Hier knallt es heute - aber wie ... 300% kurzfristig möglich! - 500 Beiträge pro Seite

[04030]

RESULTS OF OPERATION

Comparison of Three Months Ended March 31, 2007 and March 31, 2006

Revenues increased by $1,738,824 or 129% in 2007 to $3,086,227 as compared to $1,347,403 in 2006, resulting in gross profit of $2,199,916 for 2007 as compared to gross profit of $853,652 in 2006. This was mainly attributable to the income generated from the training center, new programs, and advertising income. During 2006 and 2007, the Company has added several new programs for vocational studies and certification programs, which provides new source of income. Advertising income was increased as the result of the increased awareness of the Company\'s website, which resulted in more viewers coming to the Company\'s website, which enables the Company to increase its advertising income.

Cost of sales increased by $392,560 to $886,311 in 2007 as compared to $493,751 in 2006. Cost of sales as a percentage of sales decreased by 8% to 29% for 2007 as compared to 37% for 2006. The overall increase was primarily due to the increase of sales, which results from an increase in the cost of booklets and simulation tests to increase.

Gross profit margin increased by 8% for 2007 as compared to 2006. Gross profit margins vary from product to product depending on a number of factors including:
(a) cost of materials; (b) overall market demand and individual customer demand;
(c) cost of intellectual property rights; and (d) competitor pricing policies.

Selling expenses increased by $661,415 or 743% to $750,438 from $89,023 in 2006 due to the increase in agency fees associated with increased sales and advertising.

http://biz.yahoo.com/e/070516/ceda.ob10qsb.html

Und dann noch die Finanzierungs-News von Montag, mit Optionen, die bis zu 200% über den aktuellen Kursen liegen!

http://biz.yahoo.com/prnews/070514/cnm028.html?.v=4http://biz.yahoo.com/prnews/070514/cnm028.html?.v=4

Hier entsteht etwas wirklich GUTES!

Keine Stücke für unter 1$ hergeben!

[Dragon25]

Antwort auf Beitrag Nr.: 29.341.333 von 04030 am 16.05.07 12:27:30

warum soll die 300 prozent nach oben schießen

[04030]

Ich sage ja nicht 300% HEUTE - aber der $ ist nur eine Frage von Wochen ....

Der Wert ist extrem markteng!

[SCP]

Aber wenn gut gepusht wird ...

[04030]

Eben nicht - da nicht in D. gehandelt wird ist das kein Push, sondern einfach nur eine Information mit persönlicher Einschätzung!

Die sind massiv unterbewertet und sind wegen einer Abschreibung im letzten Quartal 2006 ungerechtfertigt unter die Räder gekommen!

Marge liegt bei 66% - macht bei konservativer Annahme, dass Umsatz gehalten wird - 12 Mio Umsatz = 8 Mio Gewinn!

Wobei ich eher von 15-17 Mio Umsatz ausgehe!

[sliverin]

Antwort auf Beitrag Nr.: 29.342.418 von 04030 am 16.05.07 13:23:43

Stimmt, nicht so ein Deutschland sinnlos Push, wie im Laufband hier jeden Tag zu sehen.

Naja gewinn wird wohl eher bei 5 Mio liegen aber das sind auch knapp 9 cent EPS. Also platz bis 1,80 Dollar wenn ich ein faires KGV von 20 nehme.

Hatte schon einen Thread vor dir, den wollte der Mod aber nicht

[ThomWaye]

On September 29, 2006 China Education Alliance, Inc., a North Carolina corporation (the "REGISTRANT"), consummated a bridge financing pursuant to which the Registrant issued $1,630,000 aggregate principal amount of secured promissory notes (each, a "NOTE" and collectively, the "NOTES") and warrants to acquire an aggregate number of shares of common stock of the registrant equal to the highest dollar amount of the Principal prior to the Maturity Date for an exercise price per share of $ 0.50. The Notes were issued in favor of each of the following: (i) Hong Kong League Central Credit Union, a Hong Kong Credit Union and SBI Advisors, LLC, in its capacity as agent for lender (the "AGENT") for an aggregate principal amount of US$530,000, (ii) HIT Credit Union, a Hong Kong Credit Union and the Agent for an aggregate principal amount of US$470,000,
(iii) Sean Wallace and the Agent for an aggregate principal amount of US$100,000, (iv) R. Ralph Parks and the Agent for an aggregate principal amount of US$100,000, (v) Cambria Fund Investment, L.P., a California limited partnership, and the Agent for an aggregate principal amount of US$200,000, (vi) The Angeloff Family L.P., a California limited partnership and the Agent for an aggregate principal amount of US$200,000, and (vii) The Angeloff Family, LLC, a California limited liability company and the Agent for an aggregate principal amount of US$30,000.

Each Note accrues interest at the rate of 6% per annum from September 29, 2006 to March 29, 2007, with interest payable each month commencing from November 1, 2006 and terminating on March 1, 2007, as well as March 29, 2007, which is the maturity date for each Note.

The Notes constitute senior indebtedness of the Registrant. The Notes are guaranteed by Harbin Zhong He Li Da Jiao Yu Ke Ji You Xian Gong Si, Heilonghiang Zhonge Education Training Center and Harbin Zhonghelida Educational Technology Company Limited, (collectively, the "SUBSIDIARY GUARANTORS"), and Xinqun Yu (together with the Subsidiary Guarantors, the "GUARANTORS"), the chief executive officer and principal stockholder of the Registrant. The guarantee of Xinqun Yu is secured by his pledge of a number of shares of common stock of the Registrant to be determined from time to time as provided therein, with a value of $3,060,000. The number of shares initially pledged is 7,859,598.

[ThomWaye]

Each Note accrues interest at the rate of 6% per annum from September 29, 2006 to March 29, 2007, with interest payable each month commencing from November 1, 2006 and terminating on March 1, 2007, as well as March 29, 2007, which is the maturity date for each Note.

[ThomWaye]

OVERVIEW

China Education Alliance, Inc. (“CEDA”), formerly known as ABC Realty, Inc., is registered in the state of North Carolina, USA. The company’s primary business activity is online education and on-site training services. It offers large scale of high-quality educational resources, and focuses on network education as well as on-site training. It is mainly operated through its wholly owned subsidiaries, Harbin Zhonghelida Education Technology Company Limited with registered website domain www.edu-chn.com for its online education and Heilongjiang Zhonghe Education Center for its on-site training services.

China Education Alliance, Inc. dedicates to develop IT education industry and offer network solution for the education course of China. As an excellent education resources provider and operator, CEDA has a leading interactive business platform. It made full use of the network resources, and broke through the time and space limits of the traditional teaching methods and the face-to-face constraints on high-quality resources. Through the physical integrations and successful case spreading, it serves to change the uneven education resources distribution and create a better sharing of education resources across China. Meanwhile, it is promoting the Chinese education by opening schools and training agencies. It has shaped www.edu-chn.com to become a leading functional portal website, through the enforcement of the “on-site” training business. It has become a network and physical training agency.

As a provider and operator of high-quality education resources, China Education Alliances, Inc., based on its know-how of the educational market in China and its own strengths, currently takes the exam-oriented education in junior middle and high school as its core business. The company combined its superior network operating experience with rich education resources integrating experience, and takes the company’s website as a platform to carry out services like “Famed Instructors Test Paper Store” through its service charging system by way of rechargeable learning cards. The learners can study via online classrooms or materials downloading for offline education. The company also provides on-site teaching services under the “Big Classroom of the Famed Instructors” program through its state-of-the-art training center.

www.edu-chn.com is a major functional education resources portal website in China. It provides plenty of client resources and strong brand promotion for business developing. Under the website, there are four modules, eight alliances, nine platforms and eight columns of interactive entertainment columns. It provides informative education products through the updated communication tools under www.edu-chn.com. It provides multi-media resources such as college school, middle school and elementary school test papers, courseware, and video data since 1980s, owning intellectual property rights for more than 300,000 sets of courseware and test papers. www.edu-chn.com is a major enterprise-class comprehensive education network platform which based on the network video technology and the large data sources of elementary education resources. It provides online education and material download for customers by integrating “the big classroom of the famed instructors”. By the end of 2005, more than 3 million visitors had viewed the website.

[ThomWaye]

Heilongjiang Zhonghe Education Center engages in the on-site training services and face-to-face tutorship under “The Big Classroom of the Famed Instructors” program and its VOD courseware resources. The usable area for the training center is about 3400 square meters, with 17 modern classrooms that has capacity of 1,200 students. The courses covered each phases of compulsory education, and take the junior middle and high school as the key part.

The company is also providing new services to fulfill the market needs of online vocational training services. The core business for CEDA’s vocation education will be in three main areas: vocation education enrollment, vocational certification, and career development for college graduates. CEDA has collaborated with the China Vocation Education Society in setting up www.360ve.com. This website will be the credible site for vocational education enrollment providing customers with reliable information regarding vocation training schools and vocation trainings both on-line and on-site. Pilot version of the www.360ve.com, a “high-quality vocational teaching resource supermarket”, has been launched during this reporting period. CEDA leverages the existing resources of China Vocational Education Society which as members including provincial education bureau and more than one thousand vocational training schools across the country in carry out its fast expansion strategic cooperation with the outstanding training agencies in local area, especially in the aspects of joint enrollment, resources exchanging and on-site training agencies establishments. The Company has carried out various level cooperation with over one thousand professors in their respective expertise fields, more than two thousand membership schools, over three thousand school principals, over fifty thousand school teachers, as well as over one hundred news media and twenty scholarly research organizations.

Through the authorizing of China Vocation Education Society, the vocational certificating center will contact and coordinate education ministry, labor ministry and other authorized government agencies to draw up benchmark for different education training sectors and organize performance evaluation. CEDA will become not only the provider of on-line vocational education but also the administrator for various vocational certifications. CEDA has currently received three authorizations in certification of Nutrition Analyst, Logistic Management, and Real Estate Planer.

13

CEDA’s “Millions of College Students Employment Crossroad” program is developed in response to the high jobless rate for China’s current college graduates. More than 35% of the college graduates can not find a job in the year of graduation. Many of the college graduates pursue vocational training after college education. CEDA’s “Millions of College Students Employment Crossroad” program is to establish a long term training program for college students to build connections with corporations and obtain education programs prescribed by the hiring corporations.

[ThomWaye]

The discussion that follows is based on our consolidated results of operations for the periods ended September 30, 2006 and September 30, 2005.

[sliverin]

Revenues increased by $1,265,501 or 124% in the third quarter of 2006 to $2,284,521 as compared to $1,019,020 in the same quarter of 2005, resulting in gross income of $1,550,487 for the third quarter of 2006 as compared to gross income of $541,575 in the same quarter of 2005. For the nine-months ended September 30, 2006, sales increased by $4,415,731 or 320% to $5,798,779 as compared to $1,383,048 in the same period of 2005, resulting in gross income of $3,907,381 for the nine months ended September 30, 2006 as compared to gross income of $849,309 in the same period of 2005. This was mainly attributable to the income generated from the training center, new programs, and advertising income. The training center was established during the third quarter of 2005, providing little income at its initial stage of operation, and expanded tremendously afterwards. During 2006, the Company has added several new programs for vocational studies and certification programs, which provides new source of income. Advertising income was increased as the result of the increase awareness of the Company’s website, which resulted more viewers coming to the company’s website, which enables the Company to increase its advertising income.

[sliverin]

ross profit margin increased by 15% for the third quarter of 2006 as compared to the third quarter of 2005. Gross profit margins vary from product to product depending on a number of factors including: (a) cost of materials; (b) overall market demand and individual customer demand; (c) cost of intellectual property rights; and (d) competitor pricing policies.

[sliverin]

Selling, general and operating expenses (“S, G & A”) represented expenditures in connection with the distribution and selling of properties as well as expenses incurred for the operating of the business. S, G&A increased by $293,525 to $359,456 in the third quarter of 2006 as compared to $65,931 in the same quarter of 2005. S, G & A as a percentage of sales increased by 10% to 16% in the third quarter of 2006 as compared to 6% for the same quarter of 2005. For the nine-months ended September 30, 2006, S, G &A increased by $594,169 to $738,361 as compared to $144,192 for the same period of 2005. S, G & A as a percentage of sales increased by 3% to 13% in the nine-months of 2006 as compared to 10% in the same period of 2005. The increase in S, G & A are mainly due to the expanding of the companies business

[sliverin]

The Company’s assets primarily consist of its operating subsidiaries, marketable properties for sales, cash and cash equivalents.

Cash and Cash Equivalents increased by 1,443% or $5,247,158 to $5,610,885 at September 30, 2006 as compared to $363,727 at September 30, 2005. The increase in cash and cash equivalents was mainly due to bank deposits fund generated from a bridge loan of $1,530,000 and sales receipts during the period.

[sliverin]

The Company’s current ratio at September 30, 2006 was 2.45. Its primary sources of funds include cash balances, cash flow from operations, the potentially, the proceeds of prepayments made by customers or offering of equity. The management endeavors to ensure that the funds are always available to take advantage of new investment opportunity and they are sufficient to meet future liquidity and capital needs. Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. For future operating, management plans to finance $6 million through equity financing in the international capital market.

There was no restrictive bank deposit pledged as of Sept. 30, 2006. Therefore, the Company did not have to maintain any minimum balance in the relevant deposit account as security.

There was no restrictive bank deposit pledged as of September 30, 2006 and September 30, 2005. Therefore, the Company did not have to maintain any minimum balance in the relevant deposit account as security.

[sliverin]

Inventories decreased by $17,056 to $72 as of September 30, 2006 from $12,790 as of September 30, 2005. The decrease in inventories is primarily due to the increase awareness of the company’s debit card services. More students purchased the rechargeable debit cards in order to obtain materials and lectures from the company’s website to study for various state-wide entrance exams. The cost of debit cards has been decreased dramatically, which lower the cost of inventory on hand.

[sliverin]

Prepaid expense decreased by $228,134 or 62% to $142,088 as of September 30, 2006 compared to $370,222 as of September 30, 2005. Prepaid expenses are primarily comprised of advance payments made for services to teachers for online materials and video.

Properties and equipments , stated at cost less accumulated depreciation and amortization, consist of:

[sliverin]

Total properties and equipments increased by 67% or $1,761,504 to $4,391,384 as of September 30, 2006 as compared to $2,629,880 as of September 30, 2005.

[sliverin]

Current liabilities increased by $2,004,032 to $2,344,525 as of September 30, 2006 as compared to $340,493 as of September 30, 2005 were attributable to the increase in advances on accounts, notes payable, and other business expense payable.

Accounts payable and accrued expenses decreased by $30,845 or 94% to $2,021 as of September 30, 2006 as compared to $32,866 as of September 30, 2005 was mainly attributable to the decrease in accrued expense.

[sliverin]

Advances on accounts recorded $477,496 as of September 30, 2006 (2005: $nil) was attributable to the usage of the prepaid debit card system. Advances on accounts are deferred revenues prepaid by customers for the future download of materials thru company website.

Loan from shareholder increased by $183,003 or 186% to $281,503 as of September 30, 2006 as compared to $98,500 as of September 30, 2005 was mainly attributable to the shareholder payments on behalf of the company to oversea financial advisors and consultants for services provided.

[sliverin]

Taxes payable decreased by $199,537 or 84% to $38,090 as of September 30, 2006 as compared to $237,627 as of September 30, 2005 was mainly attributable to the enterprise income tax exemption the company now enjoyed.

Notes payable recorded $1,530,000 as of September 30, 2006 (2005: $nil) was attributable to the bridge loan that the Company entered into with third party on September 29, 2006

[sliverin]

Capital reserve represented that amount appropriated from net income after tax (Enterprise Income Tax) for the year. As stipulated by the relevant laws and regulations applicable to China's foreign invested enterprises, the company is required to make appropriations from net income as determined under accounting principles generally accepted in the PRC ("PRC GAAP") to the statutory surplus reserves which include a general reserve, an enterprises expansion reserve, and employee welfare and bonus reserves. Pursuant to the relevant PRC regulations and the provisions of the Company’s Memorandum and Articles of Association, the Company is required to appropriate 10% of the net distributable profit after enterprise income tax to capital reserve, profit attributable to the shareholders shall be appropriated in the following sequence; the general reserve is used to offset future extraordinary losses as defined under PRC GAAP. The company may, upon a resolution passed by the owners, convert the general reserve into capital.

The employee welfare and bonus reserve is used for the collective welfare of the employees of the company. The enterprise expansion reserve is used for the expansion of the company and can be converted to capital subject to approval by the relevant authorities. The Company record reserves of $407,824 for the three months ended September 30, 2006. No such adjustments are required under accounting principles generally accepted in the United States of America in 2006.

[sliverin]

INDUSTRY AND MARKET OUTLOOK

The education resources distribution is uneven in different areas across China, most of the excellent teachers are in the developed areas and key middle schools. Among the 15,998 high schools in China, 847 of them are key schools, which account for 5.29. Most of the excellent teachers’ resources are in the key high schools, the ratio of college entrance of key high school is higher than 90%, but the national average ratio of college entrance is about 55%.

[sliverin]

Most of high-quality resources of China elementary education often centralize in a few of key schools, and its amount and the scale are quite limited. Because the college entrance rate of key high schools is higher than that of the ordinary high schools, so, each student expects to enter the key high school where they can obtain the most excellent teaching resources. The students who have poor performance but want to enter into the key high school must pay additional “school selecting fees”. According to the Chinese Nanfang Daily, in China the school selecting fees was more than RMB 27 billion in 2005, which is over $3 billion. There are even about 20% students entering into high school through sponsorship and school selecting fee in China. Thus it can be noted that the China elementary and secondary education is in urgent need for high-quality education resources.

On the whole, the China online education market is still at the preliminary stage. In 2004, China online education market turnover reached RMB 14.4 billion, about $1.8 billion. As China becomes more information-oriented, while people become increasingly aware of the network’ function, the size of the online education market will increase dramatically. iResearch, a well-known market consulting firm, forecasts the China online market turnover in 2005, 2006, and 2007 will reach RMB 18.1 billion, RMB 23.3 billion, and RMB 29.6 billion respectively.

According to the China Network Information Center’s statistics as of December 31, 2005, the total number of internet users in China was 111 million, ranked second over the world, a increase of 17 million compared with the same period a year earlier or 18.1% higher. The students account for 35.7%, about 39.627 million (objects of exam-oriented education); company staff accounted for 29.70%, about 32.967 million (objects of profession education); the jobless accounted for 6.9%, about 7.657 million (objects of vocational education); the China online education market is of great potential.

[sliverin]

e-Fang Accountancy Corp., & CPA, the previous independent registered public accounting firm of China Education Alliance, Inc. (the "Company") for the fiscal years ended prior to December 31, 2006, was terminated on January 4, 2007, from further audit services to the Company.

During the fiscal year ended December 31, 2005, the financial statements of the Company did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to any uncertainty, audit scope, or accounting principles.

For the two fiscal years ended December 31, 2005, and the subsequent interim periods, there were no disagreements between the Company and e-Fang Accountancy Corp., & CPA on any matter of accounting principles or practice, financial statement disclosure, or auditing scope or practices which if not resolved to the satisfaction of e-Fang Accountancy Corp., & CPA would have caused e-Fang Accountancy Corp., & CPA to make reference to the subject matter of the disagreement in connection with its reports.

On January 4, 2007, the Company executed an engagement letter with Murrell, Hall, McIntosh & Co., PLLP, located at 2601 N.W. Expressway, Suite 700 East, Oklahome City, Oklahoma 73112, to audit the consolidated financial statements of the Company for its fiscal year ended December 31, 2006, and the related statements of income, stockholders' equity, and cash flows for the year then ended. The Board of Directors approved the appointment of Murrell, Hall, McIntosh & Co., PLLP, effective January 4, 2007. During the two most recent fiscal years or any subsequent interim period, the new independent registered public accounting firm had not previously been engaged as either the principal accountant of the Company to audit its financial statements or of any significant subsidiary, nor has the Company consulted with the firm regarding any accounting issue, auditing or financial reporting issue regarding such financial statements or any reportable event prior to December 31, 2006

[sliverin]

Corporate History

CEDA was incorporated in the State of North Carolina on December 2, 1996 under the name of ABC Realty Co. to engage in residential real estate transactions as a broker or agent. In performing these residential real estate services. The Company changed its name several times and engaged in several types of business before it became inactive.

On September 15, 2004, the Company executed a Plan of Exchange (the "Agreement"), between and among the Company, Zhong He Li Da Education Technology, Inc., a corporation organized and existing under the laws of the People's Republic of China ("ZHLD"), the shareholders of ZHLD (the "ZHLD Shareholders"), and Duane Bennett, Chairman of the Board and controlling shareholder of the Company.

At the closing of the Plan of Exchange which occurred on December 13, 2004, the Company issued the ZHLD Shareholders 55,000,000 shares of common stock of the Company, or 95% of the Company's then outstanding common stock, in exchange for all of the shares of capital stock of ZHLD owned by the ZHLD shareholders. Immediately upon the closing, the Company cancelled 11,000,000 shares of common stock controlled by Duane Bennett, and, as a result, the Company had 2,915,000 shares issued and outstanding before the issuance of the 55,000,000 new shares. Payment for the cancelled shares was made by ZHLD and/or the ZHLD Shareholders in the amount of $400,000 in the aggregate (composed of $300,000 in cash and $100,000 in a promissory note).

1

On November 17, 2004, the Company changed its name to China Education Alliance, Inc.

[sliverin]

It is expected that there will be more competitors from both domestic and overseas companies because the Chinese educational market is large and growing. In order to avoid or minimize the potential of low-price competition in the future, the Company has determined to increase its competitiveness in the educational markets.

2

Employees. The Company’s employees are located in northern China. The Company has 99 employees, including 33 employees at its education training center and 22 marketing employees. The need for employees and their availability will be addressed in connection with the business development plans of the Company in the ordinary course of its business.

[sliverin]

The Company is authorized to issue 150,000,000 shares of Common Stock, $.001 par value per share. At December 31, 2006, there were 57,935,000 shares of Common Stock issued and outstanding that were held by 531 stockholders of record.

[sliverin]

On September 6, 2006, the Company issued 20,000 shares of restricted common stock to Stephen A. Zrenda, Jr. for legal services in reliance upon Section 4(2) under the Securities Act of 1933, as amended.

On March 7, 2007, the Company issued 30,000 shares of restricted common stock to Taylor Raferty Associates Inc. for public relations services in reliance upon Section 4(2) under the Securities Act of 1933, as amended.

Registrar and Stock Transfer Agent

The registrar and stock transfer agent of the Company is Florida Atlantic Stock Transfer, Inc., 7130 Nob Hill Road, Tamarac, FL 33321.

[sliverin]

The discussion that follows is based on our consolidated results of operations for the years ended December 31, 2006 and December 31, 2005.

[sliverin]

China Education Alliance, Inc. (“CEDA”), formerly known as ABC Realty, Inc., is a corporation organized in the State of North Carolina. The Company’s primary business activity is online education and on-site training services. It offers high-quality educational resources, and focuses on network education, and also provides on-site training. It is operated in China through its wholly owned subsidiaries, Harbin Zhonghelida Education Technology Company Limited with the registered website domain www.edu-chn.com for its online education, and Heilongjiang Zhonghe Education Center for its on-site education and vocational training services.

The Company is dedicated to becoming the leading provider of education services in China. As an education resources provider and operator, the Company has a leading interactive business platform. It makes full use of network resources. Through the integration of the Internet and of classes, it serves to change the uneven distribution of education resources creates a better sharing of education resources across China. Meanwhile, it is promoting Chinese education by opening schools and training agencies. It has shaped its website www.edu-chn.com to become a leading functional portal website, through the enhancement of its “on-site” training business. It has become a network and physical training agency.

As a provider and operator of high-quality educational resources, the Company, based on its know-how of the educational market in China, currently provides the exam-oriented education in junior, middle, and high school as its core business. The Company has combined its network operating experience with its education resources and its integrating experience, and takes the Company’s website as a platform to carry out services like “Famed Instructors Test Paper Store” through its service charging system by way of rechargeable debit learning cards. The learners can study via online classrooms or through materials downloading for offline education. The Company also provides on-site teaching services under the “Big Classroom of the Famed Instructors” program through its state-of-the-art training center.

[sliverin]

www.edu-chn.com is a major functional education resources portal website in China. It provides a diverse variety of resources and provides strong brand promotion for its business development. Under the website, there are four modules, eight alliances, nine platforms and eight columns of interactive entertainment columns. It provides informative education products through its updated communication tools under www.edu-chn.com. It provides multi-media resources such as college school, middle school and elementary school test papers, courseware, and video data since the 1980s, owning intellectual property rights for more than 300,000 sets of courseware and test papers. www.edu-chn.com is an enterprise-class comprehensive education network platform which is based on network video technology and large data sources of elementary education resources. It provides online education and material for download customers by integrating “the big classroom of the famed instructors”.

Heilongjiang Zhonghe Education Center engages in the on-site training services and face-to-face tutorship under “The Big Classroom of the Famed Instructors” program and its VOD courseware resources. The useable area for the training center is about 3,400 square meters, with 17 modern classrooms that has capacity of 1,200 students. The courses cover each phase of compulsory education, and its junior middle and high school as its key parts.

The Company is also providing new services to fulfill the market needs of online vocational training services. The core business for the Company’s vocation education will be in three main areas: vocation education enrollment, vocational certification, and career development for college graduates. The Company has collaborated with the China Vocation Education Society in setting up www.360ve.com. This website is a credible site for vocational education enrollment providing customers with reliable information regarding vocation training schools and vocation training both on-line and on-site. The Pilot version of the www.360ve.com, a “high-quality vocational teaching resource supermarket”, has been recently launched. The Company leverages the existing resources of the China Vocational Education Society which has members including provincial education bureaus and more than one thousand vocational training schools across the country to carry out its fast expansion strategic cooperation with the outstanding training agencies in local area, especially in the aspects of joint enrollment, resource exchanges and on-site training agencies establishments. The Company has carried out various levels of cooperation with over one thousand professors in their respective expertise fields, more than two thousand membership schools, over three thousand school principals, over fifty thousand school teachers, as well as over one hundred news media and twenty scholarly research organizations.

The Company’s “Millions of College Students Employment Crossroad” program was developed in response to the high jobless rate for China’s current college graduates. More than 35% of the college graduates can not find a job in the year of graduation. Many of the college graduates pursue vocational training after college education. The Company’s “Millions of College Students Employment Crossroad” program is to establish a long term training program for college students to build connections with corporations and obtain educational programs prescribed by the hiring corporations.

[sliverin]

Comparison of Years Ended December 31, 2006 and December 31, 2005

Revenues increased by $5,211,741 or 167% in 2006 to $8,324,473 as compared to $3,112,732 in 2005, resulting in gross profit of $5,760,583 for 2006 as compared to gross profit of $2,095,358 in 2005. This was mainly attributable to the income generated from the training center, new programs, and advertising income. The training center was established during the third quarter of 2005, initially providing little income, and which expanded afterwards. During 2006, the Company has added several new programs for vocational studies and certification programs, which provides new sources of income. Advertising income was increased as the results of the increased awareness of the Company’s website, which resulted in more viewers coming to the Company’s website, which enables the Company to increase its advertising income.

[sliverin]

Cost of sales increased by $1,546,516 to $2,563,890 in 2006 as compared to $1,017,374 in 2005. Cost of sales as a percentage of sales decreased by 2% to 31% for 2006 as compared to 33% for 2005. This was primarily due to the increase in sales, which results in the cost of booklets and simulation tests to increase.

[sliverin]

Gross profit margin increased by 2% for 2006 as compared to 2005. Gross profit margins vary from product to product depending on a number of factors including: (a) cost of materials; (b) overall market demand and individual customer demand; (c) the cost of intellectual property rights; and (d) competitor pricing policies.

[sliverin]

Selling expenses increased by $1,234,518 or 727% to $1,404,319 from $169,801 in 2005 due to the increase in agency fees associated with increased sales and advertising.

[sliverin]

Administrative expenses increased by $1,403,916 or 1,243% to $1,516,865 in 2006 as compared to $112,949 in 2005. The increase is due primarily to an increase in salaries due to bonuses paid at year end and the overall growth of the business of the Company.

[sliverin]

Interest expense increased by $147,355 due to the issuance of notes payable and associated warrants.

[sliverin]

Liquidity and Capital Resources

The Company’s assets primarily consist of its operating subsidiaries, marketable properties for sales, cash and cash equivalents.

[sliverin]

Cash and Cash Equivalents increased by 208% or $1,240,895 to $1,838,339 at December 31, 2006 as compared to $597,444 at December 31, 2005. The increase in cash and cash equivalents was mainly due to bank deposits generated from bridge loans of $1,530,000 and sales receipts during the period.

The Company’s current ratio at December 31, 2006 was 1.53. Its primary sources of funds include cash balances, revenues, the proceeds of prepayments made by customers, or the sale of common stock. Management endeavors to ensure that the funds are always available to take advantage of new investment opportunities and that they are sufficient to meet future liquidity and capital needs. Management considers current working capital and borrowing capabilities adequate to cover the Company’s planned operating and capital requirements. For future operations, management plans to raise capital through equity financing in the international capital markets.

[sliverin]

Any additional funding most likely through debt financing. In general, the commitment of funds to the acquisition of plant and equipment tends to impair liquidity. However, we believe that because of the upward trend in our revenues in recent years, even if this upward trend levels off, our income from operations coupled with such additional financing should provide sufficient liquidity to meet our needs.

There are no restrictive bank deposits pledged as of December 31, 2006 and December 31, 2005. Therefore, the Company did not have to maintain any minimum balance in the relevant deposit accounts as security.

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Industry and Market Outlook

The distribution of educational resources is uneven in different areas across China, most of the excellent teachers are in the developed areas and key middle schools. Among the 15,998 high schools in China, 847 of them are considered key schools, which account for 5.29% of the total schools. Most of the excellent teachers’ resources are in the key high schools, the ratio of college entrance of key high schools is higher than 90%, but the national average of college entrance is about 55%.

Most of the high-quality resources of China’s elementary education often centralize in a few of key schools, and its scale is quite limited. Because the college entrance rate of key high schools is higher than that of the ordinary high schools, each student expects to enter the key high school where they can obtain the best teaching resources. The students who have poor performance but want to enter into the key high school must pay additional “school selecting fees”. According to the Chinese Nanfang Daily in China, the school selecting fees was more than RMB 27 billion in 2005, which is over $3 billion. There are even about 20% students entering into high school through sponsorship and school selecting fee in China. Thus it can be noted that the China elementary and secondary education is in urgent need for high-quality education resources.

On the whole, the China’s online education market is still at the preliminary stage. In 2004, the China online education market turnover reached RMB 14.4 billion, about $1.8 billion. As China becomes more information-oriented, while people become increasingly aware of the network’s function, the size of the online education market is expected to increase dramatically. iResearch, a well-known market consulting firm, forecasts the China online market turnover in 2007 will reach RMB 29.6 in billings.

According to the China Network Information Center’s statistics as of December 31, 205, the total number of internet users in China was 111 million, ranked second over the world, a increase of 17 million compared with the same period a year earlier or 18.1 higher. The students account for 35.7%, about 39.627 million (objects of exam-oriented education); company staff accounted for 29.70%, about 32,967 million (objects of profession education); the jobless accounted for 6.9%, about 7.657 million (objects of vocational educational); the China online education market has of great potential.

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The following persons are the directors and executive officers of the Company.

Name

Age

Position

Xiqun Yu

39

Chairman of the Board of Directors, Chief Executive Officer, President and Director
Chunqing Wang

47

Vice Chairman of the Board of Directors and Chief Financial Officer
Yuhong Yang

41

Vice President and Director
Yanzhi Liu

38

Director
Yuzhong Wu

36

Director

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The following is a summary of the business experience and other biographical information with respect to each of the Company’s officers and directors listed in the above-referenced table.

Mr. Yu has over 16 years of experience in senior management with several Northern China based enterprises. He was responsible for marketing, strategic planning and designing for many of these corporations. In addition to his posts with subsidiaries of the Company in China, he is also the CEO of RETONG.COM., as well as the Chairman of Harbin Zhonghelida Technology Corporation, Heilongjiang Retong Advertising Co., Ltd. and Heilongjiang Wantong Telecommunication Project Co., Ltd. Mr. Yu is a member of the Council of China Harbin Advertising Association and is a Director of the China Internet Network Association. Mr. Yu received a degree in English from the Harbin University of Science and Technology in 1989.

Mr. Wang holds a Certificate of Senior Accountant in China. Mr. Wang has extensive experience in financial management. Prior to joining the Company, from 1986 to 1989, he served as a Financial Director for Harbin Battery Manufacturing Company. From 1989 to 1992, he was a Financial Director with Harbin Tianrun Chemical Joint-Stock Company. From 1992 to 2001, he assumed the in CFO position for Tianrun Group. Since 2001, he has been the Chief Financial Officer of the subsidiaries of the Company. Mr. Wang is a graduate in industrial accounting from the Harbin College of Economic Carde Management.

Mr. Yang was the Managing Director and Chief Editor of the Qitaihe Evening Paper September 1992 to October 1995, a Vice President with the Orient Realty Development Co., Ltd. From October 1995 to March 2000, and was the President of Harbin Runtong Group before joining the Company. He is also a member of the Council of Heilongjiang Young Enterpriser Association. Mr. Yang is a specialist in capital deployment and asset management, and is excellent in human resource cultivation. He received a Business Administration degree from the Open University of Hong Kong in 2001.

Mr. Liu is a graduate in computer science, and holds a Certificate of Senior Engineer. Mr. Liu served as a Technical Manager for the Thermodynamic Company of the Harbin Power Station Group, and as the Technical Manager for the Heilongjiang Wantong Telecom Project Company. He is a specialist in telecommunications.

Mr. Wu is a graduate in enterprise management and is a certified economist. Mr. Wu was a Marketing Manager for Harbin Kaida Wood Products Company, and later was an Administration Officer and Strategic Planning Manager for Heilongjiang Retong Advertising Co., Ltd. Mr. Wu has planned many provincial and municipal activities. Mr. Wu is a graduate of Harbin University in 1993.

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The following tables set forth the ownership, as of December 31, 2006, of our common stock (a) by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, and (b) by each of our directors, executive officers and our officers and directors as a group. To the best of our knowledge, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted.

25



Title of Class



Name and Address



Number of Shares


Percent of Total
Outstanding Shares
Common

Xiqun Yu (1)
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

30,190,411 (1)

52.1%
Common

Guilan Feng
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

4,000,000

6.9%
Common

Chunqing Wang
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

3,000

.001%
Common

Yuhong Yang
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

0

0%
Common

Yanzhi Liu
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

15,000

.001%
Common

Yuzhong Wu
80 Heng Shan Rd.
Kun Lun Shopping Mall Harbin,
P.R. China 150090

1,017,723

1.8%
Common

Officers and Directors as a group as a group

35,226,134

60.8%

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(1)
Mr. Yu has pledged 7,859,598 shares of his Common Stock of the Company as collateral for loans to the Company in the aggregate amount of $1,530,000 and accrued interest in connection with his personal guaranty of such loans.

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On May 8, 2007, China Education Alliance, Inc. (the “Company”), sold, for a purchase price of $2,400,000, its 3% convertible subordinated notes in the aggregate principal amount of $2,400,000 to three investors. The notes are convertible into either:

[sliverin]

(a)

an aggregate of (i) 6,486,486 shares of the Company’s series A convertible preferred stock, which is convertible into one share of the Company’s common stock, subject to adjustment, and five-year common stock purchase warrants to purchase 6,000,000 shares of common stock at $.69 per share, 3,000,000 shares of common stock at $.80 per share and 3,000,000 shares of common stock at $1.00 per share, or

[sliverin]

(b)

an aggregate of (i) 6,486,486 shares of common stock and five-year common stock purchase warrants to purchase 6,000,000 shares of common stock at $.69 per share, 3,000,000 shares of common stock at $.80 per share and 3,000,000 shares of common stock at $1.00 per share, or

[sliverin]

(c)

if the Company does not amend its articles of incorporation to authorize the issuance of preferred stock and file a certificate of designation setting forth the rights of the holders of the series A preferred stock, as required by the securities purchase agreement pursuant to which the notes were issued and the terms of the notes, 18,486,486 shares of common stock.

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In connection with the financing, the Company entered into a securities purchase agreement with Barron Partners LP, Eos Holdings and Hua-Mei 21st Century Partners, LP pursuant to which the Company issued the notes. The following table sets forth the investment made by each investor, the principal amount of the note issued to the investor and the number of shares of series A preferred stock or common stock are issuable upon conversion initially and the number of shares of common stock issuable upon exercise of each set of warrants:

[sliverin]

Name



Investment



Note



Shares



$.69 Warrants



$.80 Warrants



$1.00 Warrants

Barron Partners, LP

$

2,175,000

$

2,175,000

5,878,378

5,437,500

2,718,750

2,718,750

Eos Holdings

125,000

125,000

337,838

312,500

156,250

156,250

Hua-Mei 21st
Century Partners, LP

100,000

100,000

270,270

250,000

125,000

125,000

Total

$

2,400,000

$

2,400,000

6,486,486

6,000,000

3,000,000

3,000,000

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The numbers under the column “Shares” represents the number of shares of series A preferred stock or shares of common stock issuable upon conversion of the notes. By the terms of the notes, the notes automatically convert into shares of series A preferred stock and the three sets of warrants when the articles of incorporation are amended to create a class of preferred stock and a certificate of designation setting forth the rights, preferences, privileges and limitations of the holders of the series A preferred stock is filed with the Secretary of State of North Carolina. Common stock will only be issued to the extent that the notes are converted prior to the automatic conversion to preferred stock and warrants.

The notes provide for interest at 3% per annum. However, upon the conversion of the notes, the Company is to issues the stock and warrants based on the principal amount of the notes. There is no adjustment for the interest. Payment of the notes is subordinated to payment of senior indebtedness, which is defined as indebtedness and obligations to banks, insurance companies and other institutional lenders.

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The warrants have a term of five years, and expire on May 8, 2012. The warrants provide a cashless exercise feature; however, the holders of the warrants may not make a cashless exercise during the twelve months commencing on May 8, 2007 and thereafter only if the underlying shares are not covered by an effective registration statement.

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The warrants provide that the exercise price of the warrants may be reduced by up to 50% if the Company’s pre-tax income per share of common stock, on a fully-diluted basis, is less than $0.06647. Pre tax-income is defined as income before income taxes determined in accordance with generally United States generally accepted accounting principles (“GAAP”) plus (a) any charges relating to the transaction contemplated by the purchase agreement and the registration rights agreement, minus (b) the amount, if any, by which all non-recurring losses or expenses exceed all non-recurring items or income or gain . Pre-tax income shall not be adjusted if all non-recurring items of income or gain exceed all non-recurring losses or expenses. Items shall be deemed to be non-recurring only if they qualify as non-recurring pursuant to GAAP. For determining pre-tax income per share, all shares which are outstanding or which may be issuable upon exercise or conversion of options, warrants and other convertible securities are deemed to be outstanding, regardless of whether the shares would be counted for purposes of computing diluted earnings per shares under GAAP. An adjustment in the warrant exercise price does not affect the number of shares issuable upon exercise of the warrants. The following table sets forth the exercise price of the warrants if the Company’s pre-tax income is 20% below the threshold (a “20% shortfall”) and 50% or more below the threshold (a “50% shortfall”):

[sliverin]

The warrants also give the Company the right to call the warrants for $.01 per share if the trading price of the common stock is not less than the greater of (a) $1.38 or 200% of the exercise price for the $.69 warrants, (b) $1.38 or 172.5% of the exercise price for the $.80 warrants, and (c) $1.75 or 175% of the exercise price for the $1.00 warrants on each trading day in the 20 trading days ending on the date prior to the date on which the warrants are called for redemption provided that the trading volume on each day in the computation period is at least 200,000 shares.

[sliverin]

The note, the certificate of designation and the warrants provide that those securities may not be exercised or converted if such conversion or exercise would result in the holder and its affiliates having beneficial ownership of more than 4.9% of the Company’s outstanding common stock. Beneficial ownership is determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder. This limitation may not be waived .

[sliverin]

Upon the filing of both the restated certificate of incorporation and the certificate of designation, the notes are automatically converted into an aggregate of (i) 6,486,486 shares of the Company’s series A convertible preferred stock, which is convertible into one share of the Company’s common stock, subject to adjustment, and five-year common stock purchase warrants to purchase 6,000,000 shares of common stock at $.69 per share, 3,000,000 shares of common stock at $.80 per share and 3,000,000 shares of common stock at $1.00 per share.


·

The Company shall place in escrow 2,000,000 shares of common stock and Mr. Xiqun Yu, the Company chief executive officer and principal stockholder, shall place in escrow 2,000,000 shares of common stock. Upon the filing of the certificate of amendment and the certificate of designation, the Company will issue a certificate for 2,000,000 shares of series A preferred stock in exchange for the certificate for 2,000,000 shares of common stock, and the Company shall cancel the returned shares of common stock.


·

If the Company’s pre-tax income for 2007 is less than $0.06647 per share, on a fully-diluted basis, the percentage shortfall shall be determined by dividing the amount of the shortfall by the target number. If the percentage shortfall is equal to or greater than 33 1/3%, then the the 2,000,000 shares of series A preferred stock shall be delivered to the investors and the 2,000,000 shares of common stock placed in escrow by Mr. Yu shall be delivered to the Company, and the Company shall cancel such shares.

[sliverin]

If the percentage shortfall is less than 33 1/3%, the escrow agent shall:

§
(i) deliver to the investors such number of shares of series A preferred stock as is determined by multiplying the percentage shortfall by 2,000,000 shares, and (ii) deliver to the balance of the 2,000,000 shares of series A preferred stock to the Company, and the Company shall cancel such shares, and

§
(i) deliver to the Company such number of shares of common stock as is determined by multiplying the percentage shortfall by 2,000,000 shares, and the Company shall cancel such shares, and (d) deliver to Mr. Yu the balance of the 2,000,000 shares that were not transferred to the Company.

[sliverin]

Comparison of Three Months Ended March 31, 2007 and March 31, 2006

[sliverin]

Revenues increased by $1,738,824 or 129% in 2007 to $3,086,227 as compared to $1,347,403 in 2006, resulting in gross profit of $2,199,916 for 2007 as compared to gross profit of $853,652 in 2006. This was mainly attributable to the income generated from the training center, new programs, and advertising income. During 2006 and 2007, the Company has added several new programs for vocational studies and certification programs, which provides new source of income. Advertising income was increased as the result of the increased awareness of the Company’s website, which resulted in more viewers coming to the Company’s website, which enables the Company to increase its advertising income.

[sliverin]

Cost of sales increased by $392,560 to $886,311 in 2007 as compared to $493,751 in 2006. Cost of sales as a percentage of sales decreased by 8% to 29% for 2007 as compared to 37% for 2006. The overall increase was primarily due to the increase of sales, which results from an increase in the cost of booklets and simulation tests to increase.

[sliverin]

Gross profit margin increased by 8% for 2007 as compared to 2006. Gross profit margins vary from product to product depending on a number of factors including: (a) cost of materials; (b) overall market demand and individual customer demand; (c) cost of intellectual property rights; and (d) competitor pricing policies.

[sliverin]

Selling expenses increased by $661,415 or 743% to $750,438 from $89,023 in 2006 due to the increase in agency fees associated with increased sales and advertising.

[sliverin]

Administrative expenses increased by $128,068 or 433% to $157,663 in 2007 as compared to $29,595 in 2006. The increase is due primarily to an increase in salaries due to the overall growth of the business of the Company.

[sliverin]

ash and Cash Equivalents increased by 134% or $2,071,558 to $3,618,217 at March 31, 2007 as compared to $1,546,659 at march 31, 2006. The increase in cash and cash equivalents was mainly due to bank deposits fund generated from sales receipts during the period.

[sliverin]

The Company’s current ratio at December 31, 2006 was 2.09. Its primary sources of funds include cash balances, cash flow from operations, the proceeds of prepayments made by customers or offering of equity. The management endeavors to ensure that the funds are always available to take advantage of new investment opportunity and they are sufficient to meet future liquidity and capital needs. Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. For future operating, management plans to finance $6 million through equity financing in the international capital market.

There was no restrictive bank deposits pledged as of March 31, 2007. Therefore, the Company did not have to maintain any minimum balance in the relevant deposit account as security.

[sliverin]

Prepaid expense increased by $778,537 or 685% to $892,221 as of March 31, 2007 compared to $113,684 as of March 31, 2006. Prepaid expenses are primarily comprised of advance payments made for services to teachers for online materials and videos, prepaid rent expense, and prepaid advertising.

[sliverin]

Accounts payable increased by $265,667 or 1,204% to $287,727 as of March 31, 2007 as compared to $22,060 as of March 31, 2006 was mainly attributable to the increase operations during the year that resulted in an increase in accrued taxes payable.

[sliverin]

Advances by customers decreased by $328,679 or 62% to $204,599 as of March 31, 2007 as compared to $533,278 in 2006. The increase was attributable to the usage of the prepaid debit card system. Advances on accounts are deferred revenues prepaid by customers for the future download of materials thru company website.

[sliverin]

Notes payable recorded $1,530,000 as of March31, 2007 was attributable to the bridge loans that the Company entered into with third parties on September 29, 2006. The bridge loans were paid off subsequent to March 31, 2007.

[sliverin]

INDUSTRY AND MARKET OUTLOOK

The education resources distribution is uneven in different areas across China, most of the excellent teachers are in the developed areas and key middle schools. Among the 15,998 high schools in China, 847 of them are key schools, which account for 5.29. Most of the excellent teachers’ resources are in the key high schools, the ratio of college entrance of key high school is higher than 90%, but the national average ratio of college entrance is about 55%.

Most of high-quality resources of China elementary education often centralize in a few of key schools, and its amount and the scale are quite limited. Because the college entrance rate of key high schools is higher than that of the ordinary high schools, so, each student expects to enter the key high school where they can obtain the most excellent teaching resources. The students who have poor performance but want to enter into the key high school must pay additional “school selecting fees”. According to the Chinese Nanfang Daily, in China the school selecting fees was more than RMB 27 billion in 2005, which is over $3 billion. There are even about 20% students entering into high school through sponsorship and school selecting fee in China. Thus it can be noted that the China elementary and secondary education is in urgent need for high-quality education resources.

On the whole, the China online education market is still at the preliminary stage. In 2004, China online education market turnover reached RMB 14.4 billion, about $1.8 billion. As China becomes more information-oriented, while people become increasingly aware of the network’ function, the size of the online education market will increase dramatically. iResearch, a well-known market consulting firm, forecasts the China online market turnover in 2005, 2006, and 2007 will reach RMB 18.1 billion, RMB 23.3 billion, and RMB 29.6 billion respectively.

According to the China Network Information Center’s statistics as of December 31, 2005, the total number of internet users in China was 111 million, ranked second over the world, a increase of 17 million compared with the same period a year earlier or 18.1% higher. The students account for 35.7%, about 39.627 million (objects of exam-oriented education); company staff accounted for 29.70%, about 32.967 million (objects of profession education); the jobless accounted for 6.9%, about 7.657 million (objects of vocational education); the China online education market is of great potential.

18

[sliverin]

On May 31, 2007, China Education Alliance, Inc. (the “Company”), sold, for a purchase price of $1,000,000, its 3% convertible subordinated note in the principal amount of $1,000,000 to Barron Partners LP. The notes were sold pursuant to an amendment (the “Amendment”) dated as of May 23, 2007 to the previously reported securities purchase agreement (the “Purchase Agreement”) dated May 8, 2007. The Amendment was executed by the parties on May 31, 2007. The note is convertible into either:

[sliverin]

(a)

an aggregate of (i) 2,702,702 shares of the Company’s Series A Convertible Preferred Stock, (ii) Warrants to purchase 2,500,000 shares of Common Stock at $.69 per share, and (iii) Warrants to purchase 1,250,000 shares of Common Stock at $.80 per share, or

[sliverin]

(b)

an aggregate of (i) 2,702,702 shares of the Common Stock, (ii) Warrants to purchase 2,500,000 shares of Common Stock at $.69 per share and (iii) Warrants to purchase 1,250,000 shares of Common Stock at $.80 per share, or

[sliverin]

(c)

if the Company does not amend its articles of incorporation to authorize the issuance of preferred stock and file a certificate of designation setting forth the rights of the holders of the series A preferred stock, as required by the securities purchase agreement pursuant to which the notes were issued and the terms of the notes, 6,452,702 shares of common stock.

[sliverin]

The warrants also give the Company the right to call the warrants for $.01 per share if the trading price of the common stock is not less than the greater of (a) $1.38 or 200% of the exercise price for the $.69 warrants, or (b) $1.38 or 172.5% of the exercise price for the $.80 warrants on each trading day in the 20 trading days ending on the date prior to the date on which the warrants are called for redemption provided that the trading volume on each day in the computation period is at least 200,000 shares.

[sliverin]

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on July 26, 2007

[sliverin]

NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of China Education Alliance, Inc. will be held at the offices of the Corporation, 58 Heng Shan Road, Kun Lun Shopping Mall, Harbin, The People’s Republic of China 150090, on Thursday, July 26, 2007, at 9:00 A.M. local time. At the meeting, you will be asked to vote on:

[sliverin]

(1)

An amendment to our articles of incorporation

(2)

The transaction of such other and further business as may properly come before the meeting.

The board of directors has fixed the close of business on June 15, 2007 as the record date for the determination of stockholders entitled to notice of and to vote at the special meeting.

The enclosed proxy statement contains information pertaining to the matters to be voted on at the annual meeting. A copy of the Corporation’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006 and Quarterly Report on Form 10-QSB for the quarter ended March 31, 2007 are being mailed with this proxy statement.

[sliverin]

On June 16, 2007, China Education Alliance, Inc. (the “Company”), entered into a second amendment dated as of June 8, 2007, to its agreement dated May 8, 2007, as previously amended by an amendment dated as of May 23, 2007, among the Company, Barron Partners LP, and the other investors named therein, relating to the sale by the Company in May 2007 of its convertible notes in the aggregate principal amount of $3,400,000.

[sliverin]

The amendment:

•
reduced the number of shares of common stock issuable upon exercise of $1.00 warrants by 2,206,897 shares and reduced the exercise price to $.50 per share of warrants to purchase 2,206,897 which had formerly had an exercise price of $.80 per share.

•
reduced from 200,000 shares to 1,000 share the Target Volume, as defined in the warrants, which is required in order to permit the Company to redeem the warrants; and

•
clarified the method of adjustment in the event that the Company does not meet the required level of pre-tax income determined on a fully-diluted basis.

[sliverin]

Amendment (this “ Amendment ”) dated as of this 8 th day of June, 2007 to a certain Securities Purchase Agreement dated as of May 8, 2007 by and among China Education Alliance, Inc. , a North Carolina corporation, and Barron Partners LP, and other Investors, as amended by an amendment dated as of May 23, 2006, which agreement, as so amended, is referred to as the “ Agreement .”

[sliverin]

1. All terms defined in the Agreement and used in this Amendment shall have the same meaning in this Amendment as in the Agreement.

2. The Investors agree to reduce by 2,206,897 shares the number of shares of Common Stock issuable upon exercise of warrants with an exercise price of $1.00 per share (the “$1.00 Warrants”), in consideration for which the Company will reduce the exercise price to $.50 with respect to an equal number of shares issuable upon Warrants having an exercise price of $.80 per share ($.80 Warrants”). The $.80 Warrants with respect to which the exercise price is reduced to $.50 are referred to as the “$.50 Warrants.”

[sliverin]

3. Set forth in Exhibit A is a table setting forth the the current number of shares of Series A Preferred Stock and Warrants issuable upon conversion of the Notes and New Note (with the number of shares issuable to Barron with respect to its $1,000,000 New Note being corrected) and the number of shares of Series A Preferred Stock and Warrants issuable upon conversion of the Notes and New Note being adjusted to reflect the changes provided for in Section 2 of this Agreement.

4. Schedules A and B of the Notes and the New Note are hereby amended to reflect the adjustment set forth under “Adjusted Numbers” in Exhibit A to this Agreement. The number of shares of Common Stock issuable as provided in Schedule B is the same as the number of shares of Series A Preferred Stock. The number of shares of Common Stock issuable pursuant to Schedule C of each Investor’s Note is the sum of the numbers set forth in columns E through I with respect to such Investor.

[sliverin]

5. The $.50 Warrants will be identical to the $.80 Warrants except that the exercise price will be $.50.

6. All of the Warrants are hereby modified to change the definition of Target Volume , so that the definition of Target Volume is one thousand (1,000) shares.

[sliverin]

Msg: 2 of 773 8/9/2006 10:41:55 AM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
education in China

CEDA is selling in the $.33 range. With earnings projected to increase to $.05 to $.06 in 2006. This company has just entered into profitability with what should be continued strong growth as the China masses satisfy their education needs. They have 50%margins & a product that is needed & of high priorty for the Chinese family budget.

[sliverin]

Msg: 3 of 773 8/10/2006 10:37:00 AM Recs: 0 Sentiment: Not Disclosed
By: xxxmike Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 2 by pappytom
Re: education in China

pappytom:
Since you alerted me to this stock on the CHID board, I researched it and believe it may have great potential. Haven't bought any yet but plan to do so. Right now i'm trying to get a handle on buy/sell stats. I was going to set up a message board for it but found you had already done so. Thanks.

Also I'm curious as to the impact, if any, that the current typhoon hitting the east coast of china may have on both chid and ceda. Did some research but didn't find anything of value.

[sliverin]

Msg: 4 of 773 8/17/2006 12:25:40 PM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
earnings

Have not been released;;;Investors relations at three numbers I called are either not answering the phone or no longer represent the company.

If guidance is achieved I will be one happy camper. In the meantime I will wait & hope.

[sliverin]

Msg: 5 of 773 8/17/2006 3:03:15 PM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 4 by pappytom
Re: earnings

Finally got a e=mail reply saying earnings will be delayed. No details given.

[sliverin]

Msg: 6 of 773 8/18/2006 2:07:48 PM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 5 by pappytom
Re: earnings

Second quarter earnings were very positive. No guidance given but it now appears that my 2006 est. of $.06 up from 2005=$.03 should be the low end for 2006. I being the positive guy I am most of the time can now see eps=2006 of $.06 to $.08 as margins & revenue growth looks very positive barring entry of competion.

[sliverin]

Msg: 7 of 773 8/19/2006 3:08:19 PM Recs: 0 Sentiment: Not Disclosed
By: Sonydee Send PM Profile Ignore Recommend Add To Favorites
earnings

Earnings are impressive and so is the BS. On-line education here in US is facing stiff competition. What does CEDA's competition look like in China?

[sliverin]

Msg: 8 of 773 8/20/2006 2:16:12 PM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 7 by Sonydee
Re: earnings

Presently on-line education in China has more room to grow than competion. Presently they service only a fraction of China, thus the coming need for additional financing to expand throughout China.

The coming 6 million finacing will give this very small but high margin player the chance to be a much bigger player. So even though eps maybe hurt in the nearterm due to the dilutive effects of the 27% approx. increase in shares outstanding, I still think $.07 in 2006 is attainable while the longterm growth will be vastly improved. They have a strong & growing associate professors & schools that should give them a edge over competitors that are sure to want to share in this high margin bussiness. Unlike the U.S. however there is presently more room for growth & thus competition is less although a growing threat.

[sliverin]

Msg: 9 of 773 8/21/2006 9:43:39 PM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
E

ceda traded with a E today due too their late filling. However they have already filled so this created a buying opportunity as the E that was will be dropped tomorrow. jmo

[sliverin]

Msg: 10 of 773 8/26/2006 12:39:50 AM Recs: 0 Sentiment: Not Disclosed
By: Valuefinder99 Send PM Profile Ignore Recommend Add To Favorites
Where is the financing?

Pappytom, where did you get your info on the $6M financing? I cant seem to locate any PR that relates to that! Also, why the $6M financing when they are generating strong free cash flows from operations? I am looking to establish a position for the IRA account due to my belief in the future prospects of the company. The high margins are very sexy although 2nd quarter margins dropped from 89% to 57 or so % YOY (which is still high). I like the fact that they maintain a very small AR balance as compared to the dog(Which i own) IGII.
I also did some research today and forcast 7 cents by year end. But then again, my calculations didnt include the dilutive effects you stated in your prior posts.

BTW- What a short term house of pain GV turned out to be right? Losing my shirt right now on that one!!!

[sliverin]

Msg: 11 of 783 8/26/2006 10:51:24 AM Recs: 0 Sentiment: Not Disclosed
By: pappytom Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 10 by Valuefinder99
Re: Where is the financing?

Valuefinder,

In the Ceda [10QSB] They talk about raising $6 million in the international equity markets for product development & expanding into other China providences.
Remember presently they do most of their business in one providence.

I also have IGII in at $.185 & think it is undervalued based on earnings & growth rate but one has to dislike the slow rate of receivables that seem to force them into more dilution for their ambitious growth plan.

I was in GV@$.93 & took the money & ran for the exit when it tripled & never went back because of the condo market exposure prefering to rebuy HSOA in the $5.50 area.

[sliverin]

Msg: 12 of 783 8/26/2006 11:30:34 AM Recs: 0 Sentiment: Not Disclosed
By: Valuefinder99 Send PM Profile Ignore Recommend Add To Favorites
Posted as a reply to msg 11 by pappytom
Re: Where is the financing?

I just finished combing through the 10Q and found the $6M financing you were refering to. Thanks!! Do you have any insights on the number of outstanding shares relative to the float? Could it be that insiders are holding for the huge pay day in the future? In any case, i do plan on buying a little sometime next week and may average down if it falls lower.
BTW- I have a huge cost basis of $1.70 in GV. I hate day trading but feel i need to do it in order to reduce the GV basis. I dont plan on commiting any more fresh funds to that house of pain. Plan on selling half if it rallies to $1.40 and buy back when it retreats! What do you think?

[sliverin]

Re: Where is the financing?

As far as GV I think cutting your loss on such a rally as you speak of makes since, but buying backin with the present state of the Florida condo market doesn't. imo

As far as CEDA goes I will wait to see how the financing goes & if it is use as they say as it is already one of my larger positions.

good luck, pappytom

[sliverin]

$.42+$.07

Nice percentage move up this morning as someone hit the ask,,,however the bid is still $.36 & the volume is only 25,000 shares. Hard to accumulate a large position in this lightly traded stock. I increased my position as I averaged down but will hold for now as volume is somewhat lacking & the spread is wide.

However the fundamentals are much to my liking so im willing to hold this one longterm to see how the growth unfolds.

[sliverin]

Re: $.42+$.07

I plan on establishing a position for the IRA Friday when my funds become available via Scottrade.I still don't understand why the stock hasn't moved based on the high margins and healthy balance sheet the company carries.

[sliverin]

Re: $.42+$.07

It seems to me most of these China stocks are suffering not so much from selling as from lack of buyers at the present time.

Very few small caps have performed well of late but the bb china stocks like CEDA sometimes have very little to no buying interest.

[sliverin]

Re: $.42+$.07

In due time though, in due time. I deposited some funds today to reach the maximum allowed for the IRA only to find CEDA up 14%. I hope it retreats tomorrow so i can buy. Damn it

[sliverin]

entry point

pappytom
What do you think might be a good entry point on this? Still got my fingers crossed on ceda.

[sliverin]

Re: entry point

Mike, Sorry for the late reply

Been on a 2 week vacation; My thoughts on a present entry point $.36 is off about 2/3rd the yearly high which to me seems very overdone considering the growth rate & potential for more growth going forward. However things have been very quite since they announced the need to raise $6 million to further expand their business reach beyond the one provence they now serve so I am taking a wait & see before adding to my present holding. And if I wasn't already a shareholder I would probably also wait on some overdue pr from the company before buying presently.

[sliverin]

Re: entry point

Thanks

I appreciate your suggestion.

I'm still waiting for some information from chid. Its hard to tell what to expect.

[sliverin]

ceda

new info on ceda on message board

[sliverin]

Re: ceda

Did you mean chid, I see no new info on ceda.

[sliverin]

no news

To account for todays action that I can see. I don't know if it will hold as the volume is only moderate. $.37+$.06 19.35% with a gapup low of $.34.

I know they got a partial on that $6million loan they were seeking but other than that I have heard nothing since they reported excellant 2ndQ results in June last.

I do know CEDA has been drifting lower on light volume so todays pps has only retraced some of that lost ground.

[sliverin]

earnings

http://new.quote.com/stocks/sec.action?sym=CEDA

[sliverin]

end of day

They took it down $.03 to $.40 on 100 shares. Todays trading totaled 700 shares. I think the stock is in strong hands & I don't intend to sell any as the last two quarterly reports have been excellent.

The point is we need more volume so as to narrower the spread which has been about 10% & deters buyers from entering the stock.

[sliverin]

Re: end of day

Charts are telling me to wait. I'm looking to enter near $.30. Definitely a winner in the making.

[sliverin]

Re: end of day

Hello fan37,

Its great that im not just talking to myself. Although my average pps here is around $.40 im very bullish on this one. Stranger things have happen but I don't see CEDA revisiting $.30 unless a pp is done at a lower price to raise that $6 million to expand their network.
However without volume one never knows what the market makers intent is. I do know the spread is too wide to accomodate buying in any quantity. This is one of the view that im taking a longer term view on as my impression of managements ability is close to a 10.

[sliverin]

Re: end of day

So what you are saying is that, although they have dilution plans, they won't sell the stock cheap, and it will take a while to move, so you don't see it really dropping the share price?

[sliverin]

Re: end of day

I think if it wasn't for the wait & see on the $6 million financing the pps would be much higher presently as the last two quarters have been outstanding.

[sliverin]

Re: end of day

Gotcha. The more I read, the more I like. I bought some at $.43.

[sliverin]

website

http://www.chinaeducational.com/

[sliverin]

Re:2005 results & 2006 guidance

http:www.chinaeducational.com/page_view.php?page_id=36

[sliverin]

Slow and steady

the volume on this little guy is definitely low. however, there definitely seems to be no urgency to sell, and the price is chugging along. Dropped a penny today, pick up two tomorrow. I would like to see this move into the $.50s and build a strong foundation.

[sliverin]

Re: Slow and steady

I would also like to see this move in the $.50s but without volume the pps im afraid will remain erratic for the time being. The overriding theme here is that they continue to grow with the high margins that they now have.
Of all the China plays I have mentioned CEDA & UTVG are my picks for having the best chance of becoming the next AOB look alike. I'm sure that education & travel in China hold at least as much promise for future growth as the area AOB serves. As far as management goes I like the course both companies have taken so far, If only they had the cash & balance sheet of a AOB they could really show some growth. AOB used a pp to attain their growth & at some point CEDA will need to do a pp. UTVG for its part will use franchising as a way to growth with 20 outlets scheduled to be added. I believe they mentioned they presently have 80 outlets with half company owned + working relationships being added with other companies that have a mutual interest of travel in the three fast growth areas UTVG serves. One + I have found about CEDA management is that they have been able to exceed guidance so far while using cashflow to fund growth.

[sliverin]

Re: Slow and steady

I read a few articles and they suggested that the tuition income was growing very fast. I read another, unrelated article about the internet in China, which said that about 12% of Chinese homes have internet, whereas over 70% of Americans have internet. Therefore, I can only see this business growing faster and faster in the future.

What I don't understand about growth companies diluting is this: Do they dilute because of impatience, or because there is a demand that they cannot meet without cash flow, or because they cannot get a loan?

[sliverin]

Re: Slow and steady

" Do they dilute because of impatience,or because there is a demand that they cannot meet without cash flow, or because they cannot get a loan?"

As for CEDA they have plenty of cashflow to grow in the one province they now serve. However they will need to do a pp to expand their reach into other areas of China. Cashflow alone is not enough to do both & competition dictates that they not wait to long. So the need to expand soon to take advantage of the leadership role they have already established in the areas they serve is present. Im thinking they would like to do the pp close to $.50, I got this impression by reading the terms of the bridge bank loan they just did to compliment cashflow. Chinas banking system is corrupt & thus the need to raise working capitol thru equity financing in the good ole US ofA for most of their needed funds.

[sliverin]

Re: Slow and steady

So, in other words, there is a market to capitalize on, but they need $$$ to do it, so they do a PP. It hurts the PPS in the near term, but in the long road longs make out because the company gets so much larger. They could save their cash flow to pay for it, but by the time they did that, someone else has already capitalized on that market. Do I have that right?

If this is the case, then why are investors so against dilution? I can see why they would be against it if they don't know what it is for or where the money is going, but if it leads to further gains down the road...

[sliverin]

Re: Slow and steady

"Do I have that right?" YES

Most investors are not against raising money to expand. However a lot of China companies. > HQSM < as a example >do not raise money for growth at terms that are favorible to the bottom line thus diluting eps. Sometimes this works out in the longterm. However as was also the case with AOB earlier this year when they did a pp without a immediate use for those funds the eps suffered.

[sliverin]

Re: Slow and steady

Thanks for clarifying.

When AOB diluted, there was nearly a year where the stock was fairly stagnant before earnings caught up with dilution. This was a great opportunity to swing trade and accumulate shares, as you have talked about in the past.

When I swing trade, I have gotten to be fairly good at measuring my entry point. However, judging when to sell without having the stock continue upward has been difficult for me. Do you have a particular indicator you watch to determine when a stock is going to turn around? A lot of times when a stock is in an uptrend, I have noticed that you are pretty right on your call with consolidation...how do you know when the stock is going to drop down and rest before moving up again?

[sliverin]

Re: Slow and steady

If you swingtrade & have mastered the art of measuring a entry point with a high degree of success you will win eneough battles to come out ahead.

As far as when to sell? That's harder & I don't always follow my own advice.

I don't buy a stock unless its at a pps that I feel will double my money. I watch how management is growing the business & will settle for 50% if I think their slackers or even sell for a loss if they turn out to be looney tunes like CHID management. If management outperforms sell only half when it doubles & let the free shares ride while finding a new home with the investment funds you cashed in & not too big a hurry unless you've spotted a good buy ahead of time. Everyone has their own investment makeup but common sense is one's biggest weapon in being successful. It really is about buying low & selling high & saving the love part for the one's that are dear in your life. I love trading stocks but try not to love any stock regardless of how great it seems.

[sliverin]

Re: Slow and steady

Thanks Pappy. that helps quite a bit.

What I want to accomplish is accumulation of more shares of these stocks, CEDA and CPHI, as they move higher.
At some point there will no doubt be some dilution that will stop the uptrend and settle into a regular trading range. I suppose that is the easiest time to do it.

[sliverin]

Reversal

I am looking for a reversal of this downtrend in the next couple of days. I wish I had more powder to throw at CEDA...IMHO, it is a real bargain at under $.40.

I was tempted to sell half at $.46 and swing down, but I am still pretty new to swing trading and I wanted to confirm its action. The last thing I want to do is sell and have to jump back in higher later. I have learned that lesson.

[sliverin]

Re: Reversal

I agree that trying to swingtrade CEDA with the light volume that is now occuring may well find you reentering at a higher pps later.

OMO CEDA is presently a sleeper as the outstanding financial results have not been noticed by the investment public. But as this outstanding growth continues the pps will move higher as trading volume is bound to move the stock higher if this kinda growth is maintained. It would be nice to get the planned pp behind us. As that should really maintain the longterm growth rate on this "high margin" company. "Sound familiar" AOB had very low volume & "high margins" when I fiest found it on the bb not unlike CEDA. Even the balance sheet of CEDA is simular to AOBO in those earlier days. Think longerterm accumlulation presently by buying the dips as their will be plenty of time to trade the swings once volume picks up. For now I will practice patience with CEDA.

[sliverin]

Re: Reversal

I agree that swinging is likely to be difficult right now, except for the fact that I don't have tons of shares.

Mostly I am trying to get a real feel for judging the market action, and build confidence in my short term analysis. Hey, I did okay. I said I thought it was going back up here and it did. Looks like I might be on to something, huh?

I feel good.

[sliverin]

CEDA is selling at about 7x 2006 projected eps. For a company with the growth & prospects for continued fast growth & with margins of 50% it deserves a p/e ratio at least half its growth rate. And if they ever get around to raising that $6 million to expand thruout China I can see a stock worth 30x eps in the future. Since I have owned CEDA right after the drop from over $1 down to under $.50 per share I have seen 2 quarters that have beaten a very highly projected guidance & now it is still under $.50 per share while it now is the dominent player in the province they serve. The balance sheet is much improved & cashflow is sufficent to continue present growth & once yearend results of $.06 or $.07 over double last years eps get posted I can see volume returning to propel CEDA to a pps =20x eps a I feel once the $6 million pp takes effect a 50 % revenue growth can be maintained for many years to come. Sure their will be competition but CEDA has establish a good relationship with some scholared tutors & a good reputation for high standards that it intends to continue. Presently in China education needs far outweigh the competitive pressures & companies like CEDA that give quality eduction to those trying to improve their living standards will continue to find plenty of students ready to enroll in their courses. The average China family budgets education as one of the top three priorities of need. Patience here is all that I see being needed to have a successful investment as long as they continue to deliver as they have been doing. If one checks how the balance sheet has been improving at a very fast pace thruout this year one can invision a future cash cow in the making. Cashflow is very much related to margins & not many companies in any industry sport margins of even half CEDA's 50%.

[sliverin]

Re: All we need is volume

Ask and you shall receive !

[sliverin]

Re: All we need is volume

Very nice volume for this stock, and a quick pop at $.50.

[sliverin]

Re: All we need is volume

I wonder if this is insider buying. I stated earlier that I believed they would like to do the pp around $.50 to raise the $6 million needed to expand. I maybe way off but the sudden burst of volume is very welcome for whatever the reason or reasons.

[sliverin]

Re: All we need is volume

If they are planning to dilute at $.50, why would there be insider buying? Won't dilution lower the PPS?

[sliverin]

Re: All we need is volume

If I am right they could be supporting the pps in order to do the pp at that price. Remember insiders hold a large portion of the shares & would like the pp to be done at the best price available.

This may not be the reason for todays sudden show of volume but it is a thought that crossed my mind. I'm sure management would like to raise the $6 needed to expand soon as the opportunity to grow is only awaiting the necessary funds. Dilution to eps would only occur in the very shorterm,,, remember their business has very high margins. With 50% margins the faster they can grow revenue the better the bottom line will also look. Sure about 12 million more shares will be outstanding but the prospect of having continued high margin revenue growth makes it worthwhile. Over time if margins can be maintained were talking about a cashcow not unlike AOB.

[sliverin]

Re: All we need is volume

Pappy - you didn't go and buy another 100K shares, did you ?

[sliverin]

have plenty of CEDA already. By the way have you looked at LWLL a low priced profitable company that is forecasting triple digit growth over the next two years on only 30% dilution. Insiders made a large purchase at $.24. They just entered the import export business & have plans to boost organic growth to 50% up from 30% so you see they plan to consolidate the disinfectant industry in China to achieve triple digit growth. PR told me they feel this can be done with a minimal 30% dilution. Today it is moving up on strong volume. I established a strong position @$.24 last week.

[sliverin]

Re: beyond black

Pappy - I looked at it when you 1st mentioned it and established a nice position at .24 as well.

As always thanks !

These Chinese stocks have unbelieveable potential !

Can't wait for the HSOA breakout !!!

Looking at anything else interesing these days ?

Hope all is well with you personally !

[sliverin]

Sold @ $.49

I sold my position today@ $.49. I am still big on this stock but I fear dilution will pull it back to the $.30-$.40 range. Therefore, I sold and will be looking to re-enter at around $.40. I made a decent little profit from my entry @ $.43.

[sliverin]

Re: Sold @ $.49

Tou sold one of my favorite stocks? Well you made a profit so all is forgiven now you got money to buy LWLL on the dip. lolo

[sliverin]

Re: Sold @ $.49

I bought NWD. Gonna take it for a little ride up over $2.00, the re-evaluate.

[sliverin]

link

http://www.chinaeducational.com/page_view.php?page_id=43

[sliverin]

1 year chart

The upward movement since the November lows has been very impressive although I would like to see a bit more volume. Volume does seem to be increasing,however. I'm thinking any good news or another impressive quarter simular to 2nd & 3rd Q will be needed to again challenge the $1 mark made earlier in the year.

[sliverin]

New Acquisition

Any thoughts on this new acquisition?? Hard to discern anything from the PR. But thye do have the cash available and they need to grow, so this is good?? Looks like they paid $1MM for $1MM in annual revenue (I can't imagine they mean profit) plus all of the RE and other assets. Margins should be pretty high, so I'm sure payback would be within a couple years. But they need to grow, grow, grow...

[sliverin]

Re: New Acquisition

CEDA's total revenue in 2006 will probably be $8mm or less so yes adding $1mm with the chance to solidify their position as the leader in vocational training in the areas they serve is a bigger acquisition than most would think.
Remember also CEDA sports around 50% margins. So any revenue gains adds to the bottom line results in a hurry.

[sliverin]

Re: New Acquisition

I would agree with your comments. I think this is another great growth area for China. As hard as the Chinese work, they also understand that to get ahead you need education. As their lower class continues to strengthen, I think this is a great option for their people. On-line education supported by class-room instruction where available.

[sliverin]

more news

http://biz.yahoo.com/prnews/070108/cnm024.html?.v=1

[sliverin]

Re: more news

Very positive news out today. I expect we will have a delayed reaction to this event when some folks start running the numbers on how this massive job placement will effect the bottom line of their vocational training centers.

[sliverin]

Re: more news

Think you just have to be patient here until the Chinese sector starts to climb again, get additional news, or earnings come out.

[sliverin]

Re: more news

Pappytom:
I'm still watching ceda and thinking of buying. Any idea on a good entry price? I've been somewhat gunshy about Chinese penny stocks because of chid so have't bought ceda yet.

Ceda might be an interesting stock now with management changes but not till after the next earning report to see how they are faring since the buyout or whatever fell through.

[sliverin]

Re: more news

HiMike,

CEDA's support is presently $.65 if it is able to remain above $.60 it is a buy presently.imo However if it does break below $.60 it could very well test the $.46 to $.50 range again. The very light volume hinders having confidence in forecasting a entry point but the fundamentals do remain strong.

One possible reason for the weakness is that they changed to a new auditor. Nothing negative was mentioned about the previous audited results. The new auditor is out of Oklahoma so they are upgrading to a U.S auditor which should give more credence to their future results. Remember they still plan to raise $6mm in the U.S. to expand their present reach. The two may or may not be connected.

[sliverin]

Re: more news

Pappytom:
Thanks for the info I find your comment useful. I need to go review the sec reports. I am particularly interested in the planned $6 million they plan to raise and see if I can figure out how this might affect the stock the stock price. This does look like a worthwhile investment. I just need to figure out the entry point.

[sliverin]

bought

Finally took the plung and bought 3000 shares @ $.63. May buy more later on.

[sliverin]

Re: bought

Welcome aboard mike, we maybe the only poster presently as this gem is still undiscovered otherwise it would be selling at a p/e much higher than sub10x.

[sliverin]

Re: bought

Hello again, Pappy.

What do you think will finally spark some interest in this one to bring its value up to par?

Thanks for the UTVG tip (from the PRZ board...still sitting on that turkey for now, hoping for a marginal pop on the sales news). Made a quick 60% on that one. Will go back in again if it does one of it's swoons again.

Also still with NMKT, hoping for good things.

Only dabbling in these (1,000 to 1,500 shares) with some "mad" money but always
appreciate your posts.

Best of luck to you in 2007.

[sliverin]

Re: bought

4thQ NUMBERS should spark some interest. Every quarter this year has outdone the Q before & I expect about $.07 eps to be reported for 2006. I reasonably expect CEDA to reach minimal fare value of 15x eps at that time!

good luck to you also, I'm not sure UTVG will redrop again below $.80 as I expect 2006 eps to come in at $.10-$.11 per share with margin even better than CEDA's outstanding better than 50% margins. As for NMKT I will feel like a genius in expecting a higher pps once they deliver a dividend or two.

While your around these parts take a look at= LWLL CHCG IBIN HSOA CKGT CHNG some have reasons for being undervalued but there seems to be no denying that they are all big revenue growers that are cheap.

[sliverin]

Re: bought

I bought back in as well, @ $.63. Let's see $1.

[sliverin]

I've been buying for the last few days

I bought CEDA, UTVG, added a lot of CHCG last week (very happy about that!).

Pappy what do you think about CPHI at this price?

Your messages are wonderful! You are wise and very kind man. The best of humanity is shining through your posts.