UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Commission File Number: 0-25765

(011) (86) 29-33257666

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No ¨

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

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

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

TABLE OF CONTENTS
  

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

(c) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.

(d) Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

(e) Revenue recognition

The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

The Company's revenue consists of management services rendered to senior homes. Service revenue is recognized when the service is performed.

(f) Cost of revenue

The cost for providing management services is comprised of direct labor wages and purchasing cost of food for preparing meals for the seniors.

(g) General & administrative expenses

General and administrative expenses include general overhead such as the office rental and utilities.

(h) Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

The Company has implemented ASC Topic 740, "Accounting for Income Taxes." Income tax liabilities computed according to the People's Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.

Effective January 1, 2008, PRC government implemented a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises that were already participating in tax holidays before January 1, 2008, to continue enjoying the tax holidays until they had been fully utilized.

In order to encourage enterprises to operate senior homes, PRC tax law provides a tax holiday by waiving the income tax for entities operating in this industry. According to the Minfa (2015) No. 33 "Advice to Encourage Private Capital to Participate in the Development of Pension Services", jointly issued by ten ministries which include the Ministry of Civil Affairs and the Ministry of Finance of the People's Republic of China, the Company is entitled to benefit from the sales tax exemption and business tax exemption policy. As such, the Company is not subject to income tax as of June 30, 2016.

(i) Earnings per share

Basic earnings per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

(j) Statutory reserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $- and $15,208 from retained earnings to statutory reserves for the six-months ended June 30, 2016 and the year ended December 31, 2015, respectively. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise's PRC registered capital.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

(k) Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Hong Kong Dollars (HKD). The financial statements are translated into United States dollars from the functional currencies at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation.

(l) Financial Instruments

The Company's financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.

As of June 30, 2016 and December 31, 2015, the Company did not identify any assets and liabilities whose carrying amounts were required to be adjusted in order to present them at fair value.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

(m) Commitments and 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.

(n) Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company's current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.

The Company uses FASB ASC Topic 220, "Reporting Comprehensive Income". Comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the periods ended June 30, 2016 and 2015 included net income and foreign currency translation adjustments.

(o) Subsequent Events

The Company evaluated for subsequent events through the issuance date of the Company's financial statements.

(p) Unaudited Interim Financial Information

These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

(q) Recent accounting pronouncements

On January 5, 2016, the FASB issued ASU 2016-01 "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities", which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017.

On February 25, 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)", its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASB's new revenue recognition standard (e.g., those related to evaluating when profit can be recognized).

Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to:

The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

On March 15, 2016, the FASB issued ASU 2016-07 "Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting", which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis of the investor's previously held interest and the equity method would be applied subsequently from the date on which the investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method.

The guidance in the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU's effective date. Additional transition disclosures are not required upon adoption.

On March 17, 2016, the FASB issued ASU 2016-08 "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", which amends the principal-versus-agent implementation guidance and illustrations in the Board's new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard's control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is "a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer." Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others.

The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard.

On March 30, 2016, the FASB issued ASU 2016-09 "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting", which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods.

The Company is currently evaluating the impact that the pronouncements will have on the Company's consolidated financial statements.

As of June 30, 2016, there are no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company's financial statements.

3. (LOSS)/EARNINGS PER SHARE

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

4. RELATED PARTY RECEIVABLES

Related party receivables consisted of the following as of June 30, 2016 and December 31, 2015:

Related party receivable represented the following:

5. RELATED PARTY ADVANCES

Related party advances consisted of the following as of June 30, 2016 and December 31, 2015:

Related party advances represented advances received in connection with services that have not yet been rendered to Xianyang but are expected to be in the future. Xianyang is controlled by the management of the Company.

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

6. RELATED PARTY PAYABLE

Related party payable consisted of the following as of June 30, 2016 and December 31, 2015:

Mr. Liu, Shengli is the former Chairman, President, and Director of the company. Mr. Liu had paid some necessary overseas consulting and advising fees, lawyer fees, and accounting fees on behalf of the company. The loan is unsecured and have no fixed terms of repayment, and are therefore deemed payable on demand.

Xianyang is controlled by the management of the Company. Xianyang from time to time paid some of the professional fees on behalf of the company. The loan is unsecured and have no fixed terms of repayment, and are therefore deemed payable on demand.

7. LEASE COMMITMENTS

On January 4, 2013, the Company entered into an operating lease agreement with a related party leasing for office space located in Xianyang City, Shaanxi Province. The lease expires on December 31, 2045. As of June 30, 2016 and December 31, 2015, the Company had commitments for future minimum lease payments under a non-cancelable operating lease as follows:

China Senior Living Industry International Holding Corporation

Notes to Condensed Consolidated Financial Statements

As of and for the three-months and six-months ended June 30, 2016

(Stated in U.S. Dollars)

8. RELATED PARTY TRANSACTION

As of June 30, 2016 and 2015, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company:

9. CONCENTRATIONS AND RISKS

A. Concentration

As of June 30, 2016, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company.

B. Economic and Political Risks

The Company's operations are mainly conducted in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.

The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

10. SEGMENT INFORMATION

For the six-months ended June 30, 2016 and 2015, all revenues of the Company represented the provision of management services to senior homes. No financial information by business segment is presented. Furthermore, as all revenues are derived from the PRC, no geographic information by geographical segment is presented.

11. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the issuance of the consolidated financial statements through August 15, 2016, which is the date the consolidated financial statements were available to be issued and there is no reportable subsequent event.

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

The following discussion of the results of our operations and financial condition should be read in conjunction with our consolidated financial statements and the related notes thereto, which appear elsewhere in this Quarterly Report on Form 10-Q. Except for the historical information contained herein, the following discussion, as well as other information in this report, contain "forward-looking statements," which are based on information we have when those statements are made or management's good faith belief as of that time with respect to future events. Actual results and the timing of the events may differ materially from those contained in these forward looking statements due to a number of factors, including those discussed in the "Forward-Looking Statements" set forth elsewhere in this Quarterly Report on Form 10-Q.

Description of Business

The Company was incorporated in Nevada on January 13, 1986. On September 29, 2015, the Company's indirectly wholly-owned subsidiary Xian Qi Ying Senior Living, Inc (formerly known as Xi'an Qi Ying Bio-Tech Limited) ("Qi Ying") entered into a series of various interest entity ("VIE") agreements with Shaanxi Yifuge Investments and Assets Co, Ltd ("Yifuge"), and accordingly, Yifuge became our affiliated operating company in China. As consideration, we issued 33,600,000 shares of common stock to Jincao Wu, who is the control person and owner of Yifuge and the Company's current chief executive officer. On September 29, 2015, our board of directors approved the transfer of Qi Ying's equity ownership in Hanzhong Hengtai Bio-Tech Limited ("Hengtai") to three individuals, Zhenheng Shao, Zhenguo Shao and Yongli Yang. Upon the completion of this equity transfer, Hengtai is no longer our indirectly wholly-owned subsidiary in China, and we ceased the business of plantation and sale of garden plants through Hengtai and became engaged in senior living and senior care business through Yifuge. On 31 December, 2015, Yifuge changed its name from Shaanxi Yifuge Investments and Assets Co., Ltd to Shaanxi Jinjiangshan Senior Living Management Co, Ltd.

We mainly engage in the business of operating senior living facilities in Xianyang City, a part of Xi'an Metropolitan Area in Shaanxi Province, People's Republic of China (or "China" or "PRC"), out of our single location with the ability to serve 200 residents. We offer our residents access to a full continuum of services across all sectors of the senior living industry. We generate our revenues from private customers, which limits our exposure to government reimbursement risk. In addition, we control the operating economics of our facilities through property ownership and long-term leases. We believe we operate in the attractive sectors of the senior living industry in China with significant opportunities to increase our revenues through providing a combination of housing, hospitality services and health care services.

We plan to grow our revenue and operating income through a combination of: (i) organic growth in our existing portfolio; (ii) acquisitions of additional operating companies and facilities; and (iii) the realization of economies of scale. Given the size and breadth of our basic platform, we believe that we are well positioned to invest in a broad spectrum of assets in the senior living industry.

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

The following table summarizes the results of our operations during the three months period ended June 30, 2016 and 2015,respectively and provides information regarding the dollar and percentage increase or (decrease) from the three months period ended June 30, 2016 compared to the three-month period ended June 30, 2015.

(All amounts, other than percentages, stated in U.S. dollars)

Revenue

Net revenues. Our net revenue for the three months period ended June 30, 2016 amounted to $ 122,490, which represents a decrease of approximately $ 8,880, or 6.8 %, from the three months period ended June 30, 2015, in which our net revenue was $ 131,370.

Cost of Revenues. Our cost of revenue for the three months period ended June 30, 2016 amounted to $ 81,029, which represents a decrease of approximately $ 8,912, or 9.9 %, from the three months period ended June 30, 2015, in which our cost of revenue was $ 89,941.

Gross Profit. Our gross profit for the three months period ended June 30, 2016 amounted to $ 41,461, which represents an increase of approximately $ 32, or 0.1 %, from the three months period ended June 30, 2015, in which our gross profit was $ 41,429.

Operating Expenses

Selling and Marketing Expenses. There were no selling expenses incurred in three-month period ended June 30, 2016 and 2015.

Operating(Loss)/Income

Our operating loss for the three months period ended June 30, 2016 amounted to $5,835, whereas our operating income for the three-month periods ended June 30, 2015 amounted to $22,726, which was mainly due to the increase of general and administrative expenses.

Income Taxes

There were no income tax expenses incurred in for the three months period ended June 30, 2016 and 2015.

Other income/(expense)

Our other income (interest income) for the three months period ended June 30, 2016 amounted to $8, whereas other expense in the same period of 2015 amounted to $9,973, which represented the accruals of interest expense.

Net (loss)/income

Taking into account of the above mentioned, our net loss for the three months period ended June 30, 2016 amounted to $5,827, whereas net income amounted to $12,753 for the same period ended June 30, 2015.

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

The following table summarizes the results of our operations during the six-months period ended June 30, 2016 and 2015,respectively and provides information regarding the dollar and percentage increase or (decrease) from the six-months period ended June 30, 2016 compared to the six-months period ended June 30, 2015.

(All amounts, other than percentages, stated in U.S. dollars)

Revenue

Net revenues . Our net revenue for the six-months period ended June 30, 2016 amounted to $ 238,218, which represents a decrease of approximately $23,541, or 9.0%, from the six-months period ended June 30, 2015, in which our net revenue was $261,759.

Cost of Revenues.  Our cost of revenue for the six-months period ended June 30, 2016 amounted to $165,094, which represents a decrease of approximately $5,625, or 3.3%, from the six-months period ended June 30, 2015, in which our cost of revenue was $170,719.

Gross Profit . Our gross profit for the six-months period ended June 30, 2016 amounted to $73,124, which represents a decrease of approximately $17,916, or 19.7%, from the six-months period ended June 30, 2015, in which our gross profit was $91,040.

Operating Expenses

Selling and Marketing Expenses. There were no selling expenses incurred in six-months period ended June 30, 2016 and 2015.

Generaland Administrative Expenses. We experienced an increase in general and administrative expense of $48,070 from $31,985 to $80,055 for the six-months period ended June 30, 2016, compared to the same period in 2015. The increase was mainly due to the provision of additional professional fees resulted from the change in our major business in second half of 2015.  

Operating(Loss)/Income

Our operating loss for the six-months period ended June 30, 2016 amounted to $6,931,whereas our operating income for the six-month periods ended June 30, 2015 amounted to $59,055, which was mainly due to the increase of general and administrative expenses.

Income Taxes

There were no income tax expenses incurred in for the six-months period ended June 30, 2016 and 2015.

Other income/(expense)

Our other income (interest income) for the six-months period ended June 30, 2016 amounted to $19, whereas other expense in the same period of 2015 amounted to $19,836, which represented the accruals of interest expense.

Net (loss)/income

Liquidity and Capital Resources General

As of June 30, 2016, our cash and cash equivalents was $90,564.

Based upon our present plans, we believe that cash on hand, cash flows from operations and funds available under our bank facilities will be sufficient to fund our capital needs for the next twelve months.  However, if available liquidity is not sufficient to meet our operating and loan obligations as they come due, our plans include pursuing alternative financing arrangements or reducing expenditures as necessary to meet our cash requirements. There is no assurance that we will be able to raise additional capital or reduce discretionary spending to provide liquidity, if needed. Currently, the capital markets for small capitalization companies are difficult. Thus we cannot be sure of the availability or terms of any alternative financing arrangements.  

The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.

Operating Activities

Net cash used in operating activities for the six-month period ended June 30, 2016 and 2015 were $36,959 and $92,051 respectively. The net decrease of approximately 142,506 in net cash flows provided by operating activities resulted primarily from the significant drop in increase of related party receivable for $18,717 in 2016, compared to an increase of $175,177 in 2015.

Financing Activities

Net cash provided by financing activities for the six-month period ended June 30, 2016 was $87,414, which represented the increase in related party payable.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable. 

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures as required under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports 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 the Company's management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 2016, the Company's management carried out an evaluation, under the supervision and with the participation of the Company's chief executive officer and chief financial officer, of the effectiveness of its disclosure controls and procedures. Based on the foregoing, its chief executive officer and chief financial officer concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2016. The Company does not have a chief financial officer that is familiar with the accounting and reporting requirements of a U.S. publicly-listed company, nor does it have a financial staff with accounting and financial expertise in U.S. generally accepted accounting principles ("US GAAP") reporting. In addition, the Company does not believe it has sufficient documentation concerning its existing financial processes, risk assessment and internal controls. There are also certain deficiencies in the design or operation of the Company's internal control over financial reporting that has adversely affected its disclosure controls that may be considered to be "material weaknesses."

We plan to designate individuals responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources on our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

There have been no material changes for the risk factors disclosed in the "Risk Factors" section of our annual report on Company's Form 10-K filed on March 30, 2016 for the period ended December 31, 2015.

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

None.

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURE.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

SIGNATURES

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