UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 ~~May~~November 3130, 2010

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

For the transition period from _____ to _____

Commission File Number 000-51755

CHINA RUNJI CEMENT INC.

(Exact name of Registrant as specified in its charter)

Delaware		98-0533824
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Xian Zhong Town, Han Shan County

Chao Hu City, An Hui Province, People’s Republic of China

(Address of principal executive offices)

(86) 565 4219871

(Registrant's telephone number)

~~Check~~Indicate by check mark whether the registrant (1) 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 o

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

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

Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No x

State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: ~~July~~January 1514, ~~2010~~2011, 78,832,064 shares.

Table of Contents

CHINA RUNJI CEMENT INC.

Form 10-Q for the period ended ~~May~~November 3130, 2010

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
	ITEM 1 - FINANCIAL STATEMENTS
		Consolidated Balance Sheets as of May 31, 2010 and August 31, 2009 (Unaudited)	3
		Condensed Consolidated Balance Sheets as of November 30, 2010 and August 31, 2010 (Unaudited)	3
		Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended May 31, 2010 and 2009 (Unaudited)	4
		Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended November 30, 2010 and 2009 (Unaudited)	4
		Consolidated Statements of Cash Flows for the nine months ended May 31, 2010 and 2009 (Unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the three months ended November 30, 2010 and 2009 (Unaudited)	5
		Notes to Unaudited Consolidated Financial Statements	6
		Notes to Condensed Consolidated Financial Statements	6
	ITEM 2 - MANAGEMENT'’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		11
	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		1615
	ITEM 4 - CONTROLS AND PROCEDURES		1615
PART II - OTHER INFORMATION
	ITEM 1 - LEGAL PROCEEDINGS		17
	ITEM 6 – EXHIBITS		16
	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		17
		SIGNATURES	17
	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		17
	ITEM 4 - REMOVED AND RESERVED		17
	ITEM 5 - OTHER INFORMATION		17
	ITEM 6 – EXHIBITS		17
		SIGNATURES	18

Table of Contents

~~Consolidated~~PART ~~Balance~~I ~~Sheets~~- FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

China Runji Cement Inc.

Condensed Consolidated Balance Sheets

(UNAUDITED)

Assets	May 31, 2010		August 31, 2009
ASSETS	November 30, 2010		August 31, 2010
Current Assets
Current assets
Cash and cash equivalents	$	~~141~~1,~~850~~585,518	$	~~752~~683,~~952~~545
Accounts receivable, net (Note 3)		8,729,607		7,758,060
Accounts receivable, net of allowance for doubful account of $197,443 and $193,339 as of 11/30/2010 and 08/31/2010, respectively		14,573,743		9,364,751
Accounts receivable from related party (Note 3)		190,874		120,615
Accounts receivable from related party		296,191		212,374
Advances		5,572,054		6,323,149
Advances to suppliers		3,473,204		826,994
Short Term Deferred Assets		25,611		102,298
Short term deferred assets		100,004		151,296
Inventory		42,~~148~~436,~~055~~857		2,~~015~~090,~~140~~248
Prepaid expenses and other receivables		1,586,919		1,110,522
Other receivables		1,798,431		1,678,279
Total Current Assets		20,394,970		18,182,736
Other current assets		32,607		143,124
Advance for construction in progress projects		930,817		2,743,828
Total current assets		24,296,555		15,150,611
Property, plant and equipment, net		55,484,937		51,766,946
Advance for purchase of fixed assets		809,662		467,225
Intangible Assets & Deferred Charges		4,438,406		4,416,306
Property, plant and equipment, net		55,651,574		54,801,428
Total Assets	$	81,249,130	$	77,109,816
Intangible Assets & Deferred Charges		4,352,491		4,357,468
Liabilities and Stockholders’ Equity
Total assets		85,110,282		74,776,732
Current Liabilities
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payables and accrued liabilities	$	28,175,982	$	19,477,476
Current liabilities
Short-term loans (Note 4)		13,320,580		13,301,615
Accounts payable and accrued liabilities		28,428,273		23,805,922
Long-term loan-current portion		427,780		733,143
Short-term loans		13,340,223		14,094,478
Due to related parties (S/T) (Note 5)		12,514,078		16,816,524
Long-term loan-current portion		37,994		236,148
Taxes payable and other		307,198		739,405
Due to related parties		10,716,256		10,625,700
Total Current Liabilities		54,745,618		51,068,163
Taxes payable and other		2,812,297		970,841
Long-Term loan-non-current portion		-		235,174
Total current liabilities		55,335,043		49,733,089
Total Liabilities		54,745,618		51,303,337
Total liabilities		55,335,043		49,733,089
Commitments and Contingencies		-		-
Stockholders' equity
Stockholders' Equity
Preferred stock: 20,000,000 shares authorized, $0.0001 par value, No shares issued and outstanding		-		-
Preferred Stock: 20,000,000 shares authorized, $0.0001 par value No shares issued and outstanding		-		-
Common stock: 200,000,000 shares authorized, $0.0001 par value, 78,832,064 shares issued and outstanding		7,883		7,883
Common Stock: 200,000,000 shares authorized, $0.0001 par value 78,832,064 shares issued and outstanding		7,883		7,883
Additional paid in capital		15,984,109		15,984,109
Additional paid in capital		12,327,962		12,327,962
Accumulated other comprehensive income		3,172,875		2,623,937
Accumulated other comprehensive income		2,572,349		2,535,914
Retained earnings		10,610,372		6,427,714
Retained earnings		11,595,318		10,934,720
Total Stockholders' Equity		29,775,239		25,043,643
Total Stockholders' Equity		26,503,512		25,806,479
Total liabilities and stockholders' equity		85,110,282		74,776,732
Total Liabilities and Stockholders' Equity	$	81,249,130		77,109,816

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

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China Runji Cement, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income

(UNAUDITED)

	For the Three Months Period Ended						For the Nine Months Period Ended
	For the three months ended
	May 31,						May 31,
	November 30,
	2010			2009			~~2010~~		~~2009~~
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)
Revenue		20,801,677			10,930,701
Revenue	$	13,643,199		$	15,487,487		$	36,241,863	$	40,528,647
Cost of goods sold		14,067,990			10,225,190
Cost of goods sold		12,673,488			15,292,572			33,600,446		38,555,892
Gross profit		6,733,687			705,511
Gross Profit		969,711			194,915			2,641,417		1,972,755
Operating costs and expenses:
Operating Costs and Expenses:
Selling expenses		61,533			86,647
Selling expenses		54,824			177,101			189,253		336,523
G&A expenses:		710,139			625,380
A&G expenses:		445,439			255,204			1,984,766		1,141,995
Depreciation on office equipment:		101,788			39,566
Depreciation of property, plant and equipment		46,894			38,027			143,929		113,667
Total operating expenses		873,460			751,593
Total operating costs and expenses		547,157			470,332			2,317,948		1,592,185
Income (loss) from operations		5,860,227			(46,082	)
Income (Loss) From Operations		422,554			(275,417	)		323,469		380,570
Other income (expenses)
Interest income (Expense)		(185,064	)		(72,834	)		(639,844)		(108,469	)
Interest expense		(295,040	)		(222,098	)
Government subsidies /Grants		(745,030	)		-			1,596,392		-
Government subsidies/grants and other income		11,697			1,871,361
Other income (expenses)		(18,775	)		1,042,412			(18,708)		3,213,947
Income before income taxes		5,576,884			1,603,181
Income (expense) Before Income Taxes		(526,315)			694,161			1,261,309		3,486,048
Income taxes expense		1,394,226			403,247
Income taxes expense (benefit)		197,940			(376,825	)		600,711		5,615
Net income		4,182,658			1,199,934
Net Income (loss)	$	(724,255)		$	1,070,986		$	660,598	$	3,480,433
Other comprehensive income
Other Comprehensive Income
Foreign currency translation adjustment		548,938			54,559
Foreign currency translation adjustment		20,924			36,540			36,435		11,566
Comprehensive income		4,731,596			1,254,493
Comprehensive Income (Loss)	$	(703,331)		$	1,107,526		$	697,033	$	3,491,999
Earnings per share - basic and diluted		0.05			0.02
Earnings (Loss) Per Share, Basic and Diluted	$	(0.01)		$	0.01		$	0.01	$	0.04
Weighted average shares outstanding - basic and diluted		78,832,064			78,832,064
Weighted Average Shares Outstanding		78,832,064			78,832,064			78,832,064		78,832,064

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

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China Runji Cement, Inc.

Condensed Consolidated Statements of Cash Flows

(UNAUDITED)

	For the nine months Period Ended
	Three Months Ended
	31-May-10			31-May-09
	November 30,			November 30,
	2010			2009
Operating activities
Net income	$	~~660~~4,~~598~~182,658		$	31,~~480~~199,~~433~~934
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization		~~367~~97,~~117~~060			~~204~~69,~~599~~289
Depreciation, expense and cost		3,781,831			3,141,660
Depreciation expense		1,399,252			1,159,684
Changes in operating assets and liabilities:
Accounts receivable, net		(1,030,659	)		(3,596,842	)
Accounts receivable		(5,089,536	)		1,319,321
Advances to suppliers		~~711~~(2,~~364~~628,657	)		-5,334
Prepaid expenses and other receivables		(475,205	)		465,324
Inventory		(302,244	)		(326,896	)
Inventory		(2,130,064	)		469,008
Other receivables		(84,531	)		(949,992	)
Accounts payable and accrued liabilities		8,671,489			4,165,604
Other current assets		113,555			-
Customer Deposit		-			(1,001,520	)
Accounts payable and accrued liabilities		4,117,072			1,298,818
Tax payable		~~(433~~1,~~253~~820,850	)		(2380,~~059,586~~423	)
Net cash provided by operating activities		103,~~123~~625,~~218~~480			53,~~268~~395,~~680~~069
Investing activities
Change in due from related parties		-			53,534
Cash paid for property, plant and equipment additions		(1,428,756	)		(3,902,162	)
Property, plant and equipment additions		(5,888,215	)		(3,753,924	)
Net cash used in investing activities		(1,428,756	)		(3,902,162	)
Net cash (used in) investing activities		(5,888,215	)		(3,700,390	)
Financing activities
Short term loan proceeds		10895,~~978,355~~644			4878,~~240,960~~928
Short term loan (repayment)		(101,~~978~~940,~~355~~562	)		(68878,~~377~~928	)
Proceeds/(repayment) of related party loans		(4,326,687	)		(6,681,365	)
(Repayments) of due to related parties		(134,904	)		146,488
Proceeds from sale-leaseback financing –Current			-		710,818
Principle payment of the sale-leaseback financing		(202,326	)		(175,126	)
Proceeds from sale-leaseback financing - Non current			-		427,371
Net cash used in financing activities		(1,382,148	)		(28,638	)
Principal payment of the sale-leaseback financing		(541,907	)		-
Effect of exchange rate changes on cash and cash equivalents		87,397			(131,958	)
Net cash (used in) financing activities		(4,868,594	)		(1,370,593	)
Increase (decrease) in cash and cash equivalents		901,973			(667,689	)
Effect of exchange rate changes on cash and cash equivalents		22,489			(9,791	)
Cash and cash equivalents, beginning of year		683,545			752,952
Increase (decrease) in cash and cash equivalents		(611,102)			187,906
Cash and cash equivalents, end of year		1,585,518			85,263
Cash and cash equivalents, beginning of year		752,952			415,031
Cash and cash equivalents, end of year	$	141,850		$	602,937
Supplemental Disclosures
Interest paid	$	564,441		$	41,782
Interest Paid		113,837			98,225
Income taxes paid	$	~~600,638~~-		$	1403,~~444,339~~247
Non-Cash Investing Activity:
Construction in progress transferred to fixed assets	$	~~11,131,326~~-		$	-7,160,024
Advance transfer to CIP		-			3,496,594
Advances transferred to fixed asset		1,097,610			-

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

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CHINA RUNJI CEMENT INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2010

(UNAUDITED)

NOTE 1 – ORGANIZATION, ~~BASIS OF PRESENTATION~~ AND ~~SIGNIFICANT ACCOUNTING POLICIES~~BUSINESS

~~The~~China Runji Cement Inc. and our wholly owned subsidiaries (“we”, “us”, “our” or the Company) ~~was~~are ~~incorporated~~a asleading ~~FitMedia~~producer ~~Inc~~and distributor of cement, primarily in An Hui Province of central China and neighboring locations. Anhui Province Runji Cement Co. Ltd. (“Anhui Runji”) is our operating subsidiary located in Xianzong Town, aAn ~~Delaware~~Hui ~~corporation~~province, onChina, ~~August~~where 30the factory occupies an area of 418 mu, ~~2004~~and its limestone mine comprises an area of 1,000 mu. The Anhui Runji factory, limestone reserve and storing mine together comprise an area of approximately 50,000 square meters.

OnAt ~~November 1~~present, ~~2007,~~ the Company ~~closed~~has aone ~~reverse~~cement ~~merger~~production ~~with~~line and ~~Anhui~~one ~~Province~~cement ~~Runji~~clinker ~~Cement~~production Coline., ~~Limited~~The ~~(“Anhui~~production ~~Runji”).~~capacity ~~Anhui~~of ~~Runji~~each isline ~~the~~amounts ~~accounting acquirer~~to 2,500 tons per day and one million tons per year. Presently, the ~~transaction~~Company ismainly ~~accounted~~focuses ~~for~~production on Runji Brand cement P.II52.5, P.O42.5, P.O32.5 P.C32.5 as awell ~~recapitalization~~as cement clinker. ~~The~~ ~~historical~~P.II52.5 ~~financial~~is ~~statements~~a ofhigh grade, high strength cement that is made for Anhui ~~Runji~~and ~~survived~~Jiangsu Provinces and the ~~merger~~region north of the Changjiang River and ~~are presented~~is ~~herein.~~used Toin ~~reflect~~large ~~its~~infrastructure ~~business~~projects. ~~and~~The ~~business~~cement ~~plan,~~clinker is the ~~Company~~semi-finished ~~changed~~ingredient ~~its~~of ~~name~~cement, ~~from~~which ~~“FitMedia~~is ~~Inc.”~~ able to ~~“China~~be ~~Runji~~processed ~~Cement~~into ~~Inc~~different categories of cement products.”

~~Anhui~~The ~~Runji, a~~Company ~~producer~~produces ~~and~~cement ~~distributor~~through ofthe ~~cement~~advanced ~~located~~dry inproduction ~~Anhui~~process, ~~Province~~an inenergy ~~China,~~efficient ~~was~~and ~~established~~environmentally infriendly ~~December~~cement ~~2003~~production ~~with~~technique. Although ~~registered~~the ~~capital~~Chinese ofgovernment ~~RMB~~has 60mandated the elimination of 250 million. ~~Anhui~~tons ~~Runji~~of ~~started~~outdated cement production incapacity ~~October~~by ~~2005~~2010, ~~and~~only ~~specializes~~60% inof ~~cement~~the ~~production~~total ~~and~~output ~~sales.~~in ~~The~~the ~~main~~region ~~cement~~is ~~varieties~~currently produced ~~are~~by ~~ordinary~~dry ~~silicate~~process. ~~cement~~The ~~PO52.5,~~Company ~~PO42.5,~~has ~~PO32.5~~a ~~and~~rigorous ~~PC32.5.~~quality ~~Following~~control ~~the~~system ~~commencement~~and ofreceived ~~the~~ISO9001 ~~second~~quality ~~cement~~system ~~clinker~~certification ~~production~~and ~~line~~international accreditation in ~~October~~March ~~2008~~2006. In addition, ~~Anhui~~our ~~Runji~~Company ~~currently~~passed ~~has~~the ~~one~~national ~~production~~GB/T ~~line~~19001-2000 ofstandard ~~cement~~authentication. The ~~and~~Company’s ~~one~~pollution ~~of cement~~control ~~clinker;~~exceeds ~~each~~the isnational ~~designed~~standard toand ~~produce~~received ~~2,500~~“green ~~tons~~building ~~per~~material” ~~day~~certification in 2007.

~~Anhui~~The ~~Runji~~Company ~~obtained~~has ~~its~~an ~~production~~abundant ~~license~~supply inof ~~2005.~~high ~~Presently,~~quality ~~Anhui~~raw ~~Runji mainly focuses production on Runji Brand PII52~~materials.5, ~~PO42.5,~~The ~~PO32.5~~Company ~~and~~has ~~PC32.5~~obtained ~~cements. PII52.5 is~~ a ~~high~~30 ~~grade,~~year ~~high~~mining ~~strength~~right ~~cement~~for ~~that~~87 ismillion ~~made~~tons ~~in Anhui and Jiangsu Provinces and the region~~ of ~~north~~limestone ofreserve, ~~the~~which ~~Changjiang River~~can ~~and~~supply istwo ~~used~~cement inclinker ~~large~~production ~~infrastructural~~lines ~~projects.~~with ~~Anhui Runji has~~ a ~~rigorous~~daily ~~quality~~output ~~control~~of ~~system~~2,500 ~~and~~tons for ~~received~~40 ~~ISO9001 quality system certification and international accreditation in March 2006~~years. ~~In addition Anhui Runji passed the national GB/T 19001-2000 standard authentication.~~

Presently, the Company is one of the largest cement producers and distributors in the north Changjiang region of Anhui, ~~Runji~~with a 10% market share within a 100 mile radius of its facility. The Company is the only producer of P.II52.5 cement (the highest quality cement) in the north Changjiang region of Anhui and Jiangsu Provinces, with 70% market share within a 100 miles radius of its facility. Annual production capacity of the Company is two million tons cement and cement clinker. The Company’s main market for cement is in Hefei ~~city~~(Anhui Province), with total sales of 750 thousand tons, representing 75% of our total annual cement production and ~~Pukou~~an additional 25% is sold in Chaohu and its surrounding areas, Moreover, the Company’s main cement clinker market is in Chaohu with total sales of 800 thousand tons in the area, representing 80% of ~~Nanjing~~ ~~city~~our total annual cement clinker production, and an additional 20% is sold in Hefei.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These accompanying ~~unaudited~~condensed ~~interim~~ consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Ren Ji Cement Investment Co., Ltd (a BVI corporation), Ren Ji Cement Company Limited (a Hong Kong corporation) and Anhui Province Runji Cement Co., Ltd. (a PRC corporation), and have been prepared in accordance with accounting principles generally accepted in the United States of America ~~and~~(“US ~~the~~GAAP”) ~~rules~~for ofinterim information, and with the ~~Securities~~instructions ~~and~~to ~~Exchange~~Form ~~Commission,~~10-Q and ~~should~~Rule be10-01 ~~read~~of inRegulation ~~conjunction~~S-X ~~with~~of the ~~August~~Securities ~~31,~~and ~~2009~~Exchange ~~audited~~Commission ~~financial~~(“SEC”). ~~statements~~Accordingly, ofthey ~~the~~do ~~Company~~not ~~and~~include ~~the~~all ~~notes~~of ~~thereto~~the asinformation ~~included~~and infootnotes ~~the~~required ~~Company’s~~by ~~Form~~U.S. ~~10-K~~GAAP ~~filed~~for onannual ~~November~~financial ~~25, 2009~~statements. In the opinion of management, ~~all~~the ~~adjustments,~~interim ~~consisting~~financial ofstatements ~~normal~~reflect ~~recurring~~all normal adjustments, that are necessary ~~for~~to provide a fair presentation of the financial ~~position and~~ results ~~of operations~~ for the interim periods presented ~~have been reflected herein~~. Operating ~~The~~ results ~~of operations~~ for interim periods are not necessarily indicative of ~~the~~ results tothat may be expected for ~~the~~an ~~full~~entire fiscal year. ~~Notes~~The tocondensed consolidated balance sheet as of August 31, 2010 has been derived from the audited consolidated financial statements, ~~which~~as ~~would~~of ~~substantially~~such ~~duplicate~~date. ~~the~~For ~~disclosure~~a ~~required~~more incomplete understanding of the Company’s ~~August~~financial 31position, ~~2009~~operating ~~annual~~results, ~~financial~~risk ~~statements~~factors, ~~have~~and ~~been~~other ~~omitted~~matters, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2010.

~~These~~All ~~accompanying~~significant ~~consolidated~~inter-company ~~financial~~balances ~~statements include the accounts of the Company~~ and ~~its~~transactions wholly owned subsidiaries, Ren Ji Cement Investment Co., Ltd (a BVI corporation), Ren Ji Cement Company Limited (a Hong Kong corporation) and Anhui Province Runji Cement Co., Ltd. (a PRC corporation), and have been ~~prepared~~eliminated in ~~accordance with accounting principles generally accepted in the United States of America (“US GAAP”)~~consolidation.

All significant inter-company balances and transactions have been eliminated in consolidation. Certain prior period numbers are reclassified to conform to current period presentation.

Use of Estimates

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates.

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CHINA RUNJI CEMENT INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~May~~November 3130, 2010

(UNAUDITED)

NOTE 13 – ~~ORGANIZATION,~~ACCOUNTS ~~BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)~~RECEIVABLE

Government Subsidies Income

	30-Nov-10			31-Aug-10

Notes Receivable	$	1,506,061		$	138,118
Accounts Receivable –Trade	$	13,265,125		$	9,419,972
Accounts Receivable from related party		296,191			212,374
Allowance for Doubtful Accounts		(197,443	)		(193,339	)
	$	14,869,934		$	9,577,125

AThe ~~government~~accounts ~~subsidy~~receivable isfrom ~~recognized~~related ~~only~~party ~~when~~was ~~there~~$296,191 isand ~~reasonable~~$212,374 ~~assurance~~at ~~that~~November ~~the~~30, ~~enterprise~~2010 ~~will~~and ~~comply~~August ~~with~~31, ~~any~~2010 ~~conditions~~respectively. ~~attached~~The torelated ~~the~~party ~~grant~~is ~~and~~an entity controlled by the ~~grant~~President ~~will~~and beCEO ~~received~~of the Company.

~~During~~The ~~the~~accounts ~~quarter~~receivable ~~ended~~amount ~~November~~of 30$3, ~~2009~~300,035 the Company recorded government subsidy income of RMB 12.8 million, including RMB 6 million received from the local government of Hanshan County as the allowance for the Company’s waste heat generator project; and ~~a receivable of RMB 6.8 million from the Local Tax Bureau of Hanshan County for a confirmed tax refund of RMB 6~~$2,~~791~~539,~~164.~~569 ~~During~~at ~~the~~November ~~quarter ended February 28~~30, 2010, ~~the Company recorded government subsidy income of RMB 3.2 million from the local government of Hanshan County to support its operation~~ and ~~growth.~~August ~~During the quarter ended May~~ 31, 2010, ~~the total tax refund received was RMB 1~~respectively,~~500,000~~ ~~and management believes that the government subsidy grants shall be adjusted by RMB 5.3 million for the probable uncollectable tax refund. The adjustment~~ is ~~due~~used ~~to the change in the government policy and is recorded~~ as a ~~change~~securitization infor ~~accounting estimate. The government subsidy income totaled RMB 10.9 million or US$1,596,392 during~~ the ~~nine~~ICBC ~~months~~Hanshan ~~ended~~bank ~~May 31, 2010~~loan.

~~New~~NOTE ~~Accounting~~4 ~~Pronouncements~~– INVENTORY

InInventory ~~October~~consists ~~2009, the FASB issued Accounting Standards Update, 2009-13, Revenue Recognition (Topic 605) “Multiple Deliverable Revenue Arrangements - A Consensus~~ of the FASB Emerging Issues Task Force.” This update provides application guidance on whether multiple deliverables exist, how the deliverables should be separated and how the consideration should be allocated to one or more units of accounting. This update establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific or third-party evidence is available. The Company will be required to apply this guidance prospectively for revenue arrangements entered into or materially modified after January 1, 2011; however, earlier application is permitted. Management is in the process of evaluating the impact of adopting this standard on the Company’s financial statements.following:

NOTE 2 – GOING CONERN

	30-Nov-10		31-Aug-10

Raw Materials	$	1,679,858	$	741,645
Packaging Materials		14,496		27,258
Semi-Finished Goods		215,521		599,178
Finished Goods		526,982		722,167
	$	2,436,857	$	2,090,248

AsNOTE ~~reflected~~5 in– ~~the~~ADVANCES ~~accompanying~~TO consolidated financial statements, the Company had a working capital deficiency of $34,350,648 as of May 31, 2010. This factor raises substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.SUPPLIERS

~~Although~~Advances ~~the Company plans~~ to ~~obtain~~suppliers ~~additional~~consist ~~funding from sources~~ of ~~equity~~the ~~or debt financing, there is no assurance these activities will be successful.~~following:

	30-Nov-10		31-Aug-10
Advances to suppliers	$	3,473,204	$	826,994
Advance for purchase of fixed assets		809,662		467,225
Advances	$	4,282,886	$	1,294,219

Advances to suppliers represent amounts prepaid for raw materials. Advances for purchase of fixed assets represents amounts prepaid for the purchase of fixed assets. The advances are applied against amounts due to the supplier as the materials are received.

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CHINA RUNJI CEMENT INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~May~~November 3130, 2010

(UNAUDITED)

NOTE 36 – ~~ACCOUNTS~~PROPERTY, ~~RECEIVABLE~~PLANT AND ~~NOTES RECEIVABLE~~EQUIPMENT

	31-May-10		31-Aug-09
Accounts Receivable –Trade	$	8,729,607	$	7,758,060
Accounts Receivable from related party		190,874		120,615
Allowance for Doubtful Accounts		-		-
	$	8,920,481	$	7,878,675

Property, plant and equipment consist of the following:

The accounts receivable from related party was $190,874 and $120,615 at May 31, 2010 and August 31, 2009 respectively. The related party is an entity controlled by the President and CEO of the Company.

	30-Nov-10		31-Aug-10

Building	$	33,006,409	$	32,320,411
Equipment & machinery		41,262,028		39,325,188
Automobiles		326,707		319,917
Other equipment		31,752		31,092
Computer equipment		33,677		32,977
Construction in progress		32,796		32,114
Total property, plant and equipment (gross)		74,693,369		72,061,699
Accumulated depreciation		(19,041,795)		(17,260,271)
Total property, plant and equipment (net)		55,651,574		54,801,428

~~The~~NOTE ~~accounts~~7 ~~receivable~~–INTANGIBLE ~~amount~~ASSETS of& ~~$2,927,600~~DEFERRED ~~and $2,923,464 at May 31, 2010 and August 31, 2009 respectively, is used as a securitization for the ICBC Hanshan bank loan (Note 4).~~CHARGES

~~Short~~Intangibles ~~term~~and ~~loans~~deferred ~~consist~~charges ofinclude the following:

	31-May-10		31-Aug-09
	30-Nov-10		31-Aug-10		Terms
Xian Zong Credit Bank	$	878,280	$	438,519
Mineral exploration right-Shihuishi	$	3,354,874	$	3,316,634	30 years
PuFa Bank WenHu business branch		4,245,020		4,239,022
Mineral exploration right-Shayan		193,391		196,562	10 years
ICBC Hanshan branch		2,927,600		2,923,464
Land acquisition compensation (compensating fee for mine and forest)		466,637		473,066	10 years
Huishang Bank		2,342,080		5,262,235
Planting fee in working place		198,395		221,363	3 years
Runfeng Company		-		438,375
Compensating fee for stone materials in Baxiong Village		14,334		14,531	10 years
Xinneng and Jiangsu Runhuan Company		2,927,600		-
Compensating fee for limekiln and drought land in Baxiong Village		12,465		12,637	10 years
	$	13,320,580	$	13,301,615
Compensating fee for sandstone land in Qiaomai Village		99,653		100,839	10 years
Debt issue cost		12,742		21,836	2 years
Total intangible assets & deferred charges	$	4,352,491	$	4,357,468

The total amortization expenses related to the intangibles and deferred charges are $97,060 and $69,289 for the three months ended November 30, 2010 and 2009, respectively.

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CHINA RUNJI CEMENT INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~May~~November 3130, 2010

(UNAUDITED)

NOTE 48 – SHORT-TERM LOANS ~~(CONT.)~~

~~The~~Short ~~details~~term ~~for the Company’s bank~~ loans atconsist ~~May 31, 2010 are as follows~~of:

Borrowing bank	Amount		Starting date	Maturity date		Interest rate (monthly)
	30-Nov-10			31-Aug-10
* Xian Zong Credit Bank	878,280		2009-11-16	2010-11-16		0.8835%
Xian Zong Credit Bank	$	899,361		$	880,670
** PuFa Bank WenHu business branch	4,245,020		2010-05-05	2011-04-27		0.5237%
PuFa Bank WenHu business branch		4,346,914			4,256,568
*** ICBC Hanshan branch	2,927,600		2010-03-09	2011-03-16		0.6000%
ICBC Hanshan		1,948,616			2,953,564
**** Huishang Bank	2,342,080		2009-06-22	2010-06-22		0.4425%
Huishang Bank Sales Department		5,396,169			5,284,015
Runfeng company		749,163			737,661
	$	13,340,223		$	14,094,478

* The ~~loan~~details ~~from~~for the ~~Xianzhong~~Company’s ~~Credit~~bank ~~Bank~~loans ~~was~~at ~~pledged~~November in30, ~~collateral~~2010 ofare ~~machine~~as ~~equipment in value of RMB 25,173,720.~~follows:

** The loan from the Wenhu branch of PuFa Bank was pledged in collateral of the Company’s building and land use right.

	Borrowing bank	Amount		Starting date		Maturity date		Interest rate (monthly)

*	Xian Zong Credit Bank		899,361		2010-11-22		2011-11-22		0.834	%
**	PuFa Bank WenHu business branch		4,346,914		2010-05-05		2011-04-27		0.5310	%
***	ICBC Hanshan		1,948,616		2010-03-15		2011-03-15		0.6058	%
****	Huishang Bank Sales Department		5,396,169		2010-07-22		2011-07-21		0.5310	%
	Runfeng Company		749,163		2010-05-26		2011-05-25		0.8835	%

*** The loan from the Hanshan branch of ICBC Bank is securitized by an accounts receivable balance of $2,927,600 and $2,923,464 (Note 3) at May 31, 2010 and August 31, 2009 respectively.____________

**** The loan from the Huishang Bank was guaranteed by Anhui Province Credit Guarantee (Group) Co., Ltd.

*	The loan from the Xian Zong Credit Bank was pledged in collateral of machine equipment in value of RMB 24,025,000.
**	The loan from the Wenhu branch of PuFa Bank was pledged in collateral of the Company’s building and land user right.
***	The loan from the Hanshan branch of ICBC Bank is securitized by an accounts receivable balance of $3,300,035 and $2,923,464 at November 30, 2010 and August 31, 2010 respectively.
****	The loan from the sales department of Huishang Bank was guaranteed by Anhui Province Credit Guarantee (Group) Co., Ltd.

The $2,927,600 borrowing from Xinneng and Jiangsu Runhuan Company is from the Company’s vendors which is non-interest bearing and due on demand.

NOTE 5 –DUE TO RELATED PARTIES

(a) Names and relationship of related parties

Existing relationships with the Company Nanjin Hongren A company controlled by shareholder Nanjin Runji A company controlled by shareholder Zhao, Shouren Shareholder & President & CEO of the Company Yang, Xuanjun Shareholder of the Company

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CHINA RUNJI CEMENT INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~May~~November 3130, 2010

(UNAUDITED)

NOTE 59 –DUE TO RELATED PARTIES ~~(CONT.)~~

(a) Names and relationship of related parties

	Existing relationships with the Company

Nanjing Hongren	A company controlled by shareholder

Nanjing Runji	A company controlled by shareholder

Zhao, Shouren	Shareholder & president & CEO of the Company

Yang, Xuanjun	Shareholder of the Company

(b) Due to Related Parties (S/T) consists of the following:

	31-May-10		31-Aug-09
	30-Nov-10		31-Aug-10
Due to related party – Nanjin Hongren	$	7,143,953		8,279,088
Due to related party – Nanjing Hongren	$	5,516,708		5,622,218
Due to related party – Nanjin Runji		4,412,906		7,135,035
Due to related party – Nanjing Runji		4,518,830		4,424,912
Due to related party – Zhao, Shouren		~~527~~60,~~865~~876		~~611~~59,~~899~~611
Due to related party – Yang, Xuanjun		~~426~~616,~~451~~560		~~788~~515,~~052~~677
Miscellaneous		23,~~903~~282		23,~~450~~282
	$	1210,~~514~~716,~~078~~256		1610,~~816~~625,~~524~~700

The above amounts due to related parties represent loans payable, are short-term loans that are unsecured and non-interest bearing, and the loans’ ~~usage~~use will depend on the Company’s business operations.

NOTE 10 – LONG-TERM LOAN

The details for the Company’s long-term loan are as follows:

	30-Nov-10		31-Aug-10

Long-term loan – Anhui Yuanzhong (current portion)	$	37,994	$	236,148

	$	37,994	$	236,148

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~~GENERAL~~CHINA ~~DESCRIPTION~~RUNJI OFCEMENT ~~BUSINESS~~INC.

~~Introduction~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~China~~November ~~Runji was incorporated as FitMedia Inc., a Delaware company, on August~~ 30, 2004. FitMedia was a development stage company that planned to sell prenatal yoga DVDs through small retail stores and others and it also planned to sell its fitness DVDs through its Internet site www.fitmedia.net. It completed its prenatal yoga DVD for sale and began marketing it in January 2007.2010

In October 2007, the management of FitMedia determined that it was in the best interests of the stockholders of FitMedia to agree to a share exchange with Anhui Province Runji Cement Co., Limited, a Chinese company that is engaged in the business of distributing cement across many provinces in mainland China. As part of the share exchange and reverse merger, FitMedia ceased engaging in the health and fitness business.(UNAUDITED)

OnNOTE ~~October~~11 9,– ~~2007,~~COMMITMENTS ~~FitMedia~~AND entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among FitMedia, Timothy Crottey, the President and majority shareholder of FitMedia (“Crottey”), Shouren Zhao, a citizen and resident of the People’s Republic of China and owner of 100% of the share capital of Ren Ji Cement Investment Company Limited (“Zhao”); Ren Ji Cement Investment Company., Ltd., a British Virgin Islands corporation (“Renji Investment”) and owner of 100% of the share capital of Ren Ji Cement Company Limited; Ren Ji Cement Company Limited, a corporation organized and existing under the laws of the Hong Kong SAR of the People’s Republic of China (“HK Renji”) and owner of 100% of the share capital of Anhui Province Runji Cement Co., Ltd.; and Anhui Province Runji Cement Co., Ltd., a corporation organized under the laws of the People’s Republic of China (“Anhui Runji”). For purposes of the Exchange Agreement, Zhao was referred to as the “Ren Shareholder,” and Renji Investment, HK Renji and Anhui Runji were referred to as the “Renji Subsidiaries.” Upon closing of the share exchange transaction (the “Share Exchange”) contemplated under the Exchange Agreement on November 1, 2007, the Ren Shareholder transferred all of his share capital in Renji Investment to FitMedia in exchange for an aggregate of 55,000,000 shares of common stock of the FitMedia, thus causing the Renji Subsidiaries to become direct and indirect wholly-owned subsidiaries of FitMedia.CONTINGECIES

OnSocial ~~October~~insurance 9, 2007, FitMedia entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among FitMedia, Crottey, and the Ren Shareholder, pursuant to which the Ren Shareholder, as Purchaser, at closing on November 1, 2007, acquired 18,500,000 shares (the “Stock Purchase”) of common stock of FitMedia from Crottey for ~~$540,000.00.~~employees

InAccording ~~addition~~to the prevailing laws and regulations of the PRC, ~~pursuant~~the Company is required to ~~the~~cover ~~terms~~its employees with medical, retirement and ~~conditions~~unemployment insurance programs. Management believes that due to the transient nature of its employees, the ~~Exchange~~Company ~~Agreement:~~does not need to provide all employees with such social insurances, and has paid the social insurances for the Company’s employees who have completed three months’ continuous employment with the Company.

●In ~~Demand~~the ~~and~~event ~~piggy-back~~that ~~registration~~any ~~rights~~current ~~were~~or ~~granted~~former toemployee ~~the~~files ~~Ren~~a ~~Shareholder~~complaint with ~~respect~~the PRC government, the Company may be subject to ~~shares~~making ofup the social insurances as well as administrative fines. As the Company’s ~~restricted~~believes ~~common~~that ~~stock~~these tofines bewould ~~acquired~~not bybe ~~him~~material, atno ~~closing~~provision inhas abeen ~~Regulation~~made Sin ~~offering~~this regard.

●Tax On the Closing Date, the current officers of FitMedia resigned from such positions and the persons chosen by Anhui Runji were appointed as the officers of FitMedia, notably Shouren Zhao, as Chairman, CEO and President and Yichun Jiang as CFO.issues

●The Ontax authority of the ~~Closing~~PRC ~~Date,~~Government ~~Crottey~~conducts ~~resigned~~periodic ~~from~~and ~~his~~ad ~~position~~hoc astax afiling ~~director~~reviews ~~effective~~on ~~upon~~business ~~the~~enterprises ~~expiration~~operating ofin the ~~ten~~PRC ~~day~~after ~~notice~~those ~~period~~enterprises ~~required~~have bycompleted ~~Rule~~their ~~14f-1~~relevant tax filings, athence ~~which~~the ~~time~~Company’s ~~additional~~tax ~~persons~~filings ~~designated~~may bynot ~~Anhui~~be ~~Runji~~finalized. ~~were~~It ~~appointed~~is therefore uncertain as ~~directors~~to ofwhether ~~FitMedia~~the PRC tax authority may take different views about the Company’s tax filings, ~~notably~~which ~~Liming~~may Bilead ~~and~~to ~~Xuanjun~~additional ~~Yang~~tax liabilities.

●The OnCompany ~~the~~does ~~Closing~~not ~~Date,~~have ~~FitMedia~~any ~~paid~~operating leases and ~~satisfied~~other ~~all of its “liabilities” as such~~ long-term ~~is defined by U.S. GAAP as of the closing.~~commitments

●NOTE As12 of– ~~the~~INCOME ~~Closing, the parties consummated the transactions contemplated by the Stock Purchase Agreement.~~TAXES

OnThe ~~January~~Company’s 8,Chinese ~~2008,~~Enterprise ~~FitMedia~~Income ~~changed~~Tax ~~its~~(“EIT”) ~~name~~rate tois ~~China Runji Cement Inc. and increased its authorized common stock from 80~~25%,~~000,000 shares to 200,000,000 shares.~~

		Three months ended 30-Nov-10				Three months ended 30-Nov-09
Income Taxes		$	1,394,226			$	403,247

A reconciliation between the income tax computed at the U.S. statutory rate and the Company’s provision for income tax is as follows:

	Three months ended
	November 30,			November 30,
	2010			2009
U.S. statutory rate		34	%		34	%
Foreign income not recognized in the U.S.		(34.00	)%		(34.00	)%
PRC preferential enterprise income tax rate		25	%		25	%
Others permanent differences		0	%		0	%
Provision for income tax		25	%		25	%

There are no significant temporary differences between book and tax income. The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises have completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings, which may lead to additional tax liabilities.

The Company’s corporate income tax liability is $2,065,099 and $651,263 as of November 30, 2010 and August 31, 2010, respectively.

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~~Anhui~~ITEM ~~Runji~~2 is- aMANAGEMENT'S ~~producer~~DISCUSSION ~~and~~AND ~~distributor~~ANALYSIS ofOF ~~cement,~~FINANCIAL ~~primarily~~CONDITION inAND AnRESULTS ~~Hui~~OF Province of central China and neighboring locations, which was founded in December 2003. Its initial capital was 60,000,000 RMB and there were two founding shareholders who owned such capital in a ratio of 60 to 40. Anhui Runji is located in Xianzong Town, Hanshan County, An Hui Province, where the factory occupies an area of 418 mus, and its limestone mine comprises an area of 1,000 mus. The Anhui Runji factory, limestone reserve and storing mine together comprise an area of approximately 50,000 square meters.OPERATIONS

~~Summary~~GENERAL ofDESCRIPTION ~~the~~OF ~~Operations of Anhui Runji~~BUSINESS

Anhui Province Runji Cement Co., Limited (www.chinarunji.com), a private company located in Anhui Province in China, was established in December 2003 with registered capital of 60 million RMB. The Company started production in October 2005 and specializes in cement production and sales. The main cement varieties produced are ordinary silicate cement P.O52.5, P.O42.5, P.O32.5 and P.C32.5. At present, the Company has one cement production line and one cement clinker production line. The production capacity of each line amounts to 2,500 tons per day and one million tons per year.Introduction

~~The~~China ~~Company~~Runji ~~obtained~~Cement ~~its~~Inc. ~~production~~and ~~license~~our inwholly ~~2005.~~owned ~~Presently~~subsidiaries (“we”, “us”, “our” or the Company) ~~mainly~~are ~~focuses~~a ~~production~~leading onproducer ~~Runji~~and ~~Brand~~distributor ~~cement~~of ~~P.II52.5~~cement, ~~P.O42.5,~~primarily ~~P.O32.5~~in ~~P.C32.5~~An asHui ~~well~~Province asof ~~cement~~central ~~clinker~~China and neighboring locations. ~~P.II52.5~~ isAnhui aProvince ~~high~~Runji ~~grade,~~Cement ~~high~~Co. ~~strength~~Ltd. ~~cement~~(“Anhui ~~that~~Runji”) is ~~made~~our ~~for~~operating ~~Anhui~~subsidiary ~~and~~located ~~Jiangsu~~in ~~Provinces~~Xianzong ~~and~~Town, ~~the~~An ~~region~~Hui ~~north~~province, ofwhere the ~~Changjiang~~factory ~~River~~occupies ~~and~~an isarea ~~used~~of in418 ~~large~~mu, ~~infrastructure~~and ~~projects.~~its ~~The~~limestone ~~cement~~mine ~~clinker~~comprises isan ~~the~~area ~~semi-finished~~of ~~ingredient~~1,000 ofmu. ~~cement~~The Anhui Runji factory, ~~which~~limestone ~~can~~reserve beand ~~processed~~storing ~~into~~mine ~~different~~together ~~categories~~comprise an area of ~~cement~~approximately ~~products~~50,000 square meters.

~~The~~At present, the Company ~~produces~~has one cement ~~through~~production ~~the~~line and ~~advanced~~one ~~dry~~cement clinker production ~~process,~~line. anThe ~~energy~~production ~~efficient~~capacity ~~and~~of ~~environmentally~~each ~~friendly~~line ~~cement~~amounts ~~production~~to ~~technique~~2,500 astons ~~only~~per ~~60%~~day ofand ~~the~~one ~~total~~million ~~output~~tons inper year. Presently, the ~~region~~Company ismainly ~~produced~~focuses byproduction ~~dry~~on ~~process~~Runji Brand cement P.II52.5, ~~The~~P.O42.5, ~~Company~~P.O32.5 ~~has~~P.C32.5 as well as cement clinker. P.II52.5 is a ~~rigorous~~high ~~quality~~grade, ~~control~~high ~~system~~strength ~~and~~cement ~~received~~that ~~ISO9001~~is ~~quality~~made ~~system~~for ~~certification~~Anhui and ~~international~~Jiangsu ~~accreditation~~Provinces inand ~~March~~the ~~2006. In~~region ~~addition,~~north ~~our~~of ~~Company~~the ~~passed~~Changjiang ~~the~~River ~~national~~and ~~GB/T~~is ~~19001-2000~~used ~~standard~~in ~~authentication~~large infrastructure projects. The ~~Company’s~~cement ~~pollution~~clinker ~~control~~is ~~exceeds~~ the ~~national~~semi-finished ~~standard~~ingredient ~~and~~of ~~received~~cement, ~~“green~~which ~~building~~is ~~material”~~able ~~certification~~to inbe ~~2007~~processed into different categories of cement products.

The Company produces cement through the advanced dry production process, an energy efficient and environmentally friendly cement production technique. Although the Chinese government has mandated the elimination of 250 million tons of outdated cement production capacity by 2010, only 60% of the total output in the region is currently produced by dry process. The Company has a rigorous quality control system and received ISO9001 quality system certification and international accreditation in March 2006. In addition, our Company passed the national GB/T 19001-2000 standard authentication. The Company’s pollution control exceeds the national standard and received “green building material” certification in 2007.

The Company has an abundant supply of high quality raw materials. The Company has obtained a 30 year mining right for 87 million tons of limestone reserve, which can supply two cement clinker production lines with a daily output of 2,500 tons for 40 years.

Presently, the Company is one of the largest cement producers and distributors in the north Changjiang region of Anhui, with a 1210% market share within a 100 mile radius of its facility. The Company is the only producer of P.II52.5 cement (the highest quality cement) in the north Changjiang region of Anhui and Jiangsu Provinces, with 70% market share within a 100 miles radius of its facility. Annual production capacity of the Company is two million tons cement and cement clinker. The Company’s main market for cement is in Hefei ~~and Pukou~~ (~~Nanjing~~Anhui Province), with total sales of ~~600,000~~750 ~~tons~~thousand ~~in the area~~tons, representing 6075% of our total annual cement production ofand ~~one~~an ~~million~~additional ~~tons.~~25% Anis ~~additional~~sold ~~30%~~in ofChaohu ~~total~~and ~~annual~~its ~~production~~surrounding areas, Moreover, the Company’s main cement clinker market is ~~sold~~in Chaohu with total sales of 800 thousand tons in the ~~cities~~area, ~~surrounding~~representing ~~Hefei~~80% ~~and~~of ~~Pukou,~~our ~~with~~total ~~another~~annual ~~10%~~cement ~~being~~clinker ~~sold~~production, inand ~~Liu’~~an ~~and~~additional ~~Dingyuan~~20% inis ~~Anhui~~sold ~~and~~in ~~Jiangsu~~Hefei.

~~The~~Summary ~~Company’s~~of ~~net sales to customers for~~ the ~~nine~~Operations ~~months~~of ~~ended~~Anhui ~~May 31, 2010 and May 31, 2009 were $36,241,863 and $40,528,647, respectively.~~Runji

The Company’s net sales to customers for the three months ended November 30, 2010 and November 30, 2009, were $20,801,677 and $10,930,701, respectively.

Anhui Runji’s Plan of Operation

●Ÿ We plan to raise adequate capital over the next five years for expansion and growth.

●RESULTS WeOF ~~plan~~OPERATIONS toFOR ~~construct~~THE aTHREE ~~third~~MONTHS ~~production~~ENDED ~~line~~NOVEMBER in30, ~~late~~ 2010, ~~which~~AND will have a daily cement clinker production capacity of 5,000 tons or 1.5 million tons annually. Upon completion, our total cement production capacity will reach 3.6 million tons per year, and cement clinker production will reach 3 million tons per year, controlling 30% of the market share within a 100 miles radius of our production facility.2009

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The following discussion should be read in conjunction with the financial statements included in this report and is qualified in its entirety by the foregoing.

FORWARD LOOKING STATEMENTS

Certain statements in this report, including statements of our expectations, intentions, plans and beliefs, including those contained in or implied by "Management's Discussion and Analysis" and the Notes to Financial Statements, are "forward-looking statements", within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are subject to certain events, risks and uncertainties that may be outside our control. The words “believe,”, “expect,”, “anticipate,”, “optimistic,”, “intend,”, “will,”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements. These forward-looking statements include statements of management's plans and objectives for our future operations and statements of future economic performance, information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital requirements, the availability of funds and our ability to meet future capital needs, the realization of our deferred tax assets, and the assumptions described in this report underlying such forward-looking statements. Actual results and developments could differ materially from those expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context of such forward-looking statements.

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Revenues

We generated all of our revenue primarily by selling cement products. ~~and~~Revenues increased by $9,928,941 or 90.8% to $20,859,647 for the three months ended November 30, 2010 from $10,930,706 for the three months ended November 30, 2009. The increase is due to the increase in retail prices of cement ~~clinkers~~products and increased sales volume. The breakdown of our revenue and volume is shown as follows:

For the Three Months Ended

~~For the Nine Months Ended~~

May 31, 2010

May 31, 2009

Difference

May 31, 2010

May 31, 2009

Difference

November 30,2010

November 30,2009

Difference

(Unaudited)

~~(Unaudited)~~

(Unaudited)

~~(Unaudited)~~

Revenue

~~13,643,199~~$

20,801,677

~~15,487,487~~100

~~(1,844,288~~$

)10,930,706

$100

~~36,241,863~~%

409,~~528~~870,~~647~~971

90.30

~~(4,286,784~~

)

Cement

~~6,797,918~~

10,251,712

~~7,374,466~~49

~~(576,548~~

)4,852,748

~~16,568,034~~%

245,~~777~~398,~~907~~964

111.26

~~(8,209,873~~

)

Cement clinker

~~6,845,281~~

10,549,965

~~8,113,021~~51

~~(1,267,740~~

)6,077,958

~~19,673,829~~%

154,~~750~~472,~~740~~007

73.58

~~3,923,089~~

Revenues decreased by $1,844,288 or 12% to $13,643,199 for the three months ended May 31, 2010 from $15,487,487 for the same corresponding period in 2009 and the sales revenue of cement clinker decreased $1,267,740. The decline in revenues is primarily the result of reduced sales volume from cement clinker produced by the second production line.

	For the Three Months Ended
	November 30,2010				November 30,2009				Difference
	(Unaudited)				(Unaudited)
	tons				tons
Sales Volume		484,182	100	%		381,104	100	%		$	103,079	27.0	%
Cement		228,381	47	%		143,036	38	%			85,345	59.7	%
cement clinker		255,801	53	%		238,067	62	%			17,734	7.4	%

~~Revenues~~Note: ~~decreased~~Comparing with the same period last year, the revenue of cement increased by $45,~~286~~398,~~784~~964 ~~or 11%~~ to $3610,~~241~~251,~~863~~712 for the ~~nine~~three months ended ~~May~~November 3130, 2010 from $404,~~528~~852,~~647~~748 for the ~~same~~three ~~corresponding~~months ~~period~~ended inNovember 30, 2009; and that of cement clinker increased by $4,472,007 ~~during~~to ~~which~~$10,549,965 ~~2009~~for ~~period~~the three months ended November 30, 2010 from $6,077,958 for the ~~sales~~three months ended November 30, 2009; the percentage of revenue of cement ~~products~~increased ~~declined~~to $849% for the three months ended November 30,~~209~~ 2010 from 44% for the three months ended November 30,~~873~~ ~~and~~2009, the ~~sales~~percentage of revenue of cement clinker ~~increased~~decreased $3to 51% for the three months ended November 30,~~923,089.~~ ~~The~~2010 ~~decrease~~from is56% ~~primarily~~for the ~~result~~three months ended November 30, 2009; the percentage of ~~lower~~ volume of cement ~~sales~~increased ~~volume~~to 47% for the three months ended November 30, ~~especially~~2010 ~~PO42.5~~from ~~cement~~38% for the three months ended November 30, 2009, and ~~also~~the ~~due~~percentage toof avolume ~~decline~~of incement clinker decreased to 53% for the ~~retail~~three ~~price~~months ended November 30, 2010 from 62% for ~~cement~~the ~~products~~three months ended November 30, 2009.

Cost of Goods Sold

Our cost of goods sold for the three months ended November 30, 2009 was $14,067,990, compared to $10,225,190 for the three months ended November 30, 2009, an increase of $3,842, 800 or approximately 38%. This is attributed to an increase in our sales volume and increased production costs.

	For the Three Months Ended
	November 30,2010					November 30,2009					Difference
	(Unaudited)					(Unaudited)

Cost of goods sold		$	14,067,990	100	%		$	10,225,195	100	%		$	3,842,795	38	%
Cement			6,882,311	49	%			4,573,174	45	%			2,309,137	50	%
Cement clinker			7,185,679	51	%			5,652,021	55	%			1,533,658	27	%

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	For the Three Months Ended							For the Nine Months Ended
	May 31, 2010		May 31, 2009		Difference			May 31, 2010			May 31, 2009		Difference
	(Unaudited)		(Unaudited)					(Unaudited)			(Unaudited)
Cost of goods sold	$	12,673,488	$	15,292,572	$	(2,619,084	)		$	33,600,446	$	38,555,892		$	(4,955,446	)
Cement		6,088,144		7,859,346		(1,771,202	)			14,991,543		22,717,675			(7,726,132	)
Cement clinker		6,585,344		7,433,226		(847,882	)			18,608,903		15,838,217			2,770,686

Our cost of goods sold for the three months ended May 31, 2010 was $12,673,488 compared to $15,292,572 for the same corresponding period in 2009, a decrease of $2,619,084 or approximately 17%. Our cost of goods sold for the nine months ended May 31, 2010 was $33,600,446, compared to $38,555,892 for the same corresponding period in 2009, a decline of $4,955,446 or approximately 13%. The decreased costs of cement products were mainly attributed to a reduction in cement production volume and a drop in the price of raw materials.

Gross Profit

Our gross profit increased by $~~774~~6,~~796~~028,176 or approximately 854% to $~~969~~6,~~711~~733,687 for the three months ended ~~May~~November 3130, 2010 from $~~194~~705,~~915~~511 for the ~~same~~three ~~period~~months inended November 30, 2009. ~~Our~~The ~~gross~~increase ~~profit rose~~was byprimarily ~~$668,662~~due to ~~$2,641,417 for~~ the ~~nine~~higher ~~months~~sales ~~ended~~volume ~~May~~and ~~31,~~an ~~2010~~increase ~~from $1,972,755 for the same period~~ in ~~2009. The increase was mostly~~ the ~~result~~retail ~~of the~~price ~~cost~~for ~~control~~cement ~~procedures that we implemented~~products.

Operating Expenses

Total operating expenses for the three months ended ~~May~~November 3130, 2010 was $~~547~~873,~~157~~460, compared to $~~470~~751,~~332~~593 for the ~~same~~three ~~period~~months inended November 30, 2009, an increase of $76121,~~825~~867 or approximately 16.2%. The increase was mainly due to consulting, depreciation and office expenses.

Total operating expenses for the nine months ended May 31, 2010 was $2,317,948, compared to $1,592,185 for the same period in 2009, an increase of $725,763 or approximately 46%. The increase was mainly due to repairs and maintenance, consulting fees, real estate and land use taxes, social insurance and sewage charges.

Interest Expenses

Our interest expense for the three months ended ~~May~~November 3130, 2010 and ~~May~~November 3130, 2009 was $~~185~~295,~~064~~040 and $72222,~~834~~098, respectively. The increased interest expense of $72,942 was due mainly to the increase in short-term loans.

Our interest expense for the nine months ended May 31, 2010 and May 31, 2009 was $639,844 and $108,469, respectively. The increased interest expense of $531,375 was due primarily to the increase in short-term loans.

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Liquidity and Capital Resources

AsNet ~~reflected~~cash inflows ~~the~~provided ~~accompanying~~by ~~consolidated~~operating ~~financial~~activities ~~statements,~~for the ~~Company~~three ~~had~~months aended ~~working~~November ~~capital deficiency of $34~~30,~~350,648~~ as2010 ofand ~~May~~November 3130, ~~2010. This~~2009 ~~factor~~were ~~raises~~$3,625,480 ~~substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis~~ and do$3,395,069, ~~not include any adjustments that might result from the outcome of this uncertainty~~respectively. ~~Although~~ ~~the~~This ~~Company~~was ~~plans~~primarily due to ~~obtain~~net ~~additional sources of equity or debt financing, there is no assurance these activities will be successful~~income.

Net cash flows ~~provided~~used byin ~~operating~~investing activities for the ~~nine~~three months ended ~~May~~November 3130, 2010 and ~~May~~November 3130, 2009 were $101,~~123~~428,~~218~~756 and $53,~~268~~902,~~680, respectively~~162. This was ~~primarily~~ due mainly to ~~net~~decreased ~~income~~expenditures ~~and~~for ~~an increase in accounts payable~~property.

Net cash flows used in ~~investing~~financing activities for the ~~nine~~three months ended ~~May~~November 3130, 2010 and ~~May~~November 3130, 2009 were $(51,~~888~~ 382,~~215)~~148 and $(328,~~700~~639,~~390)~~ respectively. ~~This~~The ~~was~~decrease ~~due~~is ~~mainly~~primarily due to ~~increased~~the ~~expenditures~~decrease ~~for property, plant and equipment~~ in ~~connection~~repayment ~~with~~of ~~the~~related ~~waste~~party ~~heat generator project~~loans.

~~Net~~Overall, ~~cash~~we ~~flows~~have ~~used~~funded inmost ~~financing~~of ~~activities~~our ~~for~~cash ~~the~~needs ~~nine~~from ~~months~~inception ~~ended~~through ~~May~~November 3130, 2010 ~~and~~with ~~May~~operating ~~31,~~activities ~~2009 were $(4,868,594)~~ and ~~$(1,370,593),~~loans ~~respectively.~~from ~~This~~related ~~is primarily due to repayment of short-term loan borrowing~~parties.

~~Overall~~On November 30, 2010, we ~~have~~had ~~funded~~cash ~~most~~and cash equivalents of ~~our~~$1,585,518 ~~cash~~on ~~needs~~hand. ~~from~~We ~~inception~~anticipate raising funds through ~~May~~an ~~31,~~equity ~~2010~~or ~~with~~debt ~~operating~~offering ~~activities~~or ~~and~~with ~~loans~~a ~~from~~strategic ~~financial~~partner ~~institutes~~in ~~and~~the ~~related~~coming ~~parties~~year.

On May 31, 2010, we had cash and cash equivalents of $141,850 on hand. We anticipate raising funds through an equity or debt offering or with a strategic partner in the coming year.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of the Company’s financial condition presented in this section are based upon the unaudited consolidated financial statements of China Runji Cement Inc., which have been prepared in accordance with the generally accepted accounting principles in the United States. During the preparation of the financial statements China Runji Cement Inc. is required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, China Runji Cement Inc. evaluates its estimates and judgments, including those related to sales, returns, pricing concessions, bad debts, inventories, investments, fixed assets, intangible assets, income taxes and other contingencies. China Runji Cement Inc. bases its estimates on historical experience and on various other assumptions that it believes are reasonable under current conditions. Actual results may differ from these estimates under different assumptions or conditions.

In response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding Disclosure ~~about~~About Critical Accounting Policy,” China Runji Cement Inc. identified the most critical accounting principles upon which its financial status depends. China Runji Cement Inc. determined that those critical accounting principles are related to the use of estimates, inventory valuation, revenue recognition, income tax and impairment of intangibles and other long-lived assets. China Runji Cement Inc. presents these accounting policies in the relevant sections in this management’s discussion and analysis, including the Recently Issued Accounting Pronouncements discussed below.

Revenue Recognition. China Runji Cement Inc. recognizes sales when ~~the~~ revenue is realized or realizable, and has been earned, in accordance with SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements.”. China Runji Cement Inc.’s sales are related to sales of product. Revenue for product sales is recognized as risk and title to the product transfer to the customer, which usually occurs at the time ~~shipment,~~shipments isare made. Substantially all of China Runji Cement Inc.’s products are sold FOB (“free on board”) shipping point. Title to the product passes when the product is delivered to the freight carrier.

Sales revenue represents the invoiced value of goods, net of a value-added tax (VAT). All of China Runji Cement Inc.’s products that are sold in the China are subject to a Chinese value-added tax at a rate of 17% of the gross sales price or at a rate approved by the Chinese local government. This VAT may be offset by VAT paid by China Runji Cement Inc. on raw materials and other materials included in the cost of producing their finished product.

Accounts Receivable, Trade and Allowance for Doubtful Accounts. China Runji Cement Inc.’s business operations are conducted in the People's Republic of China. During the normal course of business, China Runji Cement Inc. extends unsecured credit to its customers. Management reviews accounts receivable on a regular basis to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is recorded when collection of the full amount is no longer probable. 14

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Accounts Receivable, Trade and Allowance for Doubtful Accounts. China Runji Cement Inc.’ business operations are conducted in the People's Republic of China. During the normal course of business, China Runji Cement Inc. extends unsecured credit to its customers. Management reviews accounts receivable on a regular basis to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is recorded when collection of the full amount is no longer probable.

Inventories. Inventories are stated at the lower of cost or market using the weighted average method. China Runji Cement Inc. reviews its inventory on a regular basis for possible obsolete goods or to determine if any reserves are necessary for potential obsolescence.

Income Taxes. China Runji Cement Inc. has adopted Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109). SFAS 109 requires the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consist of taxes currently due plus deferred taxes. Since China Runji Cement Inc. had no operations within the United States there is no provision for US income taxes and there are no deferred tax amounts at May 31, 2010 and August 31, 2009. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they related to income taxes levied by the same taxation authority and the Company intends to settle current tax assets and liabilities on a net basis.

Recently Issued Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update, 2009-13, Revenue Recognition (Topic 605) “Multiple Deliverable Revenue Arrangements - A Consensus of the FASB Emerging Issues Task Force.” This update provides application guidance on whether multiple deliverables exist, how the deliverables should be separated and how the consideration should be allocated to one or more units of accounting. This update establishes a selling price hierarchy for determining the selling price of a deliverable. The ~~selling~~Company ~~price~~does ~~used for each deliverable will be based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is~~ not ~~available,~~believe orthat ~~estimated~~there ~~selling~~are ~~price~~any ifnew ~~neither~~pronouncements ~~vendor-specific~~that orhave ~~third-party~~been ~~evidence~~issued issince ~~available. The~~December ~~Company will be required to apply this guidance prospectively for revenue arrangements entered into or materially modified after January 1~~14, ~~2011;~~2010 ~~however,~~that ~~earlier~~might ~~application~~have isa ~~permitted. The~~material ~~management is in the process of evaluating the~~ impact ~~of adopting this standard~~ on ~~the~~its ~~Company’s~~consolidated financial statements.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, operations of the Company are exposed to fluctuations in interest rates. These fluctuations can vary the costs of financing and investing yields. In view of the financing arrangements during the first ~~six~~three months of 2010, the Company is not currently subject to significant market risk.

ITEM 4 - CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

~~The~~We ~~Chief~~maintain Executive Officer and Chief Financial Officer (the principal executive officer and principal financial officer, respectively) of the Company have concluded, based on their evaluation as of May 31, 2010, that the design and operation of the Company's "disclosure controls and procedures", (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, ~~as amended~~ (the "Exchange Act")), that are ~~effective~~designed to ensure that information required to be disclosed by us in the reports ~~filed~~that orwe ~~submitted~~file byor ~~the~~submit ~~Company~~ under the Exchange Act is ~~accumulated,~~ recorded, processed, summarized and reported towithin the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including ~~the~~our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding ~~whether~~required ordisclosure. ~~not~~We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure iscontrols ~~required~~and procedures as of November 30, 2010. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

The material weakness relates to the lack of personnel with the appropriate knowledge of generally accepted accounting principles (GAAP) and SEC reporting experience, coupled with a lack of segregation of duties and minimal staffing. To remedy this material weakness, management is actively searching for competent candidates and working with outside consultants in the financial reporting process.

Changes in Internal Control over Financial Reporting

During the ~~quarter~~fourth ~~ended~~fiscal ~~May~~quarter ~~31,~~of 2010, ~~there~~we ~~were~~implemented ~~no changes in~~ the ~~internal~~following ~~controls~~measures ~~of the Company over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely~~ to ~~materially~~improve ~~affect,~~our ~~the~~ internal ~~controls~~control ~~of the Company~~ over financial reporting. :

16(1) Engaged outside consultants to assist in our assessment of the effectiveness of the company’s internal control over financial reporting; and

(2) Developed and instituted new internal control procedures to strengthen our month-end close and financial reporting processes.

We believe these measures have strengthened our internal control over financial reporting and disclosure controls and procedures.

Our senior executives and our Board of Directors are committed to achieving and maintaining a strong control environment, high ethical standards, and financial reporting integrity. This commitment has been and will continue to be communicated to and reinforced with our employees and to external stakeholders.

In addition, under the direction of the Board of Directors, management will continue to review and make changes to the overall design of our internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting and our disclosure controls and procedures.

Except for the changes discussed above, there was no change in our internal control over financial reporting that occurred during the quarter ended November 30, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

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

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - REMOVED AND RESERVED

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 – EXHIBITS

31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

32.1	Certification of the Company's Chief Executive Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

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

	CHINA RUNJI CEMENT INC.
Date: July 15, 2010	By:	/s/ Shouren Zhao
Date: January 14, 2011	By:	/s/ Shouren Zhao
		Shouren Zhao Chairman and Chief Executive Officer

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