances to unrelated companies and
individuals.  The loans are generally due one year from date issued,
unsecured, and non-interest bearing.  At September 30, 2010, three loans
totaling $3,446,928 were outstanding.





18


On July
1, 2010, two loans aggregating $3,006,500 were issued to borrowers for potential
investment in coal and bio energy projects.  The loan periods are for 1
year, and if the projects meet certain profit targets, the loans will
automatically convert into equity investments in the projects.  As of
September 30, 2010, the projects had not begun substantial
operations.





Also on
July 1, 2010, a loan for $440,428 was made to an unrelated third party. 
The loan is unsecured, due December 31, 2010, and non-interest
bearing.





We
believe that our cash on hand and cash flow from operations will meet part of
our present cash needs and we will require additional cash resources, to meet
our expected capital expenditure and working capital for the next 12 months. If
our own financial resources are insufficient to satisfy our capital
requirements, we may seek to sell additional equity or debt securities or obtain
additional credit facilities. The sale of additional equity securities could
result in dilution to our stockholders. The incurrence of indebtedness would
result in increased debt service obligations and could require us to agree to
operating and financial covenants that would restrict our operations. Financing
may not be available in amounts or on terms acceptable to us, if at all. Any
failure by us to raise additional funds on terms favorable to us, or at all,
could limit our ability to expand our business operations and could harm our
overall business prospects.





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 the price
change in travel industry and continually maintain effective cost control 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, revenues or expenses, results of operations, liquidity or capital
expenditures or capital resources that is material to an investor in our
securities.





Seasonality





Our
products’ growth is subject to seasonal weather conditions.  During
the winter our products are mostly dormant.





Critical
Accounting Policies




Use of
estimates





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 disclosure of contingent assets and
liabilities at the dates of the consolidated financial statements and the
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
results.





Revenue
recognition





The
Company recognizes sales in accordance with the United States Securities and
Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue
Recognition”. The Company recognizes revenue when the following fundamental
criteria are met: (i) persuasive evidence of an arrangement exists, (ii)
delivery has occurred or services have been rendered, (iii) the price to the
customer is fixed or determinable and (iv) collection of the resulting
receivable is reasonably assured. Revenue is not recognized until title and risk
of loss is transferred to the customer, which occurs upon delivery of goods, and
objective evidence exists that customer acceptance provisions have been met.
Deposits or advance payments from customers prior to delivery of goods and
passage of title of goods are recorded as advance from
customers.





19


Recent Accounting
Pronouncements





In
April 2010, the FASB issued new accounting guidance in applying the
milestone method of revenue recognition to research or development arrangements.
Under this guidance management may recognize revenue contingent upon the
achievement of a milestone in its entirety, in the period in which the milestone
is achieved, only if the milestone meets all the criteria within the guidance to
be considered substantive. This standard is effective on a prospective basis for
research and development milestones achieved in fiscal years, beginning on or
after June 15, 2010. Early adoption is permitted; however, adoption of this
guidance as of a date other than January 1, 2011 will require the Company
to apply this guidance retrospectively effective as of January 1, 2010 and
will require disclosure of the effect of this guidance as applied to all
previously reported interim periods in the fiscal year of adoption. As the
Company plans to implement this standard prospectively, the effect of this
guidance will be limited to future transactions. The Company does not expect
adoption of this standard to have a material impact on its financial position or
results of operations as it has no material research and development
arrangements which will be accounted for under the milestone
method.





In April
2010, the FASB issued new accounting guidance to clarify that an employee
share-based payment award with an exercise price denominated in the currency of
a market in which a substantial portion of the entity's equity securities trades
should not be considered to contain a condition that is not a market,
performance, or service condition. Therefore, an entity would not classify such
an award as a liability if it otherwise qualifies as equity. The amendments are
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2010. The Company does not expect
adoption of this standard will have a material impact on its consolidated
financial statements.





In
January 2010, the FASB issued new accounting guidance which requires new
disclosures regarding transfers in and out of Level 1 and Level 2 fair value
measurements, as well as requiring presentation on a gross basis of information
about purchases, sales, issuances and settlements in Level 3 fair value
measurements. The guidance also clarifies existing disclosures regarding level
of disaggregation, inputs and valuation techniques. The new guidance is
effective for interim and annual reporting periods beginning after
December 15, 2009.  Disclosures about purchases, sales, issuances and
settlements in the roll forward of activity in Level 3 fair value measurements
are effective for fiscal years beginning after December 15, 2010.  As
this guidance requires only additional disclosure, there should be no impact on
the consolidated financial statements of the Company upon adoption.





In
October 2009, a new accounting consensus was issued for
multiple-deliverable revenue arrangements. This consensus amends existing
revenue recognition accounting standards. This consensus provides accounting
principles and application guidance on whether multiple deliverables exist, how
the arrangement should be separated and the consideration allocated. This
guidance eliminates the requirement to establish the fair value of undelivered
products and services and instead provides for separate revenue recognition
based upon management’s estimate of the selling price for an undelivered item
when there is no other means to determine the fair value of that undelivered
item. Previously the existing accounting consensus required that the fair value
of the undelivered item be the price of the item either sold in a separate
transaction between unrelated third parties or the price charged for each item
when the item is sold separately by the vendor. Under the existing accounting
consensus, if the fair value of all of the elements in the arrangement was not
determinable, then revenue was deferred until all of the items were delivered or
fair value was determined. This new approach is effective prospectively for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010. The Company is in the process of
evaluating whether the adoption of this standard will have a material effect on
its financial position, results of operations or cash flows.





In June
2009, the FASB issued authoritative guidance on consolidation of variable
interest entities.  The new guidance is intended to improve financial
reporting by requiring additional disclosures about a company’s involvement in
variable interest entities.  This new guidance is effective for fiscal
years and interim periods beginning after November 15, 2009.  The Company
adopted this guidance effective January 1, 2010, and it had no impact on the
consolidated financial statements of the Company.





Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the Securities Exchange Commission (the
"SEC") did not or are not believed by management to have a material impact on
the Company's present or future consolidated financial statements.




Item
3.  Quantitative and Qualitative Disclosures About Market Risk





Not
applicable.





Item
4. Controls and Procedures





Disclosure
Controls and Procedures





Management,
with the participation of our Chief Executive Officer and Chief Financial
Officer, carried out an evaluation of the effectiveness of our “disclosure
controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period
covered by this quarterly report (the “Evaluation Date”). Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of the Evaluation Date, our disclosure controls and procedures were not
effective to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act (i) is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and (ii) 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.




20


Changes in Internal Control Over
Financial Reporting.





There
were no changes in our internal control over financial reporting that occurred
during the three months ending September 30, 2010 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.






PART
II. OTHER INFORMATION




Item
1. Legal Proceedings





Not
applicable.





Item
1A. Risk Factors





Not
applicable.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds





Not
applicable.





Item
3. Defaults Upon Senior Securities





Not
applicable.





Item
5. Other Information





Entry into Material
Agreements





On July
1, 2010, the Company extended two loans aggregating $3,006,500 to borrowers for
potential investment in coal and bio energy projects.





The
Company loaned approximately $1,403,033 to Shenzhen Qitongda Trading Company
Limited in connection with their bio-energy project and $1,603,467 to Shenzhen
Jin Sa Investment Development Co. Ltd. in connection with their coal mine
project.





The loan
periods are for 1 year, and if the projects meet certain profit targets, the
loans will automatically convert into equity investments in the projects. 
As of September 30, 2010, the projects had not begun substantial
operations.





The
agreements described above are filed as Exhibits 10.1, and 10.2 to this report,
and their terms are incorporated herein by reference.





On July
1, 2010, a loan for $440,428 was made to Jian Hao Da Information Consulting
Limited.  The loan is does not bear interest, is unsecured, and due
December 31, 2010.





Item
6. Exhibits





Exhibit
                    Number
                  
                  Description of Exhibit10.1
                  
                  Market
      Development Contract, effective July 1, 2010, between the Company and
      Shenzhen Qitongda Trading Company Limited.*10.2
                  
                  Loan
      Agreement, effective July 1, 2010, between the Company and Shenzhen Jin Sa
      Investment Development Co. Ltd.*31.1
                  
                  Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002*32.1
                  
                  Certifications
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002*





*       
   Filed
herewith


21




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.





North
      China Horticulture, Inc.,Date:
      November 22, 2010
                
                /s/
      Guang ZhaoGuang
      ZhaoChief
      Executive OfficerDate:
      November 22, 2010
                
                /s/
      Guang ZhaoGuang
      ZhaoChief
      Financial Officer




22