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

As of November 14, 2017, there were 3,625,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.

HUALE ACOUSTICS CORPORATION.*

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1. Condensed Financial Statements

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NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Huale Acoustics Corporation. (“the Company,” “we,” “us,” or “our”) was incorporated in the State of Nevada on October 17, 2014.

On February 7, 2017 (the date of the “Change of Control”), Jaeson Cayne (“Cayne”), on behalf of and as agent for PetsZX, Inc. has acquired control of Three Million (3,000,000) restricted shares of the Company’s issued and outstanding common stock, representing approximately 83% of the Company’s total issued and outstanding common stock, from Arusyak Sukiasyan (“Sukiasyan”), the former officer and director of the Company, in exchange for $315,000 per the terms of a Stock Purchase Agreement by and between Cayne and Sukiasyan.

On May 31, 2017, the Company entered into an agreement to acquire approximately 98.8% of the issued and outstanding shares of PetsZX, Inc., a company affiliated with Cayne. This agreement was cancelled on September 1, 2017, pursuant to the terms of a Cancellation of Stock Purchase Agreement.

On October 6, 2017, as a result of a private transaction, the control block of voting stock of Huale Acoustics Corporation., represented by 3,000,000 shares of common stock was transferred from Jaeson Cayne to a syndicated group of investorsXU. And Ms. XU Dantong has become our President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company since October 6, 2017.

On October 17, 2017, our shareholders and board of directors approved (1) change of our company name to Huale Acoustics Corporation and (2) an increase in the authorized shares of capital stock to 800,000,000, with 700,000,000 common stock and 100,000,000 preferred stock (the “Amendments”). The Amendments became effective with the State of Nevada on October 26, 2017. FINRA announced on November 6, 2017 that the new name of Huale Acoustics Corporation was effective on November 7, 2017, and the new ticker symbol of “HYAS” was effective on November 7, 2017.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues and incurred losses as of September 30, 2017. The Company currently has negative working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Due to these factors, there is substantial doubt about the Company’s ability to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

NOTE 3 – BASIS OF PRESENTATION

The accompanying unaudited financial statements of Huale Acoustics Corporation. have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim period ended September 30, 2017 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2017. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Form 10-K for the year ended December 31, 2016 filed on March 10, 2017 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Use of Estimates

The timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

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Discontinued Operations

Due to the Change of Control, the operations of the Company prior to the date of the Change of Control are reflected on the financial statements as discontinued operations.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company has cash and cash equivalents of $1 and $0 as of September 30, 2017 and December 31, 2016, respectively. As part of the settlement of debt with Sukiasyan, $500 of cash was netted against the outstanding balance due Sukiasyan on the date of the Change of Control.  See Note 4.

Inventory

The Company had $0 and $2,755 in raw materials inventory as of September 30, 2017 and December 31, 2016, respectively. As part of the settlement of debt with Sukiasyan, the inventory was netted against the outstanding balance due Sukiasyan on the date of the Change of Control.  See Note 4.

Income Taxes

The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2016, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

Revenue Recognition

The Company recognizes revenue in accordance with ASC topic 605 “Revenue Recognition.” The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Fair Value of Financial Instruments

AS topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short-term maturity.

Stock-Based Compensation

The Company records stock based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.

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Net Loss Per Share

The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents,  if any, are anti-dilutive they are not considered in the computation. There were no potentially dilutive debt or equity instruments issued or outstanding as of September 30, 2017.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

NOTE 4 – RELATED PARTY TRANSACTIONS

At September 30, 2017 and December 31, 2016 the Company had loans payable to Mr. Sukiasyan, our former sole director of $0 and $24,000, respectively, pursuant to the verbal agreement. This loan was unsecured, non-interest bearing and due on demand.   The imputed interest on this note was deemed immaterial.      As part of the Change of Control, the balance

$24,000 due to Mr. Sukiasyan was netted against various assets and netted a contribution of $29,895 resulting from the change in control which was recorded to additional paid-in capital.  See Notes 3, 5 and 6.

On January 5, 2017, the Company entered into a loan with Mr. Sukiasyan for up to $15,000, of which $12,507 was funded to the Company. This loan was unsecured, non-interest bearing and due on demand. The imputed interest was deemed immaterial. As part of the Change of Control, the balance due of $12,507 was netted against various assets and netted a contribution of $29,895 which was recorded to additional paid-in capital.  See Notes 3, 5 and 6.

On February 9, 2017, the Company entered into a loan with the father of Collin McMullen, the sole officer and director of the Company, for $2,500. The loan is unsecured, 10% interest, and is due on demand. The Company entered into additional loan agreements on the same terms on the following dates and for the following amounts: February 16, 2017 for $26,526; March 17, 2017 for $1,700; May 9, 2017 for $1,850; May 25, 2017 for $4,685; and June 23, 2017 for $11,005. The loan balances were paid and reduced by $2,500 on August 4, 2017 and by $7,330 on September 6, 2017. See Note 6.

NOTE 5 – FIXED ASSETS

As of September 30, 2017, the Company had no fixed assets. At December 31, 2016, prior to the change in control, the Company had net fixed assets of $3,468.

NOTE 6 – NOTES PAYABLE

As of September 30, 2017, the Company had the following notes payable:

On February 9, 2017, the Company entered into a loan with the father of Collin McMullen, the sole officer and director of the Company, for $2,500. The loan is unsecured, 10% interest, and is due on demand. The Company entered into additional loan agreements on the same terms on the following dates and for the following amounts: February 16, 2017 for $26,526; March 17, 2017 for $1,700; May 9, 2017 for $1,850; May 25, 2017 for $4,685; and June 23, 2017 for $11,005. The total principal and accrued interest on these notes as of June 30, 2017 was $48,226 and $1,196, respectively. The loan balances were paid and reduced by $2,500 on August 4, 2017 and by $7,330 on September 6, 2017.  See Note 4.

NOTE 7 – STOCKHOLDERS’ EQUITY

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

During January 2016, the company issued a total of 50,000 common shares for cash contribution of $955 at $0.02 per share.

During February 2016, the company issued a total of 525,000 common shares for cash contribution of $10,392 at $0.02 per share.

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During March 2016, the company issued a total of 25,000 common shares for cash contribution of $500 at $0.02 per share. There were 3,625,000 shares of common stock issued and outstanding as of September 30, 2017.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

NOTE 9 – SUBSEQUENT EVENTS

On October 6, 2017, as a result of a private transaction, the control block of voting stock of Huale Acoustics Corporation., represented by 3,000,000 shares of common stock was transferred from Jaeson Cayne to a syndicated group of investors XU(“Purchasers”). The consideration paid for the Shares, which represents 82.75% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $342,000. The source of the cash consideration for the shares was personal funds of the Purchasers. In connection with the transaction, Jaeson Cayne and Collin McMullen released the Company from all debts owed. The extinguishment of the Company’s accounts payable and related party note payable will be recorded in the quarter ending December 31, 2017.

There are no arrangements or understandings among members of both the former and new control persons and their associates with respect to the election of directors of the Company or other matters. Upon the change of control of the Company the existing director and officer resigned immediately. Accordingly, Collin McMullen, serving as the sole director and as the only officer, ceased to be the Company’s President and Principal Accounting Officer. At the effective date of the transfer, XU Dantong consented to act as the new President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company.

On October 26, 2017, an amendment to the Company’s Articles of Incorporation became effective with the State of Nevada. The amendment changed the name of the Company to Huale Acoustics Corporation and increased the number of authorized shares of common stock to 700,000,000 shares and preferred stock to 100,000,000 shares, with par value $0.001 per share.

NOTE 10 – RECLASSIFICATION OF DISCONTINUED OPERATIONS

We have reclassified certain prior-period amounts to conform to the current-year’s presentation. The reclassifications relate to operations which have been discontinued as of the current period due to the change in control.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

Overview

Huale Acoustics Corporation., was incorporated in the State of Nevada on October 17, 2014, and established a fiscal year end of December 31. We generated limited revenues, have minimal assets and have incurred losses since inception. We were formerly in cloth and fabric embroidery business in Armenia.

On February 7, 2017 (the date of the “Change of Control”), Jaeson Cayne (“Cayne”), acquired control of Three Million (3,000,000) restricted shares of the Company’s issued and outstanding common stock, representing approximately 83% of the Company’s total issued and outstanding common stock, from Arusyak Sukiasyan (“Sukiasyan”), the former officer and director of the Company, in exchange for $315,000 per the terms of a Stock Purchase Agreement by and between Cayne and Sukiasyan. As a result of the Change I Control, the Company ceased its cloth and fabric embroidery business in Armenia.

On February 21, 2017, (i) Ms. Arusyak Sukiasyan resigned from all positions with the Company, including the sole member of the Company’s Board of Directors and the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer. The resignation of Ms. Sukiasyan was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On February 21, 2017, Mr. Collin McMullen was appointed to the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Secretary.

On May 31, 2017, the Company entered into an agreement to acquire approximately 98.8% of the issued and outstanding shares of PetsZX, Inc., a company affiliated with Cayne. This agreement was cancelled on September 1, 2017, pursuant to the terms of a Cancellation of Stock Purchase Agreement.

On October 6, 2017, as a result of a private transaction, the control block of voting stock of Huale Acoustics Corporation., represented by 3,000,000 shares of common stock was transferred from Jaeson Cayne to a syndicated group of  (“Purchasers”). The consideration paid for the Shares, which represents 82.75% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $342,000. The source of the cash consideration for the shares was personal funds of the Purchasers. In connection with the transaction, Jaeson Cayne and Collin McMullen released the Company from all debts owed.

There are no arrangements or understandings among members of both the former and new control persons and their associates with respect to the election of directors of the Company or other matters. Upon the change of control of the Company the existing director and officer resigned immediately. Accordingly, Collin McMullen, serving as the sole director and as the only officer, ceased to be the Company’s President and Principal Accounting Officer. At the effective date of the transfer, XU Dantong consented to act as the new President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company.

On October 26, 2017, an amendment to the Company’s Articles of Incorporation became effective with the State of Nevada. The amendment changed the name of the Company to Huale Acoustics Corporation and increased the number of authorized shares of common stock to 700,000,000 shares and preferred stock to 100,000,000 shares.

Employees

We currently do not have any full time or part time employees. Our Chief Executive Officer, Chief Financial Officer, and Secretary, XU Dantong, is expected to carry out all administrative functions.

We do not have any union employees.

Transfer Agent

Our stock transfer agent, Action Stock Transfer Corporation is located at 2469 E. Fort Union Boulevard, Suite 214, Salt Lake City, Utah 84121. Their telephone number is (801) 274-1088 and their fax number is (801) 274-1099. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock.

Financial Condition – Going Concern

We generated no revenues for the nine months ended September 30, 2017 and have recurring net losses for continuing operations for the nine months ended September 30, 2017 of $71,251. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

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The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

RESULTS OF OPERATIONS

Comparison of the three months ended September 30, 2017 and September 30, 2016

Revenues. We did not generate any revenues from continuing operations during the three months ended September 30, 2017 or September 30, 2016. The lack of revenues is primarily attributable to the cessation of our embroidery business upon our change in control in February, 2017.

Cost of Revenues. The Company’s cost of revenue was $0 for the three months ended September 30, 2017 and September 30, 2016.

Operating Expenses. Operating expenses for continuing operations for the three months ended September 30, 2017, and 2016, were $20,442 and $0, respectively. General and administrative expenses consisted primarily of consulting fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company.

Net Loss. Net loss for continuing operations for the three months ended September 30, 2017, was $21,574, compared with net income of $0 for the three months ended September 30, 2016. The increase in net loss is primarily due to our increase in general and administrative expenses.

Comparison of the nine months ended September 30, 2017 and September 30, 2016

Revenues. We did not generate any revenues from continuing operations during the nine months ended September 30, 2017 or September 30, 2016. The lack of revenues is primarily attributable to the cessation of our embroidery business upon our change in control in February, 2017.

Cost of Revenues. The Company’s cost of revenue was $0 for the nine months ended September 30, 2017 and September 30, 2016.

Operating Expenses. Operating expenses for continuing operations for the nine months ended September 30, 2017, and 2016, were $68,561 and $0, respectively. General and administrative expenses consisted primarily of consulting fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The increase was primarily attributable to expenses related to the change in control.

Net Loss. Net loss from continuing operations for the nine months ended September 30, 2017, was $71,251 compared with a net loss of $0 for the nine months ended September 30, 2016. The increase in net loss is primarily due to our increase in general and administrative expenses. The net loss for the nine months ended September 30, 2017 and September 30, 2016, including the results of discontinued operations was $74,616 and $10,650, respectively.

Liquidity and Capital Resources

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We have not attained profitable operations and are dependent upon obtaining financing to

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develop our contemplated pet supplement and products business. For these reasons our auditors stated in their report on our audited financial statements for the year ended December 31, 2016 that they have substantial doubt we will be able to continue as a going concern.

As of September 30, 2017, the Company had $1 in cash. We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $50,000 in expenses during the next twelve months of operations. We expect that these expenses will be comprised primarily of general expenses including overhead, legal and accounting fees.

We have not paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

The success of our business strategy is dependent upon the availability of additional capital resources on terms satisfactory to management. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and loans from executive officers and other third parties. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months. We anticipate continuing to rely on equity sales of our common shares and shareholder loans in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.

Net Cash Used In Operating Activities.

During the nine months ended September 30, 2017, net cash of $50,936 was used in operating activities for continuing operations compared with $0 for the same period ended September 30, 2016. Net cash used by operating activities for continuing operations was related to general and administrative expenses. Net cash used in operating activities for discontinued operations was $9,032 for the nine months ended September 30, 2017 and $11,055 for the period ended September 30, 2016.

Net Cash Used in Investing Activities.

During the nine months ended September 30, 2017 the Company generated $3,468 cash from the investing activities of its discontinued operations. During the same period ended September 30, 2016, the Company did not have any net cash from investing activities.

Net Cash Provided By Financing Activities.

During the nine months ended September 30, 2017, the Company had cash from financing activities from continuing operations of $38,436 consisting of notes from related parties. During the nine months ended September 30, 2016, the Company had cash from financing activities for continuing operations of $11,847 and net cash from financing activities for discontinued operations of $500.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2017, due to the following deficiencies which represent a material weakness:

To remediate our internal control weaknesses, management intends to implement the following measures upon the acquisition of an operating business:

The additional hiring is contingent upon the Company’s efforts to obtain additional funding through equity or debt and the results of its operations. There can be no assurance that the Company will be able to secure the necessary funds. Please refer to our Annual Report on Form 10-K as filed with the SEC on March 10, 2017, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control Over Financial Reporting

There are no changes in our internal controls over financial reporting other than as described elsewhere herein.

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Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

ITEM 1A.  RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under 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

None.

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ITEM 6.  EXHIBITS

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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.

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