UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10-Q

_____________________

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

For the quarterly period ended June 30, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

Chaolei Marketing and Finance Company

(Exact name of registrant as specified in the Charter)

Florida		000-50214		65-0968839
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

511 NE 94th Street, Building 2, Miami Shores, Florida 33138

(Address of Principal Executive Offices)

(305) 759-2444

(Issuer Telephone number)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

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

Large accelerated filer	o	Accelerated filer	o

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

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of August 18, 2009: 59,999,756 shares of common stock.

CHAOLEI MARKETING AND FINANCE COMPANY

FORM 10-Q

June 30, 2009

TABLE OF CONTENTS

PART I— FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4T.	Controls and Procedures

PART II— OTHER INFORMATION

Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits	13

SIGNATURES

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

CHAOLEI MARKETING AND FINANCE COMPANY

BALANCE SHEETS

ASSETS
	June 30,			December 31,
	2009			2008
	(Unaudited)			(Audited)
CURRENT ASSETS
Cash	$	1,433		$	14,567
Accounts receivable		-			14,308
Total current assets		1,433			28,875

Intangible asset		53,794			53,794

TOTAL ASSETS	$	55,227		$	82,669

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	24,370		$	12,000
Total current liabilities		24,370			12,000

Advances-Related Party		29,985			-

TOTAL LIABILITIES	$	54,355		$	12,000

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS’ EQUITY

Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding	$	-		$	-
Common stock, $0.001 par value, 100,000,000 shares authorized, 59,999,756 shares issued and outstanding, as of June 30, 2009 and December 31, 2008		60,000			60,000
Additional paid in capital		114,416			114,416
Accumulated deficit		(173,544	)		(103,747	)
Total Stockholders’ Equity		872			70,669

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	55,227		$	82,669

The accompanying notes are an integral part of these financial statements.

CHAOLEI MARKETING AND FINANCE COMPANY

STATEMENTS OF OPERATIONS


	For The Three Months Ended June 30,					For The Six Months Ended June 30,
	2009			2008		2009			2008

REVENUE	$	-		$	67,421	$	15,677		$	137,175


OPERATING EXPENSES
General and administrative		12,367			15,113		29,967			30,321
Professional fees		29,241			29,052		55,507			60,880
Total operating expenses		41,607			44,165		85,474			91,201

Other income (expense):
Interest income		-			28		-			31
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		(41,607	)		23,284		(69,797	)		46,005

Provision for income taxes		-			-		-			-

NET INCOME (LOSS)	$	(41,607	)	$	23,284	$	(69,797	)	$	46,005

Net loss per share - basic and diluted	$	(0.00	)	$	0.00	$	(0.00	)	$	0.00

Weighted average number of shares outstanding during the period - basic and diluted		59,999,756			59,966,648		59,999,756			59,966,648

The accompanying notes are an integral part of these financial statements.

CHAOLEI MARKETING AND FINANCE COMPANY

STATEMENTS OF CASH FLOWS


	For The Six Months Ended June 30,
	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(69,797	)	$	46,005
Adjustments to reconcile net income (loss) to net cash provided in operating activities:
Change in assets and liabilities
Decrease (increase) accounts receivable		14,308			180
Increase (decrease) accounts payable and accrued expenses		12,370			2,100
Net cash provided by operating activities		(43,119	)		48,285

CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution related parties		29,985			-
Net cash used in financing activities		-			-

NET (DECREASE) IN CASH		(13,134	)		48,285

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		14,567			64,952

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,433		$	113,237

Supplemental disclosure of non cash investing & financing activities:
Cash paid for income taxes	$	-		$	-
Cash paid for interest expense	$	-		$	-
Common stock issued for services	$	-		$	-
Non-cash capital contributions from related parties	$	-		$	-

The accompanying notes are an integral part of these financial statements.

CHAOLEI MARKETING AND FINANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

June 30, 2009

NOTE 1 – ORGANIZATION

Organization

Chaolei Marketing and Finance Company (the Company) was established to act as a sales, marketing and finance agent of Sichuan Chaolei Industry Stock Co, Ltd. (CICO), a company organized in the People’s Republic of China that mines silicon, produces poly- and mono- crystalline silicon ingots and wafers for use in photovoltaic cells and computer chips. Additionally, CICO owns a subsidiary company that produces pipes for hydroelectric projects.

Biotex Holdings, Inc. (previously Capital Ventures Group I, Inc.) was incorporated on December 17, 1999 under the laws of the State of Florida to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

The financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company has incurred operating losses since its inception. This condition raises substantial doubt as to the Company’s ability to continue as a going concern.

As reflected in the accompanying financial statements, the Company has a net loss of $17,942 for the six months ended June 30, 2009, and accumulated net losses of $121,689. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company believes in the viability of its strategy to improve sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, generate revenue, and secure additional financing. The Company believes it is taking actions to further implement its business plan and generate revenue, including additional financing which the Company is currently pursuing, but the Company will not be able to continue as a going concern in the absence of obtaining sufficient funding. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Interim reporting

The accompanying interim unaudited financial information has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company as of June 30, 2009 and the related operating results and cash flows for the interim period presented have been made. The results of operations of such interim period are not necessarily indicative of the results of the full year. This financial information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

CHAOLEI MARKETING AND FINANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

June 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Estimates that are critical to the accompanying financial statements arise from the determination of the fair value of the Company’s investment. Because such determination involves subjective judgment, it is at least reasonably possible that the Company’s estimates could change in the near term with respect to this matter.

Revenue Recognition

The Company derives its revenue from the sale of mined silicon, and poly- and mono-crystaline silicon ingots and wafers. The Company presents revenue in accordance with Staff Accounting Bulletin (SAB) No. 104 “Revenue Recognition in Financial Statements”. Under SAB 104, revenue is realized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured.

Accounts Receivable

The Company is required to estimate the collectability of its accounts receivable. The Company's reserve for doubtful accounts is estimated by management based on a review of historic losses and the age of existing receivables from specific customers. The Company considers all accounts receivable collectible as of June 30, 2009 and, therefore, no reserve has been recorded.

Concentration of Credit Risk

During the three and six months ended June 30, 2009 and 2008 one customer accounted for 100% of the Company's sales.

Income Taxes

The Company accounts for income taxes under Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes (SFAS No. 109). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Due to the net loss incurred in all periods, there is no provision for income taxes provided as a full valuation allowance has been established.

Net Loss Per Share

Basic and diluted net losses per common share are presented in accordance with SFAS No.128, Earning Per Share (SFAS No. 128), for all periods presented.

CHAOLEI MARKETING AND FINANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

June 30, 2009

Stock-Based Compensation

In December 2004, Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment, (SFAS No. 123(R)) which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). SFAS No. 123(R) supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, (APB No. 25). SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Additionally, SFAS No. 123(R) amends the presentation of the statement of cash flows and requires additional annual disclosures. SFAS No. 123(R) is effective for public companies beginning with the first interim period that begins after June 15, 2005. In April 2005, the Securities and Exchange Commission adopted a new rule that postponed the effective date for SFAS No. 123(R) to the fiscal year beginning after June 15, 2005. The Company has adopted SFAS No. 123(R) on January 1, 2006, but as the Company does not have an option plan, there will be no effect upon implementation.

Goodwill and Indefinite-Lived Intangible Assets

In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with SFAS No. 142.

If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. SFAS No. 142 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value. The Company currently carries $53,794 as an intangible asset associated with the acquisition of the sales and marketing agreement with CICO. The Company does not believe any impairment of this asset has occurred as of June 30, 2009 and, therefore, has recorded no loss from impairment in its Statement of Operations.

Long-Lived Assets

The Company's accounting policy regarding the assessment of the recoverability of the carrying value of long-lived assets, including property and equipment and purchased intangible assets with finite lives, is to review the carrying value of the assets, annually, during the fourth quarter, or whenever events or changes in circumstances indicate that they may be impaired. If this review indicates that the carrying value will not be recoverable, as determined based on the projected undiscounted future cash flows, the carrying value is reduced to its estimated fair value.

CHAOLEI MARKETING AND FINANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

June 30, 2009

NOTE 4 – AGREEMENTS

On December 1, 2007, the Company entered into a 6 month employment agreement with its Assistant Secretary. The Company is obligated to pay to our Assistant Secretary $5,000 on the 15th of every month beginning December 15, 2007 and ending May 15, 2008. On April 12, 2008, the Company entered in to a 6 month employment agreement with its Assistant Secretary. The Company is obligated to pay to our Assistant Secretary $5,000 on the 15th of every month beginning June 1, 2008 and ending December 31, 2008. On December 9, 2008, the agreement was extended until March 31, 2009.

On December 1, 2007 the Company entered into a 12 month Consulting Agreement with a consulting company to provide regulatory compliance, business development and other ancillary business services. The Company is obligated to pay the Consultant $5,000 per month, beginning December 1, 2007 and ending November 30, 2008. On December 9, 2008, the agreement was extended until March31, 2009.

NOTE 5 – NOTES PAYABLE

On November 14, 2007, the Company borrowed $1,000 from a related party. The note was unsecured, bears interest at 10% and was due December 31, 2007. The note and accrued interest was fully repaid as of December 31, 2007.

NOTE 6 – EQUITY

In January 2006 the Company issued 816,104 shares of common stock valued at $2,400 to its President in accordance with his employment agreement.

In March 2007 the Company issued 680,087 shares of common stock valued at $2,000 for services

During 2007, related parties paid $26,760 of bills on behalf of the Company and contributed $75,000 in working capital. The Company recorded the transactions as capital contributions in the amount of $101,760.

On October 22, 2007, pursuant to a Sales and Marketing Agreement, (the ”SMA”) by and between the Company and Sichuan Chaolei Industry Stock Co., Ltd. a company organized under the laws of China (“CICO”), the Company purchased the right to act as CICO’s exclusive worldwide sales, marketing and finance agent for 56,794,042 shares of common stock, of which 53,794,042 were distributed to the CICO shareholders on a 1 for 1 basis, and 3,000,000 were distributed as consulting fees to an independent consultant of CICO’s . These shares were valued at $3,000. Pursuant to the SMA, the Company will receive 10% of all worldwide sales of CICO from the beginning of time and ending on October 22, 2057. As a result, the Company began operations as a sales and marketing agent, and is no longer a public shell corporation.

Reverse Stock Split

On October 19, 2007, the Company's stockholders approved a 1 for 2.9408 reverse stock split for its common stock. As a result, stockholders of record at the close of business on October 19, 2007, received one shares of common stock for every ten shares held. Common stock, additional paid-in capital and share and per share data for prior periods have been restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

NOTE 7 – SUBSEQUENT EVENT

Resignation of Officer

Effective August 5, 2009, Mr. Bruce S. Trulio resigned as the Assistant Secretary of our company. There were no disagreements between Mr. Trulio and us or any officer or director of the Company.

Appointment of Officer

Effective August 5, 2009, the directors appointed Mr. Stuart Cooper as assistant secretary, registered agent and a member of our Board of Directors.

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

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

BUSINESS OVERVIEW

We were incorporated on December 17, 1999 under the laws of the State of Florida to engage in any lawful corporate undertaking. In June, 2005 pursuant to a Stock Purchase Agreement and Share Exchange between the Company and BioTex Corp. (“Corp”), a Florida corporation, whereby the Company purchased all of the outstanding shares of Corp. and Corp. became a wholly owned subsidiary of the Company. BioTex Corp was established in 2003 to develop and employ technologies from around the world to process biomass (plant derived) waste, extract the usable fractions, and then utilize or sell those extractions in further downstream processes.

On December 30, 2005, pursuant to a Stock Purchase Agreement and Share Exchange by and among the Company, Corp and BTX Holdings, Inc., a Florida corporation (“BTX”), BTX purchased all of the outstanding shares of Corp. Pursuant to the Agreement, the Company transferred all of the outstanding shares of Corp. to BTX and Corp. became a wholly owned subsidiary of BTX. Since the Company had no other assets than Corp. and all of the shares of Corp. were transferred to BTX, the Company became a shell company as defined in Rule 12b-2 of the Exchange Act.

On October 22, 2007, we entered into an Agreement with Sichuan Chaolei Stock Industry Co., Ltd, (“CICO”) a company located in Chengdu, Sichuan Province, People’s Republic of China. Pursuant to the agreement, we acquired a Sales and Marketing Agreement from CICO for 53,793,990 shares of our common stock which provided for us to become the exclusive sales and marketing agent for CICO. The acquisition was approved by the unanimous consent of our Board of Directors on October 22, 2007. Pursuant to the Agreement, we filed an amendment in the State of Florida changing the name of the company to Chaolei Marketing and Finance Company. Pursuant to the Sales and Marketing Agreement, we will receive a commission of 10% of CICO’s worldwide revenues from all sources. While we have signed supply contracts with two potential major customers during the fourth Quarter of 2007, sales of silicon products were substantial impacted by events described below.

During the second quarter of 2008, a major earthquake struck Sichuan Province, China. The effects of this earthquake are still being felt. Our main supplier, Sichauan Chaolei Industry Stock Co., Ltd. is located in Sichuan province. As a result of the earthquake, CICO was forced to halt its mining operations temporarily, which has temporarily interrupted our revenues. While the mines of CICO were not to our knowledge directly impacted our supplier has faced substantial infrastructure and labor issues as a result of this event and its aftermath. We earned limited revenues during the first quarter of 2009 and have had no revenues for the three month period ending June 30, 2009 and expect that conditions to remain the same for the current quarter but thereafter slowly improve. Full operations for CICO are anticipated to resume during 2010.

RESULTS OF OPERATIONS

Results of Operations for the Three months Ended June 30, 2009 Compared to the Three months Ended June 30, 2008

The following table presents a summary of the statement of operations for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008. The discussion following the table is based on these results.

	For The Three months Ended June 30,
	2009		2008

REVENUE	$	29,985	$	67,421

Total operating expenses		19,737		44,165

NET (LOSS) INCOME	$	10,248	$	23,284

Total Revenue

We had $29,985 revenue for the three months ended June 30, 2009 and $67,421 for the three months ended June 30, 2008. This decrease is attributable to the temporary suspension of mining operations by our supplier.

Operating Expenses

Operating expenses for the three months ended June 30, 2009 decreased to $19,737 from $44,165 for the three months ended June 30, 2008 representing a decrease of $24,428. The decrease is attributable to suspension of our marketing efforts and reduction of officer compensation. The operating expenses for the three month period ending June 30, 2009 included professional fees and costs associated with our recent registration statement and other regulatory compliance issues.

Net income (loss)

Net loss was $10,248 for the three months ended June 30, 2009, compared to net income $23,284 for the same period ended June 30, 2008, a net decrease in income of $13,036. Our net losses versus net income for the comparable period are a direct result of the interruption of the mining business of our supplier as a result of the 2008 Sichuan earthquake.

Results of Operations for the Six months Ended June 30, 2009 Compared to the Six months Ended June 30, 2008

The following table presents the statement of operations for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008. The discussion following the table is based on these results.


	For The Six Months Ended June 30,
	2009			2008

REVENUE	$	45,662		$	137,175

Total operating expenses		63,604			91,201

NET (LOSS) INCOME	$	(17,942	)	$	46,005

Total Revenue

We had revenue of $45,662 for the six months ended June 30, 2009 and $137,175 for the six months ended June 30, 2008. This decrease is attributable to a suspension of mining operations of our supplier as a result of a magnitude eight earthquake in May of 2008 which directly impacted the Sichuan province of China.

Operating Expenses

Operating expenses for the six months ended June 30, 2009 decreased to $63,604 from $91,201 for the six months ended June 30, 2008 representing a decrease of $27,597. The decrease is attributable to a reduction in marketing related expenses. The most significant element of our operating expenses for the six months ended June 30, 2009 are professional fees and administrative costs associated with regulatory compliance.

Net income (loss)

Net loss was $(17,942) for the six months ended June 30, 2009, compared to net income $46,005 for the same period ended June 30, 2008, representing a decrease of $28,063. Our income decreased due primarily to the reduction of revenue due to the inability of our supplier to provide mined products as a result of the 2008 Sichuan earthquake and expenses associated with our recent registration statement.

Liquidity and Capital Resources

As of June 30, 2009, we have assets of $55,227 consisting of $1,433 in cash and intangible assets of $53,794 and total liabilities of $2,500 consisting of accounts payable of $2,500 compared with December 31, 2008 when we had assets of $82,669 consisting of cash of $14,567 accounts receivable of $14,308 and intangible assets of $53,794 and total liabilities of $12,000 consisting of accrued expenses of $12,000.

We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our business plan is subject to attaining adequate revenue base which is temporarily impacted by reconstruction projects in the Sichuan province of China. We cannot assure investors that additional financing will be available or that sufficient mining operations can safely resume with our supplier or will not be further interrupted by new significant seismic events. In the absence of additional financing, we may be unable to proceed with our plan of operations.

We intend to hire additional employees for sales, administrative and finance support staff as necessary, though we have no time frame in which we expect to hire such staff. Additional sales staff, when required, will be hired on a commission basis, and administrative and finance support staff will only be hired when revenues are such that the company can support such a staff. Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our goal of profit, revenue and growth. For the six months ending June 30, 2009 we have relied on short-term borrowings and advances from our supplier (a related party) and collection of accounts receivable. We currently have $0 in accounts receivable and can not assure investors our supplier will continue to fund operations beyond this fiscal year.

We anticipate that our general and administrative expenses for the next 12 months will total $125,000. The breakdown is as follows:


General and Administrative
Legal and Accounting	$	65,000
Salaries and Wages		22,000
Consulting Fees		15,000
Travel		12,000
Fees and Registration costs		8,000
Taxes and Licenses		1,500
Office Expenses		1,500
TOTAL	$	125,000

The foregoing table represents our best estimate of our cash needs based on current planning, anticipated expenses and costs and relevant business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

Our significant accounting policies are summarized in Note 2 of our financial statements included in our annual report on Form 10-K for the year ended December 31, 2008. Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We are currently evaluating the disclosure implications of this statement.

In April 2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of Intangible Assets”. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R, and other GAAP. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement shall be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable because we are a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting during the last quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

31.1 Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHAOLEI MARKETING AND FINANCE COMPANY

Date: August 18, 2009	By:	/s/ Luo Fan
		Luo Fan
		Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer, Controller, Principal Accounting Officer

Chaolei Marketing & Finance Co. 10-Q