UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington, D.C.
20549
  FORM
10-Q
  [X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934:
  For
the Quarterly Period ended June 30, 2008
  [  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE
ACT
  For the
transition period from __________________ to __________________
 
 Commission
File Number: 1-10559
 China International Tourism
Holdings Ltd.
 (Exact
name of registrant as specified in its charter)
  Nevada
              65-1021346(State
      or other jurisdiction of
              (IRS
      Employer Identification No.)incorporation
      or organization)
  E Pang Gong Site, 44 Hong
Guang Road, Xi An, P.R. China 710068
 (Address
of principal executive offices)
 
 ( 8629 )
8436-8561
 (Issuer's
telephone number)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the 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 is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
  Large
accelerated filer [
]                                                                           Accelerated
filer   [ ]
  Non-accelerated
filer  [
]                                                                           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]
 
 Number of
shares of common stock outstanding as of August 11, 2008: 
48,591,809
 Number of
shares of preferred stock outstanding as of August 11,
2008:   3,295,000
  CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
  The
discussion contained in this 10-Q under the Securities Exchange Act of 1934, as
amended, contains forward-looking statements that involve risks and
uncertainties. The issuer's actual results could differ significantly from those
discussed herein. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by words or phrases
such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the
Company believes," "management believes" and similar language, including those
set forth in the discussions under "Notes to Financial Statements" and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-Q. We base our forward-looking statements on
information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
  
  
  TABLE OF
      CONTENTSPART
      I. FINANCIAL INFORMATIONITEM 1.FINANCIAL
      STATEMENTS
              4ITEM 2.MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION
              9ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK
                
                ITEM 4.CONTROLS AND
      PROCEDURES
              9
                
                9PART
      II. OTHER INFORMATIONITEM 1.LEGAL
      PROCEEDINGS
              10ITEM
      1A.RISK FACTORS
              10ITEM 2.CHANGES IN SECURITIES AND USE OF
      PROCEEDS
              10ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
              10ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              10ITEM 5.OTHER
      INFORMATION
              10ITEM 6.EXHIBITS AND REPORTS ON FORM
      8-K
              10SIGNATURES
              11INDEX TO
      EXHIBITS
              12
  2
 Table of Contents
 
 ITEM 1. FINANCIAL STATEMENTS
  
 INDEX
      TO INTERIM FINANCIAL STATEMENTSPageConsolidated
      Unaudited Condensed Balance Sheets – June 30, 2008 and December 31,
      2007
              4Consolidated
      Unaudited Condensed Consolidated Statements of Operations and
      Comprehensive Income - For the Three and Six Months Ended June 30, 2008
      and 2007
              5Consolidated
      Unaudited Condensed Statements of Cash Flows - For the Six Months Ended
      June 30, 2008 and 2007
              6Notes
      to Consolidated Unaudited Condensed Financial Statements
              7
  3
 Table of Contents
  CHINA
      INTERNATIONAL TOURISM HOLDINGS, LTD. AND SUBSIDIARYUnaudited
      Consolidated Balance SheetsAs
      of June 30, 2008 and December 31, 2007June
      30, 2008
                  
                  
                  December
      31, 2007ASSETSCURRENT
      ASSETSCash
      and Cash Equivalents
                  
                  $
                  9,845
                  
                  
                  $
                  7,152Accounts
      Receivable
                  
                  
                  8,644
                  
                  
                  
                  19,338Inventory
                  
                  
                  14,712
                  
                  
                  
                  14,515Prepaid
      Expenses
                  
                  
                  17,787
                  
                  
                  
                  9,523TOTAL
      CURRENT ASSETS
                  
                  
                  50,988
                  
                  
                  
                  50,528FIXED
      ASSETSProperty,
      Plant, and Equipment
                  
                  
                  713,353
                  
                  
                  
                  691,110Accumulated
      Depreciation
                  
                  
                  (335,428
                  )
                  
                  
                  (269,508
                  )TOTAL
      FIXED ASSETS
                  
                  
                  377,925
                  
                  
                  
                  421,602TOTAL
      ASSETS
                  
                  $
                  428,913
                  
                  
                  $
                  472,130LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      Payable and Accrued Liabilities
                  
                  $
                  492,597
                  
                  
                  $
                  360,867Due
      to Shareholder
                  
                  
                  27,620
                  
                  
                  
                  24,620TOTAL
      CURRENT LIABILITIES
                  
                  
                  520,217
                  
                  
                  
                  385,487TOTAL
      LIABILITIES
                  
                  
                  520,217
                  
                  
                  
                  385,487COMMITMENTS
      AND CONTINGENCIESRedeemable
      Preferred Stock (par value $.01,
                  
                  
                  32,950
                  
                  
                  
                  32,9505,000,000
      Shares Authorized, 3,295,000 SharesIssued
      and OutstandingSTOCKHOLDERS'
      EQUITYCommon
      Stock (par $.0001, 250,000,000
                  
                  
                  4,860
                  
                  
                  
                  4,860Authorized,
      48,591,809 Issued and OutstandingAdditional
      Paid in Capital
                  
                  
                  3,617,895
                  
                  
                  
                  3,617,895Accumulated
      Other Comprehensive Income
                  
                  
                  41,086
                  
                  
                  
                  21,063Retained
      Earnings (Deficit)
                  
                  
                  (3,788,095
                  )
                  
                  
                  (3,590,125
                  )TOTAL
      STOCKHOLDERS' EQUITY
                  
                  
                  (124,254
                  )
                  
                  
                  53,693TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  
                  $
                  428,913
                  
                  
                  $
                  472,130-The
      accompanying notes are an integral part of these financial
      statements.
 
 4
 Table of Contents
  CHINA
      INTERNATIONAL TOURISM HOLDINGS, LTD. AND SUBSIDIARYUnaudited
      Consolidated Statements of OperationsFor
      the three and six months ended June 30, 2008 and 2007For
      the Three Months Ended
                
                
                For
      the Six Months EndedJune
      30, 2008
                
                
                June
      30, 2007
                
                
                June
      30, 2008
                
                
                June
      30, 2007REVENUESales
                
                $
                62,429
                
                
                $
                169,168
                
                
                $
                117,766
                
                
                $
                297,553Cost
      of Sales
                
                
                238
                
                
                
                35,634
                
                
                
                14,196
                
                
                
                63,129GROSS
      PROFIT
                
                
                62,191
                
                
                
                133,534
                
                
                
                103,570
                
                
                
                234,424OPERATING
      EXPENSESSelling,
      General , and Administrative
                
                
                120,620
                
                
                
                174,035
                
                
                
                295,957
                
                
                
                355,001INCOME
      (LOSS) FROM OPERATIONS
                
                
                (58,429
                )
                
                
                (40,501
                )
                
                
                (192,387
                )
                
                
                (120,577
                )OTHER
      INCOME / (EXPENSES):Finance
      Costs
                
                
                (207
                )
                
                
                1
                
                
                
                (207
                )
                
                
                (65
                )Non-Operating
      Income
                
                
                (5,376
                )
                
                
                (808
                )
                
                
                (5,376
                )
                
                
                119Total
      Other Income (Expense)
                
                
                (5,583
                )
                
                
                (807
                )
                
                
                (5,583
                )
                
                
                54NET
      INCOME (LOSS) BEFORE TAXES
                
                
                (64,012
                )
                
                
                (41,308
                )
                
                
                (197,970
                )
                
                
                (120,523
                )INCOME
      TAX EXPENSE
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -NET
      INCOME (LOSS)
                
                
                (64,012
                )
                
                
                (41,308
                )
                
                
                (197,970
                )
                
                
                (120,523
                )OTHER
      COMPREHENSIVE INCOME (LOSS)Foreign
      Currency Translation (Loss) Gain
                
                
                11,459
                
                
                
                1,386
                
                
                
                20,023
                
                
                
                (4,381
                )COMPREHENSIVE
      INCOME (LOSS)
                
                $
                (52,553
                )
                
                $
                (39,922
                )
                
                $
                (177,947
                )
                
                $
                (124,904
                )NET
      LOSS PER COMMON SHAREBasically
      and Fully Dilluted
                
                
                **
                
                
                
                **
                
                
                
                **
                
                
                
                **WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING
                
                
                48,591,809
                
                
                
                48,591,809
                
                
                
                48,591,809
                
                
                
                48,591,809**Less
      than $.01The
      accompanying notes are an integral part of these financial
      statements.
  5
 Table of Contents
   CHINA
      INTERNATIONAL TOURISM HOLDINGS, LTD. AND SUBSIDIARYUnaudited
      Consolidated Statements of Cash FlowsFor
      the six months ended June 30, 2008 and 2007For
      the Six Months EndedJune
      30, 2008
                
                
                June
      30, 2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Income (loss)
                
                $
                (197,970
                )
                
                $
                (120,523
                )Adjustments
      to reconcile net loss tonet
      cash provided by (used in) operating activities:Depreciation
                
                
                65,920
                
                
                
                57,471Accounts
      receivable and other receivables
                
                
                10,694
                
                
                
                (6,173
                )Prepaid
      expenses
                
                
                (8,264
                )
                
                
                14,684Inventory
                
                
                (197
                )
                
                
                360Accounts
      payable and accrued liabilities
                
                
                134,730
                
                
                
                49,316NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                
                
                4,913
                
                
                
                (4,865
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property, plant, and equipment
                
                
                (22,243
                )
                
                
                (467
                )NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
                
                
                (22,243
                )
                
                
                (467
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from shareholder loan
                
                
                -
                
                
                
                5,225NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                -
                
                
                
                5,225FOREIGN
      CURRENCY TRANSLATION ADJUSTMENT
                
                
                20,023
                
                
                
                (4,381
                )NET
      INCREASE IN CASH AND CASH EQUIVALENTS
                
                
                2,693
                
                
                
                (4,488
                )CASH
      AND CASH EQUIVALENTS:Beginning
      of period
                
                
                7,152
                
                
                
                21,333End
      of period
                
                
                9,845
                
                
                
                16,845The
      accompanying notes are an integral part of these financial
      statements.
  6
 CHINA INTERNATIONAL TOURISM HOLDINGS,
LTD. AND
SUBSIDIARY
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
 FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2008 AND 2007
  NOTE A - BASIS OF PRESENTATION        Recently Issued Accounting Pronouncements
  Business
Combinations Noncontrolling Interests in
Consolidated Financial Statements.
        NOTE B – SUPPLEMENTAL CASH FLOW
INFORMATION
       2007                
2006
      NOTE C –
PAYABLES, COMMITMENTS AND CONTIGENCIES
    NOTE D – GOING CONCERN
    NOTE E – LITIGATION
  Securities and Exchange Commission v.
David M. Wolfson, et al.
 7
 Table of Contents
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
 GENERAL
DESCRIPTION OF BUSINESS
 
 As used
in this Quarterly Report, the terms "we", "us", "our," the “Registrant,” “CIHS”
and the "Company" means, China International Tourism Holdings, Ltd., a Nevada
corporation, formerly known as Dark Dynamite, Inc., NCI Holdings, Inc., Vector
Holding, Inc., and prior to June 26, 2002, Vector Aeromotive Corporation. These
terms also refer to our subsidiary corporation, Shanxi Kai Da Lv You Gu Wen You
Xian Gong Si ("Kai Da"), a corporation organized under the laws of the Peoples’
Republic of China (“Kai Da”) acquired in August 2005.
 
 After the
acquisition of Kai Da, management changed our primary business into theme park
management and travel related services. Accordingly, we changed our name to
China International Tourism Holdings Ltd. We contract and operate the Theme Park
of Qin E Pang Gong (“Theme Park”) through Shanxi Kai Da Lv You Gu Wen You
Xian Gong Si (“Kai Da”), our wholly owned subsidiary in China. The Theme Park
was built up next to the historical address of E Pang Gong, the most prestigious
and largest palace in Chinese history built for Qin Shi Huang, the first emperor
in the Qin dynasty over 2,200 years ago. E Pang Gong was burned down during the
war and became a legend as well as the subject of numerous historical books. In
1994, the historical address of E Pang Gong was appraised by United Nations
Educational, Scientific and Cultural Organization ("UNESCO") as one of the
wonders in the ancient world due to the size of the palace and the degree of
preservation. The current theme park was built imitating the original palace
based on historical records and legends, covering approximately 5.59 million
square feet consisting of several building structure, including the Front
Palace, Qihe River, Magnetic Gate, Heaven Tower, Earth Temple, Lan-Chi Palace
and the Shang-Lin Garden. Management believes it’s a significant achievement to
be able to display such a famous and grand palace to the domestic and
international communities. It is believed to be one of the more important
historical sites in China.
 
 In
addition to our Theme Park management, we also manage Six-state Hot Spring
Resort, one of the components of Theme Park business, which is located inside
the Theme Park and built in an ancient Chinese style to match the Theme
Park.
 
 More
information about our business can be found on the corporate website at http://www.qinepanggong.com.
 
 RESULTS
OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008
 
 FORWARD LOOKING
STATEMENTS
  The
information herein contains certain forward looking statements within the
meaning of §27A of the Securities Act of 1933, as amended and §21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. Investors are cautioned that all forward
looking statements involve risks and uncertainty, including without limitation,
the ability of us to continue its current expansion strategy, changes in the
fashion and clothing markets, labor and employee benefits, as well as general
market conditions, competition and pricing. Although we believe that the
assumptions underlying the forward looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward looking statements included in this Form 10-Q
will prove to be accurate. In view of the significant uncertainties inherent in
the forward looking statements included herein, the inclusion of such
information should not be regarded as a representation by us or any other person
that our objectives and plans will be achieved.
 
 CRITICAL ACCOUNTING
POLICIES
 
 Revenue
recognition
 
 Our
policy is to recognize income when it is earned. Our revenue is derived from
ticket sales, and hotel and restaurant income. Revenues are booked net of any
cash discounts. If any material contingencies are present, revenue
recognition is delayed until all material contingencies are eliminated. Material
contingencies are circumstances in which there are any potential uncertainties
as to the completion of the revenue process being complete. Further, no revenue
is recognized unless collection of the applicable consideration is probable.
Probable collection is determined at the time collection occurs or is more than
reasonably possible it will be collected. Retail store sales - revenue is
recognized when sales are made. They are paid by cash or credit
card.
 
 Property,
Plant, and Equipment
 
 Property,
plant, and equipment are recorded at cost less accumulated depreciation and
impairment. Repairs and maintenance expenditures, which are not considered
improvements and do not extend the useful life of property, plant, and
equipment, are expensed as incurred. The cost and related accumulated
depreciation applicable to property, plant, and equipment sold or no longer in
service are eliminated from the accounts and any gain or loss is included in the
statement of operations.
  Depreciation
is calculated to write-off the cost or basis of the property, plant, and
equipment over their estimated useful lives for the date on which they become
fully operational and after taking into account their estimated residual values
(salvage value), using the straight-line method, at the following rates per
year:
  Equipment Straight-line
for 5 to 20 years with a 5% salvage value
  Furniture Straight-line
for 5 to 10 years with a 5% salvage value
  Autos Straight-line
for 5 to 10 years with a 5% salvage value
 
 When
assets are sold or retired, their costs and accumulated depreciation are
eliminated from the accounts and any gain or loss resulting from their disposal
is included in the Statement of Operations.
  The
Company recognizes an impairment loss on property, plant, and equipment when
evidence, such as the sum of expected future cash flows (undiscounted and
without interest charges), indicates that future operations will not produce
sufficient revenue to cover the related future costs, including depreciation,
and when the carrying amount of the asset cannot be realized through sale.
Measurement of the impairment loss is based on the fair value of the
assets.
 
 Stock-Based
Compensation
 
 We
account for stock-based compensation using the fair value method of Financial
Accounting Standard No. 123R. Common shares issued for services rendered by a
third party (both employees and non-employees) are recorded at the fair value of
the shares issued or services rendered, whichever is more readily
determinable.
 
 Revenues
 
 Gross
revenues for the three and six months ended June 30, 2008 were $62,429 and
$117,766, respectively, derived from ticket sales, and hotel and restaurant
income. The decrease by $106,739 and $179,787, compared to gross revenues of
$169,168 and $297,553 for the same periods ended June 30, 2007, respectively,
were due primarily to the impact from the Southwest China Earthquake occurring
in May of 2008. Our location is approximately 400 miles north to the
earthquake's epicenter, Wenchuan County. Even though our theme park was not
damaged during the earthquake, the numbers of tourists dropped significantly
afterwards.
 
 Due to
the different peak season timing for the theme park and most of our tours are a
one-day trip to the theme park, the revenue appears to be diversified. The theme
park is not the only resource of revenue. The peak season for the theme park
tickets is from March to October, compared to the peak season for the resorts in
the period.
 
 Income /
Loss
 
 Net loss
for the three and six months ended June 30, 2008 were $64,012 and $197,970,
compared to the net loss of $41,308 and $120,523 for the same period ended June
30, 2007, respectively. The increase in net loss during the three and six months
ended June 30, 2008 was due primarily to the decease in sales
revenue.
 
 We expect
to incur losses in fiscal year 2008 until traffic is increased to the Theme Park
and product sales increase. There can be no assurance that we will achieve or
maintain profitability, or that any revenue growth will take place in the
future.
  8
 Table of Contents
  Expenses
 
 Selling,
general and administrative expenses for the three and six months ended June 30,
2008 were $120,620 and $295,957, respectively, compared to selling, general and
administrative expense of $174,035 and $355,001 for the same periods ended June
30, 2007, respectively, were due primarily to the Theme Park
operation.
 
 We had
the following notable expenses during the six months ended June 30, 2008 and
2007:
 
 ·
              Salaries
      and related expenses were $85,353 and $48,205,
    respectively.
 Cost of
Sales
 
 Cost of
sales included expenses directly related to delivering our product or services.
Travel agents' commissions and direct labor would be examples of cost of sales
items. During the three and six months ended June 30, 2008, we had $238 and
$14,196, respectively, in cost of sales, compared to cost of sales of $35,634
and $63,129 for the same periods ended June 30,2007, respectively. Cost of sales
as a percentage of sales was 0.4% and 12% for the three and six months ended
June 30, 2008, respectively. The decrease in cost of sales was due primarily to
no business from the restaurant during the three months ended June 30,
2008.
 
 Impact of
Inflation
 
 We
believe that inflation has had a negligible effect on operations during this
period. We believe that we can offset inflationary increases in the cost of
sales by increasing sales and improving operating efficiencies.
 
 Liquidity and Capital
Resources
 
 Cash
flows provided by operating activities were $4,913 for the six months ended June
30, 2008, compared to cash flows of $4,865 used in operation for the six months
ended June 30, 2007. Positive cash flows from operation during the first half
year of 2008 were due primarily to the increase in accounts payable and accrued
liabilities by $134,730 and the net loss offset by the non-cash depreciation of
$65,920. Negative cash flows from operation during the first two quarters of
2007 were primarily due to the net loss of $120,523, partially offset by
depreciation of $57,471 and increase in accounts payable and accrued liabilities
by $49,316.
 
 Cash
flows used in investing activities were $22,243 and $467 for the six months
ended June 30, 2008 and 2007, respectively, attributable to the purchase of
fixed assets consisting of leasehold improvements, machinery and
equipment.  Most of the disbursements refurbished the theme
park.
 
 We had no
cash flows from financing activities during the six months ended June 30, 2008.
Cash flows provided by financing activities were $5,225 during the six months
ended June 30, 2007, which was due primarily to shareholder loan.
 
 We
project that we will need additional capital to fund operations over the next 12
months. We anticipate we will need an additional $100,000 in working capital
during 2008 and $50,000 for the two years thereafter.
 
 On a
long-term basis, liquidity is dependent on continuation and expansion of
operations, receipt of revenues, additional infusions of capital and debt
financing. However, there can be no assurance that we will be able to obtain
additional equity or debt financing in the future, if at all. If we are unable
to raise additional capital, our growth potential will be adversely affected.
Additionally, we will have to significantly modify our business
plan.
  Trends, Events, and
Uncertainties
 
 The
success of our business depends in large part on our ability to identify tourist
trends as well as to react to changing customer demand in a timely manner.
Consequently, we depend in part upon the continuing favorable market response to
the creative efforts of our purchasing, design and marketing team’s ability to
anticipate products and services that appeal to our consumer base. Failure on
our part to anticipate, identify and respond effectively to changing consumer
demands and trends will adversely affect our sales.
 
 Ability to Continue as a
Going Concern
 
 As shown
in the accompanying unaudited financial statements, we have a working capital
deficit and a small cash flow from operations that have placed substantial doubt
as to whether we can continue as a going concern. Our ability to continue as a
going concern is dependent on developing operations, increasing revenues, and
obtaining new capital. Management has enacted the following plan to address
these issues: (1) obtain funding from new investors to alleviate our capital
deficiency, (2) refinance existing debt on assets, (3) increase the revenues by
launching new attraction in the theme park.
  ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 The
information to be reported under this item is not required of smaller reporting
companies.
  ITEM
4. CONTROLS AND PROCEDURES.
  We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 (“Exchange Act”) is recorded, processed, summarized and reported within the
specified time periods. Our Chief Executive Officer and our Chief Financial
Officer (collectively, the “Certifying Officers”) are responsible for
maintaining our disclosure controls and procedures. The controls and procedures
established by us are designed to provide reasonable assurance that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act are recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms.
  During the six months ended June 30, 2008, our Certifying Officers
evaluated the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report. Based on the evaluation, the
Certifying Officers concluded that our disclosure controls and procedures were
effective to provide reasonable assurance that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the applicable rules and forms, and that it is accumulated and communicated
to our management, including the Certifying Officers, as appropriate to allow
timely decisions regarding required disclosure. These conclusions
notwithstanding you are advised that no system is 100%
foolproof.
 
 Changes
in Internal Control over Financial Reporting
  There
were no changes in the our internal control over financial reporting that
occurred during the period covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.
 
 9
 Table of Contents
  PART
II. OTHER INFORMATION
 
 Item
1. Legal Proceedings
 
 Securities and Exchange
Commission v. David M. Wolfson, et al. On October 16, 2003 a civil
complaint was filed by the Securities and Exchange Commission in which NCI
Holdings, Inc. (n/k/a China International Tourism Holdings Ltd.) was named as a
respondent. Our former president Gino Carlucci was also named as a respondent.
The suit was filed in the United States District Court for the District of Utah
and bears the docket number 2:03CV00914DAK and the style of the case
is: A Securities and Exchange Commission v. David M. Wolfson; NuWay
Holdings, Inc., a Nevada corporation; Momentous Group, LLC, a Utah limited
liability company; Leeward Consulting Group, LLC, a Utah limited liability
company; Sukumo Limited, a company incorporated in the British Virgin Islands
(a.k.a. Sukumo Group, Ltd., Fujiwara Group, First Chartered Capital Corporation,
First Colonial Trust, First China Capital and International Investment Holding);
Michael Sydney Newman (A.K.A. Marcus Wiseman); Stem Genetics, Inc., a Utah
corporation; Howard H. Robertson; Gino Carlucci; G & G Capital, LLC an
Arizona and Utah limited liability company; F10 Oil and Gas Properties, Inc.;
Jon H. Marple; Mary E. Blake; Jon R. Marple; Grateful Internet Associates, LLC,
a Colorado limited liability company; Diversified Financial Resources
Corporation, a Delaware corporation; John Chapman; Valesc Holdings, Inc., a New
Jersey corporation; Jeremy D. Kraus; Samuel Cohen; NCI Holdings, Inc., a Nevada
corporation. The complaint alleges that NCI failed to accurately and fully
disclose the nature of NCI's relationship to The Sukumo Group, Inc., including
the failure of Sukumo to complete the purchase of the shares and alleges that
Sukumo acted as a selling agent for NCI. The complaint also faults The Sukumo
Group Inc.'s actions with regard to the sale of common stock to off shore
purchasers for failing to disclose the interest that Sukumo had in each sale,
reporting that it was taking a 1-2% commission on the sale rather than keeping
70% or more of the proceeds of each transaction. A tentative settlement
agreement has been reached in this case and we expect the Final Judgment will be
entered sometime in the second quarter of 2008.  Pursuant to the terms
of the proposed Final Judgment, the Defendant is liable for disgorgement of
$107,000, representing profits gained as a result of the conduct alleged in
the Complaint, together with prejudgment interest thereon in the amount of
$35,426.39, for a total of $142,426.39, however, the Court is not ordering
Defendant to pay a civil penalty and payment of all but $30,000, of the
disgorgement and pre-judgment interest thereon is waived.  Defendant
shall satisfy this obligation by paying $30,000 within ten business days to the
Court, together with a cover letter identifying NCI Holdings, Inc. as a
defendant in this action; setting forth the title and civil action number of
this action and the name of the Court; and specifying that final payment is made
pursuant to the Final Judgment.  Defendant shall simultaneously
transmit photocopies of such payments and letters to the Commission’s counsel in
this action.  By making these payments, Defendant relinquishes all
legal and equitable right, title, and interest in such funds, and no part of the
funds shall be returned to Defendant.  Defendant shall also pay
post-judgment interest on any delinquent amounts pursuant to 28 USC
§ 1961.  The determination not to impose a civil penalty and to
waive payment of all but $30,000 of the disgorgement and pre-judgment interest
is contingent upon the accuracy and completeness of Defendant's Statement of
Financial Condition.  If at any time following the entry of the Final
Judgment the Commission obtains information indicating that Defendant’s
representations to the Commission concerning his assets, income, liabilities, or
net worth were fraudulent, misleading, inaccurate, or incomplete in any material
respect as of the time such representations were made, the Commission may, at
its sole discretion and without prior notice to Defendant, petition the Court
for an order requiring Defendant to pay the unpaid portion of the disgorgement,
pre-judgment and post-judgment interest thereon, and the maximum civil penalty
allowable under the law.  In connection with any such petition, the
only issue shall be whether the financial information provided by Defendant was
fraudulent, misleading, inaccurate, or incomplete in any material respect as of
the time such representations were made.  In its petition, the
Commission may move the Court to consider all available remedies, including, but
not limited to, ordering Defendant to pay funds or assets, directing the
forfeiture of any assets, or sanctions for contempt of the Final
Judgment.  The Commission may also request additional
discovery.  Defendant may not, by way of defense to such
petition:  (1) challenge the validity of the Consent or the Final
Judgment; (2) contest the allegations in the Complaint filed by the Commission;
(3) assert that payment of disgorgement, pre-judgment and post-judgment interest
or a civil penalty should not be ordered; (4) contest the amount of disgorgement
and pre-judgment and post-judgment interest; (5) contest the imposition of the
maximum civil penalty allowable under the law; or (6) assert any defense to
liability or remedy, including, but not limited to, any statute of limitations
defense.
  Item
1A. Risk Factors
  Information
regarding risk factors appears in Part I, “Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations” under the
captions “General Description of Business” and “Cautionary Note Regarding
Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and
in “Item 1A. RISK FACTORS” of our 2007 Annual Report on Form 10-KSB. There
have been no material changes from the risk factors previously disclosed in our
2007 Annual Report on Form 10-KSB.
 
 Item
2. Changes in Securities and Use of Proceeds
  None.
  Item
3. Defaults Upon Senior Securities
  None.
  Item
4. Submission of Matters to a Vote of Security Holders.
 
 None.
  Item
5. Other Information
 
 None.
 
 Item
6. Exhibits And Reports On Form 8-K
 
 (1)
              Exhibits:
      Exhibits required to be attached by Item 601 of Regulation S-B are listed
      in the Index to Exhibits Beginning on page 8 of this Form 10-Q, which is
      incorporated herein by reference.
 
 Reports on Form 8-K filed in
the second quarter of 2008
 None.
  10
 Table of Contents
  SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, there
unto duly authorized.
  CHINA INTERNATIONAL TOURISM HOLDINGS
      LTD.Date:
      August 14, 2008
              By:
              /s/ Lei,
      MingLei,
      Ming
                President
      and CEO
 
 Date:
      August 14, 2008
              By:
              /s/ Wang, Xiao
      JunWang,
      Xiao Jun
                Chief
      Financial Officer
  11
 Table of Contents
  INDEX
TO EXHIBITS
  Exhibit
      No.
              
              Description31.1
              
              Certification of Chief
      Executive Officer31.2
              
              Certification of Chief
      Financial Officer.32.1
              
              Statement required by 18
      U.S.C. Section 1350, as adopted pursuant to section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
              
              Statement required by 18
      U.S.C. Section 1350, as adopted pursuant to section 906 of the
      Sarbanes-Oxley Act of
2002.