Phoenix Rising Companies - Quarter Report: 2018 April (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended April 30, 2018

or

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 000-55319

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. x YES   o 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). x YES   o NO

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of June 14, 2018, there were 520,976,241 shares of the issuer’s common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

RESORT SAVERS, INC.

Condensed Consolidated Balance Sheets

The notes are an integral part of these financial statements.

RESORT SAVERS, INC.

Consolidated Statements of Operations and Other Comprehensive Income

(Unaudited)

The notes are an integral part of these financial statements.

RESORT SAVERS, INC.

Consolidated Statements of Cash Flows

 (Unaudited)

The notes are an integral part of these financial statements.

RESORT SAVERS, INC.

Notes to the Consolidated Financial Statements

April 30, 2018

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Resort Savers, Inc. (“we,” “us,” “our,” the “Company,” “Resort Savers” or “RSSV”) is a Nevada corporation incorporated on June 25, 2012. It is based in Shenzhen, the People’s Republic of China (the “PRC”). The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is January 31.

The Company makes investments and acquisitions into sound, transparent markets and industries throughout the world. The Company has invested in a company principally engaged in the development and production of beverages, investment in agricultural business and import and export of products in the food and beverage industry, and a company principally engaged in the trading of oil, gas and lubricant.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company prepares its financial statements in accordance with rules and regulations of the SEC and generally accepted accounting principles (“GAAP”) in the United States of America. The accompanying interim financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X and presented in US dollars.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K filed with the SEC on May 16, 2018.

Principles of Consolidation

At April 30, 2018, the principal subsidiaries of the Company were listed as follows:

___________________

These consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Foreign Currency Translation and Re-measurement

The Company translates its foreign operations to U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

The Company’s functional currency and reporting currency is the U.S. dollar, subsidiaries’ functional currency is the Chinese Yuan Renminbi (“CNY”) and Hong Kong Dollar (“HKD”).

The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows:

Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations.

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into U.S. dollar as follows:

Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company also review its accounts receivable on a timely manner. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Tieshan Oil

During the three months ended April 30, 2018, one customer, who is a related party, accounted for 100% of revenues of Tieshan Oil. During the three months ended April 30, 2017, one customer accounted for approximately 100% of revenues of Tieshan Oil.

As of April 30, 2018, three customers accounted for approximately 100% of accounts receivable. As of January 31, 2018, two customers accounted for approximately 99% of accounts receivable. There were no significant changes of such concentrations of credit risk between April 30, 2018 and January 31, 2018.

Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, other receivable, prepaid expenses and deposits, amount due from related parties, accounts payable and accrued liabilities, short-term loan, deferred revenue and due to stockholders. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

Revenue Recognition

The Company will recognize revenue from the sale of products and services in accordance with ASC 605, “Revenue Recognition.” Revenue will be recognized only when all of the following criteria are met: persuasive evidence for an agreement exists, delivery has occurred or services have been provided, the price or fee is fixed or determinable, and collection is reasonably assured.

Commitments and Contingencies

The Company follows ASC 450-20, "Loss Contingencies," to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. 

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 - GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet had sufficient revenues to cover its operating cost, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – ACCOUNTS RECEIVABLE

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivable are reflected as a current asset and no allowance for bad debt has been recorded as of April 30, 2018 and January 31, 2018. No bad debts were written off for the three months ended April 30, 2018 and 2017. The Company’s accounts receivable consists of only trade receivables from customers which are unrelated to the Company. Trade receivables from customers which are related to the Company are categorized in amount due from related parties (Note 14). As at April 30, 2018 and January 31, 2018, the Company had accounts receivable of $25,504,406 and $22,820,925, respectively.

Aging analysis of accounts receivable is as follows:

NOTE 5 – EQUIPMENT

Property and equipment at April 30, 2018 and January 31, 2018 consist of the following:

During the three months ended April 30, 2018 and January 31, 2018, the Company recorded depreciation of $2,445 and $24,892, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company’s accounts payable and accrued liabilities consist of the followings:

NOTE 7 – SHORT-TERM LOAN

There are no provisions in the Company’s bank borrowings that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Company’s business.

During the year ended January 31, 2017, the Company borrowed a loan from a money provider. The amount is denominated in Renminbi of RMB7,200,000. During the year ended January 31, 2017, the Company repaid RMB 2,200,000. The interest rate is 0.5% per month. The loan is secured by 48.83% shares of Tieshan Oil held by Mr. Yang Baojin (“Mr. Yang”). The Loan was due on October 7, 2017 and the outstanding amount of $789,500 (RMB 5,000,000) is currently in default. The Company believes that the carrying value of the equity interest in Tieshan Oil, which is a financial instrument, and which has been pledged by Mr. Yang as collateral for the loan is sufficient to underlie the loan, and the Company has not been requested to add any additional credit enhancements.

During the three months ended April 30, 2018, the Company borrowed a loan from a money provider. The Amount is RMB 1,000,000 and the loan bears 2% interest per month and due on May 6, 2018.

During the year ended April 30, 2018 and 2017, the Company borrowed $158,400 (RMB1,000,000) and incurred interest of $11,880 and $0, respectively. On April 30, 2018 and January 31, 2018, the Company had a short-term loan balance of $947,400 and $795,000, respectively.

NOTE 8 - STOCKHOLDERS’ EQUITY

The capitalization of the Company consists of the following classes of capital stock as of January 31, 2018:

Preferred Stock

The Company has authorized 15,000,000 shares of preferred stock with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. No shares of preferred stock have been issued.

Common Stock

On October 9, 2015, the authorized number of shares of the Company’s common stock was increased from 100,000,000 shares to 1,000,000,000 shares.

The Company now has authorized 1,000,000,000 shares of common stock with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the three months ended April 30, 2018, there were no issuance of common stock.

As at April 30, 2018 and January 31, 2018, the Company had 74,976,241 common shares issued and outstanding.

The Company has no stock option plan, warrants or other dilutive securities.

Additional Paid-In Capital

During the three months ended April 30, 2018, related parties contributed additional paid-in capital in the amount of $40,800, to fund operating expenses.

NOTE 9 – RELATED PARTY TRANSACTIONS

Revenue, receivable and prepaid expenses

During the three months ended April 30, 2018 and 2017, the Company generated revenue from one related party of $2,457,205 and one related party of $13,847,006, respectively, which were related companies under common control with the Company.

At April 30, 2018 and January 31, 2018, the Company had amount due from related parties of $0 and $1,567,238, respectively. As of January 31, 2018, it consists of prepaid expenses of $1,567,238. All the related companies were customers of the Company and were under common control with the Company.

Accounts payable, other liabilities and loans

At April 30, 2018 and January 31, 2018, the Company had accounts payable and accrued liabilities of $18,516,996 and $17,514,842 to three and four related companies under common control with the Company, respectively.

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances were considered temporary in nature and were not formalized by a promissory note.

During the three months ended April 30, 2018 and 2017, the Company received $40,800 and $0 advances from various directors and shareholders, respectively. At April 30, 2018 and January 31, 2018, the Company owed $12,695 and $12,695 to a director of the Company, $5,203 and $5,203 to a director of Xing Rui HK, $19,234 and $19,368 to directors of Huaxin, $140,949 and $141,931 to directors of Amuli and $50,595 and $50,948 to shareholders of Amuli, for vendor payments made by those directors.

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

As of April 30, 2018 and January 31, 2018, Due to related parties consist of the follows;

Employment

The Company does not have employment contracts with its key employees, including the controlling shareholders who are officers of the Company.

Contribution

During the three months ended April 30, 2018 and 2017, related parties, who are shareholders of the Company, forgave debt, in the amount of $40,800 and $833, respectively for payments made on behalf of the Company for operating expenses. The amount has been recognized as a contribution to capital.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

On August 23, 2016, Amuli entered into a lease agreement for office space in Shenzhen city, Guangdong Province, P.R.C. commencing on August 23, 2016 for a three-year lease term. The monthly rental expense is approximately $6,762 (RMB 42,526).

As of January 31, 2018, the outstanding lease commitments are:

NOTE 11 - SEGMENTED INFORMATION

At April 30, 2018, the Company operates in two industry segments, health beverage and oil and gas, and one geographic segment, China, where majority current assets and equipment are located.

Segment assets and liabilities as of April 30, 2018 and January 31, 2018 were as follows:

Segment revenue and net loss for the three months ended April 30, 2018 and January 31, 2018 were as follows:

NOTE 12 - SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.

On May 21, 2018, the Company entered into a Convertible Note Purchase Agreement (the “NPA”) with NYJJ (Hong Kong) Limited, a Hong Kong corporation (“NYJJ”). Pursuant to the NPA, NYJJ loaned the Company $100,000, and the Company issued to NYJJ a note convertible into Common Stock of the company at the price of one-third of a cent (1/3 of $0.01) (the “Note”). Subsequent to the closing of the NPA and the issuance of the Note, NYJJ converted the Note into 30,000,000 shares of Common Stock of the Company, which represents approximately 5.76% of the Company’s outstanding Common Stock.

On May 16, 2018, the Company entered into a Share Exchange Agreement (the “Tieshan Oil Agreement”) with Mr. Yang, president and owner of 49% of Tieshan Oil. Pursuant to the Tieshan Oil Agreement and subject to the terms and conditions contained therein, the Company, through Huaxin, agreed to acquire 49% of Tieshan Oil held by Mr. Yang, in exchange for the issuance to Mr. Yang of 16,000,000 shares of the Company’s common stock. The acquisition closed simultaneously with the execution of the Agreement.

Acquisition of Admall Sdn. Bhd.

On May 16, 2018, the Company closed the acquisition of Admall Sdn. Bhd., a limited liability company incorporated in Malaysia (“Admall”) by way of share exchange (the “Admall Acquisition”). The Company effected the Admall Acquisition pursuant to the terms of that certain Share Exchange Agreement, dated February 9, 2018, by and between the Company, Admall, and Mr. Boon Jin “Patrick” Tan, an individual who prior to the closing of the Admall Acquisition held 100% of the outstanding equity interests of Admall.

At the closing of the Admall Acquisition, the Company acquired 100% of the outstanding equity interests of Admall from Mr. Tan, and the Company issued 400,000,000 shares of Common Stock to Mr. Tan, which at the time of closing represented approximately 81.47% of the Company’s outstanding Common Stock (after taking account of shares issued to Mr. Yang in connection with the Tieshan Oil Acquisition). As a result, Mr. Tan became a stockholder of the Company and Admall became a wholly-owned subsidiary of the Company.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “pursue,” “expect,” “anticipate,” “predict,” “project,” “goals,” “strategy,” “future,” “likely,” “forecast,” “potential,” “continue,” negatives thereof or similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future acquisition or merger targets, business strategies, macro-economic and sector-specific trends, future cash flows, financing plans, plans and objectives of management and any other statements which are not statements of historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual future results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, legal and regulatory changes in the jurisdictions in which we operate, volatility or decline in our stock price, potential fluctuation of our quarterly results, rapid adverse changes in markets, decline in demand for our goods and services, insufficient revenues to cover our operating costs and such other factors as discussed throughout this Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q.

Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

The Company was incorporated in the State of Nevada on June 25, 2012. At formation, the Company was authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share, and 15,000,000 shares of preferred stock, par value $0.0001 per share. Our fiscal year end is January 31. Resort Savers has limited cash on hand. We have sustained losses since inception and have relied solely upon the sale of our securities for funding. Resort Savers has never declared bankruptcy, been in receivership, or been involved in any kind of legal proceeding.

On August 1, 2014, a change of control of the Company occurred, whereby a controlling interest in the Company was sold by Michelle LaCour, our former President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director and a former 5% stockholder, and James LaCour, our former Secretary and Director and a former 5% stockholder, to the following: (1) Zhou Gui Bin (236,733 shares at a purchase price of $0.20 per share); (2) Zhou Wei (236,733 shares at a purchase price of $0.20 per share); and (3) Zong Xin International Investment Holdings Co. LTD (“Zong Xin”) (1,636,734 shares at a purchase price of $0.20 per share). On August 11, 2014, in connection with the transfer of shares described in this paragraph, Ms. LaCour and Mr. LaCour resigned from each of their roles as officers and Directors of the Company, and they were replaced by Zhou Gui Bin as President, CEO and Director, and Zhou Wei as Treasurer, CFO, Secretary and Director.

On September 25, 2014 the Company effected a forward stock split of 10 shares of common stock for each share held, or an additional nine shares were issued for each common share held. All share and per share information has been retroactively restated for financial presentation of prior periods.

Worx America, Inc.

From January 2015 through March 2015, the Company, by and through its wholly owned subsidiary, Xing Rui, acquired 20,068,750 shares of common stock (representing 20% of the issued and outstanding common stock) of Worx America, Inc. (“Worx”), a private company based in Houston, Texas, in exchange for $1,650,000 cash and 1,000,000 shares of common stock of Borneo Resource Investments Ltd. (“BRNE”) with a value of $350,000. Specifically, on January 28, 2015, the Company paid $350,000 cash in exchange for 5,403,728 common shares of Worx, on March 20, 2015, the Company paid $1,300,000 cash and transferred 1,000,000 shares of common stock of BRNE in exchange for 14,665,022 common shares of Worx. The Company accounted for this investment using the equity method, with an initial cost of $2,000,000.

Worx designs automated solutions for industrial, environmental and energy industries to improve efficiency and systems output. The Worx automated robotic tank cleaning system reduces tank cleaning time, reduces or eliminates the need for personnel to enter tanks, and may reduce the volume of solvents used to clean a tank.

Shenzhen Amuli Industrial Development Co. Ltd.

On October 1, 2015, the Company issued 3,033,926 shares of its common stock to Xu Xiao Yun in exchange for sixty percent (60%) of Shenzhen Amuli Industrial Development Co. Ltd., a PRC corporation (“Amuli”). The equity of Amuli that was transferred by Xu Xiao Yun is held by Huaxin, which was formed by Xing Rui for the purpose of holding the equity of Amuli and other PRC subsidiaries. The purchase price was valued $2,400,000.

Amuli seeks to develop, market and sale the health beverage drink Kvass and hopes to generate sales and profits in 2018.

Amendment to Articles of Incorporation

On October 9, 2015, we amended our articles of incorporation to increase the maximum number of authorized shares of common stock to 1,000,000,000 shares. We did not amend the number of authorized shares of preferred stock or par values for common stock or preferred stock.

Beijing Yandong Tieshan Oil Products Co., Ltd.

On January 29, 2016, the Company entered into an exchange agreement (the “Tieshan Oil Exchange Agreement”) with Mr. Yang, a citizen of the PRC, and the Company’s subsidiary Huaxin. Mr. Yang is the president and majority owner of Tieshan Oil. Pursuant to the Tieshan Oil Exchange Agreement, the Company issued 4,800,000 shares of its common stock to Mr. Yang, who delivered to Huaxin an ownership interest in Tieshan Oil such that Huaxin at the time of closing owned 51% of all ownership interests in Tieshan Oil (the “Tieshan Oil Exchange”). The Company held 1,200,000 shares of its common stock in escrow (the “Escrow Shares”) to issue to Mr. Yang twelve months following the closing of the Tieshan Oil Exchange, in connection with the successful performance of certain covenants by Mr. Yang. The Company did not issue the Escrow Shares to Mr. Yang in connection with the Tieshan Oil Exchange.

On May 16, 2018, the Company completed its acquisition of Tieshan Oil by entering into a second share exchange agreement (the “Second Tieshan Oil Exchange Agreement”) with Mr. Yang. Pursuant to the Second Tieshan Oil Exchange Agreement, the Company, through Huaxin, agreed to acquire the remaining 49% of Tieshan Oil held by Mr. Yang, in exchange for the issuance to Mr. Yang of 16,000,000 shares of the Company’s common stock (the “Tieshan Oil Acquisition”). The Tieshan Oil Acquisition closed simultaneously with the execution of the Second Tieshan Oil Exchange Agreement.

Tieshan Oil is principally engaged in the trading of oil, gas and lubricant products within the PRC.

Abandonment of Plans to Acquire Dusun Eco Resort (2005) Sdn. Bhd.

On December 7, 2017, the Company entered into a Share Exchange Agreement (the “Dusun Exchange Agreement”) with Dusun Eco Resort (2005) Sdn. Bhd., a limited liability company registered under the laws of Malaysia (“Dusun Eco”), and the shareholders of Dusun Eco (the “Dusun Sellers”), by which the Company agreed to acquire all of the issued and outstanding stock of Dusun Eco in exchange for the issuance of 400,000,000 shares of the Company’s common stock. After further review of the due diligence materials related to the Exchange, the Company’s Board of Directors felt that it was in the Company’s best interest to terminate the Dusun Exchange Agreement. On February 9, 2018, the Company, Dusun Eco and the Dusun Sellers entered into a Termination of Share Exchange Agreement (the “Dusun Termination Agreement”), by which the Company, Dusun Eco and the Dusun Sellers agreed to terminate the Dusun Exchange Agreement with no legal consequence to any of the parties to the Dusun Exchange Agreement.

Admall Sdn. Bhd.

On February 9, 2018, the Company entered into a Share Exchange Agreement (the “Admall Exchange Agreement”) with Admall Sdn. Bhd., a limited liability company incorporated in Malaysia (“Admall”), and Boon Jin “Patrick” Tan, the owner of 100% of the equity interests in Admall. Pursuant to the Admall Exchange Agreement, the Company acquired from Mr. Tan all outstanding equity interests of Admall in exchange for 400,000,000 shares of common stock of the Company (the “Admall Acquisition”). On May 16, 2018, the Company closed the Admall Acquisition.

Admall engages in the business of digital advertising and education.

Change of Management

On February 9, 2018, concurrently with the execution of the Admall Exchange Agreement and the Dusun Termination Agreement, Zhou Gui Bin resigned from his positions as President, CEO, Secretary and Director of the Company, and Zhou Wei resigned from his positions as Treasurer, CFO and Director of the Company. The departing Directors approved, by written consent in lieu of special meeting of the Board of Directors, the appointment of Mr. Ding-Shin “DS” Chang and Mr. Boon Jin “Patrick” Tan as the new Directors of the Company and submitted such appointment for approval and ratification by the Company’s stockholders. The Company’s departing Directors also appointed Mr. DS Chang as the Company’s President and CEO, Mr. Tan as the Company’s Treasurer and CFO, and Mr. Liang-Yu “Jacky” Chang as the Company’s Secretary, all of whom are to serve on an at-will basis until their resignation or removal by the Company’s Board of Directors.

Results of Operations

Our operations for the three and nine months ended April 30, 2018 are outlined below:

Three months ended April 30, 2018 compared to three months ended April 30, 2017.

For the three months ended April 30, 2018 and 2017, we had revenue of $2,457,205 and $13,849,619, respectively. Expenses for the three months ended April 30, 2018 totaled $2,506,589 resulting in a net loss of $63,506 as compared to a net loss of $93,412 for the three months ended April 30, 2017. The decrease in net loss for the three months ended April 30, 2018 is a result of an increase in gross profit.

Liquidity and Capital Resources

The following table provides selected financial data about our company as of April 30, 2018 and January 31, 2018, respectively.

Working Capital

Cash Flows

On April 30, 2018, our Company’s cash balance was $88,738 and total assets were $27,633,677. On January 31, 2018, our Company’s cash balance was $44,681 and total assets were $26,505,552. The change in total assets was primarily due to an increase in accounts receivable of $2,683,481, offset by a reduction in amount due from related parties of $1,561,324.

On April 30, 2018, our Company had total liabilities of $21,271,146, compared with total liabilities of $20,088,815 as at January 31, 2018. The increase in liabilities was primarily due to an increase in amounts owing to related parties of $1,000,685.

On April 30, 2018, our Company had working capital of $4,374,675 compared with working capital of $4,426,370 as at January 31, 2018. The decrease in working capital was primarily attributed to an increase in due to related parties and a decrease in amount due from related parties offset by an increase in accounts receivable.

Cash Flow from Operating Activities

During the three months ended April 30, 2018, our Company generated $2,574 in operating activities, compared to $49,228 provided by operating activities during the three months ended April 30, 2017. The cash used in operating activities for the three months ended April 30, 2018, was attributed to a decrease in changes in operations assets and liabilities.

Cash Flow from Investing Activities

During the three months ended April 30, 2018 and 2017, we did not use any cash for investing activities.

Cash Flow from Financing Activities

During the three months ended April 30, 2018, our Company received $199,200 in financing activities compared to $0 in financing activities during the three months ended April 30, 2017. The cash flow for financing activities for the three months ended April 30, 2018, was a result of $158,400 for a proceed from short-term loan and $40,800 in proceed from loans from related parties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within 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 our president (our principal executive officer and principal financial officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer and principal financial officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended April 30, 2018, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

As a “smaller reporting company,” we are not required to provide the information required by this Item.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

The Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 22, 2018, reported under Item 8.01 (“Other Events”) that the Company entered into a Convertible Note Purchase Agreement (the “NPA”) with NYJJ Investments Limited, a Hong Kong corporation. We incorrectly named the counterparty to the NPA in our original filing. The correct name of the counterparty to the NPA is NYJJ (Hong Kong) Limited.

Item 6. Exhibits

_________

* Filed herewith.

** Deemed furnished and not filed.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.