UNITED
STATES
SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C.
20549
FORM
N-Q
QUARTERLY
SCHEDULE OF PORTFOLIO HOLDINGS
OF
REGISTERED
MANAGEMENT INVESTMENT
COMPANY
Investment
Company Act file number:
811-22081
China
Finance,
Inc.
(Exact
name of registrant as specified
in charter)
1330
Ave of Americas, 21st floor, New
York NY 10019
(Address
of principal executive
offices) (Zip code)
Wei
Wei
1330
Ave of Americas, 21st floor, New
York NY 10019
(Name
and address of agent for
service)
Registrant's
telephone number, including
area code:
(212)
823-0530
Date
of fiscal year end:
December 31
Date
of reporting period:
September 30,
2007
ITEM
1. SCHEDULE OF
INVESTMENTS
China
Finance, Inc. Schedule of Investments
September
30, 2007 (unaudited)
|
Non-income
producing Common
Stocks
–94.34%
|
Shares
|
|
Value
|
|
Cost
|
|
Unrealized
Gains
(Losses)
|
|
China
3C Group – 31.48% (par value $0.1)
|
1,907,017
|
$
|
7,380,156
|
$
|
190,702
|
$
|
(4,424,279.44)
|
|
Universal
Travel Group – 14.89% (par value $0.6)
|
975,000
|
|
3,490,500
|
|
720,000
|
|
1,491,750
|
|
Home
System Group – 8.21% (par value $1)
|
480,000
|
|
1,924,800
|
|
480,000
|
|
(225,600)
|
|
Gulf
Resources, Inc. – 19.65%
(par
value
$1.1, restricted until December 7,2007)*
|
1,669,500
|
|
4,607,820
|
|
1,836,450
|
|
1,252,125
|
|
China
Ivy School, Inc. – 4.45% (par value $1.5)
|
3,480,750
|
|
1,044,225
|
|
1,740,375
|
|
(1,218,262.50)
|
|
Gulin
Paper, Inc – 2.76% (par value $0.75, restricted until April
17,2008)*
|
1,702,762
|
|
647,050
|
|
1,208,961
|
|
(221,359.06)
|
|
China
Organic Agriculture, Inc – 18.56% (par value $1.45, restricted until March
14,2008)*
|
1,729,273
|
|
4,350,890
|
|
2,213,469
|
|
2,507,445.85
|
|
Total
Investments in Securities
|
|
$
|
23,445,441
|
$
|
8,389,957
|
$
|
(838,180.15)
|
|
|
|
|
|
|
|
|
|
|
Real
Estate Held for Investment –
5.66%
|
|
$
|
1,405,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Investments
|
|
$
|
24,851,031
|
|
|
|
|
Notes
to Schedule of Investments
:
Restricted
Securities.
Gulf
Resources, Inc(GUFR)
.
The 1,669,500, shares of
GUFR represent approximately a 3.38% interest in the current issued and
outstanding common shares of GUFR. The GUFR shares were received as
payment for surety guarantee services provided for GUFR’s December 10, 2006
merger transaction with Haoyuan Chemical Company Limited. The closing
price of the GUFR shares was $1.10 per share on December 8, 2006. As
of September 30, 2007, the market value of unrestricted shares of GUFR was
$2.90
per share, and the Company’s board determined the fair value of its shares of
GUFR to be $2.76 per share.
Gulin
Paper, Inc(GUPR).
The 1,702,762 shares of GUPR
represent approximately a 3.55% interest in the current issued and outstanding
common shares of GUPR. The GUPR shares were received as payment for
surety guarantee services provided for GUPR’s April 18, 2007 merger transaction
with China Lipu Paper Limited. The closing price of the GUPR shares
was $0.75 per share on April 18, 2007. As of September 30, 2007, the
market value of unrestricted shares of GUPR was $0.40 per share, and the
Company’s board determined the fair value of its shares of GUPR to be $0.38 per
share.
China
Organic
Agriculture,Inc(CNOA).
The 1,729,273
shares of CNOA represent approximately a 3.36% interest in the current issued
and outstanding common shares of CNOA. The CNOA shares were received
as payment for surety guarantee services provided for CNOA’s March 15, 2007
merger transaction with Jilin Songyuan City ErMaPao Green Rice
Limited. The closing price of the CNOA shares was $1.45 per share on
March 15, 2007. As of September 30, 2007, the market value of
unrestricted shares of CNOA was $2.62 per share, and the Company’s board
determined the fair value of its shares of CNOA to be $2.49 per
share.
ITEM
2. CONTROLS AND
PROCEDURES
|
(a)
|
The
Principal Executive Officer
and the Principal Financial Officer have concluded that the registrant’s
disclosure controls and procedures are effective based on their
evaluation
of the disclosure controls and procedures required by Rule 30a-3(b)
under
the Investment Company Act of 1940 and Rules 13a-15(b) or 15d-15(b)
under
the Securities Exchange Act of 1934 as of a date within 90 days
of the
filing of this report.
|
|
(b)
|
There
were no changes in the
registrant's internal control over financial reporting that occurred
during the registrant’s last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, the registrant’s internal
control over financial
reporting.
|
ITEM
3. EXHIBITS
Certifications
for each principal
executive officer and principal financial officer of the registrant as required
pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR
270.30a-2(a)) are filed herewith as Exhibit A.
SIGNATURES
Pursuant
to the requirements of the
Securities Exchange
Act of
1934 and the
Investment
Company Act of 1940, the registrant has duly caused this report to be signed
on
its behalf by the undersigned, thereunto duly authorized.
China
Finance, Inc.
By:
/s/
Zhi Yong
Xu
Zhi
Yong Xu
Chairman
and Chief Executive
Officer
China
Finance, Inc.
Date:
November 20,
2007
Pursuant
to the requirements of the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By:
/s/
Zhi Yong
Xu
Zhi
Yong Xu
Chairman
and Chief Executive
Officer
China
Finance, Inc.
Date:
November 20,
2007
By:
/s/
Liang
Liao
Liang
Liao
Chief
Financial
Officer
China
Finance, Inc.
Exhibit
A
CERTIFICATIONS
I,
Zhi Yong Xu, certify
that:
|
|
1.
|
I
have reviewed this report on
Form N-Q of China Finance,
Inc.;
|
|
|
2.
|
Based
on my knowledge, this report
does not contain any untrue statement of
a material
fact or omit to state a
material fact necessary to make the
statements
made, in light of the
circumstances under which such statements
were made,
not misleading with
respect to the period covered by this
report;
|
|
|
3.
|
Based
on my knowledge, the
schedules of investments included in this report
fairly present
in all material
respects the investments of the registrant as of
the end of
the fiscal quarter for
which the report is filed;
|
|
|
4.
|
The
registrant’s other certifying
officer(s) and I are responsible for
establishing
and maintaining
disclosure controls and procedures (as defined in
Rule 30a-3(c)
under the Investment
Company Act of 1940) and internal
control over
financial reporting
(as defined in Rule 30a-3(d) under the
Investment
Company Act of 1940)
for the registrant and have:
|
|
|
a.
|
Designed
such disclosure controls and procedures, or caused such
disclosure
controls and procedures
to be designed under our supervision, to
ensure that
material information
relating to the registrant, including its
consolidated
subsidiaries, is made
known to us by others within those
entities,
particularly during the
period in which this report is being
prepared;
|
|
|
b.
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial
reporting to be designed under our supervision,
to provide
reasonable assurance
regarding the reliability of financial reporting
and the preparation
of financial
statements for external purposes in
accordance
with generally accepted
accounting principles;
|
|
|
c.
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures
and presented in this
report our conclusions about the
effectiveness
of the disclosure
controls and procedures, as of a date within 90
days prior
to the filing date of
this report, based on such evaluation;
and
|
|
|
d.
|
Disclosed
in this report any change in the registrant’s internal control
over
financial
reporting that occurred during the registrant’s most recent
fiscal
quarter that
has materially affected, or is reasonably likely to materially
affect, the
registrant’s internal
control over financial reporting;
and
|
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed to the
registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent
functions):
|
|
|
a.
|
All
significant deficiencies and material weaknesses in the design
or
operation
of internal
control over financial reporting which are reasonably
likely to
adversely affect the
registrant’s ability to record, process,
summarize,
and report financial
information; and
|
|
|
b.
|
Any
fraud, whether or not material, that involves management or
other
employees
who
have a significant role in the registrant’s internal control
over
financial
reporting.
|
Date:
November 20,
2007
/s/
Zhi Yong
Xu
Zhi
Yong Xu, Chairman and Chief
Executive Officer
I,
Liang Liao, certify
that:
|
|
1.
|
I
have reviewed this report on
Form N-Q of China Finance,
Inc.;
|
|
|
2.
|
Based
on my knowledge, this report
does not contain any untrue statement of
a material
fact or omit to state a
material fact necessary to make the
statements
made, in light of the
circumstances under which such statements
were made,
not misleading with
respect to the period covered by this
report;
|
|
|
3.
|
Based
on my knowledge, the
schedules of investments included in this report
fairly present
in all material
respects the investments of the registrant as of
the end of
the fiscal quarter for
which the report is filed;
|
|
|
4.
|
The
registrant’s other certifying
officer(s) and I are responsible for
establishing
and maintaining
disclosure controls and procedures (as defined in
Rule 30a-3(c)
under the Investment
Company Act of 1940) and internal
control over
financial reporting
(as defined in Rule 30a-3(d) under the
Investment
Company Act of 1940)
for the registrant and have:
|
|
|
a.
|
Designed
such disclosure controls and procedures, or caused such
disclosure
controls and procedures
to be designed under our supervision, to
ensure that
material information
relating to the registrant, including its
consolidated
subsidiaries, is made
known to us by others within those
entities,
particularly during the
period in which this report is being
prepared;
|
|
|
b.
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial
reporting to be designed under our supervision,
to provide
reasonable assurance
regarding the reliability of financial reporting
and the preparation
of financial
statements for external purposes in
accordance
with generally accepted
accounting principles;
|
|
|
c.
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures
and presented in this
report our conclusions about the
effectiveness
of the disclosure
controls and procedures, as of a date within 90
days prior
to the filing date of
this report, based on such evaluation;
and
|
|
|
d.
|
Disclosed
in this report any change in the registrant’s internal control
over
financial
reporting that occurred during the registrant’s most recent
fiscal
quarter that
has materially affected, or is reasonably likely to materially
affect, the
registrant’s internal
control over financial reporting;
and
|
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed to the
registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent
functions):
|
|
|
a.
|
All
significant deficiencies and material weaknesses in the design
or
operation
of internal
control over financial reporting which are reasonably
likely to
adversely affect the
registrant’s ability to record, process,
summarize,
and report financial
information; and
|
|
|
b.
|
Any
fraud, whether or not material, that involves management or
other
employees
who
have a significant role in the registrant’s internal control
over
financial
reporting.
|
Date:
November 20,
2007
/s/
Liang
Liao
Liang
Liao
,
Chief
Financial
Officer