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, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ~~quarterly~~transition period ~~ended:~~from ~~March~~_____________to ~~31,~~_____________ ~~2010~~

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

For the transition period from _____________ to _____________

Commission File No. 333-134287

CHINA INTERACTIVE EDUCATION, INC.
(Exact name of registrant as specified in its charter)

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

Block C, Zhennan Road, South District
Zhongshan City, Guangdong Province
People’s Republic of China
(Address of principal executive offices)

(86) 0760-2819888
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

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

Yes [ ] No [ ]

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

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

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

Yes [ ] No [X]

The number of shares outstanding of each of the issuer’s classes of common equity, as of ~~May~~August 1918, 2010, is as follows:

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

~~TABLE OF CONTENTS~~ 1

PART I	FINANCIAL INFORMATION.
Table of Contents
ITEM 1.	FINANCIAL STATEMENTS	3
		Page
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	18
PART I FINANCIAL INFORMATION
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	25
ITEM 1	FINANCIAL STATEMENTS	3
ITEM 4.	CONTROLS AND PROCEDURES.	25
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
PART II	OTHER INFORMATION
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 1.	LEGAL PROCEEDINGS.	25
ITEM 4(T).	CONTROLS AND PROCEDURES	23
ITEM 1A.	RISK FACTORS.	26
PART II OTHER INFORMATION
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	26
ITEM 1	LEGAL PROCEEDINGS	23
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	26
ITEM 1A.	RISK FACTORS	24
ITEM 4.	(REMOVED AND RESERVED).	26
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
Item 5.	OTHER INFORMATION.	26
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	24
Item 6.	EXHIBITS.	26
ITEM 4	REMOVED AND RESERVED	24
ITEM 5	OTHER INFORMATION	24
ITEM 6	EXHIBITS	24
SIGNATURES		25

PART I ~~FINANCIAL INFORMATION~~

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CHINA INTERACTIVE EDUCATION, INC. ~~(PREVIOUSLY KNOWN~~CONDENSED ASCONSOLIDATED ~~FIND~~BALANCE ~~THE~~SHEETS ~~WORLD~~(AMOUNTS ~~INTERACTIVE,~~EXPRESSED IN ~~INC.~~US DOLLARS)

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ASSETS
		June 30, 2010		December 31, 2009
		(Unaudited)
Current assets
Cash and cash equivalents	$	320,496	$	351,544
Accounts receivable, net of allowance of $720,112 and $nil as of June 30, 2010
and December 31, 2009 respectively		14,200,857		11,006,809
Inventories		3,880,367		1,152,365
Deposits, prepayments and other receivables		343,642		656,236
Total current assets		18,745,362		13,166,954
Property, plant and equipment , net		427,633		402,897
Intangible assets, net		477,769		581,604
Total assets	$	19,650,764	$	14,151,455

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts and notes payable	$	6,017,316	$	4,687,232
Other payables and accrued expenses		395,280		160,449
Advances from customers		672,768		255,852
Value added and other taxes payable		4,059,947		1,737,623
Income tax payable		959,418		742,937
Due to related parties		1,162,939		1,357,954
Total current liabilities		13,267,668		8,942,047
Total liabilities		13,267,668		8,942,047

Commitments and Contingencies

Shareholders' Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized,
none issued and outstanding		--		--
Common stock, $0.001 par value, 200,000,000 shares authorized,
65,000,000 shares issued and outstanding		65,000		65,000
Additional paid-in capital		1,128,000		1,128,000
Statutory reserves		87,884		87,884
Retained earnings		4,672,383		3,540,507
Accumulated other comprehensive income		429,829		388,017
Total shareholders' equity		6,383,096		5,209,408
Total liabilities and shareholders' equity	$	19,650,764	$	14,151,455


See accompanying notes to condensed consolidated financial statements.

	Page
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Income	5
Condensed Consolidated Statements of Cash Flows	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity	7
Notes to Consolidated Financial Statements	8

-CHINA 3INTERACTIVE -EDUCATION, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)(AMOUNTS EXPRESSED IN US DOLLARS)

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS EXPRESSED IN US DOLLAR)

		Three months ended						Six months ended
		June 30,						June 30,
		2010			2009			2010			2009

Revenue	$	11,364,984		$	3,535,064		$	14,937,973		$	6,697,468

Cost of sales		(8,197,087	)		(1,016,281	)		(10,562,739	)		(2,204,541	)

Gross profit		3,167,897			2,518,783			4,375,234			4,492,927
Operating expenses :
Selling expenses		(289,459	)		(17,232	)		(2,297,360	)		(56,131	)
General and administrative expenses		(304,189	)		(89,902	)		(544,566	)		(181,512	)
Research and development expenses		(73,451	)		(394,275	)		(73,451	)		(602,848	)

		(667,099	)		(501,409	)		(2,915,377	)		(840,491	)

Income from operation		2,500,798			2,017,374			1,459,857			3,652,436
Bank interest income		30			10			88			196

Income before provision for income tax		2,500,828			2,017,384			1,459,945			3,652,632
Provision for income taxes		(328,069	)		(323,730	)		(328,069	)		(611,460	)

Net income		2,172,759			1,693,654			1,131,876			3,041,172
Other comprehensive income :
Foreign currency translation adjustment		(101,298	)		(382,432	)		41,812			(216,193	)

Total comprehensive income	$	2,071,461		$	1,311,222		$	1,173,688		$	2,824,979

Weighted average number of shares :
- Basic and diluted		65,000,000			60,400,000			65,000,000			60,400,000
Earnings per common share
- Basic and diluted	$	0.03		$	0.03		$	0.02		$	0.05

See accompanying notes to condensed consolidated financial statements.

			March 31,		December 31,
			2010		2009
			(Unaudited)		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	180,762	$	351,544
Accounts receivable, net of allowance of $710,828 (unaudited) and nil as of March 31, 2010 and December 31, 2009 respectively			8,437,780		11,006,809
Inventories			2,290,701		1,152,365
Other current assets			1,171,525		656,236
Total current assets			12,030,537		13,166,954
Other Assets
Property, plant and equipment, net	5		441,332		402,897
Intangible assets, net	6		529,702		581,604
Total assets		$	13,001,571	$	14,151,455
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	4,082,595	$	4,687,232
Other payables and accrued expenses			251,032		225,819
Sales deposits received			641,030		255,852
Value added and other taxes payable			1,900,253		1,737,623
Income tax payable			850,197		742,937
Due to related parties	12		964,829		1,292,584
Total current liabilities			8,689,936		236,638
Total liabilities			8,689,936		236,638
Commitments and Contingencies (Note 9)
Shareholders’ Equity
Common stock, $65,000 par, 200,000,000 shares authorized, issued and outstanding			65,000		65,000
Additional paid in capital			1,128,000		1,128,000
Retained earnings			3,246,533		3,540,507
Statutory reserve			87,884		87,884
Accumulated other comprehensive income			545,277		388,017
Total shareholders’ equity			5,072,694		5,209,408
Total liabilities and shareholders’ equity		$	13,762,631	$	14,151,455

~~The~~CHINA ~~accompanying~~INTERACTIVE ~~notes~~EDUCATION, ~~are~~INC.CONDENSED CONSOLIDATED anSTATEMENTS ~~integral~~OF ~~part~~STOCKHOLDERS’ ofEQUITY(AMOUNTS ~~these~~EXPRESSED IN US ~~consolidated~~DOLLARS ~~financial~~EXCEPT ~~statements.~~FOR NUMBER OF SHARE)

- 4 -

											Accumulated
					Additional						other
	Common stock				paid-in		Statutory		Retained		comprehensive
	Shares		Amount		capital		reserves		earnings		income		Total
Balance, December 31, 2009	65,000,000	$	65,000	$	1,128,000	$	87,884	$	3,540,507	$	388,017	$	5,209,408
Net income for the six months ended June 30, 2010	--		--		--		--		1,131,876		--		1,131,876
Foreign currency translation adjustment	--		--		--		--		--		41,812		41,812
Balance, June 30, 2010 (Unaudited)	65,000,000	$	65,000	$	1,128,000	$	87,884	$	4,672,383	$	429,829	$	6,383,096

See accompanying notes to condensed consolidated financial statements.

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (AMOUNTS EXPRESSED IN US DOLLAR) 5

		For the Three Months Ended
		March 31,
		2010			2009
REVENUE	$	3,572,989		$	3,162,404
Cost of sales		(2,365,652	)		(1,188,260	)
Gross profit		1,207,337			1,974,144
Operating expenses:
Selling and promotion		(1,247,030	)		(38,899	)
General and administrative		(240,377	)		(88,099	)
Product development		-			(208,573	)
Total operating expenses		(1,487,407	)		(335,571	)
(Loss) income from operations		(280,070	)		1,638,573
Bank interest income		58			186
(Loss) income before income tax		(280,012	)		1,638,759
Provision for income tax		-			(287,730	)
NET (LOSS) INCOME		(280,012	)		1,351,029
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment		(13,962	)		-
TOTAL COMPREHENSIVE (LOSS)
INCOME	$	(293,974	)	$	1,351,029
(Loss) Earning per shares – Basic and diluted	$	(0.005	)	$	0.0224

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

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

		Six months ended June 30,
		2010			2009
Cash flows from operating activities:
Net income	$	1,131,876		$	3,041,172
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property, plant and equipment		48,994			611
Amortization of intangible assets		110,165			109,840
Allowance for doubtful debts		718,145			--
(Increase) decrease in assets :
Accounts receivable		(3,817,185	)		129,198
Inventories		(2,713,928	)		(217,933	)
Deposits, prepayments and other receivables		315,312			(302,675	)
Increase (decrease) in liabilities :
Accounts and notes payable		1,300,188			212,971
Other payables and accrued expenses		233,670			97,388
Advance from customers		415,447			282,944
Value added and other taxes payable		2,305,870			2,550
Income tax payable		211,525			(20,433	)
Net cash provided by operating activities		260,079			3,335,633

Cash flows from investing activities :
Purchase of property, plant and equipment		(71,411	)		(176,240	)
Purchase of intangible assets		(3,232	)		-
Advance to related company		-			(163,809	)
Net cash used in investing activities		(74,643	)		(340,049	)

Cash flows from financing activities:
Advance from related parties		842,824			-
Repayment to related parties		(1,044,477	)		(3,005,749	)
Net cash used in financing activities		(201,653	)		(3,005,749	)

Effect of foreign currency translation		(14,831	)		(226	)
Net decrease in cash and cash equivalents		(31,048	)		(10,391	)
Cash and cash equivalents, beginning of period		351,544			440,000
Cash and cash equivalents, end of period	$	320,496		$	429,609
Supplemental disclosure information
Income taxes paid	$	116,546		$	-

See accompanying notes to the condensed consolidated financial statements.

~~- 5 -~~ 6

CHINA INTERACTIVE EDUCATION, INC.NOTES ~~(PREVIOUSLY~~TO ~~KNOWN AS FIND THE WORLD INTERACTIVE, INC.)~~ CONDENSED CONSOLIDATED ~~STATEMENTS~~ OFFINANCIAL ~~CASH~~STATEMENTS ~~FLOWS~~ (UNAUDITED) ~~(AMOUNTS EXPRESSED IN US DOLLAR)~~

		For the Three Months Ended
		March 31,
		2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(280,012	)	$	1,347,518
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property, plant and equipment		23,382			3,511
Amortization of intangible assets		54,827			54,817
Decrease (increase) in assets:
Accounts receivable		1,883,810			111,649
Inventories		(1,137,633	)		(50,377	)
Other current assets		(394,673	)		88,621
Increase (decrease) in liabilities:
Accounts payable		(606,280	)		-
Accrued expenses		384,582			-
Sales deposits received		90,500			293,796
Income tax payable		269,018			(17,943	)
Net cash provided by operating activities		287,521			1,831,592
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(61,715	)		(52,876	)
Purchase of intangible assets		(3,222	)		-
Repayment from (advance to) a related company		22,017			(243,079	)
Advance to a director		(415,530	)		(1,794,015	)
Net cash used in investing activities		(458,450	)		(2,089,970	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend		-			-
Net cash provided by (used in) financing activities		-			-
Effect of foreign currency translation		147			(9,088	)
Increase (decrease) in cash and cash equivalents		(170,782	)		(267,466	)
Cash and cash equivalents, beginning of period/year		351,544			441,231
CASH AND CASH EQUIVALENTS, end of period/year	$	180,762		$	173,765
SUPPLEMENTAL DISCLOSURE INFORMATION
Finance cost paid	$	-		$	-
Income tax paid	$	-		$	-

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

- 6 -

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYAND COMPREHENSIVE INCOME (UNAUDITED) (AMOUNTS EXPRESSED IN US DOLLAR)

												Accumulated
					Additional							other
	Ordinary Shares				paid-in		Statutory		Retained			comprehensive
	Number		Amount		Capital		Reserves		Earnings			Income		Total
Balance, January 1, 2008	60,400,000	$	60,400	$	-	$	-	$	1,470,622		$	294	$	1,531,316
Net income for the year	-		-		-		-		6,817,691			-		6,817,691
Foreign currency translation adjustment	-		-		-		-		-			333,771		333,771
Total comprehensive income	-													7,151,462
Balance, December 31, 2008	60,400,000	$	60,400	$	-	$	-	$	8,288,313		$	334,065	$	8,682,778
Effect of reverse acquisition	4,600,000		4,600		-		-		(72,767	)		-		(68,167	)
Net income for the year	-		-		-		-		8,900,448			-		8,900,448
Foreign currency translation adjustment	-		-		-		-		-			53,952		53,952
Transfer to reserve	-		-		-		87,884		(87,884	)		-		-
Dividend paid	-		-		-		-		(13,487,603	)		-		(13,487,603	)
Share-based payment by shareholder	-		-		1,128,000				-			-		1,128,000
Balance, December 31, 2009	65,000,000	$	65,000	$	1,128,000	$	87,884		3,540,507		$	388,017	$	5,209,408
Net loss as of March 31, 2010	-		-		-		-		(293,974	)		-		(293,974	)
Foreign currency translation adjustment	-		-		-		-		-			157,260		157,260
Balance, March 31, 2010	65,000,000	$	65,000	$	1,128,000	$	87,884		3,246,533			545,277		5,072,694

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

- 7 -

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 DESCRIPTION OF BUSINESS AND ORGANIZATION

China Interactive Education, Inc (“CIE” or the “Company”) was incorporated in the State of Delaware on August 28, 2000 for the purpose of developing online internet community portals. On December 4, 2009, the Company changed its legal domicile from Delaware to Nevada by merging into ~~our~~a wholly-owned subsidiary, China Interactive Education, Inc., which wethe ~~established~~Company established in the State of Nevada for the sole purpose of effecting the change of domicile to Nevada, which wethe Company deeded to be a more favorable jurisdiction with a well recognized body of corporate law and no state income tax. The Company’s name was changed from Find the World Interactive, Inc. to China Interactive Education, Inc. On December 11, 2009, the Company completed a reverse acquisition of MenQ Technology Group Limited (“MenQ”).

As of ~~March~~June 3130, 2010, details of the Company’s wholly-owned subsidiaries are as follows:

	Place and date of	~~Place and date of~~
Subsidiaries’ names	incorporation	~~incorporation~~Paid-up capital	Principal activities	~~Paid-up capital~~	~~Principal activities~~
MenQ Technology Group Limited (“MenQ”)	British Virgin Islands (“BVI”) July 2, 2009	~~British Virgin Islands (“BVI”) July 2~~$50, ~~2009~~000	Intermediate holding company	~~$50,000~~	~~Intermediate holding company~~
Wisegate International Limited (“Wisegate”)	British Virgin Islands (“BVI”) May 30, 2007	~~BVI May 30~~$50, ~~2007~~000	Licensing of a patent of a global positioning systems (GPS) technology and as an intermediate holding company	~~$50,000~~	~~Licensing of a patent of a global positioning systems (GPS) technology and as an intermediate holding company~~
Menq International Limited (“MenQ HK”)		Hong Kong July 28, 2006		HK$10,000	Development and sales of electronic products
MenQ International Limited (“MenQ HK”)	Hong Kong July 28, 2006	HK$10,000	Development and sales of electronic products
Clever Aim Development Limited (“Clever Aim”)	Hong Kong August 3, 2009	~~Hong Kong August 3~~HK$10, ~~2009~~000	Intermediate holding company	~~HK$10,000~~	~~Intermediate holding company~~
MenQ Technology Limited (“MenQ China”)	People’s Republic of China (“PRC”) December 25, 2008	~~People’s Republic of China (“PRC”) December 25~~RMB1, ~~2008~~000,000	Development and sales of electronic products	~~RMB1,000,000~~	~~Development and sales of electronic learning products~~

Reverse Acquisition

On December 11, 2009, the Company entered into a share exchange agreement (“Share Exchange Agreement”) under which the Company issued 60,400,000 shares of the Company, to the sole shareholder of MenQ in exchange for all the issued and outstanding shares of MenQ (the “ Share Exchange ”). Immediately following the Share Exchange, the shareholder of MenQ owned approximately 92.29% of the Company’s total issued and outstanding share capital on an as-if converted and fully-diluted basis.

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

MenQ Technology Group Limited (“MenQ”) is a company incorporated with limited liability on July 2, 2009 in the British Virgin Islands, with a registered and paid up capital of $50,000.

On September 8, 2009, the Company changed its name from Mighty Genius Holdings Limited to MenQ Technology Group Limited.

- 8 -

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 DESCRIPTION OF BUSINESS AND ORGANIZATION (CONTINUED)

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

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

Restructuring

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

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

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

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

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

(i) he will not increase the number of authorized shares of the MENQ’s common stock; (ii) he will keep available the services of current officers and employees of MENQ and its subsidiaries; (iii) MENQ and its subsidiaries do not declare, accrue, set aside or pay any dividend or make any other distribution, nor do they repurchase, redeem or otherwise reacquire any equity, of shares of capital stock or any other securities; (iv) MENQ and its subsidiaries do not sell or otherwise issue any equity, shares of capital stock or any other securities.

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

~~During and after the Restructuring, there has been no change to~~ the composition of the board of directors of MenQ HK and MenQ China. The boards of directors of MenQ HK and MenQ China have continued to comprise representatives of HK Menq and MenQ China Former Shareholders. Therefore, MenQ HK and MenQ China are still under the same operating and management control of MenQ HK and MenQ China Former Shareholders. As a result of the Option Agreement, MenQ HK and MenQ China Former Shareholders, through Future Billion, continue to bear the residual risks and rewards relating to MenQ HK and MenQ China. As a result, the Restructuring has been accounted for as a recapitalization of MenQ HK and MenQ China with no adjustment to the historical basis of their assets and liabilities. The Restructuring has been accounted for using the "as if" pooling method of accounting and the operations were consolidated as if the Restructuring had occurred as of the beginning of the earliest period presented and the current corporate structure had been in existence throughout the periods covered by these financial statements. 8

- During 9and -after the Restructuring, there has been no change to the composition of the board of directors of MenQ HK and MenQ China. The boards of directors of MenQ HK and MenQ China have continued to comprise representatives of MenQ HK and MenQ China Former Shareholders. Therefore, MenQ HK and MenQ China are still under the same operating and management control of MenQ HK and MenQ China Former Shareholders. As a result of the Option Agreement, MenQ HK and MenQ China Former Shareholders, through Future Billion, continue to bear the residual risks and rewards relating to MenQ HK and MenQ China. As a result, the Restructuring has been accounted for as a recapitalization of MenQ HK and MenQ China with no adjustment to the historical basis of their assets and liabilities. The Restructuring has been accounted for using the "as if" pooling method of accounting and the operations were consolidated as if the Restructuring had occurred as of the beginning of the earliest period presented and the current corporate structure had been in existence throughout the periods covered by these financial statements.

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation and consolidation ~~These~~ interim condensed consolidated financial statements are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The result reported in the condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

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

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

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

Revenue recognition

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

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

Research and development expenses

Research and development costs are charged to expense when incurred.

Advertising and promotion costs

The Company expenses advertising and promotion costs as incurred. Advertising and promotion expenses charged to operations were $1,525,404 and $54,705 for the six months ended June 30, 2010 and 2009, respectively.

Shipping and handling cost

~~Foreign~~Technological ~~CurrencyThe~~products ~~Company~~sold ~~uses~~by the ~~United States~~Company ~~dollars~~are ~~(“U.S. Dollar” or “US$” or “$”) for financial reporting purposes.~~normally ~~The~~collected ~~PRC~~by ~~subsidiaries~~customers ~~within~~at the Company’s ~~maintain~~premises. ~~their~~During ~~books~~the ~~and~~periods ~~records~~ended inJune ~~their functional currency~~30, ~~Chinese~~2010 ~~Renminbi (“RMB”)~~ and ~~Hong Kong dollars (“HK$)~~2009, ~~being~~shipping ~~the lawful currency in the PRC~~ and ~~Hong~~handling ~~Kong.~~costs ~~Assets~~were ~~and liabilities are translated into US Dollars using the applicable exchange rates prevailing at the balance sheet date~~insignificant. Items on the statement of operations are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income.

~~The~~Foreign exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are based on the rates as published on the website of People’s Bank of China and are as follows:- Currency

	As of December 31, 2009	As of December 31, 2009
Balance sheet items, except for equity accounts	US$1=RMB6.8282	US$1=RMB6.8282
	US$1=HK$7.7805	US$1=HK$7.7805

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

	Period ended March 31,
	2010	2009
Items in the statements of income and cash flows	US$1=RMB6.8270	US$1=RMB6.8283
	US$1=HK$7.7746	US$1=HK$7.7417

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

	As of June 30, 2010	As of December 31, 2009
Balance sheet items, except for equity accounts	US$1=RMB6.7886	US$1=RMB6.8282
	US$1=HK$7.7838	US$1=HK$7.7850

	Three months ended June 30,
	2010	2009
Items in the statements of operations and cash flows	US$1=RMB6.8235	US$1= RMB6.8299
	US$1=HK$7.739	US$1=HK$7.7634

	Six months ended June 30,
	2010	2009
Items in the statements of operations and cash flows	US$1=RMB6.8072	US$1= RMB6.8155
	US$1=HK$7.7740	US$1=HK$7.7496

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

-The 10value -of RMB against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of U.S. dollar reporting.

~~CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ 10

~~NOTE 2 SUMMARIES~~Fair ~~OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~ value

~~Foreign~~ASC ~~Currency~~Topic -820, ~~continued~~Fair ~~The~~Value Measurement and Disclosures, defines fair value ofas ~~RMB~~the exchange price that would be received for an asset or ~~against~~paid ~~U.S.~~to ~~dollars~~transfer ~~and~~a ~~other~~liability ~~currencies~~(an ~~may~~exit ~~fluctuate~~price) ~~and~~in isthe ~~affected~~principal ~~by,~~or most ~~among~~advantageous ~~other~~market ~~things,~~for ~~changes~~the asset or liability in ~~China’s~~an ~~political~~orderly ~~and~~transaction ~~economic~~between market ~~conditions~~participants on the measurement date. ~~Any significant~~This ~~revaluation~~topic ofalso ~~RMB~~establishes ~~may~~a ~~materially~~fair value ~~affect~~hierarchy ~~the~~which ~~Company’s~~requires ~~financial~~classification based on observable and ~~condition~~unobservable ininputs ~~terms~~when ofmeasuring Ufair value.S. ~~dollar~~There ~~reporting.~~are three levels of inputs that may be used to measure fair value:

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

Level 1 -	Quoted prices in active markets for identical assets or liabilities.

Level 2 -	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 -	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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

There were no assets and liabilities measured at fair value on a recurring or nonrecurring basis as of ~~December~~June 3130, ~~2009~~2010 and ~~2008~~December 31, 2009.

Recent accounting pronouncementsIn June 2009, the FASB established the FASB Accounting Standards CodificationTM (ASC) as the single source of authoritative U.S generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The ASC superseded all previously existing non-SEC accounting and reporting standards, and any prior sources of U.S. GAAP not included in the ASC or grandfathered are not authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). The ASC did not change current U.S. GAAP but changes the approach by referencing authoritative literature by topic (each a “Topic”) rather than by type of standard. The ASC has been effective for the Company effective July 1, 2009. Adoption of the ASC did not have a material impact on the Company’s Consolidated Financial Statements, but references in the Company’s Notes to Consolidated Financial Statements to former FASB positions, statements, interpretations, opinions, bulletins or other pronouncements ~~are now presented as references to the corresponding Topic in the ASC.~~

Effective January 1, ~~2009~~2010, the ~~first~~Company ~~day~~adopted ~~of fiscal 2009,~~ the provisions ~~Company~~in ~~adopted~~ASU ~~FASB~~2010-06, ~~ASC~~“Fair ~~350-30~~Value Measurements and ~~ASC~~Disclosures ~~275-10-50~~ (~~formerly~~ASC ~~FSP~~Topic ~~FAS 142-3,~~820): ~~Determination~~Improving ofDisclosures ~~the~~about ~~Useful~~Fair ~~Life~~Value ~~of Intangible Assets)~~Measurements, which ~~amends~~requires ~~the~~new ~~factors~~disclosures ~~that~~related ~~should~~to betransfers ~~considered~~ in ~~developing~~and ~~renewal~~out orof ~~extension~~levels ~~assumptions used~~1 toand ~~determine~~2 ~~the~~and ~~useful~~activity ~~life~~in level of3 afair ~~recognized~~value ~~intangible asset under SFAS No. 142~~measurements, ~~Goodwill~~as ~~and~~well ~~Other~~as ~~Intangible~~amends ~~Assets.~~existing ~~The~~disclosure requirements ~~Company~~on ~~will~~level ~~apply~~of ~~ASC 350-30~~disaggregation and ~~ASC~~inputs ~~275-10-50~~and ~~prospectively~~valuation totechniques. ~~intangible assets acquired subsequent~~The ~~to the~~ adoption ~~date.~~of ~~The~~the ~~adoption~~provisions ofin ~~these~~ASU ~~revised~~2010-06 ~~provisions~~did ~~had~~not nohave an impact on ~~the~~ the Company’s ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements.

~~Effective~~In ~~January~~February 12010, ~~2009,~~ the ~~Company~~Financial ~~adopted~~Accounting ~~FASB~~Standards ~~ASC~~Board ~~815-10-65~~ (~~formerly~~“FASB”) ~~SFAS~~issued ~~161,~~authoritative ~~Disclosures~~guidance ~~about~~that ~~Derivative~~amends ~~Instruments~~the ~~and~~disclosure requirements ~~Hedging~~related ~~Activities),~~to ~~which~~subsequent ~~amends~~events. ~~and~~This ~~expands~~guidance ~~previously~~includes ~~existing~~the ~~guidance on~~definition ~~derivative~~of ~~instruments~~a Securities toand ~~require~~Exchange ~~tabular~~Commission ~~disclosure~~filer, ofremoves the ~~fair~~definition ~~value~~ of a public ~~derivative~~entity, ~~instruments~~redefines ~~and~~the ~~their~~reissuance ~~gains~~disclosure requirements and ~~losses.,~~allows ~~This~~public companies ~~ASC~~to ~~also~~omit ~~requires~~ the disclosure ~~regarding~~of the ~~credit-risk~~date ~~related~~through ~~contingent~~which ~~features~~subsequent ~~in derivative~~events ~~agreements,~~have ~~counterparty~~been ~~credit~~evaluated. ~~risk,~~This ~~and~~guidance ~~strategies~~is ~~and~~effective ~~objectives~~ for ~~using~~financial statements issued ~~derivative~~for ~~instruments.~~interim ~~The~~and ~~adoption~~annual ofperiods ~~this~~ending ~~ASC~~after February 2010. This guidance did not materially ~~have~~impact athe ~~material~~Company’s ~~impact~~results of operations or financial position, but ondid require changes to the Company’s ~~Consolidated~~disclosures ~~Financial~~in ~~Statements~~its financial statements.

In April 2010, the FASB issued ASU No. 2010-13—Compensation—Stock 11Compensation (Topic 718), which addresses the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. This Update provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company expects that the adoption of the amendments in this Update will not have any significant impact on its financial position and results of operations.

~~CHINA~~Other ~~INTERACTIVE~~accounting ~~EDUCATION,~~standards ~~INC.~~that ~~(PREVIOUSLY~~have been issued or proposed by ~~KNOWN~~the ASFASB ~~FIND~~or ~~THE~~other ~~WORLD~~standards-setting ~~INTERACTIVE,~~bodies ~~INC.)~~that ~~NOTES~~do TOnot ~~CONDENSED~~require adoption until a ~~CONSOLIDATED~~future ~~FINANCIAL~~date ~~STATEMENTS~~are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.

~~NOTE 3 INVENTORIES~~11

		March 31,		December 31,
		2010		2009
Raw materials	$	1,142,674	$	566,125
Work in progress		418,773		246,152
Finished goods		729,254		340,088
Total	$	2,290,701		1,152,365

NOTE 3 ACCOUNTS RECEIVABLE, NET

NOTE 4 OTHER CURRENT ASSETS

		June 30,			December 31,
		2010			2009
		(Unaudited)
Accounts receivable	$	14,920,969		$	11,006,809
Less: Allowance for doubtful accounts		(720,112	)		--

Accounts receivable, net	$	14,200,857		$	11,006,809

		March 31,		December 31,
		2010		2009
Advance to suppliers	$	1,045,253	$	536,368
Deposits and prepayment		53,598		67,268
Other receivables		72,614		52,600
Total	$	1,171,525		656,236

NOTE 4 INVENTORIES

- 12 -

		June 30,		December 31,
		2010		2009
		(Unaudited)
Raw materials	$	444,504	$	566,125
Work in progress		240,585		246,152
Finished goods		3,195,278		340,088

Total	$	3,880,367	$	1,152,365

~~CHINA~~NOTE ~~INTERACTIVE EDUCATION~~5 DEPOSITS, ~~INC.~~PREPAYMENTS ~~(PREVIOUSLY KNOWN~~AND ASOTHER ~~FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ RECEIVABLES

NOTE 5 PROPERTY, PLANT AND EQUIPMENT, NET

		June 30,		December 31,
		2010		2009
		(Unaudited)
Purchase deposits		150,697		536,364
Prepaid for operating expenses		135,728		67,272
Other receivables, net of $nil allowance		57,217		52,600

Total	$	343,642	$	656,236

		March 31,			December 31,
		2010			2009
Furniture, fixtures and equipment	$	59,058			59,058
Leasehold improvement		132,479			132,479
Motor vehicles		213,444			151,729
Moulds		41,896			41,896
Plant and machinery		56,686			56,686
Total cost		503,734			441,848
Less: Accumulated depreciation and amortization		(62,402	)		(38,951	)
Net	$	441,332		$	402,897

NOTE 6 PROPERTY, PLANT AND EQUIPMENT, NET

Depreciation expenses in aggregate for the years ended December 31, 2009 and 2008 were $32,413 and $6,518 respectively.

		June 30,			December 31,
		2010			2009
		(Unaudited)
Furniture, fixtures and equipment	$	47,066		$	59,058
Leasehold improvement		154,626			132,479
Motor vehicles		214,555			151,729
Plant and machinery		99,547			98,582

Total cost		515,794			441,848
Less: Accumulated depreciation and amortization		(88,161	)		(38,951	)

Net	$	427,633		$	402,897

~~NOTE~~Depreciation expenses in aggregate for the periods ended June ~~6 INTANGIBLE~~30, ~~ASSETS~~2010 and 2009 were $48,994 and $611 respectively.

		March 31,			December 31,
		2010			2009
Exclusive rights to computer programming technology	$	1,096,248		$	1,096,361
Software		3,223
Less: Accumulated amortization		(569,769	)		(514,757	)
Net	$	529,702			581,604

~~Each~~NOTE of7 INTANGIBLE the exclusive rights has a term of five years and relates to a computer programming technology under several patents based on which the Company develops its electronic products. These exclusive rights were acquired from Mr. Chen Ruofei and Mr. Zhou Yi, which is described in more details in Note 8(c). ASSETS

Amortization expenses for the periods ended March 31, 2010 and 2009 were $54,827 and $54,817 respectively.

		June 30,			December 31,
		2010			2009
		(Unaudited)
Exclusive rights to computer programming technology	$	1,105,997		$	1,096,361
Less: Accumulated amortization		(628,228	)		(514,757	)

Net	$	477,769		$	581,604

-Each 13of -the exclusive rights has a term of five years and relates to a computer programming technology under several patents based on which the Company develops its electronic products. These exclusive rights were acquired from Mr. Chen Ruofei (CEO and President of the Company) and Mr. Zhou Yi (a director of the Company).

~~CHINA~~Amortization ~~INTERACTIVE~~expenses ~~EDUCATION,~~for ~~INC.~~the ~~(PREVIOUSLY KNOWN~~periods ASended ~~FIND~~June ~~THE WORLD INTERACTIVE~~30, ~~INC.)~~2010 ~~NOTES~~and 2009 TOwere ~~CONDENSED CONSOLIDATED~~$110,165 ~~FINANCIAL~~and ~~STATEMENTS~~$109,840 respectively.

NOTE 7 8 INCOME TAXES

~~MENQ,~~The ~~being~~Company ~~incorporated~~is ~~the~~subject ~~British~~to ~~Virgin~~income ~~Islands~~tax ~~("BVI") is~~on ~~not~~an ~~subject~~entity tobasis ~~any~~ on income arising from the tax jurisdiction in ~~the~~which ~~BVI.~~they operate.

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

MenQ HK and Clever Aim ~~being~~are Hong Kong-incorporated companies and are, therefore, subject to a Hong Kong profits tax atof 16.5% on its income generated from Hong Kong for the ~~three~~six months ended ~~March~~June 3130, 2010 and 2009, respectively.

MenQ China ~~being~~is a PRC-registered company is, ~~subject~~therefore, subject to PRC income tax at 25% on its income generated from the PRC for the ~~three~~six months ~~ended~~ ~~March~~ended 31June 30, 2010 and 2009~~, respectively~~.

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

NOTE 8 INCOME TAXES – Continued

The Company’s income tax expense consisted of:

		Period ended
		Three months ended				Six months ended
		March 31,
		June 30,				June 30,
		2010		2009		2010		2009
Current	$	-	$	287,730
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Deferred		-		-
Current	$	328,069	$	323,730	$	328,069	$	611,460
	$	-	$	287,730
Deferred		-		-		-		-
	$	328,069	$	323,730	$	328,069	$	611,460

ASignificant ~~reconciliation~~components of the ~~provision~~net ~~for~~deferred ~~income taxes determined at the US statutory corporate income~~ tax ~~rate~~assets towere ~~the Company’s effective income tax rate is~~ as follows:

		Period ended
		June 30,			December 31,
		March 31,
		2010			2009
Pre-tax (loss) income	$	(285,012	)	$	1,638,759
		(Unaudited)
US statutory rate		35%			35%
Allowance for doubtful debts	$	179,536		$	-
Income tax expense computed at U.S. federal rate		-
Less: Valuation allowance		(179,536	)		-
Reconciling items:
Net deferred tax assets	$	-		$	-
Rate differential for domestic earnings
Non-deductible expenses
PRC tax concession on non-resident enterprises without permanent establishment in the PRC
Others
Effective tax expense	$	-		$	287,730

-As 14of -June 30, 2010 and 2009, valuation allowance of $179,536 and $nil, respectively, was provided to the deferred tax assets, due to the uncertainty of the deductibility by tax authority.

~~CHINA~~NOTE ~~INTERACTIVE~~9 STOCKHOLDER’S ~~EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ EQUITY

NOTE 8 STOCKHOLDER’S EQUITY

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

NOTE 9 10 STATUTORY RESERVES

In accordance with the PRC Companies Law, the Company’s PRC subsidiaries were required to transfer 10% of their profits after tax, as determined in accordance with accounting standards and regulations of the PRC, to the statutory surplus reserve and a percentage of not less than 5%, as determined by management, of the profits after tax to the public welfare fund. With the amendment of the PRC Companies Law which was effective from January 1, 2006, enterprises in the PRC were no longer required to transfer any profit to the public welfare fund. Any balance of public welfare fund brought forward from December 31, 2005 should be transferred to the statutory surplus reserve. The statutory surplus reserve is non-distributable.

~~NOTE 11 EARNING PER SHARE~~ 14

NOTE 11 EARNINGS PER SHARE

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

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

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

		Period ended
		Three months ended					Six months ended
		March 31,
		June 30,					June 30,
		2010			2009		2010		2009
Net (loss) income	$	(298,993	)	$	1,351,029
		(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)
Weighted average number of shares Basic and diluted		65,000,000			60,400,000
Net income	$	2,172,759		$	1,693,654	$	1,131,876	$	3,041,172
Net (loss) income per share Basic and diluted	$	(0.005	)	$	0.0224
Weighted average number of shares :
Basic and diluted		65,000,000			60,400,000		65,000,000		60,400,000
Net income per share :
Basic and diluted	$	0.03		$	0.03	$	0.02	$	0.05

- 15 -

CHINA INTERACTIVE EDUCATION, INC. (PREVIOUSLY KNOWN AS FIND THE WORLD INTERACTIVE, INC.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 RELATED PARTY TRANSACTIONS

(a) Outstanding balances

		June 30,		December 31,
		2010		2009
		(Unaudited)
Amount due to related parties:

- Mr. Chen Ruofei (a)(b), director, Chief Executive Officer and President of the Company	$	801,684	$	255,318
- Mr. Chen Tiannam (a)(b), Chairman of the Company		275,262		1,037,266
- Mr. Lam Hak Kwun (a), former director		65,370		65,370
- Mr. He Wei Dong (a), director of the Company		20,623		-

	$	1,162,939	$	1,357,954

				March 31,		December 31,
(a)	The amounts are unsecured, non-interest bearing and without fixed repayment term.
				2010		2009
(b)	Mr. Chan Ruofei and Mr. Chen Tiannam are also two of the major shareholders of Future Billion (see Note 1 for further details).
Amount due to a directors:
- Mr. Chen Ruofei (b), director of Wisegate		(a)	$	322,159	$	255,318
- Mr. Chen Tiannam (b), Chairman of CIE		(a)		626,018		1,037,266
				964,829		1,292,584

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

NOTE 13 COMMITMENTS AND CONTINGENCIES

Operating Leases Commitments as of ~~March~~June 3130, 2010

In the normal course of business, the Company entered into operating lease agreements to rent office space and plant and equipment. The Company was obligated under operating leases requiring minimum rentals as of June ~~March 31~~30, 2010 as follows:

		(Unaudited)
Payable within:
- 2010	$	73,523
- remainder of 2010	$	158,994
- 2011		45180,~~972~~914
- 2012		1331,~~409~~127
Total minimum lease payments	$	~~132~~371,~~904~~035

During the ~~period~~periods ended ~~March~~June 3130, 2010 and 2009, rental expenses under operating leases amounted to $7148,~~664~~604 and $816,~~416~~814, respectively.

-Commitments 16pursuant -to a partnership agreement

~~CHINA~~On ~~INTERACTIVE~~May ~~EDUCATION~~20, ~~INC.~~2009, ~~(PREVIOUSLY~~the Company entered into a three-year term ~~KNOWN~~partnership ASagreement ~~FIND~~with ~~THE~~Beijing ~~WORLD~~Normal ~~INTERACTIVE,~~University ~~INC~~for research and development purposes.) ~~NOTES~~Under TOthe ~~CONDENSED~~partnership agreement, the Company is obligated ~~CONSOLIDATED~~to ~~FINANCIAL~~pay ~~STATEMENTS~~the requiring research and development expense not less than approximately $147,000 annually until May 2012.

NOTE 14 CONCENTRATION OF RISKS

Credit risk

As of ~~March~~June 3130, 2010 and December 31, 2009, ~~100~~approximately 98% of ~~the~~ the Company’s cash included cash on hand and deposits in accounts maintained ~~within~~ within the PRC ~~and Hong Kong~~ where there is currently no rule or regulation in place ~~for~~ for obligatory insurance to cover bank deposits in the event of bank failure. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

~~Except~~For ~~for~~the asix ~~single~~months ~~external~~ended ~~customer~~June ~~who~~30, 2010, five customers accounted for 9923%, 17%, 15%, 14% and 11% of the Company’s revenue. ~~for~~For the ~~year~~six months ended ~~March~~June 3130, ~~2010~~2009, ~~there~~four customers accounted for 22%, 14%, 14% and 12% of the Company’s revenue. There was no other single customer who accounted for more than 10% of the Company’s revenue for the periods ended ~~March~~June 3130, 2010 and 2009.

As of June 30, 2010, five customers accounted for 26%, 16%, 15%, 14% and 11% of total accounts receivable of the Company. As of December 31, 2009, three customers accounted for 46%, 25% and 21% of accounts receivable of the Company. Except as disclosed, no other customer accounted for 10% or more of the Company’s accounts receivable as of June 30, 2010 and December 31, 2009.

Currency convertibility risk

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

NOTE 15 SEGMENT DATA

The Company believes that throughout the ~~years~~six months ended ~~March 31,~~June 30, 2010 and 2009, it operated in one operating segment – development and sale of of electronic products based on a computer programming technology.

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

		Period ended
		Three months ended				Six months ended
		March 31,
		June 30,				June 30,
		2010		2009		2010		2009
Revenue from external customers:
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Licensing of patent and related technology development services	$	-	$	2,877,302
Revenue from external customers:
Electronic learning products		3,531,698		-
Interactive classroom solutions products	$	7,859,789	$	-	$	7,859,789	$	-
Other electronic products		41,291		285,102
Electronic learning products		3,505,195		-		7,078,184		-
Total	$	3,572,989	$	3,162,404
Licensing of patent and related technology development services		-		3,423,155		-		6,300,457
Other electronic products		-		111,909		-		397,011
Total	$	11,364,984	$	3,535,064	$	14,937,973	$	6,697,468

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

		Period ended
		Three months ended				Six months ended
		March 31,
		June 30,				June 30,
		2010		2009		2010		2009
Revenue from external customers:
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
PRC	$	3,531,698	$	2,877,302
Revenue from external customers:
Other countries, less than 5% of the total revenue		41,291		285,102
PRC	$	11,145,447	$	3,423,155	$	14,677,145	$	6,300,457
Total		3,572,989	$	3,162,404
Other countries		219,537		111,909		260,828		397,011
Total	$	11,364,984	$	3,535,064	$	14,937,973	$	6,697,468

- 17 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

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

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

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to (i) the "“Company,"” "“we,"” "“us,"” and "“our"” are to the combined business of China Interactive Education, Inc., a Nevada corporation, and ~~its~~ its consolidated subsidiaries; (ii) "“MenQ BVI"” are to MenQ Technology Group Limited, a BVI limited company; (iii) "“Wisegate"” are to Wisegate International Limited, a BVI limited company; (iv) "“MenQ HK"” are to MenQ International Limited, a Hong Kong limited company; (v) "“Clever Aim"” are to Clever Aim Development Limited, a Hong Kong limited company; (vi) "“MenQ China"” are to MenQ Technology Limited, a PRC limited company; (vii) " “SEC"” are to the United States Securities and Exchange Commission; (viii) "“Securities Act"” are to Securities Act of 1933, as amended; (ix) "“Exchange Act"” are to the Securities Exchange Act of 1934, as amended; (x) " “PRC"” and "“China"” are to People’s Republic of China excluding Hong Kong, Macao, and Taiwan; (xi) "“Hong Kong"” are to the Hong Kong Special Administrative Region of the People’s Republic of China; (xii) " “Renminbi"” and "“RMB" ” are to the legal currency of China; and (xiii) "“U.S. ~~dollar~~dollars,"” "“$"” and "“US$"” are to United States dollars.

Overview of Our Business

Through our Hong Kong and PRC subsidiaries, we are an education solutions company that provides new era educational concepts, equipment and products to educational institutions including elementary, middle and high schools, professional training schools, and to individual students in China. We were organized to meet what we believe is an unmet need for educational resources throughout the PRC. Based on the PRC government’s statistical yearbook for 2007, the government invests more than $104 billion on education each year. However, just as economic development is not even throughout the PRC, there is an uneven allocation of educational resources in the PRC. In general, only students who pass the numerous national examinations, which are given at various stages of the educational process, can obtain better educational opportunities at a higher level. We believe that this examination-oriented education has created a market for products to improve the efficiency and performance of students and teachers.

Our principal businesses include (1) the provision of new era e-classroom and e-library solutions, (2) the distribution of computer based ELPs embedded with Beijing Normal University’s educational materials in computer programs and with self developed wireless technology and (3) the design and manufacture of GPS products via ODMs and OEMs based on self-developed technology.

On May 20, 2009, we entered into a three-year partnership agreement with Beijing Normal University, one of the top teaching universities in China with a 100-year history. Under this joint strategic partnership, we cooperate in the development of various aspects of IT applied in education. As a result of this collaboration, we founded the IT Applied in Education Institute in May, 2009 to conduct joint research and development of cutting edge interactive education methodologies and content, applying computer and internet technologies for use in education. The IT Applied in Education Institute focuses on the computerization of education systems and the digitization of supplemental study systems, including, but not limited to: (a) cost effective mini intelligent terminals and software suitable for access of high-speed 3G wireless networks; (b) terminals with embedded educational software platforms; (c) virtual experiment labs and sensor-based lab networks; and (d) specific internet service platforms for teachers and students. Under the partnership agreement, Beijing Normal University has authorized us to exclusively promote and distribute our jointly researched and developed products. We share the right to use such products, and we share 50% of the net profits from our sale of our jointly researched and developed products.

A majority of our revenues are derived from (1) sales of comprehensive sets of ELPs, including hardware with educational content certified and authorized by Beijing Normal University under the partnership agreement and sales of interactive classroom solutions products and (2) development fees from customers for providing educational content in computer programs. In the past, the majority of our revenue was generated from distributing our self-developed 18technologies in GPS and education products to overseas customers. Starting from 2009, we have been shifting our focus to the education market in the PRC. We plan to expand our sales network to all primary and secondary schools in all provinces of China with the help of educational policies, such as “The Tenth Five-Year Development Outline for Educational Information Technology,” for the development of IT in education and computerized teaching matters, and to the individual electronic ELP market.

A majority of our revenues are derived from (1) sales of comprehensive sets of ELPs, including hardware with educational content certified and authorized by Beijing Normal University under the partnership agreement and (2) development fees from customers for providing educational content in computer programs. In the past, the majority of our revenue was generated from distributing our self-developed technologies in GPS and education products to overseas customers. Starting from 2009, we have been shifting our focus to the education market in the PRC. We plan to expand our sales network to all primary and secondary schools in all provinces of China with the help of educational policies, such as “The Tenth Five-Year Development Outline for Educational Information Technology,” for the development of IT in education and computerized teaching matters, and to the individual electronic ELP market.

The chart below presents our corporate structure.

Our company headquarters is located in southern China, in the City of Zhongshan in Guangdong Province and our sales offices are located in the Shenzhen Special Economic Zone and City of Guangzhou in Guangdong Province.

We file annual, quarterly and other reports, proxy statements and other information with the SEC. You may obtain and copy any document we file with the SEC at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549-1004. The SEC maintains an Internet website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our SEC filings, including exhibits filed therewith, are accessible through the Internet at that website. You may also request a copy of our SEC filings, at no cost to you, by writing or telephoning us at: China Interactive Education, Inc., Block C, Zhennan Road, South District, Zhongshan City, Guangdong Province, 518040 People’s Republic of China, attention Corporate Secretary, telephone (+86) 0760-2819888. We will not send exhibits to the documents, unless the exhibits are specifically requested and you pay our fee for duplication and delivery.

~~2010 Financial Performance Highlights~~ 19

The following are some financial highlights for the three months ended March 31, 2010:

- 19 -

Net Sales: Net sales increased $0.4 million, or 13%, to $3.6 million for the three months ended March 31, 2010 from $3.2 million for the same period in 2009.

Gross Margin: Gross margin was 34% for the three months ended March 31, 2010, as compared to 62% for the same period in 2009.

Net Income: Net income decreased $2.4 million, or 177%, to $(1.0) million for the three months ended March 31, 2010, from $1.4 million for the same period in 2009.

Fully diluted earnings per share: Fully diluted earnings per share were $(0.016) for the three months ended March 31, 2010, as compared to $0.21 for the same period in 2009.

Results of Operations

~~The~~ Three ~~following~~month ~~table~~period ~~sets~~ended ~~forth~~June ~~key~~30, ~~components~~2010 ofas ~~our~~compared ~~results~~to ~~of operations~~three ~~for~~month ~~the~~period ~~periods~~ended ~~indicated~~June 30, ~~both~~2009 ~~in dollars and as a percentage of our net sales.~~

		Three Months Ended					Three Months Ended
		March 31, 2010					March 31, 2009
				% of				% of
		Amount		Net Sales			Amount	Net Sales
Net sales	$	3,572,989		100%		$	3,162,404	100%
Cost of sales		2,365,652		66%			1,188,260	38%
Gross profit		1,207,337		34%			1,974,144	62%
Selling, General and Administrative Expenses		2,248,278		63%			335,571	11%
(Loss) income from operations		(1,040,825	)	(29%	)		1,638,573	51%
Other income		58		0%			186	0%
(Loss) income before income taxes		(1,040,883	)	(29%	)		1,638,759	51%
Income taxes		-		0%			287,730	9%
Net (loss) income	$	(1,040,883	)	(29%	)	$	1,351,029	42%

Revenue. Our sales revenue increased to $11.36 million in the three months ended June 30, 2010, from $3.54 million for the same period in 2009, representing a 221% increase. During the 2010 period, we changed our principal business from the provision of licensing of patent and related technology development services, or PLFs, to the sale of educational learning products, or ELPs and interactive classroom solutions products or ICSPs, under our own “Five Best Students” brand. The increase in revenue reflects acceptance of this change by our customers.

~~Net~~ Cost of Sales. Our ~~sales~~cost ~~revenue~~of sales increased by $7.18 million, or 707%, to $38.62 million in the three months ended ~~March~~June 3130, 2010, from $31.202 million for the same period in 2009,. ~~representing~~The acost ~~13%~~of ~~increase.~~sales ~~During~~per ~~the~~sales ~~2010~~ratio ~~period,~~changed ~~the~~from ~~Company~~29% ~~changed~~to ~~its~~72% ~~principal~~for ~~business~~the ~~from~~three ~~providing~~months ~~product~~ended ~~and~~June ~~licensing fees~~30, or2009 ~~PLFs~~and 2010, torespectively. ~~providing~~The ~~educational~~increment ~~learning~~in ~~products,~~cost orof ~~ELPs,~~sales ~~under~~represents ~~its own~~the ~~“Five~~difference ~~Best~~in ~~Students”~~cost ~~brand.~~structure ~~The~~in ~~increase~~providing inlicensing revenue ~~reflects~~and ~~acceptance~~product ~~of this~~revenue, ~~change~~in byconnection with our ~~customers~~change from providing PLFs to providing ELPs and ICSPs during the 2010 period.

~~Cost~~ Gross ofProfit ~~Sales~~and Gross Margin. Our ~~cost~~gross ofprofit ~~sales~~ increased by $10.2 65 million, or 9926%, to $23.417 million in the three months ended ~~March~~June 3130, 2010, from $1.2.52 million for the same period in 2009. ~~The~~Gross ~~cost~~profit ofas ~~goods~~a ~~sold~~percentage ~~per sales ratio~~of ~~changed~~net ~~from~~revenue 38was 28% toand 6671% for the three months ended ~~March~~June 3130, 2010 and 2009, respectively. The ~~increment~~decrease in ~~cost~~gross ofprofit ~~sales~~percentage represents the ~~difference~~different ingross ~~cost structure~~margin in providing licensing revenue ~~and product revenue,~~ in ~~connection with~~ the ~~Company’s~~2009 ~~change~~period ~~from~~and ~~providing~~product ~~PLFs~~revenue toin ~~providing ELPs during~~ the ~~2010~~ 2010 period.

~~Gross~~ Selling ~~Profit~~Expenses. ~~and~~In ~~Gross~~the ~~Margin.~~three ~~Our~~months ~~gross~~ended ~~profit decreased~~June ~~$0.8 million~~30, ~~or 39%~~2010, toour ~~$1.2~~selling ~~million~~and inpromotion ~~the~~expenses ~~three~~increased ~~months~~by ~~ended~~$0.27 ~~March 31~~million, ~~2010~~to $0.29 million, from $2.0.02 million for the same period in 2009. ~~Gross~~During ~~profit~~the ~~as a~~2010 ~~percentage~~period, ofwe ~~net~~incurred ~~revenue~~expense ~~was~~on ~~34%~~a ~~and~~marketing ~~62%~~campaign ~~for~~regarding ~~the~~its ~~three~~change ~~months~~in ~~ended~~business ~~March~~and ~~31,~~in ~~2010~~the ~~and~~build ~~2009,~~up ~~respectively. The~~of ~~decrease~~our inown ~~gross~~“Five ~~profit~~Best ~~represents~~Students” ~~the~~brand. ~~different~~The ~~gross~~cost ~~margin~~of inadvertisement ~~providing licensing~~and ~~revenue~~consultancy infee ~~the~~related ~~2009~~to ~~period~~brand ~~and~~building ~~product revenue~~ in the second quarter of 2010 ~~period~~totaled approximately $0.29 million.

- General 20and -Administrative Expenses. In the three months ended June 30, 2010, our general and administrative expenses increased by $0.21 million, to $0.3 million, from $0.09 million for the same period in 2009. The increase was because MenQ China's factory in Zhongshan commenced operations in May 2009.

~~Selling~~ Research and Development Expenses. In the three months ended June 30, ~~General~~2010, our research and ~~Administrative~~development ~~Expenses~~expenses decreased by $0.32 million, to $0.07 million, from $0.39 million for the same period in 2009. The decrease was because the Company devoted resources in 2009 to develop the education programs. Fewer resources were required in the 2010 period to further develop these programs.

~~Other~~ Income Before Income Taxes. Our income before income taxes increased by $0.48 million, or 24%, to $2.5 million in the three months ended June 30, 2010, from $2.02 million for the same period in 2009, primarily due to the increase in sales and gross profit which was partially offset by the increase in marketing expenses during the 2010 period.

~~(Loss)~~ Net Income. In the three months ended June 30, 2010, we generated a net income ~~Before~~of ~~Income~~$2.17 ~~Taxes~~million, an increase of $0.48 million, or 28%, from $1.69 million for the same period in 2009, as a result of the factors described above.

~~Income~~ Six ~~Taxes~~month period ended June 30, 2010 as compared to six month period ended June 30, 2009

~~Net~~ Revenue. During ~~Income~~the six-month period ended June 30, 2010, we had revenue from sales of our ELPs and ICSPs of $14.94 million as compared to net sales of $6.7 million during the six-month period ended June 30, 2009, an increase of 123%. This increase is mainly attributable to a change of our principal business from provision of licensing of patent and related technology development services, or PLFs, to providing educational learning products, or ELPs, and interactive classroom solutions products or ICSPs, under our own “Five Best Students” brand. The increase in revenue reflects acceptance of this change by our customers.

~~Liquidity~~ Cost ~~And~~of ~~Capital~~Sales. ~~Resources~~Cost of sales, consisting of raw materials, direct labor and manufacturing overhead, was $10.56 million for the six-month period ended June 30, 2010, as compared to $2.2 million for the same period of 2009, an increase of 379%. The increase in cost of sales is in line with the increase in sales and also represents the difference in cost structure in providing licensing revenue and product revenue, in connection with our change from providing PLFs to providing ELPs and ICSPs during the 2010 period.

~~As of March 31, 2010, we had cash and cash equivalents of~~ $180,762, primarily consisting of cash on hand and demand deposits. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations, augmented by short-term bank borrowings and equity contributions by our stockholders.20

~~Cash~~Gross ~~Flow(all~~Profit ~~amounts~~and Gross Margin. Our gross profit decreased by $0.12 million, or 3%, to $4.38 million in Uthe six months ended June 30, 2010, from $4.S49 million for the same period in 2009. ~~dollars)~~Gross profit as a percentage of net revenue was 29% and 67% for the six months ended June 30, 2010 and 2009, respectively. The decrease in gross profit represents the different gross margin in providing licensing revenue in the 2009 period and product revenue in the 2010 period.

		Three Months Ended March 31,
		2010			2009
Net cash provided by operating activities	$	287,521		$	1,831,592
Net cash used in investing activities		(42,920	)		(295,955	)
Net cash used in financing activities		(415,530	)		(1,794,015	)
Effects of Exchange Rate Change in Cash		147			(7,857	)
Net Decrease in Cash and Cash Equivalents		(170,782	)		(266,235	)
Cash and Cash Equivalent at Beginning of the Year		351,544			440,000
Cash and Cash Equivalent at End of the Year	$	180,762		$	173,765

Selling Expenses. In the six months ended June 30, 2010, our selling and promotion expenses increased by $2.24 million, to $2.3 million, from $0.06 million for the same period in 2009. During the 2010 period, we incurred expense on a marketing campaign regarding our change in business and on a build up of our own “Five Best Students” brand. The cost of advertisement and the consultancy fee related to brand building in the second quarter of 2010 totaled approximately $1.5 million. This was offset by an allowance for doubtful accounts receivable of $0.7 million that was recorded in the period based on management review of collectability of accounts receivable.

General and Administrative Expenses. In the six months ended June 30, 2010, our general and administrative expenses increased by $0.36 million to $0.54 million, from $0.18 million for the same period in 2009. The increase was because MenQ China’s factory in Zhongshan commenced operations in May 2009.

Research and Development Expenses. In the six months ended June 30, 2010, our research and development expenses decreased by $0.53 million, to $0.07 million, from $0.6 million for the same period in 2009. The decrease was because the Company devoted resources in 2009 to develop the education programs . Fewer resources were required in the 2010 period to further develop these programs.

Income Before Income Taxes. Our income before income taxes decreased by $2.19 million, or 60%, to $1.46 million in the six months ended June 30, 2010, from $3.65 million for the same period in 2009, primarily due to the increase in selling expense.

Net Income. In the six months ended June 30, 2010, we generated a net income of $1.13 million, a decrease of $1.91 million, or 63%, from $3.04 million for the same period in 2009, as a result of the factors described above.

Liquidity and Capital Resources

As of June 30, 2010, we had cash and cash equivalents of $320,496, being cash on hand and bank deposits. The following table provides detailed information about our net cash flow for financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations.

Cash Flow Summary (Amounts expressed in U.S. dollar) (Unaudited)

		Six Months Ended June 30,
		2010			2009
Net cash provided by operating activities	$	260,079		$	3,335,633
Net cash used in investing activities		(74,643	)		(340,049	)
Net cash used in financing activities		(201,653	)		(3,005,749	)
Effects of foreign currency translation		(14,831	)		(226	)
Net decrease in cash and cash equivalents		(31,048	)		(10,391	)
Cash and cash equivalents at beginning of period		351,544			440,000
Cash and cash equivalents at end of period	$	320,496		$	429,609

Operating activities

Net cash provided by operating activities was approximately $0.326 million for the ~~three~~six months ended ~~March~~June 3130, 2010, aswhich ~~compared~~was mainly attributable to a $1.813 million net ~~cash provided~~income offset by ~~operating~~a ~~activities~~cash ~~for~~outflow ~~the~~of ~~same period in 2009~~$1. ~~The decrease from~~06 ~~period~~million todue ~~period was primarily attributable~~ to ~~the~~increase ~~Company’s~~in ~~transition~~net ~~of principal~~current ~~business~~assets ~~during~~(excluding ~~the~~due ~~2010 period, from providing PLFs~~ to ~~providing ELPs and the expense incurred in marketing activities~~ related ~~to the change~~ parties).

- 21 -

Investing activities

~~Net~~ Our ~~cash~~main ~~used~~uses inof ~~investing~~cash ~~activities~~ for ~~the~~investing ~~three~~activities ~~months ended~~are ~~March~~payments ~~31, 2010 was $42,920, as compared to $295,955~~ for the ~~same~~acquisition ~~period in 2009. During the first quarter~~ of ~~2010~~property, ~~the net cash used in investing was mainly attributable to acquisition of~~ plant and equipment and intangible assets.

Net cash used in investing activities for the six months ended June 30, 2010 was approximately $0.07 million, primarily a result of payments to acquire property, plant and the equipment and intangible assets in MenQ China.

Financing activities

Net cash used in financing activities for the ~~three~~six months ended ~~March~~June 3130, 2010 was approximately $0.42 million, aswhich ~~compared~~was tomainly ~~$1.8~~attributable ~~million~~to ~~for~~ the ~~same period.~~advances ~~During~~from ~~the~~related ~~first~~parties ~~quarter~~ of ~~2010,~~$0.84 ~~the~~million ~~net~~and ~~cash~~repayment ~~used in financing was mainly attributable~~ to ~~repayment~~related parties of ~~amount due from directors. The amount~~$1 ~~contributed~~million byin ~~directors~~the ~~was~~six ~~used~~months toended ~~finance~~June ~~the~~30, ~~Company’s working capital with interest-free~~2010.

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

Obligations ~~Under~~under Material Contracts

On May 20, 2009, we entered into a partnership agreement with Beijing Normal University. Pursuant to the partnership agreement, we are required to pay no less than RMB 1 million (approximately USD$147,~~060~~000) per year to Beijing Normal University for research and development purposes. We were required to pay RMB 300,000 (approximately USD$44,200) within 15 working days after the establishment of the IT Applied in Education Institute and are required pay the remaining amount in no less than RMB 150,000 (approximately USD$22,060) increments every three months. This agreement is for a term of three years. On August 2, 2009, we entered into a supplemental agreement with Beijing Normal University, pursuant to which we agreed to share 50% of the net profits from our sale of jointly researched and developed products under the partnership agreement.

Inflation

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

Off Balance Sheet Arrangements

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

Seasonality

We Our ~~may~~revenue ~~experience~~stream ~~seasonal~~is ~~fluctuations~~not incurrently ~~our~~affected ~~revenue~~by ~~in some regions in the PRC~~seasonality, ~~based~~since onour ~~the~~ELPs ~~academic year~~ and ~~the~~ICSPs ~~tendency~~are ofnewly ~~parents~~launched. ~~and students~~However, towe ~~make~~may ~~purchases~~experience ~~relating~~seasonal tofluctuations ~~their education just prior to or at the beginning of the school year~~ in ~~the autumn. Moreover,~~ our ~~revenues~~revenue ~~are usually higher~~ in ~~the~~some ~~second~~regions ~~half~~in of the ~~year~~PRC ~~than~~ in the ~~first~~near ~~half~~future ofas ~~the~~parents ~~year~~ and ~~the second~~students ~~quarter~~tend ~~is usually the slowest quarter because China’s educational~~to ~~institutions~~make ~~normally~~purchases ~~procure~~for ~~ELP~~schooling initems ~~first~~prior ~~and third quarters. Any seasonality may cause significant pressure on us~~ to ~~monitor~~or at the ~~development~~beginning of ~~materials accurately~~each ~~and~~school toyear ~~anticipate~~in August and ~~satisfy these requirements~~September.

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Critical Accounting Policies

These interim condensed consolidated financial statements are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The result reported in the condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

These condensed consolidated financial statements include the financial statements of CIE and its subsidiaries. All significant intercompany balances or transactions have been eliminated on consolidation

Research and development expenses

Advertising and promotion costs

Shipping and handling cost

Foreign Currency

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

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are based on the rates as published on the website of People’s Bank of China and are as follows:-

	As of March 31, 2010	As of December 31, 2009
Balance sheet items, except for equity accounts	US$1=RMB6.8259	US$1=RMB6.8282
	US$1=HK$7.7642	US$1=HK$7.7805

	Period ended March 31,
	2010	2009
Items in the statements of income and cash flows	US$1=RMB6.8270	US$1=RMB6.8283
	US$1=HK$7.7746	US$1=HK$7.7417

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

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

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Recent Accounting Pronouncements

Effective January 1, 2010, the Company adopted the provisions in ASU 2009-17, "Consolidation (ASC Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities", which changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The adoption of the provisions in ASU 2009-17 did not have an impact on the Company’s consolidated financial statements.

Effective January 1, 2010, the Company adopted ASU 2010-01, "Equity (ASC Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash", which clarifies that the stock portion of a distribution to shareholders that allow them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected prospectively in earnings per share and is not considered a stock dividend for purposes of ASC Topic 505 and ASC Topic 260. The adoption of the provisions in ASU 2010-01 did not have an impact on the Company’s consolidated financial statements.

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

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

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

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March~~June 3130, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of ~~March 31~~June 30, 2010, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.

Changes in Internal Control ~~Over~~over Financial Reporting

There have been no changes in our internal control over financial reporting during the ~~three~~six months ended ~~March~~June 3130, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS.

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

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ITEM 1A. RISK FACTORS.

Not applicable.

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

We have not sold any equity securities during the ~~quarter~~period ended ~~March~~June 3130, 2010 which sale was not previous disclosed in a current report on Form 8-K filed during that period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

We have no information to include that was required to be but was not disclosed in a report on Form 8-K during the period covered by this Form 10-Q. There have been no material changes to procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

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

Exhibit No.	Description

31.1	Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

	CHINA INTERACTIVE EDUCATION, INC.
Dated: May 24, 2010	/s/ Ruofei Chen
	Ruofei Chen
	Chief Executive Officer
Dated: May 24, 2010	/s/ Ting Pong Cheung
	Ting Pong Cheung
	Chief Financial Officer

CHINA INTERACTIVE EDUCATION, INC.

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Dated: August 19, 2010	/s/ Ruofei Chen
	Ruofei Chen
	Chief Executive Officer



Dated: August 19, 2010	/s/ Ting Pong Cheung
	Ting Pong Cheung
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description

31.1	Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Filing Compare · China Interactive Education, Inc.