As filed with the Securities and Exchange Commission on June 20, 2018

Registration No. 333-223749

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

to

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

SUNBURST ACQUISITIONS V, INC.

(Exact name of registrant as specified in its charter)

Room 2305A, 23/F,

World-Wide House, 19 Des Voeux Road,

Central, Hong Kong

 + (852) 2231 9629

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Terrence Ho

Chief Executive Officer and Chairman

Room 2305A, 23/F,

World-Wide House, 19 Des Voeux Road,

Central, Hong Kong

+ (852) 2231 9629

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

We are filing this Amendment No. 2 to our registration statement on Form S-1, initially filed on March 16, 2018 and Pre-Effective Amendment No. 1 filed on May 11, 2018 (File No. 333-223749) (the “Registration Statement”) to comments we received from the U.S. Securities and Exchange Commission, including a comment that we file this amendment to provide financial statements for the three months ended March 31, 2018, filed as part of the quarterly report for the same period on Form 10-Q on May 21, 2018 and the corresponding updated disclosures throughout the Amendment No. 2. No additional securities are being registered under this Amendment No.2. All applicable registration fees were paid at the time of the original filing of the Registration Statement.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Up to 10,000,000 Shares

Common Stock

Sunburst Acquisitions V, Inc.

We are offering, on a “best efforts” basis, up to 10,000,000 shares of our common stock, no par value, to purchasers in this offering.

This is a best-efforts, self-underwritten offering, which means our management will attempt to sell the shares being offered hereby on behalf of the Company. There is no underwriter for this offering. There is no requirement to sell any specific number or dollar amount of securities and we may sell less than 10,000,000 of our common stock. Our officers will use their best efforts to sell the securities offered. We will pay all expenses incurred in this offering.

The offering will terminate on _______, 2018, 90 days after the effectiveness of the registration statement of which this prospectus is a part, unless all the securities are sold before that date, we extend the offering another 90 days or we otherwise decide to close the offering early or cancel it, in each case in our sole discretion. If we extend the offering, we will provide that information in an amendment to this prospectus. If we close the offering early or cancel it, including during any extended offering period, we may do so without notice to investors, although if we cancel the offering we will promptly return any funds investors may already have paid. We currently expect the public offering price of the shares we are offering to be $0.02 per share of our common stock. There is no established market for our stock. The offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our capital structure and the amount of money we would need to implement our business plans. Accordingly, the offering price should not be considered an indication of the actual value of our securities.

There is no minimum number of shares that we must sell in this offering. Because there is no minimum offering amount required as a condition to closing in this offering, the actual public offering amount and proceeds to us, if any, are not presently determinable and may be substantially less than all of the securities offered hereby. As a result, the actual amount of gross proceeds from the sale of shares, if any, might not be sufficient to cover the expenses of the offering or our near or longer term working capital. We do not have an arrangement to place the proceeds from this offering in an escrow, trust or similar account. Any funds raised from the offering will be immediately available to us for our immediate use.

Our common stock is not currently quoted on the OTC Market Groups quotation system and we have no ticker symbol. There is no trading market for our common stock whatsoever.

Investing in our common stock involves substantial risk. In reviewing this prospectus, you should carefully consider the matters described under the heading “Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is ______, 2018

TABLE OF CONTENTS

RISK FACTORS

An investment in our common stock involves significant risks, including the risks described below. You should carefully consider the risks described below before purchasing our common stock. The risks highlighted here are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects, financial condition or results of operations could be negatively affected, and you might lose all or part of your investment.

Risks Related to Our Business and Industry

We have a limited operating history with our current business model, which makes it difficult to predict our future prospects and financial performance.

We have a short operating history with our current business model, since Nengcheng was established in 2012. Our business has generated limited gross revenues, and may not produce significant gross revenues in the near term, or at all, which may harm our ability to obtain additional financing and may require us to reduce or discontinue our operations. You must consider our business and prospects in light of the risks and difficulties we may encounter as an early-stage operating company in a new and rapidly evolving industry. We may not be able to successfully address these risks and difficulties, which could significantly harm our business, operating results and financial condition.

We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.

Through Nengcheng, we began operations in 2012 and for all of our history we have experienced net losses and negative cash flows from operations. As of March 31, 2018, the Company had accumulated deficits of $2,290,560 and working capital of $10,720,475. We expect our operating expenses to increase in the future as we expand our operations. If our revenue and gross profit do not grow at a greater rate than our operating expenses, we will not be able to achieve and maintain profitability. We expect to incur significant losses in the future for a number of reasons, including without limitation the other risks and uncertainties described herein. Additionally, we may encounter unforeseen operating or legal expenses, difficulties, complications, delays and other factors that may result in losses in future periods. If our expenses exceed our revenue, we may never achieve or maintain profitability and our business may be harmed.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.0 billion of revenues in a fiscal year, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

We recently became a public company on January 12, 2018 upon automatic effectiveness of our registration statement on Form 10, and as such, we now expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC, impose various requirements on the corporate governance practices of public companies. As an “emerging growth company” pursuant to the JOBS Act, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with increased disclosure requirements.

We may not be able to manage our business expansion and strategic acquisitions effectively.

We plan to continue to expand our presence through organic growth and strategic acquisitions. In particular, to support our continued growth and to strengthen our market share, we may acquire similar service companies in other regions to expand geographically. This will result in substantial demands on our management and on our operational, technological and other resources. To manage our expected growth, we will be required to expand our existing managerial, operational, technological and financial systems. We also need to expand, train, manage and retain our growing employee base. Significant financial resources may also be needed to support our planned growth. We cannot assure you that our current and planned managerial, operational, technological and financial systems will be adequate to support our future operations, or that we will be able to effectively and efficiently manage the growth of our operations or recruit and retain qualified personnel. There is no assurance that we will be able to obtain financial resources at commercial terms that are acceptable to us on a timely basis, or at all, to support our planned growth. Any failure to effectively and efficiently manage our expansion may materially and adversely affect our ability to capitalize on new business opportunities, which in turn may have a material adverse effect on our financial condition and results of operations.

In addition, as a core part of our growth strategy, we intend to pursue selective strategic acquisitions and maximize synergies through integration of acquired entities. Our strategic acquisitions involve substantial risks and uncertainties, including:

If any one or more of these risks or uncertainties materializes or if any of the strategic objectives we contemplate are not achieved, our strategic acquisitions may not be beneficial to us and may have a material adverse effect on our business, financial condition and results of operations.

We have previously failed to timely file certain periodic reports with the SEC and the SEC revoked the registration of each class of our registered securities. This poses significant risks to our business, and could materially and adversely affect our financial condition and results of operations.

The Company has not been able to, and may continue to be unable to produce timely financial statements, and file these financial statements as part of a periodic report in a timely manner with the SEC. The Company has failed to timely file with the SEC all requisite Forms 10-K, 10KSB, 10-Q or 10QSB beginning from the period ending January 31, 2008. Consequently, we were not compliant with the periodic reporting requirements under the Exchange Act beginning from the period ending January 31, 2008.

On April 26, 2017, the SEC instituted public administrative proceedings to determine whether to revoke or suspend our Company, for a period not exceeding twelve months the registration of each class of our securities for failure to make required periodic filings with the SEC. In this order, the Division of Enforcement (“Division”) alleged that the Company was delinquent in its required periodic filings with the Commission. The SEC informed the Company that pursuant to Securities Exchange Act of 1934, as amended (the “Exchange Act”) Section 12(j), a hearing would be scheduled before an Administrative Law Judge. At the hearing, the judge would hear evidence from the Division and the Company to determine whether the allegations of the Division contained in the order, which the Division alleged constituted failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, were true. The Judge in the proceeding then determined whether the registrations pursuant to Exchange Act Section 12 of each class of our securities should be revoked or suspended for a period not exceeding twelve months. The SEC ordered that the Judge issue an initial decision not later than 120 days from the date of service of the order instituting proceeding. On October 4, 2017, the SEC revoked the registration of each class of our registered securities pursuant to Section 12(j) of the Exchange Act for failure to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder by failing to make required periodic filings with the SEC.

While we are filing this Registration Statement on Form 10 to re-register our common stock under Section 12(g) of the Exchange Act, we cannot guarantee that in the future our reporting will always be timely. As such, our failure to timely file possibly future periodic reports with the SEC could subject us to enforcement action by the SEC and shareholder lawsuits, our failure to timely file our periodic reports could eventually result in the delisting of our common stock from the New York Stock Exchange, regulatory sanctions from the SEC, and/or the breach of covenants in our credit facilities or of any preferred equity or debt securities we may issue in the future, any of which could have a material adverse impact on our operations and your investment in our common stock, and our ability to register with the SEC public offerings of our securities for our benefit or the benefit of our security holders. Additionally, our failure to file our past periodic reports and future periodic reports has resulted in and could result in investors not receiving adequate information regarding the Company with which to make investment decisions. As a result, investors may not have access to current or timely financial information about our Company.

We have substantial outstanding receivables due from related parties primarily and other non-related parties, and may experience delays or defaults in collecting receivables from our customers and clients. A failure to receive payment on time and in full could have an adverse effect on our results of operations including but not limited to negative effect on our liquidity position and our ability to continue operation.

We grant credit to substantially all of our customers without requiring collateral. Our accounts receivables and other receivables due from related parties are interest free, unsecured, and payable on demand. In times of economic uncertainty, the risks relating to the granting of such credit will typically increase. Although we monitor and mitigate the risks associated with our credit policies, we cannot ensure that such mitigation will be effective. We have experienced losses due to customers failing to meet their obligations. Future losses could be significant and, if incurred, could harm our business and have a material adverse effect on our operating results and financial position.

The facts and circumstances of each account may require us to use substantial judgment in assessing its collectability. In the future, we may not be able to collect certain accounts receivable. If a business delays payment or fails to release our retention monies as scheduled, our cash flow and working capital may be materially and adversely affected. Even where we are able to recover any losses incurred pursuant to the terms of the contract, the process of such recovery is usually time-consuming and requires financial and other resources to settle the disputes. Furthermore, there can be no assurance that any outcome will be in our favor or that any dispute will be resolved in a timely manner. Failure to secure adequate payments in time or to manage past due debts effectively could have an adverse effect on our business, financial position, results of operations and prospects.

We may not be able to successfully integrate businesses that we may acquire, which may cause us to lose anticipated benefits from such acquisitions and to incur significant additional expenses.

We may not successfully integrate our operations and the operations of Nengcheng that we have acquired in a timely manner, or at all, and we may not realize the anticipated benefits or synergies of the acquisitions to the extent, or in the timeframe, we anticipated, which may have a material adverse effect on our business, financial condition and results of operations. The main challenges involved in integrating acquired entities include the following:

If we fail to successfully execute our growth strategies, our business and prospects may be materially and adversely affected.

Our growth strategies include further promoting our one-stop import service program to customers that require import services throughout the PRC market, expanding our additional raw materials and half-finished goods offerings, establishing working relationship with additional ports that we currently do not operate in, and making acquisitions or equity investments in additional businesses that complement our existing business. We may not succeed in executing these growth strategies due to a number of factors, including the following:

If we fail to successfully execute our growth strategies, we may not be able to maintain our growth rate and our business and prospects may be materially and adversely affected as a result.

We rely on overseas cargo agents to provide services to us and to our customers, and our ability to conduct business successfully may be affected if we are unable to maintain our relationships with these overseas cargo agents.

We rely on the services of independent cargo agents, who may also be providing services to our competitors, which may include consolidating and deconsolidating various shipments. Although we believe our relationships with our cargo agents are satisfactory, we may not be able to maintain these relationships. If we were unable to maintain these relationships or develop new relationships, our service levels, operating efficiency, future freight volumes and operating profits may be reduced which will adversely impact our results of operations in future periods.

We incur significant credit risks in the operation of our business which could reduce our operating profits.

Various aspects of import services involve significant credit risks. As part of our service, we first pay the cost of customs clearance, such as tarrifs and other taxes, on behalf of our customers, before we bill our customers for the cost. We endeavor to maintain tight credit controls and to avoid doing business with customers we believe may not be creditworthy. While we have not yet encountered incurring losses for customers to whom we extended credit and either delayed their payments to us or became unable or unwilling to pay our invoices after we completed shipment of their goods or rendered other services to them, we cannot guarantee that we will not incur such losses in the future.

We may not be able to adequately protect our intellectual property.

Unauthorized use of any of our intellectual property may adversely affect our business and reputation. We rely on a combination of copyright, trademark and trade secrets laws to protect our intellectual property rights. Nevertheless, third-parties may obtain and use our intellectual property without due authorization. The practice of intellectual property rights enforcement action by Chinese regulatory authorities is in its early stage of development and is subject to significant uncertainty. We may also need to resort to litigation and other legal proceedings to enforce our intellectual property rights. Any such action, litigation or other legal proceedings could result in substantial costs and diversion of our management’s attention and resources and could disrupt our business. In addition, there is no assurance that we will be able to enforce our intellectual property rights effectively or otherwise prevent others from the unauthorized use of our intellectual property. Failure to adequately protect our intellectual property could materially and adversely affect our business, financial condition and results of operations.

We may encounter disputes from time to time relating to our use of intellectual property of third parties.

We cannot be certain that third parties will not claim that our business infringes upon or otherwise violates patents, copyrights or other intellectual property rights that they hold. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our management’s attention and resources or result in the loss of goodwill associated with our brand. If a lawsuit against us is successful, we may be required to pay substantial damages and/or enter into royalty or license agreements that may not be based upon commercially reasonable terms, or we may be unable to enter into such agreements at all.

We may not be able to achieve the benefits we expect from recent and future acquisitions, and recent and future acquisitions may have an adverse effect on our ability to manage our business.

We have made and intend to continue to make acquisitions or equity investments in additional businesses that complement our existing business. We may not be able to successfully integrate acquired businesses and we may not have control over the businesses or operations of our minority equity investments, the value of which may decline over time. As a result, our business and operating results could be harmed. In addition, if the businesses we acquire or invest in do not subsequently generate the anticipated financial performance or if any goodwill impairment test triggering event occurs, we may need to revalue or write down the value of goodwill and other intangible assets in connection with such acquisitions or investments, which would harm our results of operations. In addition, we may be unable to identify appropriate acquisition or strategic investment targets when it is necessary or desirable to make such acquisition or investment to remain competitive or to expand our business. Even if we identify an appropriate acquisition or investment target, we may not be able to negotiate the terms of the acquisition or investment successfully, finance the proposed transaction or integrate the relevant businesses into our existing business and operations.

If our senior management is unable to work together effectively or efficiently or if we lose their service, our business may be severely disrupted.

Our success heavily depends upon the continued services of our management. In particular, we rely on the expertise and experience of Mr. Terence Ho, our CEO and Chairman. If Mr. Ho or one or more of our senior management were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all, and our business, financial condition and results of operations may be materially and adversely affected. If Mr. Ho or any of our senior management joins a competitor or forms a competing business, we may lose our employees, and other key professionals and staff members. If any dispute arises between our officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may be unable to enforce them at all.

We have limited insurance coverage for our operations in China, which could expose us to significant costs and business disruption.

We do not maintain any liability insurance or property insurance policies covering equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster. Consistent with customary industry practice in China, we do not maintain business interruption insurance, nor do we maintain key-man life insurance. We maintain medical insurance for our management in China. As the insurance industry in China is still in an early stage of development, insurance companies in China currently offer limited business-related insurance products. We do not maintain business interruption insurance. We cannot assure you that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected.

Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs, access to capital and cost of capital.

The capital and credit markets have previously experienced extreme volatility and disruption, including, among other things, extreme volatility in securities prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining valuations of others. Governments have taken unprecedented actions intended to address extreme market conditions that have included severely restricted credit and declines in real estate values. In some cases, the markets have exerted downward pressure on availability of liquidity and credit capacity for certain issuers. While historically these conditions have not impaired our ability to utilize our current credit facilities and finance our operations or obtaining advances from our shareholders, there can be no assurance that there will not be deterioration in financial markets and confidence in major economies such that our ability to access credit markets and finance our operations might be impaired. Without sufficient liquidity, we may be forced to curtail our operations and any planned expansion. Adverse market conditions may limit our ability to replace, in a timely manner, maturing liabilities and access the capital necessary to operate and grow our business. As such, we may be forced to delay raising capital or bear an unattractive cost of capital which could decrease our profitability and significantly reduce our financial flexibility. The tightening of credit in financial markets could adversely affect the ability of our customers to obtain financing for purchases of our products and could result in a decrease in or cancellation of orders for our products. Our results of operations, financial condition, cash flows and capital position could be materially adversely affected by disruptions in the financial markets.

We are in the process of engaging a broker-dealer to quote our stock on the OTC market. If and when our stock is quoted to trade on the OTC market, our stock price may be negatively affected if we become subject to the recent scrutiny, criticism and negative publicity involving U.S. listed Chinese companies.

Recently, U.S. publicly reporting companies that have substantially all of their operations in China, particularly companies like us which have completed share exchanges, reverse merger, or combinations under common control  have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S.-listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our Company, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our company. If such allegations are not proven to be groundless, our company and business operations will be severely negatively affected and your investment in our stock could be rendered worthless.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

As of March 31, 2018, the Company had accumulated deficits of $2,290,560 and working capital of $10,720,475 due to the substantial losses in operation in previous periods. The future of our company is dependent upon future profitable operations from Nengcheng and the continuing financial support from our stockholders or other capital sources. Our management will need to seek additional financing in the future. In addition, the presence of the going concern explanatory paragraph may have an adverse impact on our relationship with third parties with whom we do business, including our customers, vendors and employees and could make it challenging and difficult for us to raise additional debt or equity financing to the extent needed, all of which could have a material adverse impact on our business, results of operations and financial condition. These conditions raise substantial doubt about our company’s ability to continue as a going concern. Although there are no assurances that our plans will be realized, our management believes that we will be able to continue operations in the future.

Additionally, we cannot assure you that we will be able to generate net profits or positive cash flow from operating activities in the future. Our ability to achieve profitability will depend in large part on our ability to increase our operating margin, either by growing our revenues at a rate faster than our operating expenses increase, or by reducing our operating expenses, especially our sales and market expenses, as a percentage of our net revenues. As a result of the foregoing, we believe that we may continue to incur net losses for a period of time in the future.

Risks Relating to Our Corporate Structure

The draft Foreign Investment Law proposes sweeping changes to the PRC foreign investment legal regime and will likely to have a significant impact on businesses in China controlled by foreign invested enterprises primarily through contractual arrangements, such as our business.

On January 19, 2015, MOFCOM published a draft of the PRC Law on Foreign Investment (Draft for Comment), or the Foreign Investment Law, which is open for public comments until February 17, 2015. At the same time, MOFCOM published an accompanying explanatory note of the draft Foreign Investment Law, or the Explanatory Note, which contains important information about the draft Foreign Investment Law, including its drafting philosophy and principles, main content, plans to transition to the new legal regime and treatment of business in China controlled by foreign invested enterprises, or FIEs, primarily through contractual arrangements. The draft Foreign Investment Law is intended to replace the current foreign investment legal regime consisting of three laws: the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Invested Enterprise Law, as well as detailed implementing rules. The draft Foreign Investment Law proposes significant changes to the PRC foreign investment legal regime and may have a material impact on Chinese companies listed or to be listed overseas. The proposed Foreign Investment Law is to regulate FIEs the same way as PRC domestic entities, except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in a “Negative List.” Because the Negative List has yet to be published, it is unclear whether it will differ from the current list of industries subject to restrictions or prohibitions on foreign investment (including our industry). The draft Foreign Investment Law also provides that only FIEs operating in industries on the Negative List will require entry clearance and other approvals that are not required of PRC domestic entities. As a result of the entry clearance and approvals, certain FIE’s operating in industries on the Negative List may not be able to continue to conduct their operations through contractual arrangements.

There is substantial uncertainty regarding the draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption timeline or effective date of the final form of the law. While such uncertainty exists, we cannot determine whether the new foreign investment law, when it is adopted and becomes effective, will not have a material positive or negative impact on our corporate structure and business.

RISKS RELATED TO DOING BUSINESS IN CHINA

Substantially all of our assets are located in the PRC and substantially all of our revenues are derived from our operations in China, and changes in the political and economic policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.

Our business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters. Under the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization. There is no assurance, however, that the government of the PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without advance notice.

Our operations are subject to PRC laws and regulations that are sometimes vague and uncertain. Any changes in such PRC laws and regulations, or the interpretations thereof, may have a material and adverse effect on our business.

The PRC’s legal system is a civil law system based on written statutes. Unlike the common law system prevalent in the United States, decided legal cases have little value as precedent in China. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to, governmental approvals required for conducting business and investments, laws and regulations governing the battery industry, national security-related laws and regulations and export/import laws and regulations, as well as commercial, antitrust, patent, product liability, environmental laws and regulations, consumer protection, and financial and business taxation laws and regulations.

The Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.

PRC regulations relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate, including our ability to pay dividends. Our failure to obtain the prior approval of the China Securities Regulatory Commission, or the CSRC, for any offering of our common stock could have a material adverse effect on our business, operating results, reputation and trading price of our common stock.

The PRC State Administration of Foreign Exchange, or “SAFE,” issued a public notice in November 2005, known as Circular 75, concerning the use of offshore holding companies in mergers and acquisitions in China. The public notice provides that if an offshore company controlled by PRC residents intends to acquire a PRC company, such acquisition will be subject to registration with the relevant foreign exchange authorities. The public notice also suggests that registration with the relevant foreign exchange authorities is required for any sale or transfer by the PRC residents of shares in an offshore holding company that owns an onshore company. The PRC residents must each submit a registration form to the local SAFE branch with respect to their ownership interests in the offshore company, and must also file an amendment to such registration if the offshore company experiences material events, such as changes in the share capital, share transfer, mergers and acquisitions, spin-off transactions or use of assets in China to guarantee offshore obligations. If any PRC resident stockholder of an offshore holding company fails to make the required SAFE registration and amended registration, the onshore PRC subsidiaries of that offshore company may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore entity. In May 2011, the SAFE promulgated new operational rules, known as Notice 19, for the implementation of Circular 75. Failure to comply with the SAFE registration and amendment requirements of Circular 75, as applied by SAFE in accordance with Notice 19 could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. Because of uncertainty of how the SAFE notice will be further interpreted and enforced, we cannot be sure how it will affect our business operations or future plans. For example, our subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with the SAFE notice by our PRC resident beneficial holders. Failure by our PRC resident beneficial holders could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

On August 8, 2006, the PRC Ministry of Commerce (“MOFCOM”), joined by the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission and SAFE, released a substantially amended version of the Provisions for Foreign Investors to Merge with or Acquire Domestic Enterprises (the “Revised M&A Regulations”), which took effect on September 8, 2006. These rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises. These rules implemented greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOFCOM as a key regulator for issues related to mergers and acquisitions in China and requiring MOFCOM approval of a broad range of merger, acquisition and investment transactions. Further, the rules established reporting requirements for acquisition of control by foreigners of companies in key industries, and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

If the CSRC or another PRC regulatory agency subsequently determines that CSRC approval was required for any transaction not receiving prior approval, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from an offering of securities into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock. The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt any offering before settlement and delivery of the securities offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur.

Also, if later the CSRC requires that we obtain its approval for any transaction not receiving prior approval, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our common stock.

Furthermore, the Circular on establishing the Security Review System for Merger and Acquisition of Domestic Enterprise by Foreign Investors was promulgated by the General Office of the State Council on February 3, 2011 and the Ministry of Commerce issued the corresponding implementation rules on August 25, 2011, as supplemented further in June 17, 2014. According to these rules, a foreign investor’s acquisitions of Chinese companies in the fields of military, energy and resources, infrastructure, important agricultural products, infrastructure, transport service, key technology and major equipment manufacturing, and other restricted fields requires security review by both the National Development and Reform Commission and the relevant local government entities.

Complying with the requirements of the above rules to complete such transactions could be time-consuming, and any required approval processes may delay or inhibit our ability to complete such transactions, which could also affect our ability to expand our business.

We face uncertainty from China’s Circular on Strengthening the Administration of Enterprise Income Tax on Non-Resident Enterprises’ Share Transfer (“Circular 698”) that was released in December 2009 with retroactive effect from January 1, 2008.

The Chinese State Administration of Taxation (SAT) released a circular (Guoshuihan No. 698 - Circular 698) on December 15, 2009 that addresses the transfer of shares by nonresident companies. Circular 698, which is effective retroactively to January 1, 2008, may have a significant impact on many companies that use offshore holding companies to invest in China. Circular 698, which provides parties with a short period of time to comply its requirements, indirectly taxes foreign companies on gains derived from the indirect sale of a Chinese company. Where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise by selling the shares in an offshore holding company, and the latter is located in a country or jurisdiction where the effective tax burden is less than 12.5% or where the offshore income of his, her, or its residents is not taxable, the foreign investor is required to provide the tax authority in charge of that Chinese resident enterprise with the relevant information within 30 days of the transfers. Moreover, where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise through an abuse of form of organization and there are no reasonable commercial purposes such that the corporate income tax liability is avoided, the PRC tax authority will have the power to re-assess the nature of the equity transfer in accordance with PRC’s “substance-over-form” principle and deny the existence of the offshore holding company that is used for tax planning purposes.

The SAT issued Bulletin of the State of Taxation [2011] No. 24 (Bulletin) on March 28, 2011, in which various issues regarding the tax administration for non-PRC resident enterprises and clarifications on Circular 698 were addressed. The Bulletin defined some parameters stipulated in Circular 698, which, if a non-resident enterprise were to fall under, would be subject to the Circular requirements including that (a) “foreign investor (party with effective control)” applies to all foreign investors who have indirectly transferred a Chinese resident enterprise and (b) that “effective tax burden” refers to the effective tax imposed on the gains on the share transfer transaction per se. However, the SAT is expected to issue further clarification and guidance with regard to how to decide “abuse of form of organization” and “reasonable commercial purpose,” which can be utilized by us to determine if we comply with Circular 698.

If we fail to comply with the requirements under Circular 698 and the Bulletin, we may become at risk of being taxed and we may also be required to expend valuable resources to comply with Circular 698 and the Bulletin or to establish that we should not be taxed, which could have a material adverse effect on our financial condition and results of operations.

The foreign currency exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.

To the extent that we need to convert U.S. Dollars into Renminbi for our operational needs, our financial position and the price of our common stock may be adversely affected should the Renminbi appreciate against the U.S. Dollar at that time. Conversely, if we decide to convert Renminbi into U.S. Dollars for the operational needs or paying dividends on our common stock, the dollar equivalent of our earnings from our subsidiaries in China would be reduced should the dollar appreciate against the Renminbi.

Until 1994, the Renminbi experienced a gradual but significant devaluation against most major currencies, including dollars, and there was a significant devaluation of the Renminbi on January 1, 1994 in connection with the replacement of the dual exchange rate system with a unified managed floating rate foreign exchange system. Since 1994, the value of the Renminbi relative to the U.S. Dollar has remained stable and has appreciated slightly against the U.S. Dollar. Countries, including the United States, have argued that the Renminbi is artificially undervalued due to China’s current monetary policies and have pressured China to allow the Renminbi to float freely in world markets. In July 2005, the PRC government changed its policy of pegging the value of the Renminbi to the dollar. Under the new policy the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of designated foreign currencies. While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in further and more significant appreciation of the Renminbi against the dollar.

Inflation in the PRC could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. According to the National Bureau of Statistics of China, China’s Average Consumer Price Index was 1.99% in 2016. If prices for our products and services rise at a rate that is insufficient to compensate for the rise in the costs of supplies such as labor costs, in our case, it may have an adverse effect on our profitability.

Furthermore, in order to control inflation in the past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending. In January 2010, the Chinese government took steps to tighten the availability of credit including ordering banks to increase the amount of reserves they hold and to reduce or limit their lending. The implementation of such policies may impede economic growth. In October 2004, the People’s Bank of China, the PRC’s central bank, raised interest rates for the first time in nearly a decade and indicated in a statement that the measure was prompted by inflationary concerns in the Chinese economy. In April 2006, the People’s Bank of China raised the interest rate again. Repeated rises in interest rates by the central bank would likely slow economic activity in China which could, in turn, materially increase our costs and also reduce demand for our products and services.

Because our funds are held in banks that do not provide insurance, the failure of any bank in which we deposit our funds could affect our ability to continue in business.

Banks and other financial institutions in the PRC do not provide insurance for funds held on deposit. A significant portion of our assets are in the form of cash deposited with banks in the PRC, and in the event of a bank failure, we may not have access to our funds on deposit. Depending upon the amount of money we maintain in a bank that fails, our inability to have access to our cash could impair our operations, and, if we are not able to access funds to pay suppliers, employees and other creditors, we may be unable to continue in business.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

We are subject to the U.S. Foreign Corrupt Practices Act (“FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our company, because these parties are not always subject to our control.

Although we believe to date we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe criminal or civil sanctions including personal liability for management, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Dividends payable by us to our foreign investors and any gain on the sale of our shares may be subject to taxes under PRC tax laws.

If dividends payable to our shareholders are treated as income derived from sources within China, then the dividends that shareholders receive from us, and any gain on the sale or transfer of our shares, may be subject to taxes under PRC tax laws.

In January 2009, the State Administration of Taxation promulgated the Provisional Measures for the Administration of Withholding of Enterprise Income Tax for Non-resident Enterprises (“Measures”), pursuant to which, the entities which have the direct obligation to make the following payment to a non-resident enterprise shall be the relevant tax withholders for such non-resident enterprise, and such payment includes: incomes from equity investment (including dividends and other return on investment), interests, rents, royalties, and incomes from assignment of property as well as other incomes subject to enterprise income tax received by non-resident enterprises in China. Further, the Measures provides that in case of equity transfer between two non-resident enterprises which occurs outside China, the non-resident enterprise which receives the equity transfer payment shall, by itself or engage an agent to, file tax declaration with the PRC tax authority located at place of the PRC company whose equity has been transferred, and the PRC company whose equity has been transferred shall assist the tax authorities to collect taxes from the relevant non-resident enterprise. However, it is unclear whether the Measures refer to the equity transfer by a non-resident enterprise which is a direct or an indirect shareholder of the said PRC company. Given these Measures, there is a possibility that we may have an obligation to withhold income tax in respect of the dividends paid to non-resident enterprise investors.

Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.

From time to time, we may receive requests from certain U.S. agencies to investigate or inspect our operations, or to otherwise provide information. While we will be compliant with these requests from these regulators, there is no guarantee that such requests will be honored by those entities who provide services to us or with whom we associate, especially as those entities are located in China. Furthermore, under current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or disallowed. Such inspections, though permitted by us and our affiliates, are not subject to be upheld in China by those entities that are located in China, and may therefore be impossible to facilitate.

Because our business is located in the PRC, we may have difficulty establishing adequate management, legal and financial controls, which are required in order to comply with U.S. securities laws.

PRC companies have historically not adopted a western style of management and financial reporting concepts and practices, which includes strong corporate governance, internal controls and, computer, financial and other control systems. Most of our middle and top management staff are not educated and trained in the Western system, and we may have difficulty in hiring new employees in the PRC with such training. In addition, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002. This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

Most of our current operations are conducted in China. Moreover, most of our sole director and officer, Mr. Terence Ho is resident of China Mainland. All or substantially all of his assets are located outside the United States and in the PRC. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons. In addition, uncertainties exist as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.

Contract drafting, interpretation and enforcement in China involve significant uncertainties.

We have entered into numerous contracts governed by PRC law, many of which are material to our business. As compared with contracts in the United States, contracts governed by PRC law tend to contain less detail and are not as comprehensive in defining contracting parties’ rights and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges. In addition, contract interpretation and enforcement in China is not as developed as in the United States, and the result of any contract dispute is subject to significant uncertainties. Therefore, we cannot assure that we will not be subject to disputes under our material contracts, and if such disputes arise, we cannot assure that we will prevail.

RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR SHARES OUR COMMON STOCK

Because there is no minimum number of shares that we must sell in this offering, we may not raise sufficient capital to implement our planned business and your entire investment could be lost.

We are offering up to 10,000,000 shares of common stock on a “best-efforts basis” and there is no minimum number of securities that we must sell. Funds raised pursuant to this offering will not be held in any escrow account and all funds raised regardless of the amount will be available to us. We may close this offering having raised substantially less than $200,000, which could leave us without capital to fund our near or longer term operations. In the event that we do not raise sufficient capital to implement our planned operations, your entire investment could be lost.

Our management will have broad discretion in how we use the net proceeds of this offering.

Our management will have considerable discretion over the use of proceeds from this offering. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used in a manner which you may consider most appropriate. Furthermore, you will have no direct say on how our management allocates the net proceeds of this offering. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

There is no active trading market for our Common Stock, and there is no assurance of an established public trading market, which would adversely affect the ability of our investors to sell their securities in the public market.

We are currently searching for a registered broker-dealer who is willing to apply to quote our Common Stock on the Over the Counter market (the “OTC market”). The application may not be approved upon effectiveness of this registration statement. In the event that we successfully quote our Common Stock on the OTC market, broker-dealers often decline to trade in OTC stocks given the factors that the markets for such securities are often limited, the stocks are more volatile, and the risk to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline. We currently do not intend to apply to list on NASDAQ Capital Market or the NYSE MKT, but if we do decide to apply, there is no guarantee that we will meet the specific listing standards of NASDAQ or NYSE MKT.

The market price and trading volume of shares of our Common Stock may be volatile.

When and if an active market develops for our securities, the market price of our Common Stock could fluctuate significantly for many reasons, including reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or announcements by our competitors regarding their own performance, as well as general economic and industry conditions. For example, to the extent that other large companies within our industry experience declines in their share price, our share price may decline as well. Fluctuations in operating results or the failure of operating results to meet the expectations of public market analysts and investors may negatively impact the price of our securities. Quarterly operating results may fluctuate in the future due to a variety of factors that could negatively affect revenues or expenses in any particular quarter, including vulnerability of our business to a general economic downturn; changes in the laws that affect our products or operations; competition; compensation related expenses; application of accounting standards; and our ability to obtain and maintain all necessary regulatory and industry certifications and/or approvals to conduct our business. In addition, when the market price of a company’s shares drops significantly, shareholders could institute securities class action lawsuits against the Company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources.

Our officers and/or directors or entities controlled by our employees, officers and/or directors will control a majority of the shares of our common stock, decreasing your influence on shareholder decisions.

As of the date of this registration statement, our officers or directors, or entities controlled by our employees, officers and/or directors will, in the aggregate, beneficially own approximately 99.6% of our outstanding shares of common stock following the closing of the transactions underlying the Success Green Agreement. As a result, our employees, officers and directors will possess substantial ability to impact our management and affairs and the outcome of matters submitted to shareholders for approval. These shareholders, acting individually or as a group, could exert control and substantial influence over matters such as electing directors and approving mergers or other business combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company. These actions may be taken even if they are opposed by our other shareholders.

If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.

In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

Compliance with changing regulations of corporate governance and public disclosure will result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Our common stock considered a “penny stock” which is subject to restrictions on marketability, so you may not be able to sell your shares.

No public market currently exists for our common stock. The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock is expected to be less than $5.00 per share and therefore will be designated as a “penny stock” according to SEC rules. This designation requires any broker or dealer selling these securities to disclose some information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules may restrict the ability of brokers or dealers to sell the common stock and may affect the ability of investors to sell their shares. These regulations may likely have the effect of limiting the trading activity of the Company’s common stock and reducing the liquidity of an investment in its common stock. In addition, investors may find it difficult to obtain accurate quotations of the common stock and may experience a lack of buyers to purchase our Company’s stock or a lack of market makers to support the stock price.

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their shares.

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

You will incur immediate and substantial dilution as a result of this offering. After giving effect to the sale by us of up to 10,000,000 shares of common stock at the assumed public offering price of $0.02 per share, and after deducting estimated offering expenses payable by us, investors in this offering can expect an immediate dilution of $0.08 per share, or 400%, at the assumed public offering price. To the extent that the options we will grant to our officers, directors and employees, are ultimately exercised, you will sustain future dilution. We may also acquire or license other technologies or finance strategic alliances by issuing equity, which may result in additional dilution to our shareholders.

An investment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related party is offering any tax assurances or guidance regarding our company or your investment.

The formation of our company and our financings, as well as an investment in our company generally, involves complex federal, state and local income tax considerations. Neither the Internal Revenue Service nor any State or local taxing authority has reviewed the transactions described herein, and may take different positions than the ones contemplated by management. You are strongly urged to consult your own tax and other advisors prior to investing, as neither we nor any of our officers, directors or related parties is offering you tax or similar advice, nor are any such persons making any representations and warranties regarding such matters.

If and when quoted to trade on the OTC market, our Common Stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

If a market develops and the price of the Company’s stock is below $5.00 per share, or the Company does not have $2,000,000 in net tangible assets, or is not listed on an exchange or on the NASDAQ National Market System, among other conditions, the Company’s shares may be subject to a rule promulgated by the SEC that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the Subscriber and receive the Subscriber’s written consent to the transaction prior to the sale. Furthermore, if the price of the Company’s stock is below $5.00, and does not meet the conditions set forth above, sales of the Company’s stock in the secondary market will be subject to certain additional new rules promulgated by the SEC. These rules generally require, among other things, that brokers engaged in secondary trading of stock provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, and disclosure of the compensation to the broker-dealers and disclosure of the sales person working for the broker-dealer. These rules and regulations may affect the ability of broker-dealers to sell the Company’s securities, thereby limiting the liquidity of the Company’s securities.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue our operations. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this Current Report on Form 8-K generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained herein will in fact occur.

You should understand that the following important factors, in addition to those discussed in our periodic reports to be filed with the SEC under the Exchange Act, could affect our future results and could cause those results to differ materially from those expressed in such forward-looking statements:

Although we believe that our expectations (including those on which our forward-looking statements are based) are reasonable, we cannot assure you that those expectations will prove to be correct. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in our forward-looking statements as anticipated, believed, estimated, expected or intended.

Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason. All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus and the documents incorporated by reference herein might not occur.

USE OF PROCEEDS

Assuming the maximum offering amount of $200,000 is sold in this offering, the net proceeds to be received by us from this offering (after deducting offering-related expenses) are estimated to be $122,972. We currently expect to use the net proceeds from this offering as follows: 

However, readers are cautioned that we are permitted to close this offering having raised substantially less than $200,000, and there is no minimum amount that we are required to raise in order to close this offering. If we close this offering having raised less than $200,000, we may be unable to allocate the proceeds from the offering as set forth above and we may only raise enough to maintain operations for a short period of time.

Moreover, and notwithstanding the estimations set forth above, our management has significant flexibility and broad discretion in applying the net proceeds received in this offering. Our expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, and any unforeseen cash needs.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

DILUTION

If you purchase shares in this offering your interest will be diluted immediately to the extent of the difference between the assumed public offering price of $0.02 per share and the as adjusted net tangible book value per share of our common stock immediately following this offering as of March 31, 2018.

Our net tangible book value as of March 31, 2018 was approximately $10,721,619, or approximately $0.11 per share.  Net tangible book value per share represents our total tangible assets less total tangible liabilities, divided by the number of shares of common stock outstanding as of March 31, 2018. Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers in this offering and the as adjusted net tangible book value per share of common stock immediately after completion of this offering.

Assuming the sale of all 10,000,000 shares of common stock in this offering at an assumed public offering price of $0.02 per share, and after deducting estimated offering expenses, our as adjusted net tangible book value as of March 31, 2018 would have been approximately $10,844,591, or $0.10 per share. This represents an immediate decrease in net tangible book value of $0.01 per share to existing shareholders and an immediate dilution in net tangible book value of $0.08 per share to purchasers of shares in this offering.

The following table illustrates the dilution to the purchasers of the common stock in this offering. The table below includes an analysis of the dilution that will occur if 25%, 50%, 75% of the shares are sold, as well as the dilution if all shares are sold:

The following table summarizes the number and percentage of shares purchased, the amount of consideration paid and the average price per share paid by our existing shareholders and by new investors in this offering:

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2018:

DESCRPTION OF SECURITIES TO BE REGISTERED

The Company is incorporated in the state of Colorado. The rights of the Company’s shareholders are generally covered by Colorado law and the Company’s amended articles of organization and bylaws (the “Amended Articles of Incorporation and Bylaws”). The terms of the Company’s capital stock are therefore subject to Colorado law, including the Colorado Revised Statutes, and the law of the State of Colorado.

The Company’s authorized capital stock consists of 700,000,000 shares of common stock, no par value, and 20,000,000 shares of designated preferred stock, no par value. As of the date of this registration statement, the Company has 100,000,000 outstanding shares of common stock and 0 shares of preferred stock designated or outstanding. All of the shares outstanding at that date were fully paid and nonassessable.

Common Stock

Each record holder of Common Stock is entitled to one vote for each share held on all matters properly submitted to the shareholders for their vote. Cumulative voting for the election of directors is not permitted by the Amended Articles of Incorporation.

Holders of outstanding shares of Common Stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of the Company, holders are entitled to receive, ratably, the net assets of the Company available to shareholders after distribution is made to the preferred shareholders, if any, who are given preferred rights upon liquidation. Holders of outstanding shares of Common Stock have no preemptive, conversion or redemptive rights. All of the issued and outstanding shares of Common Stock are, and all unissued shares when offered and sold will be, duly authorized, validly issued, fully paid, and nonassessable. To the extent that additional shares of the Company’s Common Stock are issued, the relative interests of then existing shareholders may be diluted.

Transfer Agent

The Company has engaged the services of Corporate Stock Transfer, Inc., 3200 Cherry Creek Dr. South, Suite 430, Denver, CO. 80209, to act as transfer agent and registrar for the Company.

MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS

There is presently no public trading market for our common stock. Upon the effectiveness of the Registration Statement of which this Prospectus is a part, we anticipate that an eligible market maker shall apply to FINRA for our common stock to be quoted on the OTC. However, we cannot assure you that our common stock will be quoted on the OTC or, if quoted, that a trading market will materialize. To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market-maker, willing to list, bid, or give sale quotations and to sponsor the listing of a company’s securities. There is currently no registered broker-dealer that has agreed to act as the market-maker for our common stock. We may not now and may never qualify for quotation on the OTC.

Holders of Securities.

As of June 19, 2018, there were approximately 117 holders of record of our common stock. No shares of the Company’s common stock can be sold pursuant to Rule 144 under the Securities Act and the Company has not agreed to register any such shares under the Securities Act for sale by security holders.

Dividends.

We have not declared or paid any cash dividends on our common stock since our inception, and our Board of Directors currently intends to retain all earnings for use in the business for the foreseeable future. Any future payment of dividends will depend upon our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

BUSINESS

Unless the context requires otherwise, all references to the “Company,” “we,” “us” and “our” refer to Sunburst Acquisitions V, Inc. and its subsidiaries.

Overview

Sunburst Acquisitions V, Inc., a Colorado corporation (the “Company”) was incorporated under the laws of the State of Colorado on April 30, 1998, and was in the early developmental and promotional stages. On August 11, 2005, Onping Limited, a British Virgin Islands Corporation, wholly owned by Mr. Terence Ho, purchased an aggregate of 2,464,000 shares or approximately 90% of the issued and outstanding common stock of the Company from five of the Company’s then shareholders, pursuant to a purchase agreement dated June 21, 2005 (the “Onping Purchase Agreement”). Upon the closing of the transactions underlying the Onping Purchase Agreement and pursuant thereto, Mr. Terence Ho became the CEO and a director of the Company.

On October 26, 2016, the Company entered into a Stock Purchase Agreement (the “Sea Treasure Agreement”) with Sea Treasure Holdings Limited (“Sea Treasure”), a related party controlled by Mr. Ho, pursuant to which the Company issued an aggregate of 25,000,000 shares of common stock (the “Sea Treasure Purchase”), or approximately 91% of the Company’s issued and outstanding common stock to Sea Treasure, at an aggregate purchase price of approximately $250,000. Sea Treasure used its cash on hand to purchase the stock. Following the closing of the Sea Treasure Purchase, Mr. Ho held approximately 99% of the Company’s issued and outstanding common stock.

On December 8, 2016, the Company filed Articles of Amendment to its Amended Articles of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Colorado effecting an increase in the number of authorized shares of stock to 720,000,000, of which 700,000,000 are designated common stock and 20,000,000 are designated preferred stock.

The Company was a blank check company until the Company completed a transaction on November 13, 2017.

On November 13, 2017, a Share Exchange Agreement (the “Success Green Agreement”) was entered into by and among the Company, Success Green (Group) Limited, a British Virgin Islands business company (“Success Green BVI”) and Mr. Ho, being the beneficial owner of 27,464,000 shares of the Company’s common stock and also the sole shareholder of all of the issued share capital of Success Green BVI (the “SG Stock”).

Pursuant to the Share Exchange Agreement, upon surrender by Mr. Ho and the cancellation by Success Green BVI of the certificates evidencing the SG Stock as registered to Mr. Ho, and pursuant to the registration of the Company in the register of members maintained by Success Green BVI as the new holder of the SG Stock and the issuance of the certificates evidencing the aforementioned registration of the SG Stock in the name of the Company, the Company issued 72,265,000 shares (the “Acquisition Stock”) of the Company’s common stock to Mr. Ho. The Acquisition Stock collectively represents 72.27% of the issued and outstanding common stock of the Company immediately after the Closing, in exchange for the SG Stock, representing 100% of the issued share capital of Success Green BVI in a combination of entities under common control. Following the combination, Mr. Ho continues to be the majority beneficial owner of the Company’s common stock, holding 99.73% equity interest in the Company, and Success Green BVI and its subsidiary became wholly owned subsidiaries of the Company. As such, the Company is the 100% owner of ZhaoQing NengCheng Import and Export Co., Ltd. (“Nengcheng”), an operating company incorporated on July 3, 2012 under the laws of the PRC, through Success Green BVI.

Accounting Treatment of the Transaction

For financial reporting purposes, the Share Exchange represents a combination of entities under common control. The assets and liabilities and the results of operations that will include the assets and liabilities presented at the their carrying values at the date of the transaction; the Company’s historical shareholders’ equity has been retroactively restated to the first period presented whereby the acquisitions of by Success Green BVI and its subsidiaries were treated as a recapitalization of the Company. Through Nengcheng, we are a one-stop import service provider for third-party manufacturers who have needs for the import of various types of raw materials and half-finished goods. In the fiscal year of 2017, our primary revenues were generated from importing various types of cowhides and rubber wood square. In the fiscal years of 2015 and 2016, our primary revenues were generated from importing various types of cowhides such as wet blue cowhide, rawhide, and wet-salted cowhide, which accounted for, in the aggregate, approximately 88.97% and 87.91% of our total revenues, respectively, and less significantly, scrap plastic which accounted for approximately 5.36% and 1.04% of our total revenues, respectively. For a service fee, we negotiate and enter into import supply orders with overseas suppliers on behalf of our customers, assist our customers to settle foreign exchange payments to suppliers, receive and inspect the imported raw material and goods once overseas suppliers ship them to seaports, clear customs on behalf of the customers and coordinate transportation of the raw material and goods from sea ports to our manufacturer customers. By utilizing our one-stop import services, our customers are able to access quality raw material and goods in the international market, without increasing administrative cost and expenses for obtaining and maintaining import and customs related licenses and permits.

Corporate History and Structure

We were incorporated in Colorado on April 30, 1998.

We became the 100% equity owner of Success Green BVI and its subsidiaries, Success Green HK, WOFE and Nengcheng, pursuant to the Success Green Agreement.

Success Green BVI was incorporated in British Virgin Islands on October 26, 2016, and is the 100% shareholder of Success Green International Limited, a Hong Kong corporation (“Success Green HK”); Success Green HK was incorporated on September 24, 2007. Success Green HK is the 100% owner of Shenzhen ZhenLongBao Investment Consulting Co., Ltd. (the “WOFE”), a company incorporated in the PRC as a wholly owned foreign enterprise on April 21, 2011.

Effective as of March 14, 2017, the two then shareholders of Nengcheng, Mr. Guangxiang He and Mr. Zhanling Lei, transferred to WOFE, 100% of the then issued and outstanding shares of Nengcheng, in exchange for a consideration of RMB 10 million (approximately $1,500,000) (the “Nengcheng Acquisition”). Pursuant to the Nengcheng Acquisition, Success Green BVI effectively assumed management of the business activities of Nengcheng and has the right to appoint all executives and senior management and the members of the board of directors of Nengcheng. Additionally, at the closing of the Nengcheng Acquisition, Mr. He continues to lead Nengcheng’s operations. Nengcheng was incorporated on July 3, 2012 under the laws of the PRC.

We became the 100% equity owner of Success Green BVI and its subsidiaries, Success Green HK, WOFE and Nengcheng, pursuant to the Success Green Agreement.

The following diagram illustrates our corporate structure as of the date of this registration statement:

Our principal executive office is located at Room 2305A, 23/F, World-Wide House, 19 Des Voeux Road, Central, Hong Kong.

Our Services

As a one-stop import service provider, we procure, import, settle foreign exchange payments, clear customs, and set up delivery logistics for our customers, for raw materials, or half-finished products such as various types of cowhides and rubber wood timber, and various other materials from overseas to the PRC market. Our customers of various cowhides such as wet blue cowhide, salt wet cowhide, and rawhide are located throughout China, while our rubber wood timber customers are primarily located in the Guangdong province. In 2018, we expect to expand our service offerings to include processed and recycled plastics. We believe the demand for processed and recycled plastics in the PRC market will continue to grow.

We provide our services to PRC manufacturer customers who have needs to minimize their cost in raw materials. The raw materials and half-finished goods that we procure from overseas on behalf of our clients typically are of higher quality than those available in the PRC market, while the ultimate costs of sourcing overseas including tariffs and other import taxes, and shipping expenses typically are cheaper than sourcing from the PRC market. For the various types of cowhides, after our customers designate their preferred overseas suppliers, who are usually located in America, Central and South America, and Europe, we then negotiate with such overseas suppliers. For the rubber wood timbers, we typically source the materials from Thailand, and ensure the imported materials reach our customers in a cost-effective manner. Additionally, we are able to source processed and recycled plastics from countries that have better recycling and waste sorting regulations and practices which in turn, produce better quality recycled and processed plastics than those available in the PRC domestic market.

Our customers do not need to obtain or maintain the requisite import licenses and can rely on our services to import the raw materials and half-finished goods they need. Therefore, by engaging our services, our customers can access the international market for high quality raw materials and half-finished goods on a cost-effective basis.

Our typical sales cycle begins when our customers contact our sales team to engage our service in managing and completing the entire process of importing a specific product. After we are engaged, we then negotiate with our overseas supply partners or overseas suppliers preferred by our customers regarding the specific order of the raw materials, or half-finished products, for an import supply order with a price agreed upon by the overseas supplier and our customer.

Upon execution of the import supply order, as an import service provider, we then assist our customers in settling the foreign exchange payment, so the goods can be shipped by the overseas suppliers.

For our import logistics, we usually designate the goods to be shipped to the ports in Hong Kong, which clears customs faster than those in mainland China. After the goods clear customs in Hong Kong, we arrange for the goods to be shipped to the various seaports in mainland China that are closer and most cost-effective to each of our customers.

After the imported goods reach the ports in mainland China, our customs clearing team will settle any relevant customs tariff or tax in each port for our clients. 

We provide logistics service to customers who need to transport the imported goods from the ports to their facilities. For those customers who have self-arranged to transport the imported goods, we provide liaison services to either store the goods in a port warehouse to be picked up, or contact the transportation arranged by our customers about the completion of customs clearing.

Beginning in the end of 2017, in response to client demand, we delivered trading services to clients who requested us to purchase Daugres Ceramiche ceramics products on their behalf and then resell them to our clients. We purchased the ceramics products from Daugres Ceramiche (Tianjin) and Daugres Ceramiche (PRC), with whom Nengcheng has business relationships and were able to purchase Daugres Ceramiche ceramics products at a discount from market prices. In the three months ended March 31, 2018 and 2017, we generated revenues from trading services that accounted for, in the aggregate, approximately 92.37% and nil% of our total revenues, respectively. We provided trading services solely due to the request of our clients and do not expect to provide any trading services after the three months ending June 30, 2018. Our primary business focus continues to be one-stop import services.

Competitive Advantage

We believe that the following competitive strengths enhance our position in the PRC market:

Growth Plan

While we have established a close and stable working relationship with many of our customers, we have been growing the range of our services from various types of cowhides, to include scrap plastics in 2015. However, due to the PRC government’s recent restriction on the import of scrap plastics in 2016, we have transitioned away from customers needing scrap plastics, and have endeavored to start growing our customer base for those needing processed and recycled plastics, which we believe will see a steady rise in demand in the near future. Beginning in the fourth quarter of 2017, we have established working relationship with a few well-established plastics producers including Guangdong Xiongsu Technology Group Co., Ltd., Midea Group Co. Ltd., and China Lesso Group Holdings Ltd. where we are expected to provide import services to them on an as-needed basis beginning in 2018.

Our long-term objective is to establish our company as the regional leader in providing one-stop import services in the processed plastics industry while continuing to steadily expand our supplier and customer base for the goods offering we currently provide, such as various types of cowhides.

As of the date of this prospectus, we expect to achieve this objective through the following strategies, although general market conditions and our financial results may require us to delay these strategies or establish alternative strategies:

Industry

The most significant product we have imported in 2017 were rubber wood timber, and blue wet cowhide and raw cowhide, accounting for 35.9%, and 53.8% of service fees we have generated, respectively.  The most significant product we have imported in 2015 and 2016 were various types of cowhides. According to China Leather Industry Information Center (the “Leather Report”), in 2016, the PRC leather industry imported raw cowhides from 35 countries, with America, Australia and Canada as the top three countries. According to the Leather Report, the PRC regions that imported the greatest volume of raw cowhides are the following provinces: Hebei, Shandong, Fujian, Jiangsu, and Guangdong. For our various types of cowhides, our customers are located throughout the PRC market. In the three months ended March 31, 2018, we generated 53.3% and 42.2% of our service fee revenues from importing rubber wood timber, and blue wet cowhide and raw cowhide, respectively.

Because our customers are third-party manufacturers of leather furniture and particularly leather couches, the demand and supply of leather couches in the PRC market impacts our business more significantly than the demand and supply of cowhides in the global market. According to the Leather Report, the PRC market of leather couches and other soft couches account for 50% of the global product of similar couches in 2016, according to China Intelligence Website, which predicts that the PRC market will continue to grow. Therefore, we believe that our customers who are third-party manufacturers of leather furniture and particularly leather couches will continue to engage our services.

Competition

Virtually all of our services are provided to customers located in the PRC market. Our major competitors are PRC-based import and export agency companies that are mainly located in such seaport cities as Tianjin, Qingdao, Xiamen of Fujian Province, and Guangdong. We primarily compete with other import and export comprehensive service companies such as Shenzhen Yidatong Enterprise Service Limited Company, Seacamels Network Inc. in the industry of import and export. Some of our competitors are import and export comprehensive service companies with online platforms, such as Tus-sound Environmental Resources Co., Ltd. which operates the online platform Yizaisheng O20, who are much larger than us in operation and sales revenue, have greater financial capabilities and longer operating history. The principal factors on which we compete are cost of service and efficiency of custom clearance. The demand for our one-stop services is significantly dependent on the general economy in the PRC and the PRC domestic demand for each of the goods in our offerings.

Suppliers

We enter into short-term supply orders in the ordinary course of business with the suppliers on behalf of our customers who are located outside of the PRC, pursuant to a form of supply order typically for a short term such as three-month term or less, at a fixed price. Though the fixed price of short-term orders does not entirely protect us and our customers against volatility in raw material prices, it nevertheless suits the business needs of our customers, who agree to such fixed prices. We enter into supply orders for the raw materials and half-finished goods that we import on behalf of our customers. Suppliers are either designated by our customers, or, for our now discontinued offerings of scrap plastic, and beginning in 2018, processed plastics, respectively, were and are chosen by us depending on whether they supply goods that match the specifications of our customers.

In the three months ended March 31, 2018, the primary supply we sourced were blue wet cowhide, raw cowhide and rubber wood timber. Major suppliers were Xiangxiang Trade Co. Ltd. and Thai Sun Wood Export Co., Ltd. accounting for 60.8% and 11.9%, respectively, of our purchases on behalf of our customers in the three months ended March 31, 2018. In fiscal year 2017, the primary supply we sourced were various types of cowhides and rubber wood timber.  Major suppliers were Xiangxiang Trade Co. Ltd, who supplied blue wet cowhide and raw cowhide to us, respectively, and accounted for 91% of our purchases on behalf of our customers in 2017. In fiscal 2017, we sourced rubber wood timber from various suppliers located in Thailand. In fiscal years 2015 and 2016, the primary supply we sourced were various types of cowhides. For our offerings such as various types of cowhides, we do not rely on any primary suppliers since our customers request us to source from their preferred suppliers. A major supplier preferred by our cowhides customers is Xiangxiang Trade Ltd., which supplied blue wet cowhide and raw cowhide, and accounted for 77.09% and 74.58% of our cost of supply in fiscal year 2015 and fiscal year 2016, respectively.

For our recycled and processed plastics, we have established working relationship with suppliers located in Southeast Asia, and are in the process of searching and negotiating with additional suppliers to expand our supplier base.

Marketing and Customers

We currently generate new businesses primarily through word of mouth referrals from past and current customers. We intend to expand our sales and marketing team to accommodate our growing operation in providing processed plastics related services.

We enter into import service agreements with our customers when they first become our customer. The import service agreements stipulate our service fees, our duties and responsibilities and other customary terms and conditions.

Our top customers in fiscal year 2016 and fiscal year 2017 have been furniture manufacturing companies that use leather as part of their product components.

In fiscal year 2016, our top 5 customers were Huizhou City Bowei Leather Product Limited Company, whom we mainly represented to import wet-salted horse leather, blue wet cowhide and raw cowhide; Fujian province Jinjiang City An’hai Qiuxia Leather Limited Company, whom we mainly represented to import blue wet cowhide; Zhaoqing City Huangcheng Leather Limited Company, whom we mainly represented to import wet-salted cowhide and raw cowhide; Guangzhou City Xinchi Leather Limited Company, whom we mainly represented to import blue wet cowhide and raw cowhide; Huaiyang County Luhui Textile Limited Company, whom we mainly represented to import raw cowhide. Our top 5 customers collectively accounted for 37.11% of our revenues in fiscal year 2016.

In fiscal year 2017, our top 5 customers were Kuang Ye Trading Company Limited, Foshan City Shunde District Lecong Town Kui Xiang Timber Sales Office, Foshan City Hong De Kai Trading Company Limited, Shao Xun Hua, Foshan City Xin Tai Wood Supply Chain Management Company Limited. Our top 5 customers collectively accounted for 86% of our revenues in fiscal year 2017.

In the three months ended March 31, 2018, our top four customers were Shanghai Bing De Shi Ye Ltd. Co., Kang Ye Trading Ltd. Co., Yi Jia Yi Pin Ban, and Foshan NanHai Da Mu Xiang Wood Co. Our top four customers collectively accounted for 97.9% of our revenues for the three months ended March 31, 2018. Shanghai Bing De Shi Ye Ltd. Co., a customer to whom we provided trading services, accounted for 91.5%, of our total revenues for the three months ended March 31, 2018.

We primarily enter into purchase orders with our top customers. Each purchase order governs each transaction or order that our customers place with us. Purchase orders are typically short term based, effective from the time of the orders are placed until our services are delivered. We do not renew our purchase orders with our top customers, and they each place a new order with us for each new transaction. Our form of purchase order includes our service fee, which is a percentage of the total payment of the goods imported. Our form of purchase order also indicates that payment in full is due within 15 days of the completion of our services.

Research and Development

We have not incurred any cost or expenses in research and development in the three months ended March 31, 2018 and 2017, and the fiscal years ended December 31, 2016 and 2017. In light of our objective to strengthen our position as a one-stop import service provider that has a significantly strong practice in processed plastics, we intend to increase spending in research and development to identify overseas suppliers of processed plastics that will meet the specific specifications, quality and cost requirements of our customers.

Facilities/Properties

For Nengcheng’s operation, we lease an office space from a third-party in Dasha Town, City of Sihui Guangdong province, for an annual rent of RMB 10,000 (approximately $1,500). We have an unlimited term under this lease and can lease the premise for as long as we wish, and can terminate the lease without penalty.

We believe our facility is sufficient for our current operation.

Employees

As of the date of this registration statement, we had approximately 23 employees, 3 of which are full-time, and 20 of which are part-time. There is no labor union. We believe our relations with our employees are good.

Legal Proceedings

Except for the disclosure below, we are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition.

SEC Revokes Registration Of Securities Of Sunburst Acquisitions V Inc. For Failure To Make Required Periodic Filings

On April 26, 2017, the SEC instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of our securities for failure to make required periodic filings with the SEC. In this Order, the Division of Enforcement (“Division”) alleged that the Company was delinquent in its required periodic filings with the Commission. The SEC informed the Company that pursuant to Securities Exchange Act of 1934, as amended (the “Exchange Act”) Section 12(j), a hearing would be scheduled before an Administrative Law Judge. At the hearing, the judge would hear evidence from the Division and the Company to determine whether the allegations of the Division contained in the Order, which the Division alleged constituted failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, were true. The Judge in the proceeding then determined whether the registrations pursuant to Exchange Act Section 12 of each class of our securities should be revoked or suspended for a period not exceeding twelve months. The SEC ordered that the Judge issue an initial decision not later than 120 days from the date of service of the order instituting proceeding.

On October 4, 2017, the SEC revoked the registration of each class of our registered securities pursuant to Section 12(j) of the Exchange Act for failure to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder by failing to make required periodic filings with the SEC.

We filed a Registration Statement on Form 10 to re-register our common stock under Section 12(g) of the Exchange Act on November 13, 2017, as amended on January 18, 2018 and February 28, 2018 and such Registration Statement became effective automatically on January 12, 2018, 60 days following the initial filing of the Form 10.

Tax

Nengcheng, as a PRC entity, is subject to enterprise income tax (“EIT”) according to applicable PRC tax rules and regulations.

PRC enterprises are required to prepay the EIT on a monthly or quarterly basis and to file provisional EIT returns with the tax authorities within 15 days of the end of each quarter based on actual monthly or quarterly profits. Enterprises that have difficulty in paying monthly or quarterly tax based on actual monthly or quarterly profits may make payments based on the monthly or quarterly average taxable income in the preceding calendar year, or by any other methods approved by the relevant tax authorities. Nengcheng has filed all quarterly EIT returns based on actual quarterly profits since its inception.

Final settlement of tax liability must be made within five months of the end of each calendar year, and all EIT returns shall be based on Chinese GAAP.

Regulations and Governmental Approvals

The following summarizes the principal PRC regulations related to our business operations.

Import Related Regulations

We are required to comply with the Customs Law established by the PRC, which establishes regulations related to import/export of merchandise from or to China. The regulations define the criteria for the supervision of the transport of merchandise to and from China.

To qualify as an entity permitted to import goods into the PRC, the entity is required to include foreign trade in the scope of business of its business permit, and must hold currently valid permits such as Registration Form for Foreign Trade Manager, Registration of Declaration Entities. Continuing qualification requires an entity to file the requisite annual records with the relevant bureaus of administration of industry and commerce, the ministry of the foreign trade and economic cooperation and the PRC Customs. Since Nengcheng’s scope of operation is foreign trade, and Nengcheng holds the required and currently valid permits such as Registration Form for Foreign Trade Manager, Registration of Declaration Entities, Nengcheng is permitted to engage in import business activities.

To maintain ongoing compliance of our import business activities, we are required to file annual records with or subject to annual inspection from PRC regulatory procedures such registering with the Administration of Commerce and Industry, Ministry of Foreign Trade and Economic Cooperation, Foreign Trade and Economics Department, and PRC Customs.

To import various types of cowhides, we comply with the PRC regulations and do not import from countries on the banned list of import of animal and animal products. For import of raw cowhides, we obtain the raw cowhide import permit from the Entry-Exit Inspection and Quarantine, Office of Animal and Botanical Quarantine Inspection, from the province that the ports are located.

The import of scrap plastic (this service is currently discontinued) was, is subject to the regulation of Solid Waste Import Management Regulations. Pursuant to the Solid Waste Import Management Regulations, import of scrap plastic requires environmental protection permits. Nengcheng no longer imports and does not plan to import scrap plastics. The import of processed and recycled plastics is subject to the regulations of import of raw materials. Nengcheng holds all requisite permits as of the date of this registration statement. 

Provisions on Foreign Investment

All limited liability companies and joint stock limited companies incorporated and operating in the PRC are governed by the Company Law of the People’s Republic of China, or the Company Law, which was amended and promulgated by the Standing Committee of the National People’s Congress on December 28, 2013 and came into effect on March 1, 2014. In the latest amendment, paid-in capital registration, minimum requirement of registered capital and timing requirement of capital contribution were abolished. Foreign invested projects must also comply with the Company Law, with exceptions as specified in foreign investment laws.

With respect to the establishment and operation of wholly foreign-owned projects, or WFOE, the MOFCOM, and the National Development and Reform Commission, or NDRC, promulgated the Catalogue of Industries for Guiding Foreign Investment, or the Catalogue, as amended from time to time and the latest amendment was on June 28, 2017, which took effect on July 28, 2017 (“Catalogue (2017)”) and replaced the previous amendment (“Catalogue (2015)”). The Catalogue serves as the main basis for management and guidance for the MOFCOM to manage and supervise foreign investments. The Catalogue divides industries for foreign investment into three categories: encouraged, restricted and prohibited. Those industries not set out in the Catalogue shall be classified as industries permitted for foreign investment. According to the Catalogue (2015) and the Catalogue (2017), the provision of import related services is neither restricted nor prohibited.

On September 3, 2016, the Standing Committee of the National People’s Congress promulgated the Decision of the Standing Committee of the National People’s Congress on Amending Four Laws Including the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises (the “Decision”), which provides record-filing in lieu of administrative approval for the establishments and alterations of foreign invested enterprises (the “FIEs”) not subject to special administrative measures. On October 8, 2016, the MOFCOM issued the Interim Measures for Record-filing for the Establishment and Alteration of Foreign-invested Enterprises (the “Interim Measure”), and the MOFCOM and the NDRC jointly issued a statement (the “Joint Statement”), clarifying that the special administrative measures in this case are implemented by referencing the Catalogue. To be specific, the special administrative measures to be implemented are the restricted and prohibited industry categories as well as encouraged industry categories having shareholding and executive management requirements prescribed in the Catalogue. Since then, FIE establishments and alterations that are not subject to special administrative measures have been changed from a pre-approval system to a more standardized and convenient filing process. On June 30, 2017, the MOFCOM further revised the “Interim Measures.” The modification includes among others that where a non-foreign-invested enterprise changes into a foreign-invested enterprise due to acquisition, consolidation by merger or otherwise, which is subject to record-filing as stipulated in the Measures, it shall complete the record-filing formalities for incorporation and submit the Incorporation Application in accordance with Paragraph 1 hereof mutatis mutandis.

Nengcheng has completed the registration as a wholly owned foreign enterprise on March 14, 2017 and the Administrative Bureau for Industry and Commerce of Shanxi Province has issued Nengcheng the relevant business license on the same date.

Regulations on Foreign Exchange

Foreign Exchange Settlement

The Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, which was promulgated by the SAFE on March 30, 2015 and became effective as of June 1, 2015, adopts the approach of discretional foreign exchange settlement, under which the foreign exchange capital in the capital account of a foreign-invested enterprise for which the foreign-invested enterprise has obtained confirmation by the local SAFE branches regarding the rights and interests of monetary contribution (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs of such foreign-invested enterprise. The capital in Renminbi obtained by the foreign-invested enterprise from the discretionary settlement of foreign exchange capital shall be managed under the account pending for foreign exchange settlement payment. The proportion of discretionary settlement of foreign exchange capital is temporarily determined as 100%, subject to the adjustment of the SAFE.

Regulations Relating to Employment and Social Insurance

Pursuant to the PRC Labor Law effective as of January 1, 1995 (as amended on August 27, 2009), and the PRC Labor Contract Law effective as of January 1, 2008 (as amended on December 28, 2012), a written labor contract shall be executed by employer and an employee when the employment relationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with appropriate workplace safety training. Moreover, all PRC enterprises are generally required to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining approvals from the relevant authorities.

Pursuant to the Social Insurance Law of China effective from July 1, 2011, and the Housing Fund Regulation which was amended and became effective on March 24, 2002, employers in China shall pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount payable shall be calculated based on the employee actual salary in accordance with the relevant regulations.

Regulations on Tax

PRC Enterprise Income Tax Law

In January 2008, the PRC Enterprise Income Tax Law, or the EIT Law, took effect (revised and took effect on February 24, 2017). The EIT Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. An enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. According to the EIT Law and its implementation regulations, certain high and new technology enterprises which have proprietary intellectual property rights and simultaneously meet the prescribed requirements as stipulated in the implementation regulations of the EIT Law and other relevant regulations are permitted to enjoy a reduced EIT rate of 15%.

Under the EIT Law and its implementation regulations, dividends generated from the business of a PRC subsidiary after January 1, 2008 and payable to its foreign investor may be subject to a withholding tax rate of 10% if the PRC tax authorities determine that the foreign investor is a non-resident enterprise, unless there is a tax treaty with China that provides for a preferential withholding tax rate. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax.

Under the PRC Enterprise Income Tax Law, an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. The implementing regulations of the EIT Law define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. On April 22, 2009, the State Administration of Taxation, or SAT issued the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management, or Circular 82, which provides certain specific criteria for determining whether the “de facto management bodies” of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed rules or precedents governing the procedures and specific criteria for determining “de facto management body.”

PRC Value-added Tax Law

Pursuant to the Interim Regulations on Value-added Tax of China, or VAT Regulations which was promulgated by the State Council on December 13, 1993 and became effective as of January 1, 1994 and further amended on November 10, 2008 and February 6, 2016, and the last amendment of which became effective on February 6, 2016, all units and individuals engaging in the sale of goods, provision of processing, repair and fitting services, and importation of goods within the territory of China are taxpayers of value-added tax( or VAT), and shall pay VAT in accordance with the VAT Regulations. According to the VAT Regulations, a VAT tax rate at 13% or 17% applies to the Chinese enterprises unless otherwise exempted or reduced according to the VAT Regulations and other relevant regulations.

We have abided by the relevant PRC tax laws in our operation.

Seasonality

We believe our operation and sales do not experience seasonality.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this registration statement. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this registration statement.

Through Nengcheng, our wholly owned subsidiary in the PRC, we are a one-stop import service provider for third-party manufacturers who have needs for the import of various types of raw materials and half-finished goods. We procure, import, settle foreign exchange payments, clear customs, and set up delivery logistics for our customers, for raw materials, or half-finished products such as various types of cowhides, and various other materials from overseas to the PRC market.

Results of Operation – Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017.

Results of Operations

Below we have included a discussion of our operating results and material changes in our operating results during the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

We mainly provide import custom clearing services in the Guangdong province in the People’s Republic of China (“PRC”). Our primary operations are conducted by a subsidiary located in the PRC.

For additional information on the potential risks associated with these initiatives and our operations, please refer to the “Risk Factors.” 

Revenue

The Company did not generate any revenues from import and custom services for the three months ended March 31, 2017. Instead, the Company generated a loss on sales of $30,661 because blue wet cowhides imported by one of its customers were imperfect, therefore the customer proposed to the Company to absorb a portion of the loss. Although the Company is not responsible for the import of imperfect goods, the Company accepted the proposal as a courtesy to maintain its long-term relationship with customer. The loss on sales were recorded as general and administrative expenses.

Our aggregate revenues for the three months period ended March 31, 2018 were $349,822 ($26,704 for import and custom clearing services and $323,118 for trading services) representing an increase of approximately $380,000, or 1,241% due to a $30,661 of loss on sales for import and custom clearing services for the three months period ended March 31, 2017. The growth was mainly driven by the gross income from trading services engaged in second half of 2017.

Operating Expenses

Our operating expenses for the three months period ended March 31, 2018 and 2017 were approximately $285,000 and $113,000, respectively, an increase of approximately $173,000 or 153%. The increase was mainly due to increase in general and administrative expenses.

Operating expenses for providing our services to our clients are comprised of selling and marketing expenses, general and administrative expenses and loss on sales.

Selling and Marketing

Sales and marketing expenses for the three months ended March 31, 2018 and 2017 were approximately $9,000 and $1,000, respectively, an increase of approximately 1,517%. The increase was primarily attributable to the increase in transportation fee for its trading services.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2018 and 2017 were $276,000 and $81,000, respectively, an increase of 239%. This was primarily due to the decrease in net exchange loss on foreign currency transactions (other than RMB). Further, the expiration of the value added tax deductible of $107,000 and receivables adjustments approximately of $121,000 were recognized during the three months ended March 31, 2018 while there were no such expenses incurred during the three months ended March 31, 2017. 

Income taxes

The provision for taxes for the three months ended March 31, 2018 principally relates to federal, state, local and foreign jurisdiction income taxes.

No provision for income tax was required to be provided for the three months ended March 31, 2018 and 2017.

Net Income

Net loss for the three months ended March 31, 2018 and 2017, were $309,000 or $0.003 per share basic and diluted, and $180,000 or $0.002 per share basic and diluted respectively, increase approximately of $130,000 or 72%.

Results of Operations — Fiscal Year Ended December 31, 2017 Compared to Fiscal Year Ended December 31, 2016.

We mainly provide import custom clearing services in the Guangdong province in the People’s Republic of China (“PRC”). Our primary operations are conducted by a subsidiary located in the PRC.

Revenue

Total revenues were approximately $87,844 in 2017 ($51,871 for import and custom clearing services and $36,014 for trading services).  There was a decrease of 50.1% in its import and custom clearing services from $105,087 in 2016.  The decline was partially offset by revenues generated in its trading services, which was started in 2017.  The decline in revenue from import and custom clearing services was principally driven by the lower services fees per transaction the Company was able to charge to its customer on certain imported goods.

Operating expenses

Operating expenses include selling and marketing expenses and general and administrative expenses and loss on sales.

Selling and Marketing.

Sales and marketing expenses decreased by 86% to approximately $13,000 in 2017 from approximately $90,000 in 2016, primarily attributable to the decrease in import goods health treatment fee from approximately $23,000 in 2016 to approximately $500 in 2017 and decrease in transportation fee from approximately $67,000 in 2016 to $11,000 in 2017 due to those fees were borne by the customers directly instead.

General and Administrative.

General and administrative expenses increased by 134% to approximately $511,000 in 2017 from approximately $218,000 in 2016, primarily due to the decrease in net exchange loss on foreign currency transactions other than RMB while legal and professional fee increased to approximately $292,000 incurred in 2017 from approximately $114,000 in 2016 in relation to resume trading and restructuring of the Group.

Loss on Sales.

Loss on sales in 2016 represents the loss making in the transactions with our related parties.

Other Income

Other income in 2016 was nil. Other income in 2017 represents PRC government subsidy for development of the PRC subsidiary.

Interest income

Interest income decreased by 99% to $4 in 2017 from $502 in 2016 due to the decreased the level of cash and cash equivalents during 2017.

Interest expenses

Interest expense decreased by 27% to approximately $280,000 in 2017 from approximately $384,000 in 2016 due to decease in the level of short-term bank loans by the repayment of a portion of bank borrowings during 2017.

Income taxes

Income tax expense was $1,440 in 2017, an increase of 321% over $342 in 2016, primarily due to less tax adjustment items as compare with 2016.

Liquidity and Capital Resources

Liquidity

Our current assets primarily consist of cash and cash equivalents, accounts and other receivable, related parties’ receivables, and prepaid expenses. Our accounts receivables are primarily from our long term customers, the management evaluates the collectability of each customer periodically.

Our current liabilities primarily consist of accounts and other payable, related parties’ payables, and accrued expenses.

As of March 31, 2018, we had cash and cash equivalents of approximately $238,000, as compared to December 31, 2017 in which we had cash and cash equivalents of approximately of $151,000. This represents an increase of approximately $87,000, primarily due to our total cash activities, including our payment of accounts and other payable, extended collection of accounts and other receivable and accrued expenses.

We have financed our operations primarily through cash flow from operating activities, shareholder contributions and advancement from related parties.

We require cash for working capital, payment of accounts and other payables and accrued expenses, salaries, and related benefits, and other operating expenses and income taxes.

As of March 31, 2018, we had a working capital surplus of approximately $10.7, as compared to December 31, 2017 in which we had a working capital surplus of approximately $10.6 million. This represents an increase of approximately $0.1 million. The increase in working capital surplus is principally attributable to the increase of cash and cash equivalents, accounts and other receivable, accounts and other payable, and accrued expenses.

At March 31, 2018, we had cash and cash equivalents approximately of $236,000, an increase approximately of $87,000 or 58%, from approximately of $151,000 over the prior year period.

Three Months Ended March 31, 2018 compared to Three Months Ended March 31, 2017

Cash Flow from Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2018 was approximately $27,000, compared to net cash used in operating activities approximately of $75,000 for the three months ended March 31, 2017, a decrease in net cash consumed by operating activities of $102,000. We had net loss approximately of $309,000 for the three months ended March 31, 2018, an increase of approximately $130,000 from the net loss approximately of $180,000 for the three months ended March 31, 2017.

The cash flow from operating activities for the three months ended March 31, 2017 were primarily attributable to increase in notes receivables and decrease in related parties’ receivable with an offset by decrease in accruals and other payables. While the cash flow for the same period in 2018 were primarily attributable to increase in other receivables with an offset by increase in accruals and other payables.

Cash Flow from Investing Activities

We had no cash flow from investing activities during the three-month periods ended March 31, 2018 and 2017.

Cash Flow in Financing Activities

Cash provided by financing activities decreased approximately $50,000 for the three months ended March 31, 2018 as compared to 2017 due to decrease in net funding from capital injection and advancement from related parties in 2018. Cash provided by financing activities in 2018 consisted primarily of bank borrowings repayment as well as advancement from related parties.

We believe that our working capital will be sufficient to enable us to meet our cash requirements for the next 12 months. However, we may incur additional expenses as we seek to expand our operations by establishing additional representative offices in our major market, the PRC, increasing our marketing efforts and hiring more personnel to support our growing operations. We believe we have adequate working capital to fund future growth activities.

Fiscal Year Ended December 31, 2017 compared to Fiscal Year Ended December 31, 2016

Cash and cash equivalents as of December 31, 2016 and 2017 were approximately $68,000 and $151,000 respectively. Cash used in operating activities decreased approximately $216,000 in 2017, as compared in 2016. The change is primarily attributable to a decrease of net loss of approximately $163,000 and an increase of approximately $53,000 due to changes in the level of operating assets and liabilities.

Cash provided by financing activities decreased approximately $6,000 in 2017 as compared to 2016. Cash provided by financing activities in 2017 consisted primarily of bank borrowings repayment as well as capital injection and advancement from related parties.

Capital Resources

As of December 31, 2016, we recorded a working capital of approximately $10.5 million and accumulated deficits of approximately $1.2 million and as of December 31, 2017, we recorded a working capital of approximately $10.6 million and accumulated deficits of approximately $2.0 million. Our principal sources of liquidity have been cash generated from operating activities and borrowings from banks and related parties. Our cash and cash equivalents consist of cash on hand which are unrestricted as to withdrawal or use. Our financing activities mainly consist of borrowings from and repayment to banks and related parties. Except as disclosed in the financial statements, we have no financial guarantees or similar commitments to guarantee the payment obligations of third parties and other line of credit granted by our banks. We believe that our current cash and cash equivalents, our cash flow from operations and proceeds from our financing activities will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for the foreseeable future and for at least 12 months subsequent to the filing of this registration statement. We may, however, require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

As of December 31, 2016 and 2017, we had no any capital commitment in connection with capital expenditures of property, plant and equipment.

Critical Accounting Policies

Use of estimates

The preparation of the 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 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.

Cash and cash equivalents

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

Accounts receivable

Accounts receivable are carried at the amounts invoiced to customers less allowance for doubtful accounts. The allowance is an estimate based on a review of individual customer accounts on a regular basis. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

The Company reviews the collectability of accounts receivable based on an assessment of historical experience, current economic conditions, and other collection indicators.

Inventory

Inventory consisting of finished goods purchased for sale are stated at the lower of cost or market value using average method.

Equipment

Equipment is carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

Revenue recognition

The Company adopted ASU 2014-09, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The adoption of Topic 606 has no impact on revenue amounts recorded on the Company’s interim financial statements. Most of the Company’s revenues are generated under contracts with importing agents or customers. Revenue is recognized and recorded when the related contractual services are rendered or when control of the goods are transferred to the customer. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits and recognized in revenue when revenue recognition criteria are met.

Import & custom clearance service

Under the typical terms of these agreements, services are rendered when the imported goods cleared customs at the port and ready to be picked up by the importer or its customers. The Company's revenue consists of net service revenue based on invoiced value of goods, net of a value-added tax (VAT).

Trading

Under the typical terms of these agreements, control is transferred to customers when goods ready to be picked up and delivery arrangement can be made by the customers.

Please refer to footnote 2 of the consolidated financial statements for additional critical accounting policies of the Company.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we are currently not party to, any off-balance sheet arrangements.

Seasonality 

We believe our operation and sales do not experience seasonality. 

Recent accounting pronouncements

In January 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.

In February 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.

In March 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.

In March 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.

In March 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.

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

In June 2016, the FASB issued ASU 2016-13 “the FASB issued ASU 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”.

The new standard requires entities to use the following models:

The existing loss contingency model in ASC 450-20 will apply to instruments outside the scope of these models, including receivables between entities under common control, participant loans made by a defined contribution plan, pledges receivable of a not-for-profit entity and policy loan receivables of an insurance entity.

The standard also eliminates today’s accounting model for purchased credit impaired loans and debt securities. Instead, entities will gross up the initial amortized cost for so-called purchased financial assets with credit deterioration (PCD assets). Under this approach, an entity will record as the initial amortized cost the sum of (1) the purchase price and (2) the estimate of credit losses as of the date of acquisition. Thereafter, the entity will account for PCD assets using the models listed above.

The ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for all entities for annual periods beginning after 15 December 2018, and interim periods therein.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill. Under the new guidance, fewer acquired sets are expected to be considered businesses. For the Company, this ASU is effective January 1, 2018 on a prospective basis with early adoption permitted. the Company would apply this guidance to applicable transactions after the adoption date.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. For the Company, this ASU is effective prospectively to impairment tests beginning January 1, 2020, with early adoption permitted. The Company adopted this ASU in the fourth quarter of 2017 in conjunction with its annual goodwill impairment testing. The adoption did not have an impact on the Company’s consolidated results of operations and financial condition.

In February 2017, the FASB issued ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU addresses scope-related questions that arose after the FASB issued its revenue guidance in ASU No. 2014-09, Revenue from Contracts with Customers. The new standard clarifies the accounting for derecognition of nonfinancial assets and defines what is considered an in substance nonfinancial asset. Nonfinancial assets largely relate to items such as real estate, ships and intellectual property that do not constitute a business. The new ASU impacts entities derecognizing (e.g. selling) nonfinancial assets (or in substance nonfinancial assets), including partial interests therein, when the purchaser is not a customer. Under the new guidance, the seller would apply certain recognition and measurement principles of ASU No. 2014-09, Revenue from Contracts with Customers, even though the purchaser is not a customer. For the Company, this new standard is effective coincident with the Company’s January 1, 2018 adoption of ASU No. 2014-09. The Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations and financial condition.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU changes how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the income statement. Under the new standard, only the service cost component of net periodic benefit cost would be included in operating expenses and only the service cost component would be eligible for capitalization into assets such as inventory. All other net periodic benefit costs components (such as interest, expected return on plan assets, prior service cost amortization and actuarial gain/loss amortization) would be reported outside of operating income. For the Company, this ASU is effective January 1, 2018 on a retrospective basis; however, guidance limiting the capitalization to only the service cost component is applied on prospective basis.

In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities held at a premium. Under existing standards, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The new guidance shortens the amortization period to the earliest call date for certain callable debt securities that have explicit, noncontingent call features and are callable at a fixed price and preset date. The amendments do not require an accounting change for securities held at a discount. For the Company, this ASU is effective January 1, 2019 with a modified retrospective transition resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Early adoption is permitted. the Company’s marketable security portfolio includes very limited instances of callable debt securities held at a premium. As a result, the Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations and financial condition.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. The general model for accounting for modifications of share-based payment awards is to record the incremental value arising from the changes as additional compensation cost. Under the new standard, fewer changes to the terms of an award would require accounting under this modification model. For the Company, this ASU is effective January 1, 2018, with early adoption permitted. Because the Company does not typically make changes to the terms or conditions of its issued share-based payment awards, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In May 2017, the FASB issued ASU No. 2017-10, Determining the Customer of the Operation Services, that clarifies how an operating entity determines the customer of the operation services for transactions within the scope of a service concession arrangement. Service concession arrangements are typically agreements between a grantor and an operating entity whereby the operating entity will operate the grantor’s infrastructure (i.e. airports, roadways, bridges, and prisons) for a specified period of time. The operating entity also may be required to maintain the infrastructure and provide capital-intensive maintenance to enhance or extend its life. In such arrangements, typically the operation services (i.e. operation and maintenance of a roadway) would be used by third parties (i.e. drivers). The ASU clarifies that the grantor, not the third party, is the customer of the operation services in such arrangements. For the Company, this new standard is effective coincident with the Company’s January 1, 2018 adoption of ASU No. 2014-09. Because the Company is not typically a party to agreements within the scope of accounting for service concession arrangements, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In July 2017, the FASB issued ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. For the Company, this ASU is effective January 1, 2019, with early adoption permitted. Because the Company has not issued financial instruments with down-round features, the Company does not expect this ASU to have a material impact on its consolidated results of operations and financial condition.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. The ASU amends existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align their hedge accounting with their risk management activities. Existing standards contain certain requirements for an instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity’s ability to hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements, modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular disclosures of derivative and hedge-related information. For the Company, this ASU is effective January 1, 2019, with a modified retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings as of the adoption date. Early adoption is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

Unless otherwise stated, the Company is currently assessing the above the accounting pronouncements and their potential impact from their adoption on the financial statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Dismissal of Malone Bailey, LLP (“Malone Bailey”)

The Board of Directors of the Company dismissed Malone Bailey, LLP (“Malone Bailey”) as the Company’s independent registered public accounting firm, effective as of January 3, 2017.

Malone Bailey’s report on the financial statements for the fiscal years ended April 30, 2007 and 2006, the last reports issued by Malone Bailey, contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle, other than an explanatory paragraph as to a going concern.

During the fiscal years ended April 30, 2007 and 2006, and in the subsequent interim period through January 4, 2017, there were (i) no “disagreements” (as that term is described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Malone Bailey on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Malone Bailey’s satisfaction, would have caused Malone Bailey to make reference thereto in their reports, and (ii) no “reportable events” (as that term is described in Item 304(a)(1)(v) of Regulation S-K).

On December 1, 2016 the Board appointed WWC, P.C. (“WWC”) as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2017. The Company has not consulted WWC during any period prior to the engagement of WWC regarding (i) the application of accounting principles to any specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company’s financial statements, and either a written report was provided to the registrant or oral advice was provided that the new accountant concluded was an important factor considered by the registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(o)(1)(iv)) or a reportable event (as defined in Item 304(a)(1)(v)).

MANAGEMENT

Set forth below is a brief biography of each of our executive officers and directors as of the date of this prospectus. The Board is comprised of only one class. All of the directors will serve until the next annual meeting of shareholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Officers are elected by and serve at the discretion of the Board. To date we have not had an annual meeting. Except as set forth below, there are no family relationships between any of our directors or executive officers.

Terence Ho, has been the director and chairman of the Board, and our chief executive officer since June 21, 2005. Mr. Ho received his bachelor’s degree in Business Management from Chinese University in Hong Kong, an Executive MBA degree from Zhongshan University and holds an Honorary bachelor’s degree from Winnipeg University in Canada. Additionally, Mr. Ho has been an investor and controller of various ventures and shell companies. From June 2005, Mr. Ho has been the chairman and director of Onping Limited. From July 2005, Mr. Ho has been the director and legal person of Xin Long Bao Investment Consultants (Shenzhen) Co., Limited. From May 2008, Mr. Ho has been the chairman of Success Green (International) Limited. From January 2011, Mr. Ho has been the chairman and director of Sea Treasure Holdings Limited. From September 2013, Mr. Ho has been the chairman of Tian Hong Tai Fu Financial Group (International) Limited. From September 2013, Mr. Ho has been the chairman and director of Tian Fu Financial Group (Investment) Limited. From January 2014, Mr. Ho has been the director and legal person of Shenzhen Tian Hong Tai Fu Investment Advisory Co., Limited. From March 2014, Mr. Ho has been the director and founding partner of Guangzhou Zhongzhan Real Estate Co., Limited. From March 2015, Mr. Ho has been the director of Shenzhen Tianhong Tai Fu Investment Management Co., Limited. From December 2016, Mr. Ho has been the chairman and director of Success Green (Group) Limited. From September 2017, Mr. Ho has been the chairman and director of Tin Fu Asset Management Co., Limited.

Lina Liao, has been the CFO since November 1, 2017. From 2014 to present, Ms. Liao worked as the Associate Director at Sky Wealth Capital Financial Group (Int’l) Limited. Ms. Liao received her bachelor’s degree in law from Guangdong University of Finance & Economics.

Involvement in Certain Legal Proceedings

To the best of the Company’s knowledge, none of the following events occurred during the past ten years that are material to an evaluation of the ability or integrity of any of our executive officers, directors or promoters:

(1) A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2) Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) Subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii) Engaging in any type of business practice; or

(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4) Subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described y such activity;

(5) Found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

(6) Found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(7) Subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

(i) Any Federal or State securities or commodities law or regulation; or

(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8) Subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S. C 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Director Independence

Presently, we are not currently listed on a national securities exchange or in an inter-dealer quotation system and therefore are not required to comply with the director independence requirements of any securities exchange.

Executive Compensation

Summary Compensation Table

The following tables set forth, for each of the last two completed fiscal years of the Company, the total compensation awarded to, earned by or paid to any person who was a principal executive officer during the preceding fiscal year and every other highest compensated executive officer earning more than $100,000 during the last fiscal year (together, the “Named Executive Officers”).

Summary Compensation Table

Agreements with Named Executive Officers

On November 1, 2017, we entered into an employment agreement with our chief executive officer, Mr. Ho Pursuant to his employment agreement, Mr. Ho shall serve as our CEO from January 1, 2017 to December 31, 2019, with no compensation.

On November 1, 2017, we entered into an employment agreement with our executive financial officer, Ms. Liao. Pursuant to her employment agreement, Ms. Liao shall serve as our CFO from January 1, 2017 to December 31, 2019 with no compensation.

Each of our executive officers is employed for a specified time period, which will be renewed upon both parties’ agreement thirty days before the end of the current employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a one-month prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

Compensation of Directors

For the fiscal years ended December 31, 2017 and 2016, we have not paid compensation to any of our directors. 

Outstanding Equity Awards

There were no equity awards outstanding as of the end of the fiscal year ending December 31, 2017. 

PRINCIPAL SHAREHOLDERS

The following tables set forth certain information as to the number and percentage of shares of Common Stock beneficially owned as of June 19, 2018, (i) by each person known by the Company to own beneficially more than 5% of the Company’s outstanding shares of Common Stock, (ii) by each of the Company’s directors and executive officers, and (iii) by all directors and executive officers as a group. As of June 19, 2018, there were 100,000,000 shares of Common Stock outstanding and percentages are based on such total of shares outstanding.

Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of the date of the respective table. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of the date of the respective table is deemed to be outstanding for such person, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.

Unless otherwise noted, the business address of each beneficial owner listed is the Company’s address, Room 303, Building No. 1 (Yi Jing Building), Xinxu Guanghai East Road, Dasha Town, City of Sihui, Guangdong province. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Other than compensation agreements and other arrangements described in “Management,” and our transactions described below, since our inception there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party:

On November 13, 2017, Success Green Agreement was entered into by and among the Company, Success Green BVI, and Mr. Ho, being the beneficial owner of record of 27,464,000 shares of the Company’s stock and also the sole shareholder of all of the issued share capital of Success Green BVI (the “SG Stock”).

Pursuant to the Success Green Agreement, upon surrender by Mr. Ho and the cancellation by Success Green BVI of the certificates evidencing the SG Stock as registered to Mr. Ho, and pursuant to the registration of the Company in the register of members maintained by Success Green BVI as the new holder of the SG Stock and the issuance of the certificates evidencing the aforementioned registration of the SG Stock in the name of the Company, the Company issued 72,265,000 shares (the “Acquisition Stock”) of the Company’s common stock to Mr. Ho. The Acquisition Stock collectively represents approximately 72.27% of the issued and outstanding common stock of the Company immediately after the Closing, in exchange for the SG Stock, representing 100% of the issued share capital of Success Green BVI in a reverse merger, or the “RTO”. Following the RTO, Mr. Ho continues to be the majority beneficial owner of the Company’s common stock, holding 99.73% equity interest in the Company. 

Related parties receivable

Foshan City Jisheng Technology Co. Ltd. (“Jisheng”) is owned by the former shareholder of Nengcheng until September 17, 2016. During 2015 and 2016, Nengcheng conducted sales transactions with Jisheng. The amounts outstanding represent account receivable and other receivable due from Jisheng. As of March 31, 2018 and 2017, the outstanding balances of related parties receivable due from Jisheng amounted to $4,690,424 and $4,885,517, respectively. As of December 31, 2017 and 2016, the outstanding balance of related parties receivable due from Jisheng amounted to $4,885,517 and $15,729,770, respectively. These amounts are interest free, unsecured, and payable on demand. In accordance with ASC 310-10-S99-2 and S99-3, related party receivables that are not expected to be settled in the short term are prescribed to be offset against the Company’s contributed capital. The Company offsets such amounts up to the expected recoverable amount up to the issuance date of the financial statements.

As of December 31, 2017 and 2016, Mr. Guangxiang He, a principal shareholder of Nengcheng until March 14, 2017, has interest free, unsecured, and payable on demand advances outstanding and due to the Company in the amount of $7,099,584 and $6,636,059, respectively, for the purpose of corporate development. As of March 31, 2018 and 2017, the outstanding balances of such on demand advances to Mr. He were $6,984,348 and $7,099,584, respectively. The Company has no plans to offer such advances to Mr. He or any other related parties. The Company determined that such receivables are currently due from Mr. He, and that the Company has not offered an extended repayment timeline to him. The Company expects Mr. He to repay the balance in full no later than September 30, 2018.

Related parties payable

The Company has related outstanding parties payable due to Mr. Mr. Terence Ho, the Chairman and CEO of the Company as of March 31, 2018 and 2017, in the amount of $359,934 and $275,977, respectively, and as of December 31, 2017 and December 31, 2016, in the amount of $275,977 and $367,073, for certain expenses Mr. Ho paid on behalf of the company from time to time. The amounts due to Mr. Ho are interest free, unsecured, and payable on demand.

The Company has related outstanding parties payable due to Mr. Da Hong He as of March 31, 2018 and 2017, in the amount of $188,783 and $182,034, respectively, and as of December 31, 2017 and 2016 of $182,034 and $nil, respectively for certain expenses that Mr. He has paid on behalf of the Company. Mr. He is former CEO of the Company’s subsidiary Shenzhen Zhenlongbao Investment Consulting Co., Ltd.

Related parties transactions

For the three months ended March 31, 2018, and 2017, the Company had no related party sales. For the fiscal year ended December 31, 2017, the Company had no related party sales. For the fiscal year ended December 31, 2016, the Company conducted certain sales transactions with Jisheng. The gross sales amount for the years ended December 31, 2016 was $1,778,758.

SHARES AVAILABLE FOR FUTURE SALE

We cannot predict what effect, if any, market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of common stock, including shares issued upon the exercise of outstanding options or warrants, in the public market, or the perception that such sales could occur, could materially and adversely affect the market price of our common stock and could impair our future ability to raise capital through the sale of our equity or equity-related securities at a time and price that we deem appropriate.

Assuming that all 10,000,000 common shares in this offering are issued and sold, we will have 110,000,000 shares of common stock outstanding as of the closing of this public offering. Of the outstanding shares, the shares sold in our initial public offering, subsequent public offering, and this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares held by our “affiliates”, as that term is defined under Rule 144, may be sold only in compliance with the limitations described below. The remaining outstanding shares of common stock will be deemed “restricted securities” as that term is defined under Rule 144. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration, including the exemptions under Rule 144, which we summarize below. The restricted shares held by our affiliates will be available for sale in the public market at various times after the date of this prospectus pursuant to Rule 144. As of June 20, 2018, there were 100,000,000 shares of common stock outstanding. Many of our shares are currently eligible for resale under Rule 144, subject to the restrictions set forth therewith.

Rule 144

Rule 144 governs resale of “restricted securities” for the account of any person (other than an issuer), and restricted and unrestricted securities for the account of an “affiliate” of the issuer. Restricted securities generally include any securities acquired directly or indirectly from an issuer or its affiliates which were not issued or sold in connection with a public offering registered under the Securities Act. An affiliate of the issuer is any person who directly or indirectly controls, is controlled by, or is under common control with, the issuer. Affiliates of ours may include its directors, executive officers, and persons directly or indirectly owning 10% or more of the outstanding common stock. Under Rule 144, non-affiliates are able to sell restricted securities pursuant to Rule 144, after six months, subject to certain conditions, including if we are current in our reporting obligations with the Commission and remain current for an additional period of six months, and thereafter after one year, with no volume or reporting obligations.

Under Rule 144, affiliates are able to sell restricted securities pursuant to Rule 144 after six months, subject to certain conditions, including if we are current in our reporting obligations with the SEC and remain current for an additional period of six months, as well as other requirements described below. Resales by our affiliates of restricted and unrestricted common stock are subject to volume limitation, aggregation, broker transaction, notice filing requirements, and requirements concerning publicly available information about our company. The volume limitations provide that a person (or persons who must aggregate their sales) cannot, within any three-month period, sell more than the greater of one percent of the then outstanding shares, or the average weekly reported trading volume during the four calendar weeks preceding each such sale.

Equity Incentive Plans

The Company does not currently have an equity incentive plan.

PLAN OF DISTRIBUTION

We are offering up to 10,000,000 shares of our common stock on a self-underwritten “best efforts” basis for aggregate gross proceeds of up to $200,000 at an estimated price of $0.02 per share. Our management will attempt to sell the shares being offered hereby on behalf of the Company. There is no underwriter for this offering. There can be no assurance that the offering will be fully subscribed. Accordingly, we may sell substantially less than $200,000 of our shares of common stock, in which case our gross proceeds would be substantially reduced.

We expect to enter into securities purchase or subscription agreements directly with investors in connection with this offering, and we will only sell to investors who have entered into such agreement with us.

This prospectus forms a part of a registration statement that permits our officers and directors to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares they sell. There are no plans or arrangements to enter into any contracts or agreements to sell the shares with a broker or dealer. In offering the securities on our behalf, our officers and directors will rely on the safe harbor from broker/dealer registration set out in Rule 3a4-1 under the Exchange Act, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer’s securities and not be deemed to be a broker/dealer.

There is no requirement to sell any specific number or dollar amount of securities and we may raise substantially less than the $200,000 in common stock offered hereby. Our officers will use their best efforts to sell the securities offered. We will pay all expenses incurred in this offering.

We currently expect the initial public offering price of the shares we are offering to be $0.02 per share of our common stock. There is no established market for our stock. The offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our capital structure and the amount of money we would need to implement our business plans. Accordingly, the offering price should not be considered an indication of the actual value of our securities.

The offering (for both the Company and the selling shareholders) will close on _______, 2018, 90 days after the effectiveness of the registration statement of which this prospectus is a part, unless all the securities are sold before that date, we extend the offering another 90 days or we otherwise decide to close the offering early or cancel it, in each case in our sole discretion. If we extend the offering, we will provide that information in an amendment to this prospectus. If we close the offering early or cancel it, including during any extended offering period, we may do so without notice to investors, although if we cancel the offering we will promptly return any funds investors may already have paid.

There is no minimum number of shares that we must sell in this offering. Because there is no minimum offering amount required as a condition to closing in this offering, the actual public offering amount and proceeds to us, if any, are not presently determinable and may be substantially less than all of the securities offered hereby. As a result, the actual amount of gross proceeds from the sale of shares, if any, might not be sufficient to cover the expenses of the offering. Funds raised pursuant to this offering will not be held in any escrow account and all funds raised regardless of the amount will be available to us. In the event that we do not raise sufficient capital to implement our planned operations, your entire investment could be lost.

The shares of common stock are being offered for the Company by Terence Ho, our Chief Executive Officer, Director and Chairman of the Board. Terence Ho will be relying on the safe harbor in Rule 3a4-1 of the Securities Exchange Act of 1934 to sell the common stock. No sales commission will be paid for any shares of common stock sold by Terence Ho.

Terence Ho will not register as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer.

Penny Stock Considerations

Our shares of common stock are “penny stock” covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated under the Exchange Act. They impose additional sales practice requirements on broker/dealers who sell securities to persons other than established customers and accredited investors, which are generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rules may affect the ability of broker/dealers to sell our securities and also may affect your ability to resell your shares.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny stock. These rules require a one-page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to an understanding of the function of the penny stock market, such as “bid” and “offer” quotes, a dealers “spread” and broker/dealer compensation; the broker/dealer compensation, the broker/dealer’s duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers’ rights and remedies in cases of fraud in penny stock transactions; and the Financial Industry Regulatory Authority’s toll-free telephone number and the central number of the North American Securities Administrators Association (NASAA), for information on the disciplinary history of broker/dealers and their associated persons. Rules 15g-1 through 15g-6 which apply to broker/dealers but not our company are summarized as follows:

The application of the penny stock rules may affect your ability to resell your shares of Common Stock because many brokers are unwilling to buy, sell or trade penny stock as a result of the additional sales practices imposed upon them which are described in this section.

Regulation M

During such time as we may be engaged in a distribution of any of the shares we are registering by this registration statement, we are required to comply with Regulation M. In general, Regulation M precludes the selling security holder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods. Regulation M also defines a “distribution participant” as an underwriter, prospective underwriter, broker, dealer or other person who has agreed to participate or who is participating in a distribution.

Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security.

LEGAL MATTERS

The validity of the securities offered hereby has been passed upon for us by Hunter Taubman Fischer & Li LLC, New York, New York.

EXPERTS

The financial statements for the years ended December 31, 2017 and 2016, appearing in this Prospectus and Registration Statement have been audited by WWC Professional Corporation, an independent registered public accounting firm, as stated in their report appearing elsewhere herein, (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the Company’s ability to continue as a going concern) and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No “expert” or “counsel” as defined by Item 509 of Regulation S-K promulgated under the Securities Act, whose services were used in the preparation of this Form S-1, was hired on a contingent basis or will receive a direct or indirect interest in us or our parents or subsidiaries, nor was any of them a promoter, underwriter, voting trustee, director, officer or employee of the Company.

SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS

Some of our directors and officers reside in the PRC and substantially all of our assets are located in the PRC. In addition, certain “experts” named in this prospectus are located in the PRC. As a result, it may be difficult or impossible for you to effect service of process on our officers and directors or those experts within the United States.

As such, we believe that there is uncertainty as to whether the courts of the PRC would (1) recognize or enforce judgments of United States courts obtained against our officers or directors or the experts named in this prospectus based on the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the PRC against our officers or directors or the experts named in this prospectus based on the securities laws of the United States or any state in the United States.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 with the Securities and Exchange Commission (SEC) for our common stock offered in this offering. This prospectus does not contain all of the information set forth in the registration statement. You should refer to the registration statement and its exhibits for additional information. Whenever we make references in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for the copies of the actual contract, agreement or other document.

Our fiscal year ends on December 31. We are a reporting company and file annual, quarterly, and current reports, and other information with the SEC. You may read and copy any reports, statements, or other information we file at the SEC’s public reference room at 100 F. Street, N.E., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC’s Internet site at http://www.sec.gov. Information contained in or accessible through our website is not and should not be considered a part of this prospectus and you should not rely on that information in deciding whether to invest in our common stock, unless that information is also in or incorporated by reference in this prospectus.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES

The Company’s Amended Articles of Incorporation and Bylaws provide that the Company will indemnify its officers and directors for costs and expenses incurred in connection with the defense of actions, suits, or proceedings where the officer or director acted in good faith, and (1) for actions in his official capacity with the corporation, in a manner he reasonably believed to be in the Company’s best interest, or (2) in all other cases (except criminal cases), for actions that were at least not opposed to the corporation’s best interests, or (3) in the case of any criminal proceeding, that he had no reasonable cause to believe his conduct was unlawful.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SUNBURST ACQUISITIONS V, INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEAR THEN ENDED

DECEMBER 31, 2017 AND 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sunburst Acquisitions V, Inc. (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had incurred substantial losses during the year, and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 1. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WWC, P.C.

WWC, P.C.

Certified Public Accountants

San Mateo, California

April 17, 2018

We have served as the Company’s auditor since December 1, 2016

SUNBURST ACQUISITIONS V, INC.

CONSOLIDATED BALANCE SHEETS

(Stated in U.S. Dollars)

See Accompanying Notes to the Financial Statements 

SUNBURST ACQUISITIONS V, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Stated in U.S. Dollars)

See Accompanying Notes to the Financial Statements

SUNBURST ACQUISITIONS V, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in U.S. Dollars)

See Accompanying Notes to the Financial Statements

SUNBURST ACQUISITIONS V, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Stated in U.S. Dollars)

The accompanying notes are an integral part of these financial statements

Sunburst Acquisitions V, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2017 and 2016

Organization

Sunburst Acquisitions V, Inc. (the “Company”) was incorporated in Colorado on May 29, 1998.  The Company, through its direct and indirect wholly owned subsidiaries, is in the business of providing import custom clearing services in the Guangdong province in the People’s Republic of China (“PRC”).  The Company’s primary operations are conducted through its indirectly wholly owned subsidiaries located in Sihui, Guandong, PRC

Success Green (Group) Limited (“SGG”) was incorporated on October 26, 2016 in the British Virgin Islands (“BVI”).  SGG wholly owns Success Green (International) Limited (“SGI”) which was incorporated on September 24, 2007 in the Hong Kong SAR.  SGI wholly owns Shenzhen Zhenlongbao Investment Consulting Co., Ltd. (“SZZLB”). SZZLB is a wholly foreign owned entity organized in the PRC on April 21, 2011.  SZZLB wholly owns Zhaoqing Nengcheng Import and Export Co., Ltd. (“ZQNC”).

On November 13, 2017, a Share Exchange Agreement (the “Success Green Agreement”) was entered into by and among the Company, SGC, and Mr. Ho, being the beneficial owner of 27,464,000 shares of the Company’s common stock and also as the sole shareholder of all of the issued share capital of SGG; Mr. Ho was issued 72,265,000 shares of common stock in exchange for his interest in SGG. The transaction by and amongst the Company and SGG, SGI, SZZLB, and ZQNC have been accounted for as a business combination under common control in accordance to ASC 805-50-30-5; the assets and liabilities of SGG and its subsidiaries have been presented at the their carrying values at the date of the transaction; the Company’s historical stockholders’ equity has been retroactively restated to the first period presented whereby the acquisitions of SGG, SGI, SZZLB, and ZQNC were treated as a recapitalization of the Company.

Share Issuance

On or about October 26, 2016, the Company issued 25,000,000 shares of common stock to Sea Treasure Holding limited, an entity controlled by Mr. Terence Ho, Chairman and Chief Executive Officer of the Company, for $250,000 or $0.01 per share.

Going Concern & Uncertainties

These financial statements have been prepared assuming that Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As of December 31, 2017, the Company had accumulated deficits of $1,981,384 due to the substantial losses in operation in previous periods. Management’s plan to support the Company in operations and to maintain its business strategy is to raise funds through public and private offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company do not raise all of the money it needs from public or private offerings, the Company will have to find alternative sources, such as loans or advances from its officers, directors or others. Such additional financing may not become available on acceptable terms and there can be no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for the Company’s stockholders, in the case of equity financing. If the Company require additional cash and cannot raise it, it will either have to suspend operations or cease business entirely.

The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s consolidated financial statements are expressed in U.S. dollars.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated.  The consolidated financial statements include 100% of assets, liabilities, and net income or loss of those wholly-owned subsidiaries.

The Company’s subsidiaries are listed as follows: