**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**Amendment
      No. 1**


to


**FORM
      10 - QSB**





**x QUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**





**For
      the Quarterly Period Ended March 31, 2008**





**o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**





**For
      the transition period from __________ to ____________**




**Commission
      File Number** **000-51081**





**China
      Infrastructure Investment Corporation**


**(Exact
      Name of Issuer as Specified In Its Charter)**





**Nevada**
            **88-0485183**(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)





**Room
      42, 4F, New Henry House, 10 Ice House Street, Central, Hong
      Kong**


(Address
      of principal executive offices)





**(011)
      852-2530 0222**


(Registrant’s
      Telephone Number, Including Area Code)





**LEARNING
      QUEST TECHNOLOGIES, INC.**


**1065
      West 1150 South, Provo, UT 84601**


(Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report)





Indicate
      by check mark whether the issuer (1) has filed all reports required to be filed
      by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12
      months, and (2) has been subject to such filing requirements for the past 90
      days. Yes x   No
      o




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




The
      number of outstanding shares of the registrant’s Common Stock, par value $0.001
      per share on May 14, 2008 was 80,000,000.












**EXPLANATORY
          NOTE**
 
 China
          Infrastructure Investment Corporation (the “Company”) is amending this Quarterly
          Report on Form 10-QSB/A solely to provide added detail with respect to
          a related
          party loan in the Notes to the Company’s Condensed Consolidated Financial
          Statements set forth herein.




**Table
        of Contents**


**Page**PART
                  I -- FINANCIAL INFORMATION
              F-1ITEM
                  1. FINANCIAL STATEMENTS
              F-1ITEM
                  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION
              1ITEM
                  3. CONTROLS AND PROCEDURES
              17PART
                  II - OTHER INFORMATION
              II-1ITEM
                  1. LEGAL PROCEEDINGS
              II-1ITEM
                  2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
                  PROCEEDS
              II-1ITEM
                  3. DEFAULT UPON SENIOR SECURITIES
              II-1ITEM
                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              II-1ITEM
                  5. OTHER INFORMATION
              II-1ITEM
                  6. EXHIBITS
              II-2SIGNATURES
              II-4EXHIBIT
                  31.1
              31.1-1EXHIBIT
                  31.2
              31.2-1EXHIBIT
                  32.1
              32.1-1EXHIBIT
                  32.2
              32.2-1




i




**PART
      I -- FINANCIAL INFORMATION**




**ITEM
      1.** **FINANCIAL
      STATEMENTS**




**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(UNAUDITED)**





**ASSETS****March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            2,414,924
            
            $
            5,830,962Restricted
                cash
            
            
            -
            
            
            2,631,475Notes
                receivable
            
            
            745,053
            
            
            656,556Accounts
                receivable, net
            
            
            4,139,956
            
            
            2,721,057Other
                receivables
            
            
            781,638
            
            
            1,389,579Due
                from related parties
            
            
            165,444,123
            
            
            156,096,787Other
                current assets
            
            
            704,440
            
            
            138,742Total
                current assets
            
            
            174,230,134
            
            
            169,465,158Toll
                road infrastructures, net
            
            
            433,232,786
            
            
            398,701,246Property,
                plant and equipment, net
            
            
            15,761,736
            
            
            14,754,523Land
                use rights, net
            
            
            48,501,768
            
            
            46,068,301Long-term
                investment
            
            
            1,424,055
            
            
            1,313,111Deferred
                taxes
            
            
            6,502,414
            
            
            6,170,156Total
                long-term assets
            
            
            505,422,759
            
            
            467,007,337**TOTAL
                ASSETS**
            
            $
            679,652,893
            
            $
            636,472,495




See
      accompanying notes to the condensed consolidated financial
      statements.




F-1





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(UNAUDITED)**





**LIABILITIES
                AND SHAREHOLDERS’ EQUITY****March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)****CURRENT
                LIABILITIES**Other
                payables and accrued liabilities
            
            $
            2,478,678
            
            $
            2,932,841Short-term
                bank loans
            
            
            -
            
            
            10,504,891Current
                portion of long-term loans
            
            
            10,307,311
            
            
            134,047,666Notes
                payables
            
            
            -
            
            
            5,262,951Payable
                to contractors
            
            
            25,110,652
            
            
            26,411,885Other
                current liabilities
            
            
            112,662
            
            
            157,426Deferred
                taxes
            
            
            7,435,581
            
            
            4,604,522Total
                current liabilities
            
            
            45,444,884
            
            
            183,922,182**LONG-TERM
                LIABILITIES**Long-term
                bank loans
            
            
            459,368,859
            
            
            299,279,102Deferred
                revenue
            
            
            6,502,338
            
            
            6,041,304Total
                long-term liabilities
            
            
            465,871,197
            
            
            305,302,406**TOTAL
                LIABILITIES**
            
            
            511,316,081
            
            
            489,242,588**CONTINGENCIES****SHAREHOLDERS’
                EQUITY**Common
                stock, $.001 par value, 150,000,000 shares authorized, 80,000,000
                shares
                and 54,400,000 shares issued and outstanding as of March 31, 2008
                and June
                30, 2007, respectively
            
            
            80,000
            
            
            54,400Additional
                paid-in capital
            
            
            140,573,673
            
            
            140,662,392Accumulated
                other comprehensive income
            
            
            22,992,478
            
            
            10,192,480Retained
                earnings
            
            
            4,690,661
            
            
            (3,679,365
            )Total
                Shareholders’ Equity
            
            
            168,336,812
            
            
            147,229,907**TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY**
            
            $
            679,652,893
            
            $
            636,472,495




See
      accompanying notes to the condensed consolidated financial
      statements.




F-2





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**


**(UNAUDITED)**





**Three
                Months Ended March 31,**
            
            **Nine
                Months Ended March 31,****2008**
            
            **2007**
            
            **2008**
            
            **2007****REVENUES**
            
            $
            11,630,749
            
            $
            9,857,195
            
            $
            40,509,496
            
            $
            26,876,316**OPERATING
                COSTS**
            
            
            830,977
            
            
            462,054
            
            
            4,012,823
            
            
            1,032,546**DEPRECIATION
                AND AMORTIZATION**
            
            
            1,758,334
            
            
            1,444,361
            
            
            5,121,538
            
            
            4,080,983**GROSS
                PROFIT**
            
            
            9,041,438
            
            
            7,950,780
            
            
            31,375,135
            
            
            21,762,787General
                and administrative expenses
            
            
            825,983
            
            
            628,402
            
            
            3,211,241
            
            
            1,561,433**INCOME
                FROM OPERATIONS**
            
            
            8,215,455
            
            
            7,322,378
            
            
            28,163,894
            
            
            20,201,354**OTHER
                INCOME (EXPENSES)**Interest
                expense, net
            
            
            (6,061,743
            )
            
            (4,777,610
            )
            
            (17,677,618
            )
            
            (14,191,792
            )Other
                income (expense), net
            
            
            290,200
            
            
            227,044
            
            
            679,216
            
            
            (33,822
            )**INCOME
                FROM OPERATIONS BEFORE INCOME TAXES**
            
            
            2,443,912
            
            
            2,771,812
            
            
            11,165,492
            
            
            5,975,740**INCOME
                TAX EXPENSE**
            
            
            (620,049
            )
            
            (692,953
            )
            
            (2,795,466
            )
            
            (1,493,935
            )**NET
                INCOME**
            
            
            1,823,863
            
            
            2,078,859
            
            
            8,370,026
            
            
            4,481,805**OTHER
                COMPREHENSIVE INCOME**Foreign
                currency translation gain
            
            
            6,421,839
            
            
            7,395,291
            
            
            12,799,998
            
            
            8,199,050**OTHER
                COMPREHENSIVE INCOME, NET**
            
            
            6,421,839
            
            
            7,395,291
            
            
            12,799,998
            
            
            8,199,050**COMPREHENSIVE
                INCOME**
            
            $
            8,245,702
            
            $
            9,474,150
            
            $
            21,170,024
            
            $
            12,680,855**WEIGHTED
                AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED**
            
            
            69,560,440
            
            
            55,000,000
            
            
            59,818,182
            
            
            55,000,000**NET
                INCOME PER COMMON SHARE, BASIC AND DILUTED**
            
            $
            0.03
            
            $
            0.04
            
            $
            0.14
            
            $
            0.08





See
      accompanying notes to the condensed consolidated financial
      statements.




F-3





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CHANGES IN CHAREHOLDERS’ EQUITY**


**(UNAUDITED)**





**Accumulated****Common
                Stock**
            
            
            
            **Other**
            
            **(Deficit)****($0.001
                par value)**
            
            **Additional**
            
            **Comprehensive**
            
            **Retained****Number
                of shares**
            
            **Par
                value**
            
            **Paid-in
                Capital**
            
            **Income**
            
            **Earnings**
            
            **Total****BALANCE
                AT JULY 1, 2007**
            
            
            54,400,000
            
            $
            54,400
            
            $
            140,662,392
            
            $
            10,192,480
            
            $
            (3,679,365
            )
            $
            147,229,907Foreign
                currency translation gain
            
            
            -
            
            
            -
            
            
            -
            
            
            12,799,998
            
            
            -
            
            
            12,799,998Recapitalization
            
            
            25,600,000
            
            
            25,600
            
            
            (88,719
            )
            
            -
            
            
            -
            
            
            (63,119
            )Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            8,370,026
            
            
            8,370,026**BALANCE
                AT MARCH 31, 2008**
            
            
            80,000,000
            
            $
            80,000
            
            $
            140,573,673
            
            $
            22,992,478
            
            $
            4,690,661
            
            $
            168,336,812




See
      accompanying notes to the condensed consolidated financial
      statements.





F-4





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      CONSOLIATED STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





**Nine
                Months Ended March 31,****2008**
            
            **2007****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                income
            
            $
            8,370,026
            
            $
            4,481,805Adjustments
                to reconcile net income to net cash providedby
                operating activities:Provision
                for doubtful accounts
            
            
            664,658
            
            
            -Depreciation
                and amortization
            
            
            5,532,921
            
            
            4,439,106Deferred
                taxes
            
            
            2,498,801
            
            
            1,389,508Deferred
                revenue
            
            
            (424,291
            )
            
            (394,913
            )Imputed
                interest
            
            
            376,932
            
            
            354,099**Changes
                in operating assets and liabilities, net of effects****of
                reverse merger:****(Increase)
                Decrease In:**Accounts
                receivable
            
            
            (2,083,557
            )
            
            (3,215,734
            )Other
                receivables
            
            
            607,941
            
            
            433,614Other
                current assets
            
            
            (565,699
            )
            
            510,569**Increase
                (Decrease) In:**Other
                payables and accrued liabilities
            
            
            (454,163
            )
            
            (2,603,548
            )Other
                current liabilities
            
            
            (107,883
            )
            
            59,124Net
                cash provided by operating activities
            
            
            14,415,686
            
            
            5,453,630**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Purchases
                of construction in progress
            
            
            (5,672,002
            )
            
            (22,622,234
            )Purchases
                of plant and equipment
            
            
            (485,713
            )
            
            (239,023
            )Purchases
                of toll road infrastructures
            
            
            (21,733
            )
            
            -Refund
                of deposit for long-term investment
            
            
            -
            
            
            1,230,449Proceeds
                from disposition of plant and equipment
            
            
            162,817
            
            
            904Due
                from related parties
            
            
            3,651,467
            
            
            3,254,809Net
                cash used in investing activities
            
            
            (2,365,164
            )
            
            (18,375,095
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from long-term bank loans
            
            
            160,822,769
            
            
            18,799,392Repayments
                of long-term bank loans
            
            
            (161,074,015
            )
            
            (19,259,391
            )Proceeds
                from short-term bank loans
            
            
            -
            
            
            5,083,706Repayments
                of short- term bank loans
            
            
            (10,923,768
            )
            
            -Proceeds
                from notes payable
            
            
            -
            
            
            7,114,647Repayments
              of notes payable
            
            
            (5,472,808
            )
            
            -Restricted
              cash
            
            
            2,631,475
            
            
            (3,615,835
            )Net
                cash (used in) provided by financing activities
            
            
            (14,016,347
            )
            
            8,122,519**NET
                DECREASE IN CASH AND CASH EQUIVALENTS**
            
            
            (1,965,825
            )
            
            (4,798,946
            )Effect
                of exchange rate changes on cash
            
            
            (1,450,213
            )
            
            2,963,382Cash
                and cash equivalents at beginning of year
            
            
            5,830,962
            
            
            5,524,840**CASH
                AND CASH EQUIVALENTS AT END OF PERIOD**
            
            $
            2,414,924
            
            $
            3,689,276Interest
                paid
            
            $
            24,275,663
            
            $
            18,799,392Income
                taxes paid
            
            $
            682,736
            
            $
            -




See
      accompanying notes to the condensed consolidated financial
      statements.





F-5





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**CONDENSED
      CONSOLIATED STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**







**SUPPLEMENTAL
      NON-CASH DISCLOSURES:**




1.
            During
                the nine months ended March 31, 2008 and 2007, $4,370,769 and $7,070,132
                were transferred from construction in progress to toll road
                infrastructures, respectively.




2.
            During
                the nine months ended March 31, 2008 and 2007, $0 and $29,214 were
                transferred from construction in progress to plant and equipment,
                respectively.




3.
            As
                of March 31, 2008 and 2007, $4,370,769 and $6,139,058 of purchase
                of
                construction in progress for the nine months ended was not settled
                in cash
                or cash equivalents and the liabilities were recorded as payable
                to
                contractors accordingly.




See
      accompanying notes to the condensed consolidated financial
      statements.




F-6




**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONSENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**1.**  **ORGANIZATION
      AND PRINCIPAL ACTIVITIES**




China
      Infrastructure Investment Corporation (Formerly Learning Quest Technologies,
      Inc.) and subsidiaries (“ CIIC ”
or
      the
“ Company ”)
      was
      incorporated under the laws of the State of Nevada on January 11, 2001.
      Effective April 5, 2008, the Company changed its name to China Infrastructure
      Investment Corporation.




On
      February 8, 2008, the Company entered into a Share Exchange Agreement (the
      “ Exchange
      Agreement ”)
      with
      Color Man Holdings Limited, a British Virgin Islands company (“ CMH ”)
      and
      Joylink Holdings Limited, a British Virgin Islands company and the sole
      stockholder of CMH (the “ Stockholder ”).
      As a
      result of the share exchange, CIIC acquired all of the issued and outstanding
      securities of CMH, an inactive holding company, from the Stockholder in exchange
      for 54,400,000 newly-issued shares of CIIC’s common stock, par value $0.001 per
      share (“ Common
      Stock ”),
      representing 68% of CIIC’s issued and outstanding Common Stock (the
“ Exchange ”).
      The
      Exchange is intended to constitute a tax-free reorganization pursuant to the
      provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
      amended. As a result of the Exchange, CMH became a wholly-owned subsidiary
      of
      CIIC. Generally accepted accounting principles require that a company whose
      shareholders retain the majority interest in a combined business be treated
      as
      the acquirer for accounting purpose, resulting in a reverse acquisition.
      Accordingly, the share exchange transaction has been accounted for as a
      recapitalization of CIIC.




CMH
      was
      formed on April 11, 2005 as a British Virgin Islands company with authorized
      capital of US$50,000 divided into 50,000 shares, each having a par value of
      US$1.00. Wise On China Limited (“ WOCL ”)
      was
      established and incorporated on November 2, 2005 with authorized share capital
      of HK$10,000 (approximately US$1,279.44) divided into 10,000 shares, each having
      a par value of HK$1.00 (approximately US$0.13). CMH’s sole business is to act as
      a holding company for WOCL, and WOCL’s sole business is to act as a holding
      company for the Company. CMH owns one share of WOCL approximately equal to
      US$0.13 in registered capital. Neither CMH nor WOCL have a board of directors,
      however each company has one Executive Director that serves as the legal
      representative and which may appoint a General Manager to lead each company’s
      routine operations. CMH’s current Executive Director is RCD (Nominee) Limited
      and WOCL’s current Executive Director is Siu Choi Fat. Both CMH and WOCL are
      inactive holding companies and have their offices located at Room Flat/Room
      42,
      4F, New Henry House, 10 Ice House Street, Central, Hong Kong.




Pingdingshan
      Pinglin Expressway Co., Ltd (“ Ping ”)
      was
      incorporated under the laws of the People’s Republic of
      China (“ PRC ”)
      on May
      12, 2003 by four investors, namely Henan Shengrun Venture Investment Management
      Co., Ltd. (“ SVIC ”),
      Henan
      Pingdingshan Zhongya Road and Bridge Construction Co., Ltd. (“ PZRB ”),
      Pingdingshan Expressway Construction Co., Ltd. (“ PECC ”)
      and
      Zhongyuan Trust & Investment Co., Ltd. (“ ZTIC ”).
      At
      establishment, the percentage of each party’s equity interests was 46%, 18%, 18%
      and 18%, respectively. On May 21, 2007, PZRB, PECC, and ZTIC transferred their
      equity interests in Ping to SVIC and Li Xipeng. As a result, Ping is held by
      SVIC and Li Xipeng with equity interests of 95% and 5%, respectively. Ping’s
      approved operation tenure is 30 years from May 21, 2007. On July 30, 2007,
      Ping’s shareholders completed an acquisition and exchange transactions with
      WOCL. After the transfer, WOCL owned 100% interest of Ping.




With
      the
      approval from Henan Transportation Bureau and the State Development and
      Revolution Committee of China [NO. 2003-1784], the Company is permitted to
      construct and operate the toll road from Pingdingshan to Linru, Henan, China,
      for 30 years from 2003. Pursuant to the permission from Henan Transportation
      Bureau and Henan Development and Revolution Committee [NO. 2005-1885], the
      Company is entitled to operate 6 toll gates. All the rates applicable to the
      automobiles are defined by the Henan Transportation Bureau and Henan Development
      and Revolution Committee.




The
        principal activities of the Company are investment, construction, operation,
        and
        management of the Pingdingshan - Linru section (“ Pinglin
        Expressway ”),
        and
        the rent of petrol stations and service districts along the toll roads.
        Currently, all the operations of the Company are in China.


F-7





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**




**2.**  **BASIS
      OF PRESENTATION**




The
      unaudited condensed consolidated financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles for interim
      financial information and pursuant to the requirements for reporting on Form
      10−QSB and Item 310(b) of Regulation S−B. Accordingly, they do not include all
      the information and footnotes required by accounting principles generally
      accepted in the United States of America for complete financial statements.
      However, such information reflects all adjustments (consisting solely of normal
      recurring adjustments), which are, in the opinion of management, necessary
      for
      the fair presentation of the consolidated financial position and the
      consolidated results of operations. Results shown for interim periods are not
      necessarily indicative of the results to be obtained for a full year. The
      condensed consolidated balance sheet information as of June 30, 2007 was derived
      from the audited consolidated financial statements included in the Company’s
      Current Report on Form 8−K filed with the SEC on February 11, 2008. These
      interim financial statements should be read in conjunction with that
      report.




**3.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**




**(a)**  **Principles
      of Consolidation**




The
      consolidated financial statements include the accounts of China Infrastructure
      Investment Corporation and the following subsidiaries:




(i)
            CMH
                (An inactive holding company, 100% subsidiary of CIIC).(ii)
            WOCL
                ( An inactive holding company,100% subsidiary of CMH)(iii)
            Ping
                ( 100% subsidiary of WOCL).




All
      inter-company accounts and transactions have been eliminated in
      consolidation.




**(b)**  **Use
      of Estimates**




The
      preparation of the financial statements in conformity with generally accepted
      accounting principles in the United States of America requires management to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting periods.




Management
      makes these estimates using the best information available at the time the
      estimates are made. Actual results could differ materially from those
      estimates.




F-8





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**


3.  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES **(Continued)****




**(c)**  **Fair
      Value of Financial Instruments**




The
      Company’s financial instruments include restricted cash, accounts receivable,
      note receivable, due from related parties, other receivables, notes payable,
      other payables and accrued liabilities, short-term bank loans, payable to
      contractors, other current liabilities and deferred taxes. Management has
      estimated that the carrying amount approximates fair value due to their
      short-term nature. The fair value of the Company’s long-term bank loans,
      deferred revenue and payables to contractors are estimated based on the current
      rates offered to the Company for debt of similar terms and maturities. The
      Company’s fair value of long-term bank loans, deferred revenue and payables to
      contractors was not significantly different from the carrying value at March
      31,
      2008.




**(d)**  **Cash
      and Cash Equivalents**




For
      financial reporting purposes, the Company considers all highly liquid
      investments purchased with original maturity of three months or less to be
      cash
      equivalents. The Company maintains no bank accounts in the United States of
      America.




**(e)**  **Accounts
      Receivables**




Trade
      receivables are recognized and carried at original invoice amount less allowance
      for any uncollectible amounts. An estimate for doubtful accounts is made when
      collection of the full amount is no longer probable. Allowance for doubtful
      accounts amounting to $664,658 was provided by the
      Company’s management as of March 31, 2008.




**(f)**  **Toll
      Road Infrastructures**




Toll
      road
      infrastructures are carried at cost less accumulated depreciation and
      amortization. Depreciation and amortization of the toll road infrastructures
      are
      calculated to write off their cost, commencing from the date of commencement
      of
      commercial operation of the toll roads, based on the ratio of actual traffic
      volume compared to the total expected traffic volume of the toll roads as
      estimated by reference to traffic projection reports prepared by an independent
      PRC organization each year.




**(g)**  **Land
      Use Rights**




According
      to the laws of China, land in the PRC is owned by the Government and cannot
      be
      sold to an individual or company.  However, the government grants the user
      a “land use right” to use the land.  The land use rights granted to the
      Company is being amortized when the toll road is ready to operate, using the
      straight-line method over the approved toll road operating period of 27
      years.




**(h)**  **Revenue
      Recognition**




Revenue
      represents toll revenue net of business tax, are recognized when all of the
      following criteria are met:




-
            The
                amount of revenue can be measured
                reliably,




-
            It
                is probable that the economic benefits associated with the transaction
                will flow to the enterprise,




-
            The
                costs incurred or to be incurred in respect of the transaction can
                be
                measured reliably, and




-
            Collectibility
                is reasonably assured.


F-9





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**




3.  **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES **(Continued)****


The
      rental income is measured at the fair value of the consideration receivable
      and
      represents amounts receivable for services provided in the normal course of
      business, net of discounts and sales tax.




**(i)**  **Income
      Taxes**




Deferred
      tax assets and liabilities are recognized for the future tax consequence
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases. Deferred tax
      assets and liabilities are measured using enacted tax rates expected to be
      applied to taxable income in the years in which those temporary differences
      are
      expected to reverse. The effect on deferred tax assets and liabilities of a
      change in tax rates is recognized in the statement of income in the period
      that
      includes the enactment date. 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.  Also see Note 10.




**(j)**  **Foreign
      Currency Translation**




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




**March
                31, 2008**
            
            **March
                31, 2007**Periods
                ended RMB: US$ exchange rate
            
            
            7.0222
            
            
            7.7410Average
                RMB: US$ exchange rate for the three months ended
            
            
            7.1682
            
            
            7.7792Average
                RMB: US$ exchange rate for the nine months ended
            
            
            7.3235
            
            
            7.8683




**(k)**  **Earnings
      Per Share**




Basic
      earnings per share is computed by dividing income available to common
      shareholders by the weighted-average number of common shares outstanding during
      the period. Diluted earnings per share is computed similar to basic earnings
      per
      share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      There were no potentially dilutive securities for the nine months ended March
      31, 2008 and 2007.




**(l)**  **Recent
      Accounting Pronouncements**




In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (“ SFAS ”)
      No.
      157, “Fair Value Measurements”, which provides enhanced guidance for using fair
      value to measure assets and liabilities. SFAS No. 157 provides a common
      definition of fair value and establishes a framework to make the measurement
      of
      fair value in generally accepted accounting principles more consistent and
      comparable. SFAS No. 157 also requires expanded disclosures to provide
      information about the extent to which fair value is used to measure assets
      and
      liabilities, the methods and assumptions used to measure fair value, and the
      effect of fair value measures on earnings. SFAS No. 157 is effective for
      financial statements issued in fiscal years beginning after November 15, 2007
      and to interim periods within those fiscal years. The adoption of SFAS No.
      157
      did not have an impact on the Company’s financial statements.




F-10




**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**




3.  **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES **(Continued)****


In
      February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option
      for
      Financial Assets and Financial Liabilities Including an amendment of FASB
      Statement No. 115 (FAS 159). FAS 159 became effective for the Company on July
      1,
      2007. This standard permits companies to choose to measure many financial
      instruments and certain other items at fair value and report unrealized gains
      and losses in earnings. Such accounting is optional and is generally to be
      applied instrument by instrument. The adoption of SFAS No. 159 did not have
      an
      impact on the Company’s financial statements.




In
      December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and
      SFAS No. 160, Noncontrolling Interests in Consolidated Financial
      Statements. SFAS No. 141 (R) requires an acquirer to measure the
      identifiable assets acquired, the liabilities assumed, and any noncontrolling
      interest in the acquiree at their fair values on the acquisition date, with
      goodwill being the excess value over the net identifiable assets acquired.
      SFAS
      No.160 clarifies that a noncontrolling interest in a subsidiary should be
      reported as equity in the consolidated financial statements. The calculation
      of
      earnings per share will continue to be based on income amounts attributable
      to
      the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for
      financial statements issued for fiscal years beginning after December 15,
      2008. Early adoption is prohibited. We have not yet determined the effect on
      our
      consolidated financial statements, if any, upon adoption of SFAS No. 141
      (R) or SFAS No. 160. We are aware that our accounting for minority
      interest will change and we are considering those effects now but believe the effects will only be a
      reclassification of minority interest from mezzanine equity to our stockholder’s
      equity section in the balance sheet. In any case we do not believe the
      implementation of SFAS 160 will be material to our financial position. SFAS
      141
      (R) will significantly affect the accounting for future business
      combinations and we will determine the accounting as new combinations occur.




**4.**  **RELATED
      PARTY TRANSACTIONS**




**March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)****Notes
                receivable from related companies:**Tai
                Ao Expressway Co., LtdDue
                June 30, 2008 and 2007, respectively
            
            $
            68,358,373
            
            $
            46,881,641Interest
                receivable
              (subsequently
                settled in April 2008)
            
            
            3,491,373
            
            
            8,172,55471,849,746
            
            
            55,054,195Xinyang
                Expressway Co., LtdDue
                June 30, 2008 and 2007, respectively
            
            
            68,518,033
            
            
            63,180,005Interest
                receivable
              (subsequently
                settled in April 2008)
            
            
            3,807,890
            
            
            7,863,93972,325,923
            
            
            71,043,944Subtotal
            
            $
            144,175,669
            
            $
            126,098,139





**Advance
                to a related company:**Tai
                Ao Expressway Co., Ltd
            
            $
            21,268,454
            
            $
            29,998,648Total
            
            $
            165,444,123
            
            $
            156,096,787





F-11




**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**


4.  **RELATED
      PARTY TRANSACTIONS (Continued)**




The
      notes
      receivables were provided to these companies for their construction working
      capital. The above two companies are related to the Company through common
      control by the same shareholder, SVIC. The notes receivable are short term,
      interest bearing and unsecured. The interest rate was 7.83% and 6.57% for the
      nine months ended March 31, 2008 and 2007, respectively. Interest income
      amounting to $7,293,966 and $5,224,179 is recognized in the condensed
      consolidated statements of income for the nine months ended March 31, 2008
      and
      2007, respectively.




During
      the 2006 and 2007 fiscal years, the Company made advances to suppliers on behalf
      of Tai Ao Expressway Co. Ltd. for the purchase of construction materials,
      amounting to approximately $45 million, in order to develop a strategic
      relationship with such expressway company for the purpose of advancing the
      future business development of the Company. The balances of $21,268,454 and
      $29,998,648 at March 31, 2008 and June 30, 2007, respectively, are unsecured,
      interest free and due on demand.




**5.**  **TOLL
      ROAD INFRASTRUCTURES, NET**




Toll
      road
      infrastructures consist of the following:




**March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)**At
                cost:
            
            $
            441,575,190
            
            $
            402,949,366Less:
                Accumulated depreciation
            
            
            8,342,404
            
            
            4,248,120Toll
                road infrastructures, net
            
            $
            433,232,786
            
            $
            398,701,246





Depreciation
      expenses for the nine months ended March 31, 2008 and 2007 were $3,581,694
      and
      $2,648,269, respectively.




**6.**  **PLANT
      AND EQUIPMENT, NET**




Plant
      and
      equipment consist of the following:




**March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)**At
                cost:Toll
                station and ancillary facilities
            
            $
            9,897,388
            
            $
            8,924,281Communication
                and monitoring equipment
            
            
            5,553,519
            
            
            5,120,861Motor
                vehicles
            
            
            1,429,437
            
            
            1,505,873Machinery
            
            
            290,165
            
            
            231,449Office
                equipment
            
            
            386,926
            
            
            230,15517,557,435
            
            
            16,012,619Less:
                Accumulated depreciationToll
                station and ancillary facilities
            
            
            704,634
            
            
            431,525Communication
                and monitoring equipment
            
            
            335,262
            
            
            184,962Motor
                vehicles
            
            
            567,044
            
            
            528,774Machinery
            
            
            63,609
            
            
            35,417Office
                equipment
            
            
            125,150
            
            
            77,4181,795,699
            
            
            1,258,096Property,
                plant and equipment, net
            
            $
            15,761,736
            
            $
            14,754,523




Depreciation
      expenses for the nine months ended March 31, 2008 and 2007 were $552,433 and
      $488,895, respectively.




F-12





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**7.**  **LAND
      USE RIGHTS**




Land
      use
      rights consist of the following:




**March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)**Cost
            
            $
            52,360,946
            
            $
            48,281,667Less:
                Accumulated amortization
            
            
            3,859,178
            
            
            2,213,366Land
                use rights, net
            
            $
            48,501,768
            
            $
            46,068,301







Amortization
      expense for the nine months ended March 31, 2008 and 2007 were $1,398,793and
      $1,301,941, respectively.




Amortization
      expense for the next five years and thereafter is as follows:




March
                31, 2009
            
            $
            1,945,076March
                31, 2010
            
            
            1,945,076March
                31, 2011
            
            
            1,945,076March
                31, 2012
            
            
            1,945,076March
                31, 2013
            
            
            1,945,076Thereafter
            
            
            38,776,388Total
            
            $
            48,501,768




**8.**  **LONG-TERM
      INVESTMENT**




Ownership
                Interest
            
            **March
                31, 2008**
            
            Ownership
                Interest
            
            **June
                30, 2007****(Unaudited)**At
                cost:Pingdingshan
                City
              Credit
                Co., Ltd.
            
            
            3%
            
            $
            1,424,055
            
            
            3%
            
            $
            1,313,111




On
      March
      29, 2006, Ping entered into a share purchase agreement with Pingdingshan City
      Credit Co., Ltd., a local financial institute. Pursuant to the agreement, Ping
      obtained 3% of the total equity interest of Pingdingshan City Credit Co., Ltd.
      with the consideration amounted to Rmb10 million (approximately US$1.4 million).
      Cost method was adopted by the management for the accounting of such investment
      as the Company obtained a minor interest in Pingdingshan Co., Ltd. The
      Company evaluates its long-term investment for impairment each reporting
      period.




F-13





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**9.**  **LONG-TERM
      BANK LOANS**




Long-term
      bank loans consist of the following:




**Non-current
                portion**
            
            **March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)**Loans
                from National Development Bank of China Henan Branch, due May 20,
                2017,
                bearing a 7.83% interest rate per annum, secured by the toll road
                operating right owned by the Company. Principal is paid every 6 months
                in
                20 unequal installments from November 2007, and the interest is paid
                quarterly.
            
            $
            93,987,639
            
            $
            89,291,576Loans
                from Agricultural Bank of China, due November 20, 2018, bearing a
                7.83%
                interest rate per annum, secured by the toll road operating right
                owned by
                the Company. Principal is to be paid every year in 10 unequal installments
                from November 2009, and the interest is paid monthly.
            
            
            28,481,103
            
            
            26,262,228Loans
                from Agricultural Bank of China, due March 20, 2019, bearing a 7.83%
                interest rate per annum, secured by the toll road operating right
                owned by
                the Company. Principal is to be paid every year in 10 unequal installments
                from November 2010, and the interest is paid monthly.
            
            
            28,481,103
            
            
            26,262,228Loans
                from Industrial and Commercial Bank of China Pingdingshan Branch,
                due
                November 19, 2019, bearing a 7.05% interest rate per annum, secured
                by the
                toll road operating right owned by the Company. Principal is paid
                every
                year in 13 unequal installments from November 2007, and the interest
                is
                paid monthly.
            
            
            166,013,500
            
            
            157,463,070




F-14





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**


**9.****LONG-TERM
      BANK LOANS(Continued)**




**March
                31, 2008**
            
            **June
                30, 2007****(Unaudited)****Non-current
                portion**Loans
                from National Development Bank of China Henan Branch, due November
                22,
                2022, bearing a 7.83% interest rate per annum, secured by the toll
                road
                operating right owned by the Company. Principal is to be paid every
                6
                months in 12 unequal installments from May 2017, and the interest
                is paid
                quarterly.
            
            
            142,405,514
            
            
            -**Current
                portion**
            
            
            10,307,311
            
            
            134,047,666Total
            
            $
            469,676,170
            
            $
            433,326,768







For
      the
      nine months ended March 31, 2008 and 2007, the Company incurred interest
      expenses of $24,275,663 and $18,799,392, respectively, for the related long
      term
      bank loans.




According
      to the loan agreements with National Development Bank of China Henan Brach,
      the
      bank has the right to demand the repayment in full if the Company provides
      the
      guarantee that exceeds 70% of its total assets to third parties. The Company
      did
      not provide any guarantee to the third party as of March 31, 2008 and
      2007.




The
      repayment schedule for the long-term bank loans is as follows:




March
                31, 2009
            
            $
            10,307,311March
                31, 2010
            
            
            15,673,151March
                31, 2011
            
            
            19,475,378March
                31, 2012
            
            
            28,982,370March
                31, 2013
            
            
            28,982,370Thereafter
            
            
            366,255,590Total
            
            $
            469,676,170




F-15





**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**







**10.**  **INCOME
      TAXES**




On
      March
      16, 2007, the National People’s Congress of China approved the Corporate Income
      Tax Law of the People’s Republic of China (the “ new
      CIT Law ”),
      which
      is effective from January 1, 2008.Under the new CIT Law, the corporate income
      tax rate applicable to the Company starting from January 1, 2008 is 25%,
      replacing the currently applicable tax rate of 33%.




Effective
      January 1, 2007, the Company adopted Financial Accounting Standards Board
      (“ FASB ”)
      Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“ FIN
      48 ”).
      -- AN
      INTERPRETATION OF FASB STATEMENT NO. 109, ACCOUNTING FOR 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 FIN 48, 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. FIN 48 also provides guidance on recognition, classification,
      interest and penalties on income taxes, accounting in interim periods and
      requires increased disclosures. As of March 31, 2008, the Company does not
      have
      a liability for unrecognized tax benefits.




Income
      tax expense is summarized as follows:




**Nine
                Months Ended****March 31****2008**
              **(Unaudited)**
            
            **2007**
              **(Unaudited)**Current
            
            $
            272,625
            
            $
            -Deferred
            
            
            2,522,841
            
            
            1,493,935Income
                tax expense
            
            $
            2,795,466
            
            $
            1,493,935




The
      Company’s income tax expense differs from the “expected” tax expense (computed
      by applying the CIT rate of 25% percent to income before income taxes) as
      follows:




**Nine
                Months Ended****March
                31****2008**
              **(Unaudited)**
            
            **2007**
              **(Unaudited)**Computed
                “expected” expense
            
            $
            2,795,466
            
            $
            1,493,935Permanent
                difference
            
            
            -
            
            
            -Income
                tax expense
            
            $
            2,795,466
            
            $
            1,493,935




F-16




**CHINA
      INFRASTRUCTURE INVESTMENT CORPORATION**


**(FORMERLY
      LEARNING QUEST TECHNOLOGIES, INC.) AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**


10.  **INCOME
      TAXES (Continued)**




The
      tax
      effects of temporary differences that give rise to the Company’s net deferred
      tax assets and liabilities are as follows:




**March
                  31, 2008**
              
              **June
                  30, 2007****(Unaudited)****Non-current
                  portion:**Rental
                  income
              
              $
              75,779
              
              $
              -Business
                  tax
              
              
              -
              
              
              81,262Capitalized
                  interest
              
              
              2,177,667
              
              
              2,008,011Amortization
              
              
              964,795
              
              
              553,341Depreciation
              
              
              424,341
              
              
              424,830Bad
                  debt
              
              
              2,623,822
              
              
              2,419,408Accumulated
                  loss carry forward
              
              
              236,010
              
              
              683,304Total
                  deferred tax assets
              
              $
              6,502,414
              
              $
              6,170,156**Current
                  portion**Sales
                  cut-off
              
              $
              (1,307,575
              )
              $
              (889,090
              )Interest
                  income
              
              
              (6,212,007
              )
              
              (4,011,492
              )Other
                  income
              
              
              84,001
              
              
              296,060Total
                  deferred tax liabilities
              
              $
              (7,435,581
              )
              $
              (4,604,522
              )




**11.**  **CONTINGENCIES**




**Pending
      litigation**




(a)  The
      Company entered into an agreement to purchase land from Pingdingshan No.3 Cement
      Factory for $1,843,646. However, the Company was not informed that such land
      was
      pledged as collateral for loans to the cement factory. Pingdingshan No. 3 Cement
      Company went bankrupt and the Company that loaned them money then sued the
      Company for the loss of the collateral. On July 13, 2006, judgment was made
      by
      the Henan Pingdingshan Intermediary Court in which the Company was required
      to
      pay the lending company $485,851. The amount was paid in August 2006 and
      recorded as other expense in the statement of income (loss) for the year ended
      June 30, 2007. The Company is appealing the ruling to a higher court and the
      final judgment is pending.




(b)  On
      June
      27, 2007, China railway No. 5 bureau, the constructor who won the bid in the
      Pinglin expressway no.2 road connection project, was sued by the subcontractors
      Hujianting and Hefeiyue for postponing the commencing date of construction
      for
      more than 10 months. The total damage claimed in this case was $647,364, and
      the
      Company, as the 5th defendant, was brought into this case by the plaintiff.
      The
      case is currently ongoing and the Company believes the claims against them
      are
      without substance and they plan to vigorously defend themselves. As such, there
      is no contingency accrual for this case at March 31, 2008.




F-17


**ITEM
      2.** **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**




**Forward
      Looking Statements**




The
      following discussion of our financial condition and results of operations is
      based upon and should be read in conjunction with our consolidated financial
      statements and their related notes included in this Report. This report contains
      forward-looking statements. Generally, the words “ believes ”,
      “ anticipates ”,
      “ may ”,
      “ will ”,
      “ should ”,
      “ expect ”,
      “intend”, “ estimate ”,
      “ continue ”
and
      similar expressions or the negative thereof or comparable terminology are
      intended to identify forward-looking statements. Such statements are subject
      to
      certain risks and uncertainties, including the matters set forth in this report
      or other reports or documents we file with the SEC from time to time, which
      could cause actual results or outcomes to differ materially from those
      projected. Undue reliance should not be placed on these forward-looking
      statements which speak only as of the date hereof. We undertake no obligation
      to
      update these forward-looking statements.




**Business
      Overview**




We
      are
      engaged in the investment, construction, operation and manag ement
      of
      the Pinglin Expressway (also referred to herein as “the Expressway ”) toll
      road
      and the rental of petrol stations and service districts along the toll
      roads.




With
      the
      approval from Henan Communications Bureau
      and the State Development and Reform Committee of China [NO. 2003-1784], the Company is permitted to construct and
      operate the Pinglin Expressway in Henan, China for thirty (30) years from 2003.
      Pursuant to the permission from Henan Communications Bureau
      and Henan Development and Reform Committee [NO. 2005-1885], the Company is entitled to operate six (6) toll
      gates. All the rates applicable to the automobiles are defined by the Henan Communications Bureau
      and Henan Development and Reform Committee.




The
      Pinglin Expressway is a significant part of the national trunk, the Nanjing
      to
      Luoyang expressway (also referred to herein as the Nanluo Expressway). The
      Nanluo Expressway links the north-western regions to the south-eastern coastal
      regions of the People’s
      Republic of China (the “ PRC ”) .
      The
      construction of Pinglin Expressway started in October 23, 2003 and was completed
      in two (2) phases. The first phase of the construction which covered the part
      with a length of approximately 86 kilometers, linking Ruzhou and Pingdingshan
      in
      Henan Province, began commercial operations in December 31, 2005. On May 31,
      2006, the second phase of the construction, with the length of approximately
      21
      kilometers, linking Pingdingshan and Yexian in Henan Province was completed.
      With the operation of Pinglin Expressway, the key transport artery, national
      trunk Nanluo Expressway was entirely put into operations.




The
      Pinglin Expressway is a dual carriageway four (4) lane expressway, the toll
      section of which is 106 km in length. Toll revenue from the passing vehicles
      through the Expressway’s six (6) toll gates (South Pingdingshan, Pingdingshan
      New Town, Baofeng, Xiaotun, Ruzhou and Wenquan) is the primary source of the
      Company’s earnings. The Expressway is also located between two (2) key cities,
      Luoyang and Luohe. The Expressway extends from east to west, from Shilipu (the
      end of the Luohe-Pingdingsha expressway), through Yexian and Pingdingshan and
      then to New Xiying village at the joint of Pingdingshan and Luoyang. The road
      is
      lined with the Lianhuo (Lianyungang-Huoerguosi) national highway through the
      ringroad in Luoyang, and then extends to the southeast of Luohe City and
      connects with the Beijing-Zhuhai national highway into a network to form a
      convenient channel between Luoyang and Luohe. In addition to the traffic flow
      of
      the line itself, we believe it also attracts the traffic flow from Lianhuo
      high
      way to Zhengzhou then to Beijing-Zhuhai national highway to alter to
      Luoyang-Luohe section of Luonan route. Furthermore, the Expressway extends
      east
      to link the highway network of the Jiangsu and Anhui provinces and also links
      the sea ports, including Shanghai.




The
      Company’s operating income is achieved through toll charges on vehicles that go
      through the toll gate. The standard of toll charges is approved and set by
      the
      provincial price administrative bureau. The Company’s revenue is equal to the
      relevant standard toll rate for the types of vehicles multiplied by the relative
      miles of travel through the expressway which the Company is operating, and
      is
      cleared by the Henan Expressway System Toll Collection Center each month (Henan
      Expressway has a charges system and clearing center which calculates and
      allocates toll charge income according to the charge standards and the miles
      of
      travel of vehicles in the expressway). The Company is specialized in the
      operation and management of expressways. The maintenance projects are outsourced
      to professional road construction enterprises.




The
      Company began generating operating revenue in January 2006. The Company had
      not
      yet started full operation of the expressway prior to June 2006, therefore
      the
      operating income was at a low level and the growth was moderate. With the full
      operation of the Expressway in June 2006, the operating income had seen
      sustained rapid growth.




1




After
      several months of operations, the social awareness of the Expressway gradually
      increased, and passenger and commercial vehicles is increasing rapidly. We
      believe that along with income growth in the future, the profit earning capacity
      of the Company will improve steadily.




**Enterprise
      Strategy**




Henan
      is
      a province with the largest population in China. However, its urbanization rate
      is far below the national average level. With rapid economic and social
      development and the accelerated process of urbanization in Henan, demands for
      infrastructure, the expressway and other transportation infrastructure, urban
      facilities such as heating, water supply, and sewerage treatment are also
      growing rapidly. The existing infrastructure can no longer meet the needs of
      social development.




Because
      the Chinese government’s financial revenue growth is limited, the financial
      investment of the government alone is unable to build huge infrastructure
      projects in a relatively short period. In order to attract social funds, local
      governments are willing to grant to commercial companies the right to invest
      in
      the construction and operation of projects, or directly sell the equity of
      the
      established enterprise to recover their early input. In addition, the government
      will also give preferential treatment on charges.




To
      seize
      the historic opportunity of rapid development of infrastructure of China and
      Henan, to rapidly strengthen and expand the Company’s infrastructure industries,
      to create advantages on scale, thereby to further reduce the cost of operation,
      the Company plans to invest in construction or purchase additional expressways,
      thermoelectricity, water supply or sewage treatment facilities and other
      infrastructure assets with good profit prospects in the next few years. Because
      the amount of investment in infrastructure is often relatively large, and the
      investment funds need to be in position within two (2) or three (3) years,
      the
      accumulated capital from the Company’s operation alone cannot meet the demand
      for investment in the future. The Company desires to actively participate in
      the
      capital markets, to use various channels of financing to enhance its ability
      to
      raise funds, thus to promote and achieve these long-term development
      strategies.




Based
      on
      the operation and management of the Expressway, the Company desires to take
      full
      advantage of free cash flow and capital market instruments to invest in
      construction or purchase of infrastructure assets and to exploit all the
      advantages in management, government relationship and stockholder support to
      make the Company a professional, continuously-growing infrastructure investment
      operator.




In
      addition, the Company intends to energetically push forward the standard
      management, human-based services, establish an information management platform
      and continue to improve the road condition and traffic capacity so as to provide
      the traveler with a smooth, safe and comfortable running environment. With
      the
      increasing influence of the Expressway on the substitution and division of
      other
      transportation lines and under the great macroeconomic environment providing
      continuous and rapid growth in China and the specific area where the roads
      are
      located, we believe that the Company’s income from toll and profits will
      continue to increase.




**Significant
      Accounting Policies**




We
      prepare our financial statement in accordance with generally accepted accounting
      principles in the United States, which requires us to make estimates and
      assumptions that affect the reported amounts of our assets and liabilities,
      to
      disclose contingent assets and liabilities on the date of the financial
      statements, and to disclose the reported amounts of revenues and expenses
      incurred during the financial reporting period. We continue to evaluate these
      estimates and assumptions that we believe to be reasonable under the
      circumstances. We rely on these evaluations as the basis for making judgments
      about the carrying values of assets and liabilities that are not readily
      apparent from other sources. Since the use of estimates is an integral component
      of the financial reporting process, actual results could differ from those
      estimates. Some of our accounting policies require higher degrees of judgment
      than other in their application.




This
      section should be read together with the Summary of Significant Accounting
      Policies included as Note 3 to the consolidated financial statements included
      herein.




We
      determine the estimated useful lives and related depreciation charges for our
      toll road infrastructures, property, plant and equipment. This estimate is
      based
      on the historical experience of the actual useful lives of toll road
      infrastructures, property, plant and equipment of similar nature and functions
      and the practice in similar industry. Toll road infrastructures, property,
      plant
      and equipment are carried at cost less accumulated depreciation and
      amortization. Depreciation and amortization of the toll road infrastructures
      are
      calculated to write off their cost, commencing from the date of commencement
      of
      commercial operations of the toll roads, based on the ratio of actual traffic
      volume compared to the total expected traffic volume of the toll roads as
      estimated by reference to traffic projection reports prepared by an independent
      PRC organization each year. It could change significantly as a result of
      technical innovations and competitor actions in response to severe industry
      cycles. Other properties, plant and equipment are depreciated or amortized
      over
      their estimated useful lives, using the straight-line method. Our Directors
      will
      increase the depreciation charge where useful lives are less than previously
      estimated lives, or we will write-off or write-down technically obsolete or
      non-strategic assets that have been abandoned or sold.




2




**Revenue
      Recognition**




The
      Company’s revenue represents toll revenue net of business tax, and is recognized
      when all of the following criteria are met:




·
            The
                amount of revenue can be measured
                reliably;




·
            It
                is probable that the economic benefits associated with the transaction
                will flow to the enterprise;




·
            The
                costs incurred or to be incurred in respect of the transaction can
                be
                measured reliably; and




·
            Collectibility
                is reasonably assured.




The
      rental income is measured at the fair value of the consideration receivable
      and
      represents amounts receivable for services provided in the normal course of
      business, net of discounts and sales tax.




**Fair
      Value of Financial Instruments**




The
      Company’s financial instruments include restricted cash, accounts receivable,
      note receivable, due from related parties, other receivables, other payables
      and
      accrued liabilities, short-term bank loans, payable to contractors, other
      current liabilities and deferred taxes. We estimated that the carrying amount
      approximates fair value due to their short-term nature. The fair value of the
      Company’s long-term bank loans, deferred revenue and payables to contractors are
      estimated based on the current rates offered to the Company for debt of similar
      terms and maturities. The Company’s fair value of long-term bank loans, deferred
      revenue and payables to contractors was not significantly different from the
      carrying value at March 31, 2008 and 2007.




**Impairment
      of Long-Lived Assets**




We
      review
      periodically the carrying amounts of long-lived assets including toll road
      infrastructures, property, plant and equipment, land use rights, construction
      in
      progress, long-term investment and long-term deferred assets with finite useful
      lives or beneficial periods, to assess whether they are impaired. We evaluate
      these assets for impairment whenever events or changes in circumstances indicate
      that their carrying amounts may not be recoverable such as a change of business
      plan or a period of continuous losses. Recoverability of 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 asset.
      If the carrying amount of an asset exceeds its projected 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. In determining estimates of
      future cash flows, significant judgment in terms of projection of future cash
      flows and assumptions is required. There were no impairments for the three
      (3)
      months ended March 31, 2008 and 2007 or for the nine (9) months ended March
      31,
      2008 and 2007.




**Contingencies**




In
      normal
      course of business, we are subject to contingencies, including, legal
      proceedings and claims arising out of the business that relate to a wide range
      of matters. We recognize a liability for such contingency if we determine that
      it is probable that a loss has incurred and a reasonable estimate of the loss
      can be made. We may consider many factors in making these assessments, including
      past history and the specifics of each matter. As we have not become aware
      of
      any toll related claim since operations commenced, we have not recognized such
      a
      liability for the three (3) months ended March 31, 2008 and 2007 or for the
      nine
      (9) months ended March 31, 2008 and 2007.




**Recent
      Accounting Pronouncements**




In
      September 2006, the Financial Accounting Standards Board (“ FASB ”)
      issued
      Statement of Financial Accounting Standards (“ SFAS ”)
      No.
      157, “Fair Value Measurements”, which provides enhanced guidance for using fair
      value to measure assets and liabilities. SFAS No. 157 provides a common
      definition of fair value and establishes a framework to make the measurement
      of
      fair value in generally accepted accounting principles more consistent and
      comparable. SFAS No. 157 also requires expanded disclosures to provide
      information about the extent to which fair value is used to measure assets
      and
      liabilities, the methods and assumptions used to measure fair value, and the
      effect of fair value measures on earnings. SFAS No. 157 is effective for
      financial statements issued in fiscal years beginning after November 15, 2007
      and to interim periods within those fiscal years. The Company is currently
      in
      the process of evaluating the effect, if any, the adoption of SFAS No. 157
      will have on its results of operations, financial position, or cash
      flows.




3




Effective
      January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting
      for
      Uncertainty in Income Taxes (“ FIN
      48 ”).
      -- AN
      INTERPRETATION OF FASB STATEMENT NO. 109, ACCOUNTING FOR 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 FIN 48, 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. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties on income taxes, accounting in interim periods and
      requires increased disclosures. As of March 31, 2008 and 2007, the Company
      does
      not have a liability for unrecognized tax benefits.




In
      February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option
      for
      Financial Assets and Financial Liabilities Including an amendment of FASB
      Statement No. 115 (FAS 159), which became effective for the Company on July
      1,
      2007. This standard permits companies to choose to measure many financial
      instruments and certain other items at fair value and report unrealized gains
      and losses in earnings. Such accounting is optional and is generally to be
      applied instrument by instrument. The Company does not anticipate that election,
      if any, of this fair value option will have a material effect on the results
      or
      operations or financial position.




In
      December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and
      SFAS No. 160, Noncontrolling Interests in Consolidated Financial
      Statements. SFAS No. 141 (R) requires an acquirer to measure the
      identifiable assets acquired, the liabilities assumed, and any noncontrolling
      interest in the acquiree at their fair values on the acquisition date, with
      goodwill being the excess value over the net identifiable assets acquired.
      SFAS
      No.160 clarifies that a noncontrolling interest in a subsidiary should be
      reported as equity in the consolidated financial statements. The calculation
      of
      earnings per share will continue to be based on income amounts attributable
      to
      the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for
      financial statements issued for fiscal years beginning after December 15,
      2008. Early adoption is prohibited. We have not yet determined the effect on
      our
      consolidated financial statements, if any, upon adoption of SFAS No. 141
      (R) or SFAS No. 160. We are aware that our accounting for minority
      interest will change and we are considering those effects now but believe the
      effects will only be a reclassification of minority interest from mezzanine
      equity to our stockholder’s equity section in the balance sheet. In any case we
      do not believe the implementation of SFAS 160 will be material to our financial
      position. SFAS 141 (R) will significantly affect the accounting for future
      business combinations and we will determine the accounting as new combinations
      occur.




4




**Results
      of Operations**




***Results
      of Operations for the Three Months Ended March 31, 2008 Compared to the Three
      Months Ended March 31, 2007***




The
      following table sets forth a summary of certain key components of our results
      of
      operations for periods indicated, in dollars and as a percentage of
      revenues.




**Three
                Months**
              **Ended
                March 31,**
            
            **Three
                Months**
              **Ended
                March 31,****2008**
            
            **2007**
            
            **2008**
            
            **2007****(Unaudited)**
            
            **(Unaudited)**Revenues
            
            
            11,630,749
            
            
            9,857,195
            
            
            100.0
            %
            
            100.0
            %Operating
                costs
            
            
            830,977
            
            
            462,054
            
            
            7.1
            %
            
            4.7
            %Depreciation
                and amortization
            
            
            1,758,334
            
            
            1,444,361
            
            
            15.1
            %
            
            14.7
            %Gross
                profit
            
            
            9,041,438
            
            
            7,950,780
            
            
            77.7
            %
            
            80.7
            %General
                and administrative expenses
            
            
            825,983
            
            
            628,402
            
            
            7.1
            %
            
            6.4
            %Income
                from operations
            
            
            8,215,455
            
            
            7,322,378
            
            
            70.6
            %
            
            74.3
            %Interest
                expense, net
            
            
            (6,061,743
            )
            
            (4,777,610
            )
            
            52.1
            %
            
            48.5
            %Other
                income, net
            
            
            290,200
            
            
            227,044
            
            
            2.5
            %
            
            2.3
            %Income
                from operations before income taxes
            
            
            2,443,912
            
            
            2,771,812
            
            
            21.0
            %
            
            28.1
            %Income
                tax expense
            
            
            (620,049
            )
            
            (692,953
            )
            
            5.3
            %
            
            7.0
            %Net
                income
            
            
            1,823,863
            
            
            2,078,859
            
            
            15.7
            %
            
            21.1
            %




**Revenues**




Our
      revenues are derived from the operation of the Pinglin Expressway. Our revenues
      increased approximately US$1.7 million, or 18.0% from approximately US$9.9
      million for the three months ended March 31, 2007 to approximately US$11.6
      million for the three months ended March 31, 2008. The increase was mainly
      attributable to the increase in traffic volumes.




On
      December 26, 2005, the first phase of the Expressway with a length of
      approximately 86 kilometers was completed and commenced toll operation. On
      May
      31, 2006, with the completion of the remaining part of approximately 21
      kilometers, the entire Expressway was put into operation. The key transport
      artery, national trunk Nanluo Expressway was entirely put into operation as
      well, which increased the importance of the Expressway to those vehicles passing
      through. Accordingly, the converted average daily traffic volumes, a guide
      line
      to evaluate the operation performance specially used in the toll road industry,
      increased 2,315 units, or 21.0%, from 11,023 units for the three months ended
      March 31, 2007 to 13,338 units for the three months ended March 31, 2008.




During
      the three months period ended March 31, 2008, the growth of our revenues from
      the operation of toll road was negatively impacted by the factors mentioned
      as
      follows:




During
      January 2008, China encountered an unprecedented heavy
      snow storm in
      decades .
      Severe
      weather, harsh cold, heavy snow and freezing rain disrupted
      air, road and rail transportation, which cause the Pinglin expressway closed for 182
      hours, resulting
      in the
      decrease of passing vehicles .
      Due to
      the influence of the aforementioned factors ,
      our
      toll road revenue of January 2008 decreased approximately US$0.9 million from
      approximately US$5.0 million in December 2007 to approximately US$4.1 million
      in
      January 2008.




Normally,
      the traffic volume especially for the goods vehicle is low during the Spring
      festival. During the 15 days Spring festival holiday in
      February 2008, the daily toll road collections substantially decreased to Rmb0.5
      million (approximately US$0.07 million), which is half less compared to a normal day .
      We
      estimated our toll road loss during
      the Spring festival holiday is
      approximately US$1.5 million.




If
      excluding the aforementioned impacts on our toll operation, our toll road
      revenues during the three months ended March 31, 2008 should have increased
      substantially from the three months ended March 31, 2007.




**Operating
      Costs**




Our
      operating costs mainly represent the road maintenance cost, road management
      cost
      and labor cost associated with the toll operations. For the three months ended
      March 31, 2008, the operating costs increased approximately US$0.3 million,
      or
      79.9%, to approximately US$0.8 million, compared to approximately US$0.5 million
      for the three months ended March 31, 2007. This increase is mainly due to the
      increase of the labor cost and welfares as the Company hired more employees for toll
      operation.




5




**Depreciation
      and Amortization**




Our
      total
      depreciation and amortization related to toll operations increased approximately
      $0.3 million, or 21.7%, from approximately $1.5 million for the three months
      ended March 31, 2007 to approximately $1.8 million for the three months ended
      March 31, 2008. This increase is mainly due to the increase in toll road
      infrastructures put into operation and the increase in the depreciation ratio
      due to the increase of traffic volumes.




The
      Company depreciated and recorded the depreciation of toll road infrastructures
      based on the ratio of actual traffic volume incurred during the period compared
      to the total expected traffic volume of the toll roads during the operation
      licensing period, as estimated. As analyzed in revenues, since the traffic
      volumes grew during the comparative periods, as a result, the depreciation
      ratio
      and the depreciation of toll road infrastructures for the three months ended
      March 31, 2008 is higher than the three months ended March 31,
      2007.




**Gross
      Profit**




Our
      gross
      profit increased approximately US$1.1 million, or 13.7%, from approximately
      US$7.9 million for the three months ended March 31, 2007 to approximately US$9.0
      million for the three months ended March 31, 2008. This increase reflected
      higher net sales, improved margins and operating efficiencies generally across
      our expressway business.




Gross
      profit as a percentage of revenues decreased from 80.7% for the three months
      ended March 31, 2007 to 77.7% for the three months ended March 31, 2008. Such
      percentage decrease is primarily due to the traffic volumes decreased in
      association with the factors aforementioned in our analysis of revenues while
      our operating costs still increased in line with the growth of our toll road
      business.




**General
      and Administrative Expenses**




General
      and administrative expenses increased approximately US$0.2 million, or 31.4%,
      from US$0.6 million for the three months ended March 31, 2007 to approximately
      US$0.8 million for the three months ended March 31, 2008. The increase in our
      administration expenses was mainly attributable to the following: (i) an
      increase in employee payroll and welfare expenses as a result of the increase
      in
      the number of employees associated with our business expansions and a salary
      and
      pension rise due to the significant improvement in the Company’s performance;
      and (ii) an increase in our land use tax and real estate tax which were imposed
      by the local tax bureau from the second half of year 2007.




**Interest
      Expense, Net**




Net
      interest expense increased approximately US$1.3 million, or 26.9%, from
      approximately US$4.8 million for the three months ended March 31, 2007 to
      approximately US$6.1 million for the three months ended March 31, 2008. This
      increase is primarily due to
      the increased interest rate of our loans. The People’s Bank of China increased
      the benchmark of the interest rate for long term loan over five years from
      7.11%
      for the three months ended March 31, 2007 to 7.83% for the three months ended
      March 31, 2008.




**Income
      Tax Expense**




We
      recorded income tax expense of approximately US$0.6 million for the three months ended March 31, 2008, compared
      to approximately US$0.7 million for the three months ended March 31, 2008.
      Our
      effective tax rate was 25% for both the periods ended March 31, 2008 and 2007.




**Net
      Income**




Our
      net
      income decreased approximately US$0.3 million, or 12.3%, from approximately
      US$2.1 million for the three months ended March 31, 2007 to approximately US$1.8
      million for the three months ended March 31, 2008. This decrease is primarily due to
      the increase in our interest expenses while the growth of our toll revenues
      during the three months ended March 31, 2008 was negatively
      impacted by the factors mentioned in the analysis
      of revenues.




6




***Results
      of Operations for the Nine Months Ended March 31, 2008 Compared to the Nine
      Months Ended March 31, 2007***




The
      following table sets forth a summary of certain key components of our results
      of
      operations for the periods indicated, in dollars and as a percentage of
      revenues.




**Nine
                Months**
              **Ended
                March 31,**
            
            **Nine
                Months Ended**
              **March
                31,****2008**
            
            **2007**
            
            **2008**
            
            **2007****(Unaudited)**
            
            **(Unaduited)**Revenues
            
            
            40,509,496
            
            
            26,876,316
            
            
            100.0
            %
            
            100.0
            %Operating
                costs
            
            
            4,012,823
            
            
            1,032,546
            
            
            9.9
            %
            
            3.8
            %Depreciation
                and amortization
            
            
            5,121,538
            
            
            4,080,983
            
            
            12.6
            %
            
            15.2
            %Gross
                profit
            
            
            31,375,135
            
            
            21,762,787
            
            
            77.5
            %
            
            81.0
            %General
                and administrative expenses
            
            
            3,211,241
            
            
            1,561,433
            
            
            7.9
            %
            
            5.8
            %Income
                from operations
            
            
            28,163,894
            
            
            20,201,354
            
            
            69.5
            %
            
            75.2
            %Interest
                expense, net
            
            
            (17,677,618
            )
            
            (14,191,792
            )
            
            43.6
            %
            
            52.8
            %Other
                income (expense), net
            
            
            679,216
            
            
            (33,822
            )
            
            1.7
            %
            
            0.1
            %Income
                from operations before income taxes
            
            
            11,165,492
            
            
            5,975,740
            
            
            27.6
            %
            
            22.2
            %Income
                tax expense
            
            
            (2,795,466
            )
            
            (1,493,935
            )
            
            6.9
            %
            
            5.6
            %Net
                income
            
            
            8,370,026
            
            
            (4,481,805
            )
            
            20.7
            %
            
            16.7
            %




**Revenues**




Our
      revenues are derived from the operation of the Pinglin Expressway. Our revenues
      increased approximately US$13.6 million, or 50.7%, from approximately US$26.9
      million for the nine months ended March 31, 2007 to approximately US$40.5
      million for the nine months ended March 31, 2008. The increase in revenues
      was
      primarily attributable to the increase on traffic volumes and the increase
      of
      the toll rates.




With
      the
      completion of the second phase of Pinglin Expressway, the key transport artery,
      the Nanluo Expressway, which links up the north-western regions with the
      south-eastern coastal regions of the PRC, was entirely opened to the public
      on
      May 31, 2006. Daily traffic volumes have since increased stably. The converted
      average daily traffic volumes substantially increased 3,570, or 34.7%, from
      10,099 for the nine months ended March 31, 2007 to 13,865 for the nine months
      ended March 31, 2008.




The
      toll
      rates, regulated and approved by Henan Communications Bureau
      and Henan Development and Reform Committee, were changed in October 2006. Detailed rates are as
      follows:


**Toll
                  rates(Rmb/km)****Vehicles
                  type**
              
              **Classification**
              
              **Effective
                  from October 20, 2006****Passenger**
              
              
              Below
                  10 seats
              
              
              0.55Between
                  10 seats and 30 seats (excluding 30 seats); or, below 23
                  sleepers
              
              
              0.7530
                  seats or above; or, 23 sleepers or above
              
              
              1.10**Goods
                  vehicles**
              
              
              Below
                  2 tons
              
              
              0.55Between
                  2 tons and 5 tons (excluding 5 tons)
              
              
              0.80Between
                  5 tons and 8 tons (excluding 8 tons)
              
              
              1.40Between
                  8 tons and 20 tons (excluding 20 tons)
              
              
              1.75Between
                  20 tons and 40 tons (excluding 40 tons)
              
              
              2.1040
                  tons or above
              
              
              Rmb0.08/tons
                  for every km


7


On
      March
      15, 2007, pursuant to the measures of the implementation for toll rates
      applicable to commercial vehicles regulated by Henan Ministry of Finance, Henan Communications Bureau
      and the Henan Development and Reform  Committee,
      the Company revised the toll rates applicable to goods vehicles with reference
      to their weight. This change substantially increased the toll rates on
      commercial vehicles. Details are as follows:




Gross
                weight of goods vehicle (vehicle+goods) below 15 tons (including
                15
                tons)
            
            Gross
                weight of commercial vehicles (vehicle+goods) between 15 tons and
                49
                tons
            
            Gross
                weight less than 5 tons will be defaulted as 5 tons; and, toll charges
                less than Rmb5 will be rounded up to Rmb5.Rmb0.09/tons
                for every km
            
            Rmb0.09/tons
                for every km for the portion below 15 tons (including 15 tons) and
                will be
                linearly reduced to Rmb0.04/tons for every km for the portion beyond
                15
                tons.
            
            gross
                weight less than 5 tons will be defaulted as 5 tons; and, toll charges
                less than Rmb5 will be rounded up to
                Rmb5.





With
      the
      aforementioned increase of toll rates in accordance with the approval and
      regulation from the jurisdictional municipalities of Henan Province, our toll
      revenues from each passing vehicle grew stably during the reporting periods,
      which also increased our gross profit margins from toll operations.




**Operating
      Costs**




Our
      operating costs mainly represent the road maintenance cost, road management
      cost
      and labor cost associated with the toll operations. For the nine months ended
      March 31, 2008, the operating costs increased approximately US$3.0 million,
      or
      288.6%, to approximately US$4.0 million, compared to approximately US$1.0
      million for the nine months ended March 31, 2007. The increase in our operating
      costs was mainly attributable to the following: (i) Due to the growth of our
      traffic volume, our road maintenance cost increased substantially to
      approximately US$2.6 million for the nine months ended March 31, 2008, compared
      to US$0.1 million for the nine months ended March 31, 2007; and, (ii) the hiring
      of new employees to support future growth of our businesses, labor cost and
      welfare associated with the toll operation increased to approximately US$1.0
      million for the nine months ended March 31, 2008, compared to approximately
      US$0.5 million for the nine months ended March 31, 2007.




**Depreciation
      and Amortization**




Our
      total
      depreciation and amortization related to toll operations increased approximately
      US$1.0 million, or 25.5%, from approximately US$4.1 million for the nine months
      ended March 31, 2007 to approximately US$5.1 million for the nine months ended
      March 31, 2008. This increase is mainly due to the increase in toll road
      infrastructures put into operation as well as the increase in the depreciation
      ratio due to the increase of traffic volumes. The Company depreciates toll
      road
      infrastructures based on the ratio of actual traffic volumes incurred during
      the
      period compared to the total expected traffic volume of the toll roads during
      the operation licensing period, as estimated. As analyzed in revenues, since
      the
      traffic volumes substantially grew during the comparative periods, the
      depreciation ratio for the nine months ended March 31, 2008 is higher than
      the
      nine months ended March 31, 2007. As a result, the depreciation expenses
      relating to toll road infrastructures increased.




**Gross
      Profit**




Our
      gross
      profit increased approximately US$9.6 million, or 44.2%, from approximately
      US$21.8 million for the nine months ended March 31, 2007 to approximately
      US$31.4 million for the nine months ended March 31, 2008. This increase is
      in
      line with the growth of our revenues.




Gross
      profit as a percentage of revenues decreased from 81.0% for the nine months
      ended March 31, 2007 to 77.5% for the nine months ended March 31, 2008. Such
      percentage decrease is mainly due to the increase in our operating costs as
      a
      percentage of revenues. As mentioned in our analysis of the operating costs,
      to
      meet the business growth strategy of our company, we hired more employees for the
      toll road operation
      and incurred more
      cost in maintaining our toll road.




8




**General
      and Administrative Expenses**




General
      and administrative expenses increased approximately US$1.6 million, or 105.7%,
      from approximately US$1.6 million for the nine months ended March 31, 2007
      to
      approximately US$3.2 million for the nine months ended March 31, 2008. The
      increase in our administration expenses was mainly attributable to the
      following: (i) traveling expense increased approximately US$0.1 million for
      the
      nine months ended March 31, 2008 compared to the nine months ended March 31,
      2007, in connection with the expansion of our business for more overseas
      traveling; (ii) consulting expense increased approximately US$0.3 million for
      the nine months ended March 31, 2008 compared to the nine months ended March
      31,
      2007, which mainly represented the professional service fee provided by Industry
      and Commerce Bank of China regarding the Company’s consulting arrangement; (iii)
      miscellaneous tax and levy expense increased approximately US$0.2 million for
      the nine months ended March 31, 2008 compared to the nine months ended March
      31,
      2007, which mainly represented the stamp duties incurred during the nine month
      period ended March 31, 2008; and (iv) the management estimated the
      collectibility of two balances due from other express companies is remote,
      provision for doubtful accounts amounted to US$0.7 million was provided.




**Interest
      Expense, Net**




Net
      interest expense increased approximately US$3.5 million, or 24.6%, from US$14.2
      million for the nine months ended March 31, 2007 to approximately US$17.7
      million for the nine months ended March 31, 2008. This increase was primarily
      attributable to the increase of the loan interest rate from 5.98% to 7.15%
      in
      average.




**Income
      Tax Expense**




We
      recorded income tax expense approximately amounted to US$2.8 million and US$1.5
      million for the nine months ended March 31, 2008 and 2007, respectively. Our
      effective tax rate was 25% for both the nine months ended March 31, 2008 and
      2007.




**Net
      Income**




Our
      net income increased approximately US$3.9 million, or 86.8 %,
      from
      approximately US$4.5 million for the nine months ended March 31, 2007 to
      approximately US$8.4 million for the nine months ended March 31, 2008. This
      substantial increase was primary attributable to the increase of our toll
      revenues and the cumulative effect of other factors aforementioned.




**Liquidity
      and Capital Resources**




We
      generally finance our operations through, to a substantial extent, operating
      profit and a combination of borrowings from banks and capital contributions
      from
      Wise On China Limited (“ WOCL ”).
      During the reporting
      periods ,
      we
      arranged a number of bank loans to satisfy our financing needs. As of the date
      of this Report, we have not experienced any difficulty in raising funds by
      bank
      loans, and we have not experienced any liquidity problems in settling our
      payables in the normal course of business and repaying our bank loans when
      they
      fall due.




The
      following table sets forth the summary of our cash flows, in U.S. dollars,
      for
      the periods indicated:




**Nine
                Months Ended March 31**
              **(Unaudited)****2008**
            
            **2007**Net
                cash provided by operating activities
            
            
            14,415,686
            
            
            5,453,630Net
                cash used in investing activities
            
            
            (2,365,164
            )
            
            (18,375,095
            )Net
                cash (used in) provided by financing activities
            
            
            (14,016,347
            )
            
            8,122,519Net
                decrease in cash and cash equivalents
            
            
            (1,965,825
            )
            
            (4,798,946
            )Effect
                of exchange rate changes on cash
            
            
            (1,450,213
            )
            
            2,963,382Cash
                and cash equivalents at beginning of period
            
            
            5,830,962
            
            
            5,524,840Cash
                and cash equivalents at end of period
            
            
            2,414,924
            
            
            3,689,276





9




**Operating
      Activities**




Net
      cash
      provided by operating activities was approximately US$14.4 million for the
      nine
      months ended March 31, 2008, as compared to US$5.5 million for the nine months
      ended March 31, 2007. The increase was mainly due to the combined result of
      increased toll receipts, offset in part by settlement of the payables to
      construction project contractors, and operational expenses.




**Investing
      Activities**




Net
      cash
      used in investing activities was approximately US$2.4 million for the nine
      months ended March 31, 2008, as compared to approximately US $18.4 million
      for
      the nine months ended March 31, 2007. The decrease was mainly due to our payment
      associated with toll road construction reduced in line with the Pinglin
      Expressway opening entirely to the public in May 2006.




**Financing
      Activities**




Net
      cash
      used in financing activities was approximately US$14.0 million for the nine
      months ended March 31, 2008, as compared to approximately US$8.1 million net
      cash provided by financing activities for the nine months ended March 31, 2007.
      Such change was mainly due to i) a proceed from notes payable approximately
      amounted to US$7.1 million was received in association with toll road
      construction during the nine months ended March 31, 2007, most of which came
      to
      mature and was repaid during the nine months ended March 31, 2008; and, ii)
      partially we finance our working capital from short-term bank loans previously,
      proceeds from short-term bank loans was approximately US$5.1 million during
      the
      nine months ended March 31, 2007. In line with our growth in toll road business,
      cash flows from our daily toll road operation can basically fulfill the
      requirement in working capital, hence we repaid all of our short-term bank
      loans
      approximately amounted to US$10.9 million during the nine months ended March
      31,
      2008.




**Working
      Capital**




Our
      working capital increased by approximately US$143.2 million from a working
      capital deficiency approximately US$14.4 million as of June 30, 2007 to
      approximately US$128.8 million as of March 31, 2008, which was primarily due
      to
      our increase in accounts receivable and due from related party approximately
      amounted to US$1.4 million and US$9.3 million, respectively, and a decrease
      in
      current portion of long-term loans, notes payables and payable to contractors
      approximately amounted to US$123.7 million, US$5.3 million and US$1.3 million,
      respectively, and partly offset by a decrease of cash and cash equivalents
      and
      restricted cash approximately amounted to US$3.4 million and US$2.6 million,
      respectively. The increase in accounts receivable is the result of our toll
      road
      business growth. The increase in due from related party represented increase
      in
      unsettled related party interest income. The decrease in current portion of
      long-term loans represented the maturity of our long-term loans approximately
      amounted to US$134 million which have been renewed and extended through May
      2022, while there is no such huge repayment pressure of the Company as of March
      31, 2008. The decrease in notes payables and restricted cash was the result
      of
      our financing arrangement.




The
      Company currently generates its cash flow through operations and the Company
      believes that its cash flow generated from operations will be sufficient to
      sustain operations for the next twelve months. Also, from time to time, the
      Company may come up with new expansion opportunities for which our management
      may consider seeking external funding and financing.




**Capital
      Expenditures**




We
      made
      capital expenditures of approximately US$4.9 million and US$6.4 million for
      the
      nine months ended March 31, 2008 and 2007, respectively. The capital
      expenditures principally consisted of toll road infrastructures, toll stations
      and ancillary facilities, communication and monitoring equipments and other
      equipment related to our toll operations. If we are permitted to construct
      and
      operate new toll roads or invest in other toll road companies, we may require
      additional funds.




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any outstanding derivative financial instruments, off-balance sheet
      guarantees, interest rate swap transactions or foreign currency forward
      contracts. Furthermore, we do not have any retained or contingent interest
      in
      assets transferred to an unconsolidated entity that serves as credit, liquidity
      or market risk support to such entity. We do not have any variable interest
      in
      an unconsolidated entity that provides financing, liquidity, market risk or
      credit support to us or that engages in leasing, hedging or research and
      development services with us.




10




**Quantitative
      and Qualitative Disclosures About Market Risk**




**Interest
      Rate Risk**




Our
      exposure to interest rate risk for changes in interest rates relates primarily
      to the interest expense incurred by the bank loans and the interest income
      generated by the loans to our related parties or bank deposits. We have not
      used
      any derivative financial instruments in our investment portfolio or for cash
      management purposes. Interest-earning instruments carry a degree of interest
      rate risk. We have not been exposed nor do we anticipate being exposed to
      material risks due to changes in interest rates. However, our future interest
      expense or interest income may increase of expectations due to changes in
      interest rates in the PRC.




**Foreign
      Exchange Risk**




We
      do not
      hold any derivative instruments and do not engage in any hedging activities.
      Because most of our purchases and sales are made in RMB, any exchange rate
      change affecting the value of the RMB relative to the U.S. dollar could have
      an
      effect on our financial results as reported in U.S. dollars. If the RMB were
      to
      depreciate against the U.S. dollar, amounts reported in U.S. dollars would
      be
      correspondingly reduced. If the RMB were to appreciate against the U.S. dollar,
      amounts reported in U.S. dollars would be correspondingly
      increased.




The
      financial condition, business, operations, and prospects of the Company involve
      a high degree of risk. You should carefully consider the risks and uncertainties
      described below, which constitute the material risks relating to the Company,
      and the other information in this report. If any of the following risks are
      realized, the Company’s business, operating results and financial condition
      could be harmed and the value of the Company’s stock could suffer. This means
      that investors and stockholders of the Company could lose all or a part of
      their
      investment.




**RISKS
      RELATING TO THE PEOPLE’S REPUBLIC OF CHINA**




***Certain
      Political and Economic Considerations Relating to China Could Adversely Affect
      Our Company.***




The
      PRC
      is transitioning from a planned economy to a market economy. While the PRC
      government has pursued economic reforms since its adoption of the open-door
      policy in 1978, a large portion of the PRC economy is still operating under
      five-year plans and annual state plans. Through these plans and other economic
      measures, such as control on foreign exchange, taxation and restrictions on
      foreign participation in the domestic market of various industries, the PRC
      government exerts considerable direct and indirect influence on the economy.
      Many of the economic reforms carried out by the PRC government are unprecedented
      or experimental, and are expected to be refined and improved.




Other
      political, economic and social factors can also lead to further readjustment
      of
      such reforms. This refining and readjustment process may not necessarily have
      a
      positive effect on our operations or future business development. Our operating
      results may be adversely affected by changes in the PRC’s economic and social
      conditions as well as by changes in the policies of the PRC government, such
      as
      changes in laws and regulations (or the official interpretation thereof),
      measures which may be introduced to control inflation, changes in the interest
      rate or method of taxation, and the imposition of additional restrictions on
      currency conversion.




***The
      Chinese Government Exerts Substantial Influence Over The Manner In Which We
      Must
      Conduct Our Business Activities Which Could Adversely Affect Our
      Company.***




China
      only recently has permitted provincial and local economic autonomy and private
      economic activities. The Chinese government has exercised and continues to
      exercise substantial control over virtually every sector of the Chinese economy
      through regulation and State ownership. Our ability to operate in China may
      be
      harmed by changes in its laws and regulations, including those relating to
      toll
      collection standards, taxation, import and export tariffs, environmental
      regulations, land use rights, property and other matters. We believe that our
      operations in China are in material compliance with all applicable legal and
      regulatory requirements. However, the central or local governments of these
      jurisdictions may impose new, stricter regulations or interpretations of
      existing regulations that would require additional expenditures and efforts
      on
      our part to ensure our compliance with such regulations or
      interpretations.




11




Accordingly,
      government actions in the future, including any decision not to continue to
      support recent economic reforms and to return to a more centrally planned
      economy or regional or local variations in the implementation of economic
      policies, could have a significant effect on economic conditions in China or
      particular regions thereof, and could require us to divest ourselves of any
      interest we then hold in Chinese properties or joint ventures.




***The
      Chinese Legal System Has Inherent Uncertainties That Could Limit The Legal
      Protections Available To You.***




Our
      contractual arrangements are governed by the laws of the People’s Republic of
      China. China’s legal system is based upon written statutes. Prior court
      decisions may be cited for reference but are not binding on subsequent cases
      and
      have limited value as precedents. Since 1979, the Chinese legislative bodies
      have promulgated laws and regulations dealing with economic matters such as
      foreign investment, corporate organization and governance, commerce, taxation
      and trade. However, because these laws and regulations are relatively new,
      and
      because of the limited volume of published decisions and their non-binding
      nature, the interpretation and enforcement of these laws and regulations involve
      uncertainties, and therefore you may not have legal protections for certain
      matters in China.




***All
      Of Our Assets Are Located In China, Any Dividends Of Proceeds From Liquidation
      Is Subject To The Approval Of The Relevant Chinese Government
      Agencies.***




Our
      assets are located inside China. Under the laws governing foreign invested
      enterprises in China, dividend distribution and liquidation are allowed but
      subject to special procedures under the relevant laws and rules. Any dividend
      payments will be subject to the decision of our Board of Directors and subject
      to foreign exchange rules governing such repatriation. Any liquidation is
      subject to both the relevant government agency’s approval and supervision as
      well the foreign exchange control. This may generate additional risk for our
      investors in case of dividend payments and liquidation.




***Future
      Inflation In China May Inhibit Our Activity To Conduct Business In
      China.***




In
      recent
      years, the Chinese economy has experienced periods of rapid expansion and high
      rates of inflation. During the past ten (10) years, the rate of inflation in
      China has been as high as 20.7% and as low as 2.2%. These factors have led
      to
      the adoption by Chinese government, from time to time, of various corrective
      measures designed to restrict the availability of credit or regulate growth
      and
      contain inflation. While inflation has been more moderate since 1995, high
      inflation may in the future cause Chinese government to impose controls on
      credit and/or prices, or to take other action, which could inhibit economic
      activity in China and thereby harm our business operations.




***Currency
      Conversion And Exchange Rate Volatility Could Adversely Affect Our Financial
      Condition.***




The
      PRC
      government imposes control over the conversion of Renminbi into foreign
      currencies. Under the current unified floating exchange rate system, the
      People’s Bank of China (PBOC) publishes an exchange rate, which we refer to as
      the PBOC exchange rate, based on the previous day’s dealings in the inter-bank
      foreign exchange market. Financial institutions authorized to deal in foreign
      currency may enter into foreign exchange transactions at exchange rates within
      an authorized range above or below the PBOC exchange rate according to market
      conditions.




Pursuant
      to the Foreign Exchange Control Regulations of the PRC issued by the State
      Council which came into effect on April 1, 1996, and the Regulations on the
      Administration of Foreign Exchange Settlement, Sale and Payment of the PRC
      which
      came into effect on July 1, 1996, regarding foreign exchange control, conversion
      of Renminbi into foreign exchange by Foreign Investment Enterprises
      (“ FIEs ”),
      for
      use on current account items, including the distribution of dividends and
      profits to foreign investors, is permissible. FIEs are permitted to convert
      their after-tax dividends and profits to foreign exchange and remit such foreign
      exchange to their foreign exchange bank accounts in the PRC. Conversion of
      Renminbi into foreign currencies for capital account items, including direct
      investment, loans, and security investment, is still under certain restrictions.
      On January 14, 1997, the State Council amended the Foreign Exchange Control
      Regulations and added, among other things, an important provision, which
      provides that the PRC government shall not impose restrictions on recurring
      international payments and transfers under current account items.




Enterprises
      in the PRC (including FIEs) which require foreign exchange for transactions
      relating to current account items, may, without approval of the State
      Administration of Foreign Exchange, or SAFE, effect payment from their foreign
      exchange account or convert and pay at the designated foreign exchange banks
      by
      providing valid receipts and proofs.




Convertibility
      of foreign exchange in respect of capital account items, such as direct
      investment and capital contribution, is still subject to certain restrictions,
      and prior approval from the SAFE or its relevant branches must be
      sought.




12




Since
      1994, the exchange rate for Renminbi against the United States dollars has
      remained relatively stable. However, in 2005, the Chinese government announced
      that would begin pegging the exchange rate of the Chinese Renminbi against
      a
      number of currencies, rather than just the U.S. Dollar. As our operations are
      primarily in China, any significant revaluation of the Chinese Renminbi may
      materially and adversely affect our cash flows, revenues and financial
      condition. For example, to the extent that we need to convert United States
      dollars into Chinese Renminbi for our operations, appreciation of this currency
      against the United States dollar could have a material adverse effect on our
      business, financial condition and results of operations. Conversely, if we
      decide to convert Chinese Renminbi into United States dollars for other business
      purposes and the United States dollar appreciates against this currency, the
      United States dollar equivalent of the Chinese Renminbi we convert would be
      reduced.




***The
      Value Of Our Securities Will Be Affected By The Foreign Exchange Rate Between
      U.S. Dollars And Renminbi.***




The
      value
      of our Common Stock will be affected by the foreign exchange rate between U.S.
      dollars and Renminbi, and between those currencies and other currencies in
      which
      our sales may be denominated. For example, to the extent that we need to convert
      U.S. dollars into Renminbi for our operational needs and should the Renminbi
      appreciate against the U.S. dollar at that time, our financial position, the
      business of the Company, and the price of our Common Stock may be harmed.
      Conversely, if we decide to convert our Renminbi into U.S. dollars for the
      purpose of declaring dividends on our Common Stock or for other business
      purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar
      equivalent of our earnings from our China operations would be
      reduced.




***You
      May Experience Difficulties In Effecting Service Of Legal Process, Enforcing
      Foreign Judgments Or Bringing Original Actions In China Based On United States
      Or Other Foreign Laws Against Us.***




We
      conduct our operations in China and a significant portion of our assets is
      located in China. In addition, our directors and executive officers reside
      within China, and substantially all of the assets of these persons are located
      within China. As a result, it may not be possible to effect service of process
      within the United States or elsewhere outside China upon those directors or
      executive officers, including with respect to matters arising under U.S. federal
      securities laws or applicable state securities laws. Moreover, our Chinese
      counsel has advised us that China does not have treaties with the U.S. and
      many
      other countries that provide for the reciprocal recognition and enforcement
      of
      judgment of courts. As a result, recognition and enforcement in China of
      judgments of a court of the U.S. or any other jurisdiction in relation to any
      matter may be difficult or impossible.




***Our
      Significant Amount Of Deposits In Certain Banks In China May Be At Risk If
      These
      Banks Go Bankrupt During Our Deposit Period.***




As
      of
      March 31, 2008, we had approximately US$2.4 million in banks in China, which
      almost constitute all of our total cash. The terms of these deposits are, in
      general, up to twelve (12) months. Historically, deposits in Chinese banks
      are
      secure due to the state policy on protecting depositors’ interests. However,
      China promulgated a new Bankruptcy Law in August 2006, which has come into
      effect on June 1, 2007, which contains a separate article expressly stating
      that the State Council may promulgate implementation measures for the bankruptcy
      of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law,
      a
      Chinese bank may go bankrupt. In addition, since China’s concession to WTO,
      foreign banks have been gradually permitted to operate in China and have been
      severe competitors against Chinese banks in many aspects, especially since
      the
      opening of Renminbi business to foreign banks in late 2006. Therefore, the
      risk
      of bankruptcy of those banks in which we have deposits has increased. In the
      event of bankruptcy of one of the banks which holds our deposits, we are
      unlikely to recover our deposits back in full since we are unlikely to be
      classified as a secured creditor based on PRC laws.




**RISKS
      RELATING TO OUR BUSINESS**




***Because
      Our Operating History Is Limited And The Revenue And Income Potential Of Our
      Business And Markets Are Unproven, We Cannot Predict Whether We Will Meet
      Internal or External Expectations Of Future
      Performance.***




We
      believe that our future success depends on our ability to significantly increase
      revenue from toll collections, of which we have a limited history. The
      Expressway marketplace features high investment and a long recovery period.
      The
      main market risk in connection with our Company is the future traffic volume
      less than the predicted amount. Accordingly, our prospects must be considered
      in
      light of the risks, expenses and difficulties frequently encountered by
      companies with a limited operating history. These risks include our ability
      to:




13




·
            offer
                new and innovative services on the
                Expressway;




·
            attract
                advertisers;




·
            attract
                more travelers;




·
            respond
                effectively to competitive pressures and address the effects of strategic
                relationships or corporate
                combinations;




·
            maintain
                our current, and develop new, strategic
                relationships;




·
            increase
                awareness of the Expressway and continue to build traveler
                loyalty;




·
            attract
                and retain qualified management and employees;
                and




·
            upgrade
                our technology to support increased traffic and expanded
                services.




***Our
      Business And Growth Could Suffer If We Are Unable To Hire And Retain Key
      Personnel That Are In High Demand.***




We
      depend
      upon the continued contributions of our senior management and other key
      personnel, including Li Xipeng and Zhang Chunxian. The loss of the services
      of
      any of our executive officers or other key employees could have a material
      adverse effect on our business, operations, revenues or prospects. We do not
      maintain key man insurance on the lives of these individuals at present. As
      we
      plan to expand, we will have to attract managerial staff. We may not be able
      to
      identify and retain qualified personnel due to our lack of understanding of
      different cultures and lack of local contacts. This may impede any potential
      expansion. Our future success will also depend on our ability to attract and
      retain highly skilled and qualified technical, engineering, managerial, finance,
      marketing, security and customer service personnel in China. Qualified
      individuals are in high demand, and we may not be able to successfully attract,
      assimilate or retain the personnel we need to succeed.




***If
      We Need Additional Capital To Fund Our Growing Operations, We May Not Be Able
      To
      Obtain Sufficient Capital And May Be Forced To Limit The Scope Of Our
      Operations.***




We
      may
      experience increased capital needs and we may not have enough capital to fund
      our future operations without additional capital investments. Our capital needs
      will depend on numerous factors, including (i) our profitability; (ii) the
      success of our competitors; (iii) the amount of our capital expenditures; and
      (iv) new infrastructure project investment. We cannot assure you that we will
      be
      able to obtain capital in the future to meet our needs.




If
      we
      cannot obtain additional funding, we may be required to:




·
            reduce
                our investments in
                infrastructure industry;




·
            limit
                our expansion efforts; and




·
            decrease
                or eliminate capital expenditures.




Such
      reductions could materially adversely affect our business and our ability to
      compete. Even if we do find a source of additional capital, we may not be able
      to negotiate terms and conditions for receiving the additional capital that
      are
      acceptable to us. Any future capital investments could dilute or otherwise
      materially and adversely affect the holdings or rights of our existing
      stockholders. We cannot give you any assurance that any additional financing
      will be available to us, or if available, will be on terms favorable to
      us.




***Competition
      With The Railways and Airways in China May Have A Negative Impact On Our
      Business***




With
      the
      rapid development of the domestic expressway, China is also giving great support
      to the development of railways and airways. The construction of a special
      passenger railway and the speed-up of railways in general will be able to
      greatly improve the transport capacity of passengers and freight by railway
      and
      bring about a division of the target clients of the Expressway which could
      be an
      impediment to our growth and have a negative impact on our
      revenues.




14




**RISKS
      RELATING TO OUR COMMON STOCK**




***Our
      Common Stock Price Is Volatile And Could Decline In The
      Future.***




The
      stock
      market in general and the market price for other companies based in the PRC
      have
      experienced extreme stock price fluctuations. In some cases, these fluctuations
      have been unrelated to the operating performance of the affected companies.
      Many
      companies with operations based in the PRC have experienced dramatic volatility
      in the market prices of their common stock. We believe that a number of factors,
      both within and outside of our control, could cause the price of our Common
      Stock to fluctuate, perhaps substantially. Factors such as the following could
      have a significant adverse impact on the market price of our Common
      Stock:




·
            announcements
                of technological innovations by us or our
                competitors;




·
            our
                ability to obtain additional financing and, if available, the terms
                and
                conditions of the financing;




·
            our
                financial position and results of
                operations;




·
            litigation;




·
            period-to-period
                fluctuations in our operating
                results;




·
            changes
                in estimates of our performance by any securities
                analysts;




·
            new
                regulatory requirements and changes in the existing regulatory
                environment;




·
            the
                issuance of new equity securities in a future
                offering;




·
            changes
                in interest rates;




·
            changes
                in toll road standards;




·
            market
                conditions of securities traded on the OTC Bulletin
                Board;




·
            investor
                perceptions of us and the toll road industry generally;
                and




·
            general
                economic and other national
                conditions.




***The
      Trading Market In the Company’s Common Stock Is Limited And May Cause Volatility
      In The Market Price.***




Our
      Common Stock is currently traded on a limited basis on the Over-The-Counter
      Bulletin Board under the symbol “CIIV.OB”. The Over-The-Counter Bulletin Board
      is an inter-dealer, over-the-counter market that provides significantly less
      liquidity than the NASD’s automated quotation system, or the NASDAQ Stock
      Market. Quotes for stocks included on the Over-The-Counter Bulletin Board are
      not listed in the financial sections of newspapers as are those for the NASDAQ
      Stock Market. Therefore, prices for securities traded solely on the
      Over-The-Counter Bulletin Board may be difficult to obtain.




The
      quotation of our Common Stock on the Over-The-Counter Bulletin Board does not
      assure that a meaningful, consistent and liquid trading market currently exists,
      and in recent years such market has experienced extreme price and volume
      fluctuations. Thus, the market price for our Common Stock is subject to
      volatility and holders of Common Stock may be unable to resell their shares
      at
      or near their original purchase price or at any price. In the absence of an
      active trading market:




·
            investors
                may have difficulty buying and selling or obtaining market
                quotations;




·
            market
                visibility for our Common Stock may be limited;
                and




·
            a
                lack of visibility for our Common Stock may have a depressive effect
                on
                the market for our Common Stock.




15




***We
      May Have Difficulty Raising Necessary Capital To Fund Operations As A Result
      Of
      Market Price Volatility For Our Shares Of Common
      Stock.***




In
      recent
      years, the securities markets in the United States have experienced a high
      level
      of price and volume volatility, and the market price of securities of many
      companies have experienced wide fluctuations that have not necessarily been
      related to the operations, performances, underlying asset values or prospects
      of
      such companies. For these reasons, our shares of Common Stock can also be
      expected to be subject to volatility resulting from purely market forces over
      which we will have no control. If our business development plans are successful,
      we may require additional financing to continue to develop and exploit existing
      and new technologies and to expand into new markets. The expansion of our
      business may, therefore, be dependent upon our ability to obtain financing
      through debt and equity or other means.




***Our
      Common Stock Is Considered A “*** ***Penny
      Stock*** ***”
      And As A Result, Related Broker-Dealer Requirements Affect Its Trading And
      Liquidity.***




Our
      Common Stock is considered to be a “ penny
      stock ”
since
      it meets one or more of the definitions in Rules 15g-2 through 15g-6
      promulgated under Section 15(g) of the Exchange Act. These include but are
      not limited to the following: (i) the common stock trades at a price less
      than $5.00 per share; (ii) the common stock is not traded on a
“ recognized ”
      national exchange; (iii) the common stock is not quoted on the NASDAQ Stock
      Market, or (iv) the common stock is issued by a company with average
      revenues of less than $6.0 million for the past three (3) years. The
      principal result or effect of being designated a “ penny
      stock ”
is
      that
      securities broker-dealers cannot recommend our Common Stock to investors, thus
      hampering its liquidity.




Section 15(g)
      and Rule 15g-2 require broker-dealers dealing in penny stocks to provide
      potential investors with documentation disclosing the risks of penny stocks
      and
      to obtain a manually signed and dated written receipt of the documents before
      effecting any transaction in a penny stock for the investor’s account. Potential
      investors in our Common Stock are urged to obtain and read such disclosure
      carefully before purchasing any of our shares.




Moreover,
      Rule 15g-9 requires broker-dealers in penny stocks to approve the account
      of any investor for transactions in such stocks before selling any penny stock
      to that investor. This procedure requires the broker-dealer to (i) obtain
      from the investor information concerning his or her financial situation,
      investment experience and investment objectives; (ii) reasonably determine,
      based on that information, that transactions in penny stocks are suitable for
      the investor and that the investor has sufficient knowledge and experience
      as to
      be reasonably capable of evaluating the risks of penny stock transactions;
      (iii) provide the investor with a written statement setting forth the basis
      on which the broker-dealer made the determination in (ii) above; and
      (iv) receive a signed and dated copy of such statement from the investor,
      confirming that it accurately reflects the investor’s financial situation,
      investment experience and investment objectives.




Compliance
      with these requirements may make it more difficult for holders of our Common
      Stock to resell their shares to third parties or to otherwise dispose of them
      in
      the market or otherwise.




***Shares
      Eligible For Future Sale May Adversely Affect The Market Price Of Our Common
      Stock.***




From
      time
      to time, certain of our stockholders may be eligible to sell all or some of
      their shares of Common Stock by means of ordinary brokerage transactions in
      the
      open market pursuant to Rule 144, promulgated under the Securities Act of
      1933, as amended, subject to certain limitations. In general, effective February
      15, 2008, pursuant to Rule 144, a stockholder (or stockholders whose shares
      are aggregated) who has satisfied a six (6) months holding period may, under
      certain circumstances, sell within any three (3) month period a number of
      securities which does not exceed one percent (1%) of the then outstanding shares
      of common stock. In addition, effective February 15, 2008, Rule 144 also
      permits, under certain circumstances, the sale of securities, without any
      limitations, by a non-affiliate of our Company that has satisfied a one (1)
      year
      holding period. Any substantial sale of common stock pursuant to Rule 144
      may have an adverse effect on the market price of our Common Stock.




**One
      Stockholder Which is 50% Controlled By Our Chief Executive Officer and Chairman
      of the Board of the Company Exercises Significant Control Over Matters Requiring
      Stockholder Approval.**




After
      giving effect to the issuance of all the shares of Common Stock, the Stockholder
      has voting power equal to sixty-eight percent (68)% of our voting securities
      as
      of the date of this Report. Moreover, the Stockholder is fifty percent (50%)
      controlled by Li Xipeng, our Chief Executive Officer and Chairman of the Board.
      As a result, the Stockholder and our CEO, through such stock ownership,
      exercises control over all matters requiring stockholder approval, including
      the
      election of directors and approval of significant corporate transactions. This
      concentration of ownership in the Stockholder may also have the effect of
      delaying or preventing a change in control of us that may be otherwise viewed
      as
      beneficial by stockholders other than the Stockholder.




16




***We
      May Incur Significant Costs To Ensure Compliance With U.S. Corporate Governance
      And Accounting Requirements.***




We
      may
      incur significant costs associated with our public company reporting
      requirements, costs associated with newly applicable corporate governance
      requirements, including requirements under the Sarbanes-Oxley Act of 2002 and
      other rules implemented by the SEC. We expect all of these applicable rules
      and
      regulations to increase our legal and financial compliance costs and to make
      some activities more time-consuming and costly. We also expect that these
      applicable rules and regulations may make it more difficult and more expensive
      for us to obtain director and officer liability insurance and we may be required
      to accept reduced policy limits and coverage or incur substantially higher
      costs
      to obtain the same or similar coverage. As a result, it may be more difficult
      for us to attract and retain qualified individuals to serve on our board of
      directors or as executive officers. We cannot predict or estimate the amount
      of
      additional costs we may incur or the timing of such costs.




***We
      May Be Required To Raise Additional Financing By Issuing New Securities With
      Terms Or Rights Superior To Those Of Our Shares Of Common Stock, Which Could
      Adversely Affect The Market Price Of Our Shares Of Common
      Stock.***




We
      may
      require additional financing to fund future operations, including expansion
      in
      current and new markets, programming development and acquisition, capital costs
      and the costs of any necessary implementation of technological innovations
      or
      alternative technologies. We may not be able to obtain financing on favorable
      terms, if at all. If we raise additional funds by issuing equity securities,
      the
      percentage ownership of our current stockholders will be reduced, and the
      holders of the new equity securities may have rights superior to those of the
      holders of shares of Common Stock, which could adversely affect the market
      price
      and the voting power of shares of our Common Stock. If we raise additional
      funds
      by issuing debt securities, the holders of these debt securities would similarly
      have some rights senior to those of the holders of shares of Common Stock,
      and
      the terms of these debt securities could impose restrictions on operations
      and
      create a significant interest expense for us.




***Standards
      For Compliance With Section 404 Of The Sarbanes-Oxley Act Of 2002 Are Uncertain,
      And If We Fail To Comply In A Timely Manner, Our Business Could Be Harmed And
      Our Stock Price Could Decline.***




Rules
      adopted by the SEC, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
      require annual assessment of our internal control over financial reporting,
      and
      attestation of our assessment by our independent registered public accountants.
      The standards that must be met for management to assess the internal control
      over financial reporting as effective are new and complex, and require
      significant documentation, testing and possible remediation to meet the detailed
      standards and will impose significant additional expenses on us. We may
      encounter problems or delays in completing activities necessary to make an
      assessment of our internal control over financial reporting. In addition, the
      attestation process by our independent registered public accountants is new
      and
      we may encounter problems or delays in completing the implementation of any
      requested improvements and receiving an attestation of our assessment by our
      independent registered public accountants. If we cannot assess our internal
      control over financial reporting as effective, or our independent registered
      public accountants are unable to provide an unqualified attestation report
      on
      such assessment, investor confidence and share value may be negatively
      impacted.




***We
      Do Not Foresee Paying Cash Dividends In The Foreseeable
      Future.***




We
      have
      not paid cash dividends on our stock and we do not plan to pay cash dividends
      on
      our stock in the foreseeable future.




**ITEM 3.
      CONTROLS AND PROCEDURES**




**Evaluation
      Of Disclosure Controls And Procedures**




The
      Company maintains disclosure controls and procedures and internal controls
      designed to ensure that information required to be disclosed in the Company’s
      filings under the Securities Exchange Act of 1934, as amended is recorded,
      processed, summarized and reported within the time periods specified in the
      U.S.
      Securities and Exchange Commission’s rules and forms. As of the end of the
      period covered by this Quarterly Report, we carried out an evaluation, under
      the
      supervision and with the participation of our principal executive officer and
      principal financial officer, of the effectiveness of the design and operation
      of
      our disclosure controls and procedures. Based on this evaluation, our principal
      executive officer and principal financial officer concluded that our disclosure
      controls and procedures are effectively designed to ensure that information
      required to be disclosed or filed by us is recorded, processed or summarized,
      within the time periods specified in the rules and regulations of the Securities
      and Exchange Commission. It should be noted that the design of any system of
      controls is based in part upon certain assumptions about the likelihood of
      future events, and there can be no assurance that any design will succeed in
      achieving its stated goals under all potential future conditions, regardless
      of
      how remote.




**Changes
      In Internal Control Over Financial Reporting**




There
      was
      no change in the Company’s internal control over financial reporting that was
      identified in connection with such evaluation that occurred during the period
      covered by this Quarterly Report on Form 10-QSB/A that has materially affected,
      or is reasonably likely to materially effect, the Company’s internal controls
      over financial reporting.




17




**PART
      II - OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS**




The
      Company entered into an agreement to purchase land from Pingdingshan No.3 Cement
      Factory for $1,843,646. However, the Company was not informed that such land
      was
      pledged as collateral for loans to the cement factory. Pingdingshan No. 3 Cement
      Company went bankrupt and the company that loaned them money then sued the
      Company for the loss of the collateral. On July 13, 2006, judgment was made
      by
      the Henan Pingdingshan Intermediary Court in which the Company was required
      to
      pay the lending company $485,851. The amount was paid in August 2006 and
      recorded as other expense in the statement of income (loss) for the year ended
      June 30, 2007. The Company is appealing the ruling to a higher court and the
      final judgment is pending.




On
      June
      27, 2007, China railway No. 5 bureau, the constructor who won the bid in the
      Pinglin expressway no.2 road connection project, was sued by the subcontractors
      Hujianting and Hefeiyue for postponing the commencing date of construction
      for
      more than 10 months. The total damage claimed in this case was $647,364, and
      the
      Company, as the 5th defendant, was brought into this case by the plaintiff.
      The
      case is currently ongoing and the Company believes the claims against them
      are
      without substance and they plan to vigorously defend themselves. As such, there
      is no contingency accrual for this case at March 31, 2008.




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




The
      Company effectuated a 2-1 reverse split of its Common Stock effective on
      December 3, 2007 effectively reducing the number of issued and outstanding
      shares of Common Stock to 25,000,000 shares.




On
      January 22, 2008, the Company completed a dividend distribution to its
      shareholders of record as of January 18, 2008 in the amount equal to five
      percent (5%) (1,250,005 shares) of the then issued and outstanding Common Stock.
       Following the dividend distribution and immediately prior to the
      consummation of the Exchange, the Company had 26,250,005 shares of Common Stock
      issued and outstanding.




On
      February 8, 2008, pursuant to the terms of the Exchange Agreement, the Company
      acquired all of the issued and outstanding capital stock of CMH in exchange
      for
      the issuance by the Company of 54,400,000 newly-issued shares of Common
      Stock to the Stockholder.




**ITEM
      3. DEFAULT UPON SENIOR SECURITIES**




None.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




None.




**ITEM
      5. OTHER INFORMATION**




On
      April
      1, 2008, a principal stockholder holding in excess of fifty percent (50%) of
      the
      voting capital stock of the Company voted in favor of changing the name of
      the
      Company to “China Infrastructure Investment Corporation” as set forth in the
      Company’s Definitive Information Statement on Schedule 14C as filed with the
      U.S. Securities and Exchange Commission on March 12, 2008. On April 3, 2008,
      the
      Company filed a Certificate of Amendment to its Articles of Incorporation to
      effect such name change, effective as of April 5, 2008.




Effective
      April 23, 2008, the Common Stock of the Company now trades under the ticker
      symbol, “CIIV” on the Over-The-Counter Bulletin Board. The Company changed its
      ticker symbol from “LQTI.OB” to “CIIV.OB” as a result of the Company’s name
      change.




II-1




**ITEM
      6. EXHIBITS**




**EXHIBIT
                NO.**
            
            **DESCRIPTION**
            
            **LOCATION**3.1
            
            Articles
                of Incorporation of the Company
            
            Incorporated
                by reference to Exhibit 3.01 to the Company’s Form 10-SB as filed with the
                SEC on December 17, 2004.3.2
            
            Certificate
                of Amendment to Articles of Incorporation of the Company (name change
                to
                China Infrastructure Investment Corporation)
            
            Incorporated
                  by reference to Exhibit 3.2 to the Company’s Form 10-QSB as filed with the
                  SEC on May 15, 20083.2
            
            Bylaws
                of the Company
            
            Incorporated
                by reference to Exhibit 3.02 to the Company’s Form 10-SB as filed with the
                SEC on December 17, 2004.3.3
            
            Certificate
                of Incorporation of Color Man Holdings Limited
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 20083.4
            
            Certificate
                of Incorporation of Wise On China Limited
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 20083.5
            
            Certificate
                of Incorporation of Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 20083.6
            
            Company
                Charter of Color Man Holdings Limited (Memorandum of Association
                and
                Articles of Association)
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 20083.7
            
            Company
                Charter of Wise On China Limited
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 20083.8
            
            Articles
                of Association of Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.1
            
            Share
                Exchange Agreement, dated February 8, 2008, by and among Learning
                Quest
                Technologies, Inc., Color Man Holdings Ltd. and Joylink Holdings
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.2
            
            Chartered
                Rights Agreement on Pingdingshan-Linru Expressway Project, dated
                April 10,
                2003, by and between Pingdingshan Pinglin Expressway Co., Ltd. and
                Pingdingshan Bureau of Communications
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.3
            
            Loan
                Contract of the Year 2004, dated December 28, 2004, by and between
                the
                China Development Bank and Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 2008




II-2




**EXHIBIT
                NO.**
            
            **DESCRIPTION**
            
            **LOCATION**


10.4
            
            Loan
                Contract of the Fixed Assets (No. YBZ No. 0054, 2005), dated July
                29,
                2005, by and between The Pingdingshan Branch of Industrial and Commercial
                Bank of China and Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.5
            
            Loan
                Contract, dated February 25, 2005, by and between the Agricultural
                Bank of
                China, Xinhua Branch of Pingdingshan City and Pingdingshan Pinglin
                Expressway Co., Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.6
            
            Loan
                Contract of the Year 2007, dated September 28, 2007, by and between
                the
                China Development Bank and Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.7
            
            Loan
                Contract, dated June 7, 2005, by and between the Agricultural Bank
                of
                China, Xinhua Branch of Pingdingshan City and Pingdingshan Pinglin
                Expressway Co., Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.8
            
            General
                Loan Contract, dated November 29, 2004, by and between the China
                Development Bank and Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200810.9
            
            Loan
                Contract of the Fixed Assets (No. YBZ No. 0051, 2005), dated July
                29,
                2005, by and between The Pingdingshan Branch of Industrial and Commercial
                Bank of China and Pingdingshan Pinglin Expressway Co.,
                Ltd.
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200831.1
            
            Certification
                of Chief Executive Officer pursuant o Section 302 of the Sarbanes-Oxley
                Act of 2002
            
            Provided
                herewith31.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002
            
            Provided
                herewith32.1
            
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002
            
            Provided
                herewith32.2
            
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002
            
            Provided
                herewith99.1
            
            Audited
                Financial Statements of Pingdingshan Pinglin Expressway Co., Ltd.
                for the
                years ended June 30, 2007 and 2006
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200899.2
            
            Unaudited
                Consolidated Financial Statements of Color Man Holdings Ltd. for
                the
                period ended September 30, 2007
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 200899.3
            
            Unaudited
                Consolidated Pro Forma Financial Statements of Color Man Holdings
                Limited
                for the period ended September 30, 2007 and the year ended June 30,
                2007
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K as filed with the
                SEC on February 11, 2008




II-3





**SIGNATURES**




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




**CHINA
                INFRASTRUCTURE INVESTMENT CORPORATION**Dated:August
                1, 2008
            */s/**Li
                Xipeng*Li
                XipengChief
                Executive OfficerDated:
                August 1, 2008
            */s/
                Zhang Chunxian*Zhang
                ChunxianChief
                Financial Officer




II-4