---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10−Q(Mark One)

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2010

[   ]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: 333-134287

CHINA INTERACTIVE EDUCATION,
INC.(Exact Name of Registrant as Specified in Its
Charter)

|Nevada                          | 98-0643339                          
|------------------------------- | ------------------------------------
|(State or other jurisdiction of | (I.R.S. Employer Identification No.)
|incorporation or organization)  |                                     

Block C, Zhennan Road, South DistrictZhongshan
City, Guangdong Province People's Republic of China(Address
of principal executive offices, Zip Code)

(86) 0760-28198888(Registrant's telephone
number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [   ] No [   ]

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

|Large accelerated filer [   ]                                                   | Accelerated filer [   ]      
|------------------------------------------------------------------------------- | -----------------------------
|Non-accelerated filer [   ] (Do not check if a
      smaller reporting company) | Smaller reporting company [X]

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

The number of shares outstanding of each of the issuer's
classes of common stock, as of November 18, 2010 is as follows:

Class of
      Securities
    
    Shares OutstandingCommon Stock, $0.0001 par value
    
    65,000,000


---

|CHINA INTERACTIVE EDUCATION, INC.                   
|----------------------------------------------------
|                                                    
|Quarterly Report on Form 10-Q                       
|Three and
      Nine Months Ended September 30, 2010

|TABLE OF CONTENTS                 
|----------------------------------
|                                  
|PART I FINANCIAL
      INFORMATION
|                                  
|Item 1.                           
|Item 2.                           
|Item 3.                           
|Item 4.                           
|                                  
|PART II OTHER
      INFORMATION   
|                                  
|Item 1.                           
|Item 1A.                          
|Item 2.                           
|Item 3.                           
|Item 4.                           
|Item 5.                           
|Item 6.                           

---

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

|CHINA INTERACTIVE EDUCATION, INC.    
|-------------------------------------
|CONDENSED CONSOLIDATED BALANCE SHEETS
|(AMOUNTS EXPRESSED IN US DOLLARS)    

|ASSETS                                                                                                                       |  
|---------------------------------------------------------------------------------------------------------------------------- | -
|                                                                                                                             |  
|                                                                                                                             |  
|                                                                                                                             |  
|Current assets                                                                                                               |  
|Cash and cash equivalents                                                                                                    | $
|Accounts receivable, net of allowance of $729,515 and $nil
      as of September 30, 2010 and December 31, 2009 respectively |  
|Inventories                                                                                                                  |  
|Deposits, prepayments and other receivables                                                                                  |  
|Total current assets                                                                                                         |  
|Property, plant and equipment, net                                                                                           |  
|Intangible assets, net                                                                                                       |  
|Total assets                                                                                                                 | $
|                                                                                                                             |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                         |  
|Current liabilities                                                                                                          |  
|Accounts and notes payable                                                                                                   | $
|Other payables and accrued expenses                                                                                          |  
|Advances from customers                                                                                                      |  
|Value added and other taxes payable                                                                                          |  
|Income tax payable                                                                                                           |  
|Due to related parties                                                                                                       |  
|Total current liabilities                                                                                                    |  
|Total liabilities                                                                                                            |  
|                                                                                                                             |  
|Commitments and Contingencies                                                                                                |  
|                                                                                                                             |  
|Shareholders' Equity                                                                                                         |  
|Preferred stock, $0.001 par value, 10,000,000 shares
      authorized, none issued and outstanding                           |  
|Common stock, $0.001 par value, 200,000,000
      shares authorized, 65,000,000 and 65,000,000 shares issued and outstanding |  
|Additional paid-in capital                                                                                                   |  
|Statutory reserves                                                                                                           |  
|Retained earnings                                                                                                            |  
|Accumulated other comprehensive income                                                                                       |  
|Total shareholders' equity                                                                                                   |  
|Total liabilities and shareholders' equity                                                                                   | $

See accompanying notes to condensed consolidated financial
statements.

1

---

|CHINA INTERACTIVE EDUCATION, INC.                                             
|------------------------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
      COMPREHENSIVE INCOME
|(UNAUDITED)                                                                   
|(AMOUNTS EXPRESSED IN US DOLLARS)                                             

|                                        |   | Three months ended |   |   | Nine months ended |  
|--------------------------------------- | - | ------------------ | - | - | ----------------- | -
|                                        |   | September 30,      |   |   | September 30,     |  
|                                        |   | 2010               |   |   | 2009              |  
|                                        |   |                    |   |   |                   |  
|Revenue                                 | $ | 11,575,873         |   | $ | 5,346,732         |  
|                                        |   |                    |   |   |                   |  
|Cost of revenue                         |   | (8,079,116         | ) |   | (1,517,543        | )
|                                        |   |                    |   |   |                   |  
|Gross profit                            |   | 3,496,757          |   |   | 3,829,189         |  
|Operating expenses:                     |   |                    |   |   |                   |  
|Selling expenses                        |   | (282,388           | ) |   | (55,950           | )
|General and administrative expenses     |   | (415,781           | ) |   | (157,948          | )
|Research and development expenses       |   | (36,726            | ) |   | (139,581          | )
|                                        |   |                    |   |   |                   |  
|                                        |   | (734,895           | ) |   | (353,479          | )
|                                        |   |                    |   |   |                   |  
|Income from operations                  |   | 2,761,862          |   |   | 3,475,710         |  
|Other income                            |   | 23,150             |   |   | 268               |  
|                                        |   |                    |   |   |                   |  
|Income before income taxes              |   | 2,785,012          |   |   | 3,475,978         |  
|                                        |   |                    |   |   |                   |  
|Income taxes                            |   | (628,476           | ) |   | (512,807          | )
|                                        |   |                    |   |   |                   |  
|Net income                              |   | 2,156,536          |   |   | 2,963,171         |  
|Other comprehensive income:             |   |                    |   |   |                   |  
|Foreign currency translation adjustment |   | 206,579            |   |   | 275,372           |  
|                                        |   |                    |   |   |                   |  
|Total comprehensive income              | $ | 2,363,115          |   | $ | 3,238,543         |  
|                                        |   |                    |   |   |                   |  
|Weighted average number of shares:      |   |                    |   |   |                   |  
|- Basic and diluted                     |   | 65,000,000         |   |   | 60,400,000        |  
|Earnings per common share               |   |                    |   |   |                   |  
|- Basic and diluted                     | $ | 0.03               |   | $ | 0.05              |  

See accompanying notes to condensed consolidated financial
statements.

2

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|CHINA INTERACTIVE EDUCATION, INC.                                 
|------------------------------------------------------------------
|CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS'
      EQUITY    
|(AMOUNTS EXPRESSED IN US DOLLARS EXCEPT FOR NUMBER OF
      SHARE)

AccumulatedAdditional
    
    
    
    
    
    
    
    
    otherCommon stock
    
    
    paid-in
    
    
    Statutory
    
    
    Retained
    
    
    comprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    reserves
    
    
    earnings
    
    
    income
    
    
    TotalBalance, December 31, 2009
    
    65,000,000
    
    $
    65,000
    
    $
    1,128,000
    
    $
    87,884
    
    $
    3,540,507
    
    $
    388,017
    
    $
    5,209,408Net income for the period
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    3,288,412
    
    
    -
    
    
    3,288,412Foreign currency translation adjustment
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    248,390
    
    
    248,390Balance, September 30, 2010 (Unaudited)
    
    65,000,000
    
    $
    65,000
    
    $
    1,128,000
    
    $
    87,884
    
    $
    6,828,919
    
    $
    636,407
    
    $
    8,746,210


See accompanying notes to condensed consolidated financial
statements.

3

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|CHINA INTERACTIVE EDUCATION, INC.              
|-----------------------------------------------
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|(UNAUDITED)                                    
|(AMOUNTS EXPRESSED IN US DOLLARS)              

|                                                                                    |   | Nine months ended September
      30, |  
|----------------------------------------------------------------------------------- | - | ------------------------------------- | -
|                                                                                    |   | 2010                                  |  
|                                                                                    |   |                                       |  
|Cash flows from operating
      activities:                                         |   |                                       |  
|Net income                                                                          | $ | 3,288,412                             |  
|Adjustments to reconcile net income to cash
      provided by operating activities: |   |                                       |  
|Depreciation of property, plant and equipment                                       |   | 75,320                                |  
|Amortization of intangible assets                                                   |   | 165,579                               |  
|Allowance for doubtful debts                                                        |   | 718,145                               |  
|Increase in assets :                                                                |   |                                       |  
|Accounts receivable                                                                 |   | (3,864,810                            | )
|Inventories                                                                         |   | (2,488,411                            | )
|Deposits, prepayments and other receivables                                         |   | (143,219                              | )
|Increase (decrease) in liabilities :                                                |   |                                       |  
|Accounts and notes payable                                                          |   | (2,626,932                            | )
|Other payables and accrued expenses                                                 |   | 217,365                               |  
|Advances from customers                                                             |   | 789,684                               |  
|Value added and other taxes payable                                                 |   | 3,830,828                             |  
|Income tax payable                                                                  |   | 729,822                               |  
|Net cash provided by operating activities                                           |   | 691,783                               |  
|                                                                                    |   |                                       |  
|Cash flows from investing activities
      :                                        |   |                                       |  
|Purchase of property, plant and equipment                                           |   | (83,541                               | )
|Purchase of intangible assets                                                       |   | (5,962                                | )
|Advance to related company                                                          |   | -                                     |  
|Net cash used in investing activities                                               |   | (89,503                               | )
|                                                                                    |   |                                       |  
|Cash flows from financing
      activities:                                         |   |                                       |  
|Advance from related parties                                                        |   | 183,558                               |  
|Repayment to related parties                                                        |   | (916,425                              | )
|Net cash used in financing activities                                               |   | (732,867                              | )
|                                                                                    |   |                                       |  
|Effect of foreign currency translation                                              |   | 66,646                                |  
|                                                                                    |   |                                       |  
|Net decrease in cash and cash equivalents                                           |   | (63,941                               | )
|                                                                                    |   |                                       |  
|Cash and cash equivalents, beginning of period                                      |   | 351,544                               |  
|                                                                                    |   |                                       |  
|Cash and cash equivalents, end of period                                            | $ | 287,603                               |  
|Supplemental disclosure information                                                 |   |                                       |  
|Income taxes paid                                                                   | $ | 113,038                               |  

See accompanying notes to the condensed consolidated financial
statements.

4

---

CHINA INTERACTIVE EDUCATION, INC.NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 DESCRIPTION OF BUSINESS AND ORGANIZATION

China Interactive Education, Inc. ("CIE" or the "Company") was incorporated in
the State of Delaware as Find the World Interactive, Inc., on August 28, 2000
for the purpose of developing online internet community portals. On December 4,
2009, the Company changed its legal domicile from Delaware to Nevada by merging
into a wholly-owned subsidiary, China Interactive Education, Inc., which the
Company established in the State of Nevada for the sole purpose of effecting the
change of domicile to Nevada, which the Company deeded to be a more favorable
jurisdiction with a respectable body of corporate law and no state income tax.
China Interactive Education, Inc. was the surviving entity after the merger
thereby changing the Company's name from Find the World Interactive, Inc. to
China Interactive Education, Inc. On December 11, 2009, the Company completed a
reverse acquisition of MenQ Technology Group Limited ("MenQ"), a British Virgin
Islands ("BVI") limited company and its subsidiaries, discussed in more detail
under the "Reverse Acquisition" heading below.

On September 21, 2010, MenQ established Guangzhou Research
Institute of Collaborative Education Science and Technology ("CEST") a private
non-enterprise entity in China. Its principal activities are research,
development and promotion of education and technology applications.

As of September 30, 2010, the Company had the following direct and indirect
subsidiaries:

|                                                                                              | Place and date of                                           |                 |                                                                                                                    
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------- | -------------------------------------------------------------------------------------------------------------------
|Subsidiaries'
      names                                                                     | incorporation                                               | Paid-up capital | Principal activities                                                                                               
|                                                                                              |                                                             |                 |                                                                                                                    
|MenQ Technology Group Limited (MenQ)                                                        | British Virgin Islands (BVI)
      July 2, 2009           | $50,000         | Intermediate holding company                                                                                       
|Wisegate International Limited (Wisegate)                                                   | British Virgin Islands (BVI) May 30, 2007                 | $50,000         | Licensing of a patent of a Global Positioning
      Systems (GPS) technology and as an intermediate holding company
|MenQ International Limited (MenQ HK)                                                        | Hong Kong July 28, 2006                                     | HK$10,000       | Development and sales of
      electronic products                                                                 
|Clever Aim Development Limited (Clever Aim)                                                 | Hong Kong August 3, 2009                                    | HK$10,000       | Intermediate holding company                                                                                       
|MenQ Technology Limited (MenQ China)                                                        | People's Republic of China
      (PRC) December 25, 2008  | RMB1,000,000    | Development and sales of
      electronic products                                                                 
|Guangzhou Research Institute of Collaborative Education
      Science and Technology (CEST) | People's Republic of China (PRC)
      September 21, 2010 | RMB500,000      | Research and development of education and
      technology applications                                            

Reverse Acquisition

On December 11, 2009, the Company entered into a share exchange
agreement (Share Exchange Agreement) under which the Company issued
60,400,000 shares of the Company, to the sole shareholder of MenQ in exchange
for all the issued and outstanding shares of MenQ (the Share Exchange).
Immediately following the Share Exchange, the shareholder of MenQ owned
approximately 92.9% of the Company's total issued and outstanding share capital
on an as-if converted and fully-diluted basis.

5

---

As a result, the Share Exchange has been accounted for as a
reverse acquisition using the purchase method of accounting, whereby MenQ is
deemed to be the accounting acquirer and the Company to be the accounting
acquiree. The financial statements before the date of Share Exchange are those
of MenQ with the results of the Company being consolidated from the date of
Share Exchange. The equity section and the earnings per share have been
retroactively restated to reflect the reverse acquisition and no goodwill has
been recorded.

MenQ is a company incorporated with limited liability on July
2, 2009 in the British Virgin Islands, as Mighty Genius Holdings Limited, with a
registered and paid up capital of $50,000. On September 8, 2009, the Company changed its name to MenQ
Technology Group Limited.

MenQ has not carried out any substantive operations of its
own except for investment holding. Through its wholly-owned subsidiaries, MenQ
primarily engages in the development and sales of electronic products based on a
computer programming technology.

Since their incorporation, 100% of the equity interests in
Wisegate and Clever Aim have always been held by MenQ.

Restructuring

On September 7, 2009, pursuant to a restructuring plan
("Restructuring"), MenQ through Wisegate, acquired 100% equity interests in MenQ
HK from Mr. Chen Ruofei and another minority shareholder, who are both PRC
residents.

On October 10, 2009, also pursuant to the Restructuring, MenQ
through Clever Aim, acquired 100% equity interests in MenQ China from Mr. Chen
Ruofei, Mr. Chen Tiannan and other minority shareholders, who are all PRC
residents. On October 10, 2009, the local government of the PRC issued the
certificate of approval regarding the change in shareholding of MenQ China and
its transformation from a PRC domestic company to a wholly-foreign owned
enterprise.

On September 21, 2009, as part of the Restructuring, Mr. Chen
Ruofei, Mr. Chen Tiannan and other minority shareholders (the "MenQ HK and MenQ
China Founders") through Future Billion Limited ("Future Billion", a company
incorporated in the BVI, established and controlled by the MenQ HK and MenQ
China Founders), entered into an option agreement (the "Option Agreement") with
Mr. Liu Hai Qi (the "Granter," the sole legal shareholder and director of MenQ).

Pursuant to the Option Agreement, Future Billion obtained the
right and option to acquire all outstanding shares ("Option Shares") in MenQ at
an exercise price of $1 per share during the exercise period of five years
commencing on the ninetieth day after the effectiveness of a registration
statement under the Securities Act to be filed by a United States public
reporting shell company, with which MenQ intends to enter into a share exchange
agreement for the purposes of a reverse merger with that shell company.

Pursuant to the Option Agreement, the Granter further agrees,
among others, that throughout the exercise period of the Option Agreement,
without the prior written approval of Future Billion:

(i) he will not increase the number of authorized shares of
the  MenQ's common stock; 
(ii) he will keep available the services of current officers and employees of

MenQ and its subsidiaries; 
(iii)  MenQ and its subsidiaries do not declare, accrue, set aside or pay any
dividend or make any other distribution, nor do they repurchase, redeem or
otherwise reacquire any equity of shares of capital stock or other securities;

(iv)  MenQ and its subsidiaries do not sell or otherwise issue any equity, shares
of capital stock or any other securities.

The primary purpose of the Option Agreement is to enable the
MenQ HK and MenQ China Founders to reacquire ultimate controlling legal
ownership of MenQ HK and MenQ China in compliance with PRC regulatory
requirements.

During and after the Restructuring, there has been no change
to the composition of the board of directors of MenQ HK and MenQ China. The
boards of directors of MenQ HK and MenQ China have continued to comprise
representatives of the MenQ HK and MenQ China Founders. Therefore, MenQ HK and
MenQ China are still under the operating and management control of the MenQ HK
and MenQ China Founders. As a result of the Option Agreement, the MenQ HK and
MenQ China Founders, through Future Billion, continue to bear the residual risks
and rewards relating to MenQ HK and MenQ China. As a result, the Restructuring
has been accounted for as a recapitalization of MenQ HK and MenQ China with no
adjustment to the historical basis of their assets and liabilities. The
Restructuring has been accounted for using the "as if" pooling method of
accounting and the operations were consolidated as if the Restructuring had
occurred as of the beginning of the earliest period presented and the current
corporate structure had been in existence throughout the periods covered by
these financial statements.

6

---

NOTE 2 SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation and consolidation

These interim condensed consolidated financial statements are
unaudited. In the opinion of management, all adjustments and disclosures
necessary for a fair presentation of these interim condensed consolidated
financial statements have been included. The results reported in the condensed
consolidated financial statements for any interim periods are not necessarily
indicative of the results that may be reported for the entire year. The (a)
condensed consolidated balance sheet as of December 31, 2009, which was derived
from audited financial statements, and (b) the unaudited interim condensed
consolidated financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures normally included in annual financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made are adequate to make the
information not misleading. These unaudited condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and accompanying footnotes of the Company for the year ended December
31, 2009.

These condensed consolidated financial statements include the
financial statements of the Company and its subsidiaries. All significant inter-company
balances or transactions have been eliminated on consolidation.

The results of subsidiaries are consolidated from the date of
acquisition, being the date on which the Company obtains control, and continue
to be consolidated until the date that such control ceases. All significant
intercompany accounts, transactions and cash flows are eliminated on
consolidation.

Revenue recognition

Revenue is recognized when the following four revenue criteria
are met: persuasive evidence of an arrangement exists, delivery has occurred,
the selling price is fixed or determinable, and collectibility is reasonably
assured.

Revenue from providing technology development services and
granting the technology patent right to its customer is recognized net of sales
discounts and returns and business taxes once the services have been rendered to
its customers and the Company has the right to receive the income. Revenue from
sales of the Company's products is recognized when the significant risks and
rewards of ownership have been transferred to the buyer at the time when the
products are delivered to and accepted by its customers. The price is fixed or
determinable as stated on the sales contract, and collectibility is reasonably
assured. Customers do not have a general right of return on products shipped.
Products returned to the Company were insignificant during past years. There are
no post-shipment obligations, price protection and bill and hold
arrangements.

Research and development expenses

Research and development costs are charged to expense when
incurred.

Advertising and promotion costs

The Company expenses advertising and promotion costs as
incurred. During the nine months ended September 30, 2010, advertising and
promotion expenses amounted to $1,668,111, among which $1,626,499 and $41,612
were charged as selling expenses and general and administrative expenses,
respectively. During the nine months ended September 30, 2009, advertising and promotion expenses amounted
to $91,936 and were charged as selling expenses.

7

---

Shipping and handling cost

Technological products sold by the Company are normally
collected by customers at the Company's premises. During the nine-month periods ended
September 30, 2010 and 2009, shipping and handling costs were insignificant.

Foreign Currency

The Company uses the United States dollars (U.S. Dollars or
US$ or $) for financial reporting purposes. The PRC subsidiaries within the
Company maintain their books and records in their functional currency, Chinese
Renminbi (RMB) and Hong Kong dollars (HK$), being the lawful currency in the
PRC and Hong Kong. Assets and liabilities are translated into U.S. Dollars using
the applicable exchange rates prevailing at the balance sheet date. Items on the
statement of operations are translated at average exchange rates during the
reporting period. Equity accounts are translated at historical rates.
Adjustments resulting from the translation of the Company's financial statements
are recorded as accumulated other comprehensive income.

The exchange rates used to translate amounts in RMB and HK$
into U.S. Dollars for the purposes of preparing the consolidated financial
statements are as follows:-

|                                                      | As of September 30, 2010 |  | As of December 31, 2009
|----------------------------------------------------- | ------------------------ |  | -----------------------
|Balance sheet items, except for equity
      accounts | US$1=RMB6.7011           |  | US$1=RMB6.8282         
|                                                      | US$1=HK$7.7905           |  | US$1=HK$7.7850         

|                                                           | Three months ended September 30,
|---------------------------------------------------------- | --------------------------------
|                                                           | 2010                            
|Items in the statements of operations and
      cash flows | US$1=RMB6.7713                  
|                                                           | US$1=HK$7.7823                  

|                                                           | Nine months ended September 30,
|---------------------------------------------------------- | -------------------------------
|                                                           | 2010                           
|Items in the statements of operations and
      cash flows | US$1=RMB6.8072                 
|                                                           | US$1=HK$7.7878                 

No representation is made that the RMB amounts could have been,
or could be, converted into U.S. dollars at the above rates.

The value of RMB against U.S. dollars and other currencies may
fluctuate and is affected by, among other things, changes in China's political
and economic conditions. Any significant revaluation of RMB may materially
affect the Company's financial condition in terms of U.S. dollar reporting.

Fair value

ASC Topic 820, Fair Value Measurement and Disclosures,
defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. This topic also establishes a fair
value hierarchy which requires classification based on observable and
unobservable inputs when measuring fair value. There are three levels of inputs
that may be used to measure fair value:

|Level 1- | Quoted prices in active markets for identical
      assets or liabilities.                                                                                                                                                                                                                                                   
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                              
|Level 2- | Observable inputs other than Level 1 prices
      such as quoted prices for similar assets or liabilities; quoted prices in
      markets that are not active; or other inputs that are observable or can be
      corroborated by observable market data for substantially the full term of
      the assets or liabilities.
|         |                                                                                                                                                                                                                                                                                                                              
|Level 3- | Unobservable inputs that are supported by
      little or no market activity and that are significant to the fair value of
      the assets or liabilities.                                                                                                                                                                  

8

---

The carrying values of cash and cash equivalents, trade and
other receivables and payables, and short-term debts approximate fair values due
to their short maturities.

There were no assets and liabilities measured at fair value on
a recurring or nonrecurring basis as of September 30, 2010 and December 31,
2009.

Recent Accounting Pronouncements

Effective January 1, 2010, the Company adopted the provisions
in ASU 2010-06, Fair Value Measurements and Disclosures (ASC Topic 820):
Improving Disclosures about Fair Value Measurements, which requires new
disclosures related to transfers in and out of levels 1 and 2 and activity in
level 3 fair value measurements, as well as amends existing disclosure
requirements on level of disaggregation and inputs and valuation techniques. The
adoption of the provisions in ASU 2010-06 did not have an impact on the
Company's condensed consolidated financial statements.

In February 2010, the Financial Accounting Standards Board
(FASB) issued authoritative guidance that amends the disclosure requirements
related to subsequent events. This guidance includes the definition of a
Securities and Exchange Commission filer, removes the definition of a public
entity, redefines the reissuance disclosure requirements and allows public
companies to omit the disclosure of the date through which subsequent events
have been evaluated. This guidance is effective for financial statements issued
for interim and annual periods ending after February 2010. This guidance did not
materially impact the Company's results of operations or financial position, but
did require changes to the Company's disclosures in its financial statements.

In April 2010, the FASB issued ASU No.
2010-13CompensationStock Compensation (Topic 718), which addresses the
classification of an employee share-based payment award with an exercise price
denominated in the currency of a market in which the underlying equity security
trades. This update provides amendments to Topic 718 to clarify that an employee
share-based payment award with an exercise price denominated in the currency of
a market in which a substantial portion of the entity's equity securities trades
should not be considered to contain a condition that is not a market,
performance, or service condition. Therefore, an entity would not classify such
an award as a liability if it otherwise qualifies as equity. The amendments in
this update are effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2010. The Company expects that
the adoption of the amendments in this update will not have any significant
impact on its financial position and results of operations.

In May 2010, the FASB issued ASU 2010-19, Foreign Currency
(Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates.
The amendments in this ASU are effective as of the announcement date of March
18, 2010. The adoption of this update did not have a material impact on the
Company's condensed consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20, Receivables (Topic
310): Disclosure about the Credit Quality of Financing Receivables and the
Allowance for Credit Losses. This ASU amended Topic 310 to improve the
disclosures that an entity provides about the credit quality of its financing
receivables and the related allowance for credit losses. As a result these
amendments, an entity is required to disaggregate by portfolio segment or class
certain existing disclosure and provide certain new disclosures about its
financing receivables and related allowance for credit losses. For public
entities, the disclosures as of end of a reporting period are effective for
interim and annual reporting periods ending or after December 15, 2010. The
disclosures as of the end of a reporting period are effective for interim and
annual reporting periods beginning on or after December 15, 2010. Except for the
expanded disclosure requirements, the adoption of this ASU is not expected to
have a material impact on the Company's condensed consolidated financial
statements.

Other accounting standards that have been issued or proposed by
the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Company's
condensed consolidated financial statements upon adoption.

9

---

NOTE 3 ACCOUNTS RECEIVABLE, NET

|                                      |   | September 30, |   |   | December 31, | 
|------------------------------------- | - | ------------- | - | - | ------------ | 
|                                      |   | 2010          |   |   | 2009         | 
|                                      |   | (Unaudited)   |   |   |              | 
|                                      |   |               |   |   |              | 
|Accounts receivable                   | $ | 15,164,178    |   | $ | 11,006,809   | 
|Less: Allowance for doubtful accounts |   | (729,515      | ) |   | -            | 
|                                      |   |               |   |   |              | 
|Accounts receivable, net              | $ | 14,434,663    |   | $ | 11,006,809   | 

NOTE 4 INVENTORIES

|                 |   | September 30, |  |   | December 31, | 
|---------------- | - | ------------- |  | - | ------------ | 
|                 |   | 2010          |  |   | 2009         | 
|                 |   | (Unaudited)   |  |   |              | 
|                 |   |               |  |   |              | 
|Raw materials    | $ | 226,369       |  | $ | 566,125      | 
|Work in progress |   | 255,953       |  |   | 246,152      | 
|Finished goods   |   | 3,219,535     |  |   | 340,088      | 
|                 |   |               |  |   |              | 
|Total            | $ | 3,701,857     |  | $ | 1,152,365    | 

NOTE 5 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

|                                         |   | September 30, |  |   | December 31, | 
|---------------------------------------- | - | ------------- |  | - | ------------ | 
|                                         |   | 2010          |  |   | 2009         | 
|                                         |   | (Unaudited)   |  |   |              | 
|                                         |   |               |  |   |              | 
|Purchase deposits                        |   | 550,392       |  |   | 536,364      | 
|Prepaid for operating expenses           |   | 157,869       |  |   | 67,272       | 
|Other receivables, net of $nil allowance |   | 105,131       |  |   | 52,600       | 
|                                         |   |               |  |   |              | 
|Total                                    | $ | 813,392       |  | $ | 656,236      | 

NOTE 6 PROPERTY, PLANT AND EQUIPMENT, NET

|                                                      |   | September 30, |   |   | December 31, |  
|----------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                      |   | 2010          |   |   | 2009         |  
|                                                      |   | (Unaudited)   |   |   |              |  
|                                                      |   |               |   |   |              |  
|Furniture, fixtures and equipment                     | $ | 48,007        |   | $ | 59,058       |  
|Leasehold improvement                                 |   | 166,790       |   |   | 132,479      |  
|Motor vehicles                                        |   | 217,357       |   |   | 151,729      |  
|Plant and machinery                                   |   | 102,114       |   |   | 98,582       |  
|                                                      |   |               |   |   |              |  
|Total cost                                            |   | 534,268       |   |   | 441,848      |  
|Less: Accumulated depreciation and
      amortization |   | (115,630      | ) |   | (38,951      | )
|                                                      |   |               |   |   |              |  
|Net                                                   | $ | 418,638       |   | $ | 402,897      |  

Depreciation expenses in aggregate for the nine-month periods ended
September 30, 2010 and 2009 were $75,320 and $8,107 respectively.

10

---

NOTE 7 INTANGIBLE ASSETS

|                                                          |   | September 30, |   |   | December 31, |  
|--------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                          |   | 2010          |   |   | 2009         |  
|                                                          |   | (Unaudited)   |   |   |              |  
|                                                          |   |               |   |   |              |  
|Exclusive rights to computer programming
      technology | $ | 1,123,212     |   | $ | 1,096,361    |  
|Less: Accumulated amortization                            |   | (692,720      | ) |   | (514,757     | )
|                                                          |   |               |   |   |              |  
|Net                                                       | $ | 430,492       |   | $ | 581,604      |  

Each of the exclusive rights has a term of five years and
relates to a computer programming technology under several patents based on
which the Company develops its electronic products. These exclusive rights were
acquired from Mr. Chen Ruofei (CEO and President of the Company) and Mr. Zhou Yi
(a director of the Company).

Amortization expenses for the nine-month periods ended September 30,
2010 and 2009 were $165,579 and $164,357 respectively.

Estimated amortization expense of the intangible assets over
the next two years will be approximately $220,772 per annum.

NOTE 8 INCOME TAXES

The Company is subject to income tax on an entity basis on
income arising from the tax jurisdiction in which they operate.

Wisegate is incorporated in the British Virgin Islands (BVI)
and is, therefore, not subject to any income tax in the BVI. However, during the
nine months ended September 30, 2009, Wisegate generated patent license fees and
related service revenue from other subsidiaries of the Company which are PRC
resident enterprises. According to the PRC Income Tax Law on Foreign Invested
Enterprises and Foreign Enterprises, which was effective for periods before
January 1, 2008, and the PRC Unified Enterprise Income Tax Law, which has been
effective from January 1, 2008, Wisegate is generally subject to a withholding
income tax at 20% on its patent license fees and on service revenue generated
from PRC resident enterprises. As Wisegate has no permanent establishment within
the PRC, it is allowed a reduced withholding income tax rate of 10% according to
the relevant regulation on the implementation of the PRC income tax law.

MenQ HK and Clever Aim are Hong Kong-incorporated companies and
are, therefore, subject to a Hong Kong profits tax of 16.5% on its income
generated from Hong Kong.

MenQ China is a PRC-registered company is, therefore, subject
to PRC income tax at 25% on its income generated from the PRC.

CEST is a PRC-registered private non-enterprise entity and is,
therefore, subject to PRC income tax at 25% on its income generated from the
PRC.

No provision for other taxes is made as the Company and MenQ do
not have any taxable income in the U.S. or the British Virgin Islands.

11

---

NOTE 8 INCOME TAXES Continued

The Company's income tax expense consisted of:

|         |   | Three months ended |  |   | Nine months ended | 
|-------- | - | ------------------ |  | - | ----------------- | 
|         |   | September 30,      |  |   | September 30,     | 
|         |   | 2010               |  |   | 2009              | 
|         |   | (Unaudited)        |  |   | (Unaudited)       | 
|         |   |                    |  |   |                   | 
|Current  | $ | 628,476            |  | $ | 512,807           | 
|Deferred |   | -                  |  |   | -                 | 
|         |   |                    |  |   |                   | 
|         | $ | 628,476            |  | $ | 512,807           | 

Significant components of the net deferred tax assets were as
follows:

|                             |   | September 30, |   |   | December 31, | 
|---------------------------- | - | ------------- | - | - | ------------ | 
|                             |   | 2010          |   |   | 2009         | 
|                             |   | (Unaudited)   |   |   |              | 
|                             |   |               |   |   |              | 
|Allowance for doubtful debts | $ | 182,379       |   | $ | -            | 
|Less: Valuation allowance    |   | (182,379      | ) |   | -            | 
|                             |   |               |   |   |              | 
|Net deferred tax assets      | $ | -             |   | $ | -            | 

As of September 30, 2010, a valuation allowance of $182,379 was
provided for the deferred tax asset, due to the uncertainty of the allowance of
the deductibility of doubtful debts by the tax authority.

A reconciliation of the provision for income taxes to the
Company's effective income tax rate is as follows:

|                                                                                                 |   | Three months ended
      September 30, |   |   | Nine months ended
      September 30, |  
|------------------------------------------------------------------------------------------------ | - | -------------------------------------- | - | - | ------------------------------------- | -
|                                                                                                 |   | 2010                                   |   |   | 2009                                  |  
|                                                                                                 |   | (Unaudited)                            |   |   | (Unaudited)                           |  
|Pre-tax income from continuing operations                                                        | $ | 2,785,012                              |   | $ | 3,475,978                             |  
|                                                                                                 |   |                                        |   |   |                                       |  
|United States federal corporate income tax
      rate                                            |   | 35%                                    |   |   | 35%                                   |  
|Income tax expense computed at U.S. federal corporate
      income tax rate                      |   | 974,754                                |   |   | 1,216,592                             |  
|Reconciling items:                                                                               |   |                                        |   |   |                                       |  
|Rate differential for PRC earnings                                                               |   | (277,441                               | ) |   | (507,407                              | )
|Non-deductible expenses                                                                          |   | 93,360                                 |   |   | 113,621                               |  
|PRC tax concession on non- resident enterprises without
      permanent establishment in the PRC |   | (110,178                               | ) |   | (353,156                              | )
|Loss not recognized as deferred tax assets                                                       |   | -                                      |   |   | -                                     |  
|Others                                                                                           |   | (52,019                                | ) |   | 43,157                                |  
|                                                                                                 |   |                                        |   |   |                                       |  
|Income taxes                                                                                     | $ | 628,476                                |   |   | 512,807                               |  

12

---

As of September 30, 2010 and December 31, 2009, the Company has
no material unrecognized tax benefits which would favorably affect the effective
income tax rate in future periods and does not believe that there will be any
significant increases or decreases of unrecognized tax benefits within the next
twelve months. No interest or penalties relating to income tax matters have been
imposed on the Company during the nine-month periods  ended September 30, 2010
and 2009, and no provision for interest and penalties is deemed necessary as of
September 30, 2010 and December 31, 2009.

According to the PRC Tax Administration and Collection Law, the
statute of limitations is three years for the underpayment of taxes due to
computational errors made by the taxpayer or its withholding agent. The statute
of limitations extends to five years under special circumstances, which are not
clearly defined. In the case of a related party transaction, the statute of
limitation is ten years. There is no statute of limitation in the case of tax
evasion.

NOTE 9 SHAREHOLDER'S EQUITY

On December 11, 2009, which was the date of the Share Exchange
as set out in Note 1, the Company issued 60,400,000 shares of the Company, to
the sole shareholder of MenQ in exchange for all the issued and outstanding
shares of MenQ.

NOTE 10 STATUTORY RESERVES

In accordance with the PRC Companies Law, the Company's PRC
subsidiaries were required to transfer 10% of their profits after tax, as
determined in accordance with accounting standards and regulations of the PRC,
to the statutory surplus reserve until such reserve reached 50% of registered
capital of the Company's PRC subsidiaries. The statutory surplus reserve is
non-distributable.

NOTE 11 EARNINGS PER SHARE

Basic earnings per common share is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted income per common share is computed
similarly to basic income per common share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potentially dilutive common shares had been issued.

All per share data including earnings per share (EPS) has been
retroactively restated to reflect the reverse acquisition on December 11, 2009
whereby the 60,400,000 shares of common stock issued by the Company (nominal
acquirer) to the shareholder of MenQ (nominal acquiree) are deemed to be the
number of shares outstanding for the period prior to the reverse acquisition.
For the period after the reverse acquisition, the number of shares considered to
be outstanding is the actual number of shares outstanding during that
period.

The following table is a reconciliation of the net income and
the weighted average shares used in the computation of basic and diluted
earnings per share for the periods presented :

|                                    |   | Three months ended |  |   | Nine months ended | 
|----------------------------------- | - | ------------------ |  | - | ----------------- | 
|                                    |   | September 30,      |  |   | September 30,     | 
|                                    |   | 2010               |  |   | 2009              | 
|                                    |   | (Unaudited)        |  |   | (Unaudited)       | 
|Net income                          | $ | 2,156,536          |  | $ | 2,963,171         | 
|                                    |   |                    |  |   |                   | 
|Weighted average number of shares : |   |                    |  |   |                   | 
|Basic and diluted                   |   | 65,000,000         |  |   | 60,400,000        | 
|                                    |   |                    |  |   |                   | 
|Net income per share :              |   |                    |  |   |                   | 
|Basic and
      diluted             | $ | 0.03               |  | $ | 0.05              | 

13

---

NOTE 12 RELATED PARTY TRANSACTIONS

|                                                                                               |   | September 30, |  |   | December 31, | 
|---------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                               |   | 2010          |  |   | 2009         | 
|                                                                                               |   | (Unaudited)   |  |   |              | 
|Amount due to related parties:                                                                 |   |               |  |   |              | 
|                                                                                               |   |               |  |   |              | 
|- Mr. Chen Ruofei (a)(b), director, Chief
      Executive Officer and President of the Company | $ | 590,881       |  | $ | 255,318      | 
|- Mr. Chen Tiannam (a) (b), Chairman of the Company                                            |   | 28,347        |  |   | 1,037,266    | 
|- Mr. Lam Hak Kwun (a), former director                                                        |   | 16,652        |  |   | 65,370       | 
|                                                                                               |   |               |  |   |              | 
|                                                                                               | $ | 635,880       |  | $ | 1,357,954    | 

|(a) | The amounts are unsecured, non-interest bearing and without fixed
      repayment term.                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                               
|(b) | Mr. Chan Ruofei and Mr. Chen Tiannam are also two major shareholders
      of Future Billion (see Note 1 for further details).

NOTE 13 COMMITMENTS AND CONTINGENCIES

Operating Leases Commitments

In the normal course of business, the Company entered into
operating lease agreements to rent office space and plant and equipment. The
Company was obligated under operating leases requiring minimum rentals as of
September 30, 2010 as follows:

|                             |   | (Unaudited) | 
|---------------------------- | - | ----------- | 
|Payable within:              |   |             | 
|- remainder of 2010          | $ | 80,757      | 
|- 2011                       |   | 183,784     | 
|- 2012                       |   | 31,622      | 
|                             |   |             | 
|Total minimum lease payments | $ | 296,163     | 

During the nine-month periods ended September 30, 2010 and 2009,
rental expenses under operating leases amounted to $148,604 and $32,780
respectively.

Commitments pursuant to a partnership agreement

On May 20, 2009, the Company entered into a three-year term
partnership agreement with Beijing Normal University for research and
development purposes. Under the partnership agreement, the Company is obligated
to pay annually until May 2012, the research and development expense incurred by
the partnership of up to approximately $149,000. On August 2, 2009, the Company
entered into a supplemental agreement with Beijing Normal University, pursuant
to which the Company agreed to share 50% of the net profits from its sale of
jointly researched and developed products under the partnership agreement.

14

---

NOTE 14 CONCENTRATION OF RISKS

Credit risk

As of September 30, 2010 and December 31, 2009, approximately
96% of the Company's cash included cash on hand and deposits in accounts
maintained within the PRC where there is currently no rule or regulation in
place for obligatory insurance to cover bank deposits in the event of bank
failure. However, the Company has not experienced any losses in such accounts
and believes it is not exposed to any significant risks on its cash in bank
accounts.

For the nine months ended September 30, 2010, four customers
accounted for 23%, 19%, 13% and 12% of the Company's revenue. Except as
disclosed, no other single customer accounted for more than 10% of the Company's
revenue for the  nine-month periods ended September 30, 2010 and 2009.

As of September 30, 2010, three customers accounted for 30%,
17%, and 12% of total accounts receivable of the Company. As of December 31,
2009, three customers accounted for 46%, 25% and 21% of total accounts receivable of
the Company. Except as disclosed, no other customer accounted for 10% or more of
the Company's accounts receivable as of September 30, 2010 and December 31,
2009.

For the nine months ended September 30, 2010, three vendors
accounted for 30%, 18% and 16% of the Company's purchase. For the nine months ended September 30, 2009, one vendor
accounted for 12% of the Company's purchase. Except as disclosed, no other single supplier accounted for
more than 10% of the Company's purchase for the  nine-month periods ended September 30, 2010
and 2009.

As of September 30, 2010, four vendors accounted for 19%, 10%,
10% and 10% of total accounts payable of the Company. As of December 31, 2009,
only one
vendor accounted for 87% of total account payable of the Company. Except as disclosed,
no other supplier accounted for 10% or more of the Company's accounts payable
as of September 30, 2010 and December 31, 2009.

Currency convertibility risk

Substantially all of the Company's businesses are transacted in RMB, which is not freely convertible into foreign currencies. All foreign
exchange transactions take place either through the People's Bank of China or
other banks authorized to buy and sell foreign currencies at the exchange rates
quoted by the People's Bank of China. Approval of foreign currency payments by
the People's Bank of China or other regulatory institutions requires submitting
a payment application form together with supplier invoices, shipping documents
and signed contracts. These requirements imposed by the PRC government
authorities may restrict the ability of the Company's PRC subsidiaries to
transfer funds to the parent through loans, advances or cash dividends.

15

---

NOTE 15 SEGMENT DATA

The Company believes that throughout the nine-month periods ended
September 30, 2010 and 2009, it operated in one operating segment  development
and sale of electronic products based on a computer programming technology.

The following table sets out the analysis of the Company's
revenue by products and services.

|                                                                      |   | Three months ended |  |   | Nine months ended | 
|--------------------------------------------------------------------- | - | ------------------ |  | - | ----------------- | 
|                                                                      |   | September 30,      |  |   | September 30,     | 
|                                                                      |   | 2010               |  |   | 2009              | 
|                                                                      |   | (Unaudited)        |  |   | (Unaudited)       | 
|Revenue from external customers:                                      |   |                    |  |   |                   | 
|Interactive classroom solutions products                              | $ | 8,308,355          |  | $ | -                 | 
|Electronic learning products                                          |   | 3,264,699          |  |   | -                 | 
|Licensing of patent and related technology development
      services |   | -                  |  |   | 2,863,390         | 
|Other electronic products                                             |   | 2,819              |  |   | 2,483,342         | 
|                                                                      |   |                    |  |   |                   | 
|Total                                                                 | $ | 11,575,873         |  | $ | 5,346,732         | 

The following table sets out the analysis of the Company's
revenue by customers located in different geographical areas.

|                                 |   | Three months ended |  |   | Nine months ended | 
|-------------------------------- | - | ------------------ |  | - | ----------------- | 
|                                 |   | September 30,      |  |   | September 30,     | 
|                                 |   | 2010               |  |   | 2009              | 
|                                 |   | (Unaudited)        |  |   | (Unaudited)       | 
|Revenue from external customers: |   |                    |  |   |                   | 
|PRC                              | $ | 11,573,054         |  | $ | 4,862,907         | 
|Other countries                  |   | 2,819              |  |   | 483,825           | 
|                                 |   |                    |  |   |                   | 
|Total                            | $ | 11,575,873         |  | $ | 5,346,732         | 

16

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|        |                                                                                             
|------- | --------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We use words such as believe, expect, anticipate, project,
target, plan, optimistic, intend, aim, will or similar expressions
which are intended to identify forward-looking statements. Such statements
include, among others, those concerning market and industry segment growth and
demand and acceptance of new and existing products; any projections of sales,
earnings, revenue, margins or other financial items; any statements of the
plans, strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; as well as all
assumptions, expectations, predictions, intentions or beliefs about future
events. You are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, including
those identified in Item 1A, Risk Factors described in our Annual Report on
Form 10-K for our fiscal year ended December 31, 2009, as well as assumptions,
which, if they were to ever materialize or prove incorrect, could cause the
results of the Company to differ materially from those expressed or implied by
such forward-looking statements.

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

Use of Terms

Except as otherwise indicated by the context and for the
purposes of this report only, references in this report to:

- we, us, our, or the Company are to the combined business of China
  Interactive Education, Inc., a Nevada corporation, and its consolidated
  subsidiaries, MenQ BVI, Wisegate, Clever Aim, MenQ HK, MenQ China and CEST;
- MenQ are to MenQ Technology Group Limited, a BVI limited company;
- Wisegate are to Wisegate International Limited, a BVI limited company;
- Clever Aim are to Clever Aim Development Limited, a Hong Kong limited
  company;
- MenQ HK are to MenQ International Limited, a Hong Kong limited company;
- MenQ China are to MenQ Technology Limited, a PRC limited company;
- CEST are to the Guangzhou Research Institute of Collaborative Education
  Science and Technology, a PRC private non-enterprise entity;
- BVI are to the British Virgin Islands;
- Hong Kong are to the Hong Kong Special Administrative Region of the
  People's Republic of China;
- PRC, China, and Chinese, are to the People's Republic of China;
- SEC are to the Securities and Exchange Commission;
- Securities Act are to the Securities Act of 1933, as amended;
- Exchange Act are to the Securities Exchange Act of 1934, as amended;
- Renminbi and RMB are to the legal currency of China; and
- U.S. dollars dollars and $ are to the legal currency of the United
  States.

Overview of our Business

Through our Hong Kong and PRC subsidiaries, we are an
education solutions company that provides new era educational concepts,
equipment and products to educational institutions including elementary, middle
and high schools, professional training schools, and to individual students in
China. Our principal businesses include (1) the provision of new era e-classroom
and e-library solutions and (2) the distribution of computer based educational
learning products embedded with Beijing Normal University's educational
materials in computer programs and with self developed wireless technology. We
also engage in the design and manufacture of Global Positioning Systems, or GPS,
products via original design manufacturers and original equipment manufacturers
based on self-developed technology.

We have a joint strategic partnership with Beijing Normal
University, a 100 year-old top teaching university in China, in which we
cooperate in the development of various aspects of IT applied in education. As a
result of this collaboration, we founded the IT Applied in Education Institute
in May, 2009 to conduct joint research and development of cutting edge
interactive education methodologies and content, applying computer and internet
technologies for use in education. The IT Applied in Education Institute focuses
on the computerization of education systems and the digitization of supplemental
study systems, including, but not limited to: (a) cost effective mini
intelligent terminals and software suitable for access of high-speed 3G wireless
networks; (b) terminals with embedded educational software platforms; (c)
virtual experiment labs and sensor-based lab networks; and (d) specific internet
service platforms for teachers and students. Under the partnership agreement,
Beijing Normal University has authorized us to exclusively promote and
distribute our jointly researched and developed products. We share the right to
use such products, and we share 50% of the net profits from our sale of our
jointly researched and developed products.

On September 21, 2010, MenQ established Guangzhou Research
Institute of Collaborative Education Science and Technology (CEST), a private
non-enterprise entity, in Guangzhou, China, with a registered capital of RMB
500,000 (approximately $74,615), which has been fully paid up by MenQ China.
CEST was established to engage in the research, development and promotion of
education and technology applications. On October 10, 2010, we entered into
separate consultancy agreements with a group of six professors pursuant to
which, we are obligated to pay them anaggregate fee of approximately $3,670 per
month as consideration for providing advisory services to CEST. The agreements
are for an undefined term, however, either party may terminate an agreement by
giving one months' notice to the other party. The agreements also contain a
provision prohibiting the professors from working with any of the Company's
competitors for a period of one year following termination of their respective
agreements.

A majority of our revenues are derived from (1) sales of
comprehensive sets of educational learning products and sales of interactive
classroom solutions products and (2) development fees from customers for
providing educational content in computer programs. In the past, the majority of
our revenue was generated from distributing our self-developed technologies in
GPS and education products to overseas customers. Starting from 2009, we have
been shifting our focus to the education market in the PRC.

Our executive offices are located in southern China, in the
City of Zhongshan in Guangdong Province and our sales offices are located in the
Shenzhen Special Economic Zone and City of Guangzhou in Guangdong Province. In
addition, we have relationships with several sales agents who market our
products across China. Our customers are spread across China, but are primarily
located in the coastal metropolitan regions including Guangzhou, Zhongshan and
Beijing.

17

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Third Quarter Financial Performance Highlights

The following are some financial highlights for the third
quarter:

- Revenue: Revenue increased $6.23 million, or 117%, to $11.58
  million for the three months ended September 30, 2010, from $5.35 million for
  the same period in 2009.
- Income from operations: Income from operations decreased
  $0.71 million, or 21%, to $2.76 million for the three months ended September
  30, 2010, from $3.48 million for the same period in 2009.
- Net income: Net income decreased $0.8 million, or 27%, to
  $2.16 million for the three months ended September 30, 2010, from $2.96
  million for the same period in 2009.
- Fully diluted net income per share: Fully diluted net income
  per share was $0.03 for the three months ended September 30, 2010, as compared
  to $0.05 for the same period in 2009.

Results of Operations

Comparison of Three Months Ended September 30, 2010 and
September 30, 2009

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

(All amounts, other than percentages, in U.S. dollars)

|                                        |   | Three Months Ended |   |  | Three Months Ended | 
|--------------------------------------- | - | ------------------ | - |  | ------------------ | 
|                                        |   | September 30, 2010 |   |  | September 30, 2009 | 
|                                        |   | (unaudited)        |   |  | (unaudited)        | 
|                                        |   |                    |   |  | Percent of         | 
|                                        |   | Amount             |   |  | Revenue            | 
|Revenue                                 | $ | 11,575,873         |   |  | 100%               | 
|Cost of revenue                         |   | (8,079,116         | ) |  | 70%                | 
|Gross profit                            |   | 3,496,757          |   |  | 30%                | 
|Operating expenses                      |   |                    |   |  |                    | 
|Selling expenses                        |   | (282,388           | ) |  | 2%                 | 
|General and administrative expenses     |   | (415,781           | ) |  | 4%                 | 
|Research and
      development expenses |   | (36,726            | ) |  | 0%                 | 
|Total operating expenses                |   | (734,895           | ) |  | 6%                 | 
|Income from operations                  |   | 2,761,862          |   |  | 24%                | 
|Other income                            |   | 23,150             |   |  | 0%                 | 
|Income before income taxes              |   | 2,785,012          |   |  | 24%                | 
|Income taxes                            |   | (628,476           | ) |  | 5%                 | 
|Net income                              |   | 2,156,536          |   |  | 19%                | 
|Foreign currency translation adjustment |   | 206,579            |   |  | 2%                 | 
|Total comprehensive income              | $ | 2,363,115          |   |  | 20%                | 

Revenue. Our sales revenue increased to $11.58
million in the three months ended September 30, 2010, from $5.35 million for the
same period in 2009, representing a 117% increase. During the 2010 period, we
changed our principal business from the licensing of patent rights and provision
of related technology development services to the sale of educational learning
products and interactive classroom solutions products under our own "Five Best
Students" brand. During the three months ended September 30, 2010, sales of
education learning products and interactive classroom solutions products
accounted for 28% and 72% of our revenue, respectively. The increase in revenue
was mainly due to the sale of our educational learning products which was
attributable to the advertising and promotion efforts of the Company to promote
the new business for the three months ended September 30, 2010. During the three
months ended September 30, 2010, advertising and promotion expenses amounted to
$142,707 while only $37,231 was spent for advertising and promotion for the same
period last year.

Cost of revenue. Our cost of revenue increased by
$6.56 million, or 432%, to $8.08 million in the three months ended September 30,
2010, from $1.52 million for the same period in 2009. The cost of sales per
sales ratio changed from 28% to 70% for the three months ended September 30,
2009 and 2010, respectively. The increase in cost of revenue represents the
differences between the cost structure of licensing revenue and product revenue,
in connection with our change of business noted above. The cost of manufacturing
interactive classroom solution products and electronic learning products, in
particular the hardware and related equipment, is higher than the cost of
providing licensing of patent and related technology development services.

Gross profit. Our gross profit decreased by $0.33
million, or 9%, to $3.5 million in the three months ended September 30, 2010,
from $3.83 million for the same period in 2009. Gross profit as a percentage of
net revenue was 30% and 72% for the three-month periods ended September 30, 2010 and
2009, respectively. The decrease in gross profit margin was due to our change of
business as noted above. In the three months ended September 30, 2009, our
patent licensing and technology development services business had a gross margin
of 72%. In the same period in 2010, our educational learning products and
interactive classroom solutions products had gross margins of 24% and 32%,
respectively.

Selling expenses. In the three months ended September
30, 2010, our selling expenses increased by $0.23 million, or 405%, to $0.28
million, from $0.06 million for the same period in 2009. During the 2010 period,
we incurred expenses related to our marketing campaign for our change in
business and in the build up of our own "Five Best Students" brand. The cost of
advertisement and consultant fees related to brand building in the third quarter
of 2010 totaled approximately $0.14 million.

General and administrative expenses.In
the three months ended September 30, 2010, our general and administrative
expenses increased by $0.26 million, or 163%, to $0.42 million from $0.16
million for the same period in 2009. Such increase was due to increased legal
and professional fees in connection with our status as a public company.

Research and development expenses.In the three months ended September 30, 2010, our research and development
expenses decreased by $0.1 million, or 74%, to $0.04 million from $0.14 million
for the same period in 2009. Such decrease was because we devoted more resources
in 2009 to developing educational products and fewer resources were required in
the 2010 period to further develop these products.

Income before income taxes. Our income before
income taxes decreased by $0.69 million, or 20%, to $2.79 million in the three
months ended September 30, 2010, from $3.48 million for the same period in 2009,
resulting from the decrease in our income from operations for reasons stated
above.

Net income. In the three months ended September
30, 2010, we generated a net income of $2.16 million, a decrease of $0.81
million, or 27%, from $2.96 million for the same period in 2009, as a result of
the factors described above.

18

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Comparison of Nine Months Ended September 30, 2010 and
September 30, 2009

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

(All amounts, other than percentages, in U.S. dollars)

|                                        |   | Nine Months Ended  |   |  | Nine Months Ended  | 
|--------------------------------------- | - | ------------------ | - |  | ------------------ | 
|                                        |   | September 30, 2010 |   |  | September 30, 2009 | 
|                                        |   | (unaudited)        |   |  | (unaudited)        | 
|                                        |   |                    |   |  | Percent of         | 
|                                        |   | Amount             |   |  | Revenue            | 
|Revenue                                 | $ | 26,513,846         |   |  | 100%               | 
|Cost of revenue                         |   | (18,641,855        | ) |  | 70%                | 
|Gross profit                            |   | 7,871,991          |   |  | 30%                | 
|Operating expenses                      |   |                    |   |  |                    | 
|Selling expenses                        |   | (2,579,748         | ) |  | 10%                | 
|General and administrative expenses     |   | (960,347           | ) |  | 4%                 | 
|Research and
      development expenses |   | (110,177           | ) |  | 0%                 | 
|Total operating expenses                |   | (3,650,272         | ) |  | 14%                | 
|Income from operations                  |   | 4,221,719          |   |  | 16%                | 
|Other income                            |   | 23,238             |   |  | 0%                 | 
|Income before income taxes              |   | 4,244,957          |   |  | 16%                | 
|Income taxes                            |   | (956,545           | ) |  | 4%                 | 
|Net income                              |   | 3,288,412          |   |  | 12%                | 
|Foreign currency translation adjustment |   | 248,390            |   |  | 1%                 | 
|Total comprehensive income              | $ | 3,536,802          |   |  | 13%                | 

Revenue. Our sales revenue increased to $26.51
million in the nine months ended September 30, 2010, from $12.04 million for the
same period in 2009, representing a 120% increase. During the 2010 period, we
changed our principal business from the licensing of patent rights and provision
of related technology development services to the sale of educational learning
products and interactive classroom solutions products under our own "Five Best
Students" brand. During the nine months ended September 30, 2010, sales of
education learning products and interactive classroom solutions products
accounted for 38% and 61% of our revenue, respectively. The increase in revenue
was mainly due to the sale of our educational learning products which was
attributable to the advertising and promotion efforts of the Company to promote
the new business for the nine months ended September 30, 2010. During the nine
months ended September 30, 2010, advertising and promotion expenses amounted to
$1,668,111 while only $91,936 was spent for advertising and promotion for the
same period last year.

Cost of revenue. Our cost of revenue increased by
$14.92 million, or 401%, to $18.64 million in the nine months ended September
30, 2010, from $3.72 million for the same period in 2009. The cost of revenue
per sales ratio changed from 31% to 70% for the nine months ended September 30,
2009 and 2010, respectively. The increase in cost of revenue represents the
differences between the cost structure of licensing revenue and product revenue,
in connection with our change of business noted above. The cost of manufacturing
interactive classroom solution products and electronic learning products, in
particular the hardware and related equipment, is higher than the cost of
providing licensing of patent and related technology development services.

Gross profit. Our gross profit decreased by $0.45
million, or 5%, to $7.87 million in the nine months ended September 30, 2010,
from $8.32 million for the same period in 2009. Gross profit as a percentage of
net revenue was 30% and 69% for the nine-month periods ended September 30, 2010 and
2009, respectively. The decrease in gross profit margin was due to our change of
business as noted above. In the nine months ended September 30, 2009, our patent
licensing and technology development services business had a gross margin of
69%. In the same period in 2010, our educational learning products and
interactive classroom solutions products had gross margins of 32% and 28%,
respectively.

Selling expenses. In the nine months ended September
30, 2010, our selling expenses increased by $2.47 million, or 2202%, to $2.58
million, from $0.11 million for the same period in 2009. During the 2010 period,
we incurred expenses related to our marketing campaign for our change in
business and in the build up of our own "Five Best Students" brand. The cost of
advertisement and consultant fees related to brand building in the nine months
ended September 30, 2010 totaled approximately $1.67 million.

19

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General and administrative expenses.

Research and development expenses.In the nine
months ended September 30, 2010, our research and development expenses decreased
by $0.63 million, or 85%, to $0.11 million, from $0.74 million for the same
period in 2009. Such decrease was due to our devotion of more resources in 2009
to develop educational products such that fewer resources were required in the
2010 period to further develop these products.

Income before income taxes. Our income before
income taxes decreased by $2.88 million, or 40%, to $4.25 million in the nine
months ended September 30, 2010, from $7.13 million for the same period in 2009,
primarily due to the increase in selling expenses.

Net income. In the nine months ended September
30, 2010, we generated a net income of $3.29 million, a decrease of $2.72
million, or 45%, from $6 million for the same period in 2009, as a result of the
factors described above.

Liquidity and Capital Resources

As of September 30, 2010, we had cash and cash equivalents of
$287,603, primarily consisting of cash on hand and demand deposits. The
following table provides detailed information about our net cash flow for all
financial statement periods presented in this report.

Cash Flow(All amounts in U.S. dollars)

|                                                     |   | Nine Months Ended September 30, |  
|---------------------------------------------------- | - | ------------------------------- | -
|                                                     |   | 2010                            |  
|                                                     |   | (unaudited)                     |  
|Net cash provided by operating activities            | $ | 691,783                         |  
|Net cash used in investing activities                |   | (89,503                         | )
|Net cash used in financing activities                |   | (732,867                        | )
|Effects of foreign currency translation              |   | 66,646                          |  
|Net decrease in cash and cash equivalents            |   | (63,941                         | )
|Cash and cash equivalents at beginning of the period |   | 351,544                         |  
|Cash and cash equivalent at end of the
      period  | $ | 287,603                         |  

Operating Activities

Net cash provided by operating activities was $0.69 million for
the nine months ended September 30, 2010, as compared to $5.92 million net cash
provided by operating activities for the same period in 2009. Net cash provided
by operating activities during the nine months ended September 30, 2010 was
primarily due to a $3.29 million net income offset by a cash outflow of $2.60
million due to increase in net current assets (excluding due to related
parties).

Investing Activities

Our main uses of cash for investing activities are payments for
the acquisition of property, plant and equipment and intangible assets.

Net cash used in investing activities was $0.09 million for the
nine months ended September 30, 2010, as compared to $0.09 million net cash used
in investing activities for the same period in 2009.

20

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Financing Activities

Net cash used in financing activities was $0.73 million for the
nine months ended September 30, 2010, as compared to $6.17 million net cash used
in financing activities for the same period in 2009. Net cash used in financing
activities was primarily due to repayment to related parties.

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

Obligations Under Material Contracts

On May 20, 2009, we entered into a partnership agreement with
Beijing Normal University. Pursuant to the partnership agreement, we are
required to pay at least RMB 1 million (approximately  $149,000) per year to
Beijing Normal University for research and development purposes. We were
required to pay RMB 300,000 (approximately  $44,769) within 15 working days
after the establishment of the IT Applied in Education Institute and are
required pay the remaining amount in at least RMB 150,000 (approximately

$22,384) increments every three months for the three-year term of the
agreement. On August 2, 2009, we entered into a supplemental agreement with
Beijing Normal University, pursuant to which we agreed to share 50% of the net
profits from our sale of jointly researched and developed products under the
partnership agreement.

In the normal course of business, the Company has entered
into operating lease agreements to rent office space and plant and equipment.
The Company was obligated under operating leases requiring minimum rentals as of
September 30, 2010 as follows:

|                                 |   | (Unaudited) | 
|-------------------------------- | - | ----------- | 
|Payable within:                  |   |             | 
|- remainder of 2010              | $ | 80,757      | 
|-
    2011                       |   | 183,784     | 
|- 2012                           |   | 31,622      | 
|                                 |   |             | 
|Total minimum lease
    payments | $ | 296,163     | 

Inflation

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

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity or capital expenditures or capital resources that is
material to an investor in our securities.

Seasonality

Our revenue stream is not currently affected by seasonality,
since our educational learning products and interactive classroom solutions
products are newly launched. However, we may experience seasonal fluctuations in
our revenue in some regions in the PRC in the near future as parents and
students tend to make purchases for schooling items prior to or at the beginning
of each school year in August and September.

Critical Accounting Policies

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operation. Critical accounting policies are those that are most
important to the portrayal of our financial conditions and results of operations
and require management's difficult, subjective, or complex judgment, often as a
result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Certain accounting estimates are particularly sensitive because of their
significance to financial statements and because of the possibility that future
events affecting the estimate may differ significantly from management's current
judgments. We believe the following critical accounting policies involve the
most significant estimates and judgments used in the preparation of our
financial statements:

21

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Revenue recognition

Revenue is recognized when the following four revenue criteria
are met: persuasive evidence of an arrangement exists, delivery has occurred,
the selling price is fixed or determinable, and collectibility is reasonably
assured.

Revenue from providing technology development services and
granting the technology patent right to its customer is recognized net of sales
discounts and returns and business taxes once the services have been rendered to
its customers and the Company has the right to receive the income. Revenue from
sales of the Company's products is recognized when the significant risks and
rewards of ownership have been transferred to the buyer at the time when the
products are delivered to and accepted by its customers. The price is fixed or
determinable as stated on the sales contract, and collectibility is reasonably
assured. Customers do not have a general right of return on products shipped.
Products returned to the Company were insignificant during past years. There are
no post-shipment obligations, price protection and bill and hold
arrangements.

Research and development expenses

Research and development costs are charged to expense when
incurred.

Advertising and promotion costs

The Company expenses advertising and promotion costs as
incurred.

Shipping and handling cost

Technological products sold by the Company are normally
collected by customers at the Company's premises.

Foreign Currency

The Company uses the United States dollars (U.S. Dollars or
US$ or $) for financial reporting purposes. The PRC subsidiaries within the
Company maintain their books and records in their functional currency, Chinese
Renminbi (RMB) and Hong Kong dollars (HK$), being the lawful currency in the
PRC and Hong Kong. Assets and liabilities are translated into U.S. Dollars using
the applicable exchange rates prevailing at the balance sheet date. Items on the
statement of operations are translated at average exchange rates during the
reporting period. Equity accounts are translated at historical rates.
Adjustments resulting from the translation of the Company's financial statements
are recorded as accumulated other comprehensive income.

22

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|        |                                                                  
|------- | -----------------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.

Not applicable.

|ITEM 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------

Evaluation of Disclosure Controls and Procedures

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

As required by Rule 13a-15 under the Exchange Act, our
management, including our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of September 30, 2010. Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2010, and as of the date that the evaluation of
the effectiveness of our disclosure controls and procedures was completed, our
disclosure controls and procedures were effective to satisfy the objectives for
which they are intended.

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Changes in Internal Control over Financial Reporting

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

PART IIOTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

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

|ITEM 1A. | RISK FACTORS.
|-------- | -------------

Not applicable.

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

None.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

|ITEM 4. | (REMOVED AND RESERVED).
|------- | -----------------------



|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

On September 21, 2010, MenQ established Guangzhou Research
Institute of Collaborative Education Science and Technology, or CEST, a private
non-enterprise entity, in Guangzhou, China, with a registered capital of RMB
500,000 (approximately $74,615), which has been fully paid up by MenQ China.
CEST was established to engage in the research, development and promotion of
education and technology applications.

On October 10, 2010, we entered into separate consultancy
agreements with a group of six professors, pursuant to which, we are obligated
to pay them an aggregate fee of approximately $3,670 per month, as consideration
for providing advisory services to CEST. The agreements are for an undefined
term, however, either party may terminate an agreement by giving one months'
notice to the other party. The agreements also contain a provision prohibiting
the professors from working with any of the Company's competitors for a period
of one year following termination of their respective agreements.

Except for the foregoing, we have no additional information to disclose that
was required to be in a report on Form 8-K during the period covered by this
report, but was not reported. There have been no material changes to the
procedures by which security holders may recommend nominees to our board of
directors.

|ITEM 6. | EXHIBITS.
|------- | ---------

The following exhibits are filed as part of this report or
incorporated by reference:

|Exhibit No. | Description                                                                                                                                                                  
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                              
|31.1        | Certifications of Principal
      Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act
      of 2002.                                                   
|31.2        | Certifications of Principal Financial Officer
      filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|32.1        | Certifications of Principal
      Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2        | Certifications of Principal Financial Officer
      furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.

24

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SIGNATURES

In accordance with Section 13 or
15(d) of the Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|Date: November 19, 2010 | CHINA INTERACTIVE EDUCATION,
      INC.
|----------------------- | ---------------------------------------
|                        |                                        
|                        | By:                                    
|                        |                                        
|                        |                                        
|                        |                                        
|                        | By:                                    
|                        |                                        
|                        |                                        

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