UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For Quarter Ended: ~~June~~ September 30, 2020

Commission File Number 000-55933

QHY GROUP

(Exact name of registrant as specified in its charter)

Nevada		33-1176182
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

1501 Broadway, Suite 1515

New York, NY 10036-5601

(Address of principal executive offices) (Zip Code)

(212) 324-1876

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if change since last report)

Securities Registered pursuant to Section 12(b) of the Act: None

Securities Registered pursuant to Section 12(g) of the Act

Title of Each Class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001		QHYG		N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that ~~the~~ the registrant was required to submit such files). Yes þ ☒ No ☐

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

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company þ☒ Emerging Growth Company ☐

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. ☐

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

Securities registered pursuant to Section 12(b) of the Act: None

As of ~~July~~November 153, 2020, the registrant had ~~outstanding~~ outstanding 87,269,789 shares of common stock.

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	1
	Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	1
	Unaudited Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019	2
	Unaudited Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019	2
	Unaudited Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2020 and 2019	3
	Unaudited Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019	3
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	4
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls and Procedures	16
Item 1.	Legal Proceedings	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
Signatures		18

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements as defined under the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” and similar expressions identify forward looking statements, which generally are not historical in nature. Forward looking statements are subject to risks and uncertainties that could cause actual results to materially differ from the Company’s historical experience and its current expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, risks associated with beginning a new business, operating risks, risks associated with raising capital, dependence upon management and risks associated with recruiting personnel, our ability to develop our water treatment solutions and gain market acceptance, compliance with environmental and other governmental regulations, competition with existing and future providers of water treatment solutions, as well as the other risks described in Item 1.A in our Report on Form 10-K filed on March 30, 2020 and discussed in our future filings with the SEC. You should not place undue reliance on forward looking statements, which speak only as of the date they are made. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. Given these uncertainties, you should not place undue reliance on forward-looking statements.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QHY Group

CONSOLIDATED ~~BALANCE~~ BALANCE SHEETS

(Expressed in in U.S. dollars)

	June 30, 2020			December 31, 2019
	September 30, 2020			December 31, 2019
	~~(Unaudited)~~	(Unaudited)
ASSETS
Cash	$	7,061		$	136
Due from a related party		2,196,500			2,196,500
Prepaid expenses and other current assets		100			100
Total assets	$	2,203,661		$	2,196,736
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	~~842~~984,~~661~~763		$	573,040
Due to related parties		~~428~~469,500			346,500
Loan from a shareholder and interest payable		~~479~~496,~~451~~474			423,645
Total liabilities		1,~~750~~950,~~612~~737			1,343,185
Stockholders’ equity
Preferred stock, 5,000,000 shares authorized, 0 shares outstanding		-			-
Common stock, $0.001 par value; 1,000,000,000 shares authorized, 87,269,789 shares issued and outstanding at June 30, 2020 and December 31, 2019		87,270			87,270
Common stock, $0.001 par value; 1,000,000,000 shares authorized, 87,269,789 shares issued and outstanding at September 30, 2020 and December 31, 2019		87,270			87,270
Additional paid in capital		7,243,001			7,243,001
Accumulated deficit		(67,~~877~~077,~~222~~347	)		(6,476,720	)
Total stockholders’ equity		~~453~~252,~~049~~924			853,551
Total liabilities and stockholders’ equity	$	2,203,661		$	2,196,736

See notes to the unaudited consolidated financial statements

QHY Group

CONSOLIDATED ~~STATEMENTS~~ STATEMENTS OF OPERATIONS

AND ~~COMPREHENSIVE~~ COMPREHENSIVE LOSS

(Expressed in in U.S. dollars)

	Three Months ended						~~Six~~Nine Months ended
	June 30,						June 30,
	September 30,						September 30,
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	-		$	-		$	-		$	-
Cost of Revenue		-			-			-			-
Gross profit		-			-			-			-
Expenses
Listing fees		1,~~477~~575			31,~~545~~621			34,~~424~~999			46,~~900~~521
Professional fees		112,~~657~~851			1529,~~559~~920			1316,~~657~~508			1848,~~584~~504
Professional fees – related party		28,500			28,500			5785,~~000~~500			5785,~~000~~500
License and royalty-related party		12,500			12,500			2537,~~000~~500			2537,~~000~~500
General and administrative		~~143~~144,~~813~~240			~~296~~332,~~250~~330			~~288~~432,~~748~~988			~~457~~790,~~987~~317
Total operating expenses		~~197~~189,~~947~~666			~~356~~404,~~354~~871			~~387~~577,~~829~~495			~~563~~968,~~471~~342
Other expenses/(income)
Other income		~~(7,000~~-	)		-			(7,000	)		-
Interest expenses – related party		10,~~193~~459			78,~~583~~842			1930,~~673~~132			1423,~~613~~455
Total other expenses		310,~~193~~459			7413,~~583~~713			1223,~~673~~132			1423,~~613~~455
Net loss		~~201~~200,~~140~~125			~~363~~413,~~937~~713			~~400~~600,~~502~~627			~~578~~991,~~084~~797
Other comprehensive income		-			-			-
Total comprehensive loss	$	~~201~~200,~~140~~125		$	~~363~~413,~~937~~713		$	~~400~~600,~~502~~627		$	~~578~~991,~~084~~797
Loss per share – basic and diluted	$	(0.002	)	$	(0.~~004~~005	)	$	(0.~~005~~007	)	$	(0.~~007~~011	)
Weighted average number of shares outstanding – basic and diluted		87,269,789			87,269,789			87,269,789			87,269,789

See notes to the unaudited consolidated financial statements

QHY Group

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Expressed in in U.S. dollars)

	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficits			Equity
Balance as of December 31, 2019		87,269,789	$	87,270	$	7,243,001	$	(6,476,720	)	$	853,551
Net loss		-		-		-		(~~199~~400,~~362~~502	)		(~~199~~400,~~362~~502	)
Balance as of March 31, 2020		87,269,789		87,270		7,243,001		(6,676,082	)		654,189
Balance as of June 30, 2020		87,269,789		87,270		7,243,001		(6,877,222	)		453,049
Net loss		-		-		-		(~~201~~200,~~140~~125	)		(~~201~~200,~~140~~125	)
Balance as of June 30, 2020		87,269,789	$	87,270	$	7,243,001	$	(6,877,222	)	$	453,049
Balance as of September 30, 2020		87,269,789	$	87,270	$	7,243,001	$	(7,077,347	)	$	252,924
Balance as of December 31, 2018		87,269,789	$	87,270	$	7,243,001	$	(5,257,097	)	$	2,073,174
Net loss		-		-		-		(~~214~~578,~~147~~084	)		(~~214~~578,~~147~~084	)
Balance as of March 31, 2019		87,269,789	$	87,270	$	7,243,001		(5,471,244	)		1,859,027
Balance as of June 30, 2019		87,269,789	$	87,270	$	7,243,001		(5,835,181	)		1,495,090
Net loss		-		-		-		(~~363~~413,~~937~~713	)		(~~363~~413,~~937~~713	)
Balance as of June 30, 2019		87,269,789	$	87,270	$	7,243,001	$	(5,835,181	)	$	1,495,090
Balance as of September 30, 2019		87,269,789	$	87,270	$	7,243,001	$	(6,248,894	)	$	1,081,377

See notes to the unaudited consolidated financial statements

QHY Group

CONSOLIDATED ~~STATEMENTS~~ STATEMENTS OF CASH FLOWS

(Expressed in in U.S. dollars)

	Six Months ended June 30,
	Nine Months ended September 30,
	2020			2019
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(~~400~~600,~~502~~627	)	$	(~~578~~991,~~084~~797	)
Interest expenses		1930,~~673~~132			1423,~~613~~455
Consulting fee paid by common shares		-			~~313~~466,~~776~~589
Other income		(7,000	)		-
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Accounts payable		~~269~~411,~~621~~723			~~121~~307,~~539~~450
License fee payable – related party		2537,~~000~~500			2537,~~000~~500
Professional fee payable – related party		5785,~~000~~500			5785,~~000~~500
Net cash used in operating activities		(3642,~~208~~772	)		(4671,~~156~~303	)
Net cash provided by investing activities		-			-
Cash flows from financing activities
EIDL loan advance		7,000			-
Cash proceeds from shareholder loan		3642,~~133~~697			4671,~~266~~368
Net cash provided by financing activities		4349,~~133~~697			4671,~~266~~368
Net decrease in cash and cash equivalents		6,925			110
Net increase in cash and cash equivalents		6,925			65
Cash and cash equivalents at beginning of period		136			116
Cash and cash equivalents at end of period	$	7,061		$	~~226~~181
Supplemental disclosure of cash flow information
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-

See notes to the unaudited consolidated financial statements

QHY Group

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in in U.S. dollars)

1. Organization and principal activities

QHY Group (the “Company”, or “we”), formerly named Yakun International Investment and Holding Group (“Yakun International”), was incorporated under the laws of the State of Nevada on October 16, 2007. Prior to the acquisition of PBG Water Solutions International Inc. (“PBG Water Solutions”) on January 15, 2018, the Company was a development stage company that had not generated any revenue from operations and maintained no essential assets since inception.

In November 2017, Yakun International entered into a Share Exchange Agreement (the “PBG SEA”) with PBG Water Solutions ~~International~~ International Inc. (“PBG Water Solutions”) and its shareholders, pursuant to which Yakun International acquired 100% of the outstanding shares of PBG Water Solutions in exchange for 46,839,439 shares of common stock of the Company and 19,000 shares of Series A Convertible Preferred Stock (each Series A Convertible Preferred Stock was converted into 1,000 shares of common stock) of the Company, which constituted approximately 83% of the Company’s issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the acquisition. PBG Water Solutions was incorporated under the law of the State of Delaware on August 4, 2016, and in October 2017, it merged into a company with the same name incorporated under the law of the State of Nevada. On January 15, 2018, all parties to the SEA agreed to amend the original agreement and consummate the transaction. Shareholders of PBG Water solutions took control of Yakun International on the same date. As of the issuance of these financial statements. PBG Water Solutions has not generated revenue.

The ~~transaction~~ transaction was accounted for as a “reverse acquisition” since, immediately following completion of the transaction, the shareholders of PBG Water Solutions effectively controlled the post-combination Company. For accounting purposes, PBG Water Solutions was deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of PBG Water Solutions (i.e., a capital transaction involving the issuance of shares by the Company for the shares of PBG Water Solutions). Accordingly, the consolidated assets, liabilities and results of operations of PBG Water Solutions became the historical ~~financial~~ financial statements of the Company, and assets, liabilities and results of operations of Yakun and its subsidiaries were consolidated ~~with~~ with PBG Water Solutions beginning on the acquisition date. No step-up in basis or intangible assets or goodwill were recorded in this transaction.

On December 21, 2017, Yakun International incorporated QHY Water Solutions International Corp (“QHY Water Solutions”) under the law of State of Nevada as its wholly owned subsidiary.

On July 31, 2018, the Company filed an amendment to its articles of incorporation changing its corporate name to QHY Group. The amendment ~~became~~ became effective August 31, 2018.

In December 2018, the Company issued 1,515,000 shares of common stock to certain consultants for services rendered or to be rendered (See Note 7).

In December 2018, the Company entered into a series of securities purchase agreements with certain non-affiliate investors for the sale of 6,655,750 shares of the Company’s common stock for aggregate consideration of $2,196,500. Of the shares sold, 5,972,582 were issued to six investors for $1,851,500 and the remaining 683,168 shares were sold to a single investor for $345,000.

2. Going concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Successful execution of the Company’s plan to enter the water solutions business and its transition to attaining profitable operations, are dependent upon obtaining additional financing. The Company plans to improve its future liquidity by obtaining additional financing through the issuance of financial instruments such as equity and warrants or through credit loans. Additional financing may not be available on acceptable terms or at all. If the Company issues additional equity securities to raise funds, the ownership percentage of existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of common stock.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. WeThe Company will continue to rely on loans from our major shareholders and directors for payments of expenditures other than purchasing from manufacturers in China. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

3. Summary of significant accounting policies

(a) Basis of presentation and principles of consolidation

The ~~unaudited~~ unaudited consolidated interim financial statements are prepared and presented in accordance with U.S. GAAP.

The ~~unaudited~~ unaudited consolidated interim financial information as of ~~June~~September 30, 2020 and for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited consolidated interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K filed on March 30, 2020.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of ~~June~~September 30, 2020, its consolidated results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, and its consolidated cash flows for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

(b) ~~Use~~ Use of estimates

The ~~preparation~~ preparation of financial statements in conformity with U.S. GAAP 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~~ statements and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates.

Basic loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the weighted average number of common shares and potential common shares outstanding during the period for options and restricted shares under the treasury stock method and for convertible debts under if-convertible method, if dilutive. ~~Potential~~ Potential common shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such ~~shares~~ shares would be anti-dilutive, such as in a period in which a net loss is recorded.

	Three Months Ended				~~Six~~Nine Months Ended
Dilutive shares not included	June 30,				June 30,
	September 30,				September 30,
in loss per share computation	2020		2019		2020		2019
Dilutive shares not included in loss per share computation	2020		2019		2020		2019
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Warrants		50,000,000		50,000,000		50,000,000		50,000,000

(d) Recently issued accounting standards not yet adopted

The company does not expect the adoption of any recent accounting standards to have a material impact on its financial statements except for:

In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes. The guidance removes the following exceptions: 1) exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020. Different components of the guidance require retrospective, modified retrospective or prospective adoption, and early adoption is permitted. We are currently assessing whether we will early adopt this guidance, and the impact on our financial statements is not currently estimable.

4. Due from a related party

The Renminbi (the “RMB”) equivalent to $2,196,500 received in December 2018 as proceeds from issuing 6,655,750 shares of the Company’s common stock (see Note 7) was collected by Beijing QHY on behalf of the Company because the Company cannot collect RMB due to the currency control on RMB. The monies are considered held by Beijing QHY for the benefit of the Company and are to be used to pay manufacturers in China for the wastewater treatment equipment wethe Company would purchase if wethe Company received an order. It is likely that the funds will not be available to pay expenses incurred outside China.

5. Accounts payable

Accounts payables consisted of the following:

	June 30, 2020		December 31, 2019
	September 30, 2020		December 31, 2019
	(Unaudited)
Payroll	$	~~712~~855,~~500~~000	$	427,500
Professional fees		~~124~~125,~~272~~123		137,615
Lab and testing fees		-		1,611
Listing fees		32,~~324~~075		3,749
Others		2,565		2,565
Total	$	~~842~~984,~~661~~763	$	573,040

6. Related party transactions and balances

a) Related party transactions	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Loan from a shareholder	$	8,284	$	28,092	$	36,133	$	46,266
Interest expense to a shareholder		10,193		7,583		19,673		14,613
Fee for professional services provided by related parties		28,500		28,500		57,000		57,000
License fee expense to a related party	$	12,500	$	12,500	$	25,000	$	25,000

a) Related party transactions

b) Related party payables

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Loan from a shareholder	$	6,564	$	25,103	$	42,697	$	71,369
Interest expense to a shareholder		10,459		8,842		30,132		23,455
Fee for professional services provided by related parties		28,500		28,500		85,500		85,500
License fee expense to a related party	$	12,500	$	12,500	$	37,500	$	37,500

	June 30, 2020		December 31, 2019
	(Unaudited)
Loan from a shareholder	$	411,955	$	375,822
Interest payable to a shareholder		67,496		47,823
Payable to a related party for license fee		162,500		137,500
Professional fee payable to related parties		266,000		209,000
Due from a related party	$	2,196,500	$	2,196,500

b) Related party payables

On May 1, 2018, PBG Water Solutions and the Company entered into a Credit Loan Agreement with a 28.29% shareholder of the Company (the “Lender”). The Lender had provided operating capital to PBG Water Solutions since its inception, and to the Company since the consummation of PBG SEA. Pursuant to the Credit Loan Agreement, the Lender will provide a loan of $500,000 to the Company for 2 years with 10% annual interest which shall be applied from the date of the Credit Loan Agreement. In compensation for the loan, the Company issued to the Lender a 3-year cashless warrant, which entitles the Lender to purchase 50 million (50,000,000) shares of the Company’s common stock at an exercise price of $0.01. The warrant cannot be exercised before June 1, 2019, and shall be void and non-exercisable if the Company (i) raises more than $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. As of June 30, 2020 and December 31, 2019, the Lender has provided $411,955 and $375,822 to the Company, respectively. During the three months ended June 30, 2020 and 2019 the Lender provided $8,284 and $28,092 to the Company, respectively. During the six months ended June 30, 2020 and 2019 the Lender provided $36,133 and $46,266 to the Company, respectively. During the three months ended June 30, 2020 and 2019, the Company recorded $10,193 and $7,583 interest expense incurred from the loan, respectively. During the six months ended June 30, 2020 and 2019, the Company recorded $19,673 and $14,613 interest expense incurred from the loan, respectively.

	September 30, 2020		December 31, 2019
	(Unaudited)
Loan from a shareholder	$	418,519	$	375,822
Interest payable to a shareholder		77,955		47,823
Payable to a related party for license fee		175,000		137,500
Professional fee payable to related parties		294,500		209,000
Due from a related party	$	2,196,500	$	2,196,500

~~In February~~On ~~2018~~May 1, 2018, PBG Water Solutions and the Company entered into a ~~financial~~Credit ~~advisory~~Loan ~~agreement~~Agreement with ~~Rebus~~a ~~Capital~~28.29% ~~Group~~shareholder of the Company (the “~~Rebus~~Lender”),. anThe ~~entity~~Lender ~~affiliated~~had ~~with~~provided aoperating ~~shareholder~~capital ofto ~~the~~PBG ~~Company~~Water Solutions since its inception, ~~pursuant~~and to ~~which~~the Company since the consummation of PBG ~~Water~~SEA. ~~Solutions~~Pursuant to the Credit Loan Agreement, the Lender will ~~pay~~provide ~~Rebus~~a loan of $30500,000 ~~per~~to ~~quarter~~the Company for 2 years with 10% annual interest which shall be applied from the date of the Credit Loan Agreement. In compensation for the loan, the Company ~~The~~issued ~~agreement~~to ~~has~~the Lender a ~~term~~3-year ofcashless ~~five~~warrant, ~~years~~which ~~from~~entitles ~~March~~the ~~2018~~Lender ~~but~~to ispurchase ~~cancellable~~50 bymillion ~~either~~(50,000,000) ~~party~~shares onof ~~sixty~~the ~~days~~Company’s common ~~notice~~stock at an exercise price of $0.01. The ~~service fee~~warrant ~~for~~cannot be exercised before June 1, 2019, and shall be void and non-exercisable if the ~~first~~Company 3(i) ~~months~~raises ~~was~~more ~~waived~~than by$20 ~~Rebus~~million in equity or (ii) has revenue in excess of $100 million in any fiscal year. As of ~~Professional~~September ~~service~~30, ~~expense~~2020 ~~related~~and toDecember ~~this~~31, ~~agreement~~2019, ~~was~~the Lender has provided $28418,~~500~~519 and $28375,~~500 for~~822 to the Company, respectively. During the three months ended ~~June~~September 30, 2020 and 2019 the Lender provided $6,564 and $25,103 to the Company, respectively. ~~Professional~~During the ~~service~~nine ~~expense~~months ~~related~~ended toSeptember ~~this~~30, ~~agreement~~2020 ~~was~~and 2019 the Lender provided $5742,~~000~~697 and $71,369 to the Company, respectively. During the three months ended September 30, 2020 and 2019, the Company recorded $5710,~~000~~459 ~~for~~and $8,842 interest expense incurred from the loan, ~~six~~respectively. During the nine months ended ~~June~~September 30, 2020 and 2019, the Company recorded $30,132 and $23,455 interest expense incurred from the loan, respectively.

In ~~April~~ ~~2017,~~February 2018, PBG Water Solutions entered into a ~~License~~financial ~~and~~advisory ~~Supply~~agreement ~~Agreement~~ with anRebus ~~individual~~Capital ~~shareholder~~Group ~~who owned 50% of PBG Water Solutions’ common stock and~~ (the ~~shareholder’s majority owned company Beijing QHY Environment S & T Co., Ltd. (~~“~~Beijing QHY~~Rebus”)., ~~Pursuant~~an toentity affiliated ~~the~~with ~~License~~a ~~and Supply Agreement and its Amendment entered into in June 2017, the individual~~ shareholder ~~and Beijing QHY (the “Licensor”) granted PBG the exclusive use~~ of ~~21 patents in any area outside~~ the ~~People’s~~Company, ~~Republic~~pursuant ofto ~~China~~which ~~(the~~PBG ~~“PRC”)~~Water ~~for~~Solutions 20will ~~years.~~pay ARebus ~~one-time fee of~~ $130,000 ~~million~~per ~~shall~~quarter. beThe ~~paid before December~~agreement ~~31,~~has ~~2021,~~a ~~and~~term ~~royalties~~ of 1%five ofyears ~~the net revenue received by PBG~~ from ~~the~~March ~~sale,~~2018 ~~license~~but oris ~~other~~cancellable ~~distribution~~by ofeither ~~the~~party ~~licensed products~~on ~~shall~~sixty bedays’ ~~paid annually~~notice. InThe ~~addition,~~service ~~the~~fee ~~Licensor~~for ~~shall supply PBG Water Solutions licensed products at prices agreed~~the ~~upon~~first ~~from~~3 ~~time~~months towas ~~time~~waived by ~~the Licensor and PBG Water Solutions~~Rebus. ~~The~~Professional ~~Company,~~service ~~QHY~~expense ~~Water~~related ~~Solutions~~to ~~and~~this ~~PBG~~agreement ~~Water~~was ~~Solutions didn’t generate any net revenue from the licensed equipment or products during the six months ended June 30, 2020 and 2019. The Company recorded a~~ $1228,500 and $1228,500 ~~license fee expense~~ for the three months ended ~~June~~September 30, 2020 and 2019, respectively. ~~The~~Professional ~~Company recorded~~service aexpense related to this agreement was $2585,~~000~~500 and $2585,~~000~~500 ~~license fee expense~~ for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively~~, and made no payment of license fees as of June 30, 2020~~. ~~The shareholder/licensor owns 47.15% of the Company’s common stock as of June 30, 2020.~~

8In April 2017, PBG Water Solutions entered into a License and Supply Agreement with an individual shareholder who owned 50% of PBG Water Solutions’ common stock and the shareholder’s majority owned company Beijing QHY Environment S & T Co., Ltd. (“Beijing QHY”). Pursuant to the License and Supply Agreement and its Amendment entered into in June 2017, the individual shareholder and Beijing QHY (the “Licensor”) granted PBG the exclusive use of 21 patents in any area outside the People’s Republic of China (the “PRC”) for 20 years. A one-time fee of $1 million shall be paid before December 31, 2021, and royalties of 1% of the net revenue received by PBG from the sale, license or other distribution of the licensed products shall be paid annually. In addition, the Licensor shall supply PBG Water Solutions licensed products at prices agreed upon from time to time by the Licensor and PBG Water Solutions. The Company, QHY Water Solutions and PBG Water Solutions didn’t generate any net revenue from the licensed equipment or products during the nine months ended September 30, 2020 and 2019. The Company recorded a $12,500 and $12,500 license fee expense for the three months ended September 30, 2020 and 2019, respectively. The Company recorded a $37,500 and $37,500 license fee expense for the nine months ended September 30, 2020 and 2019, respectively, and made no payment of license fees as of September 30, 2020. The shareholder/licensor owns 47.15% of the Company’s common stock as of September 30, 2020.

In December 2018, the Company issued 6,655,750 shares of the Company’s common stock for aggregate consideration of $2,196,500. Beijing QHY collected the subscription on behalf of the Company in RMB. The monies are considered held by Beijing QHY for the benefit of the Company as of June 30, 2020, and are to be used to pay manufacturers in China for the wastewater treatment equipment we would purchase if we received an order. It is likely that the funds will not be available to pay expenses incurred outside China.8

7.In December 2018, the Company issued 6,655,750 ~~Stockholder~~shares of the Company’s ~~equity~~common stock for aggregate consideration of $2,196,500. Beijing QHY collected the subscription on behalf of the Company in RMB. The monies are considered held by Beijing QHY for the benefit of the Company as of September 30, 2020, and are to be used to pay manufacturers in China for the wastewater treatment equipment the Company would purchase if the Company received an order. It is likely that the funds will not be available to pay expenses incurred outside China.

~~Common stock~~7. Stockholder’s equity

~~In April~~Common ~~2018, the Company increased its authorized common~~ stock from 70 million to 1 billion shares. The Company issued 46,839,439 shares of common stock and 19,000 shares of Series A Convertible Preferred Stock to the shareholders of PBG Water Solutions pursuant to PBG SEA. The 19,000 shares of Series A Convertible Preferred Stock were converted into 19,000,000 shares of common stock upon increase in the number of shares of authorized common stock.

In ~~October~~ April 2018, the Company ~~hired~~increased ~~certain~~its ~~consultants~~authorized tocommon ~~provide~~stock ~~general~~from ~~advisory~~70 ~~services~~million ~~relating~~ to ~~the~~1 ~~Company~~billion ~~operating as a publicly traded enterprise, strategic planning and execution, corporate governance and financial reporting~~shares. ~~Pursuant~~The ~~to each agreement, the service term is 12 months and the~~ Company ~~shall~~issued ~~pay the Consultants an aggregate of 1~~46,~~500~~839,~~000~~439 shares of ~~the Company’s~~ common stock ~~which~~and ~~was~~19,000 ~~delivered~~shares ~~at inception~~ of ~~the~~Series ~~Agreements.~~A ~~The~~Convertible ~~shares~~Preferred ~~were~~Stock ~~issued~~to ~~in December 2018. In November 2018,~~ the ~~Company~~ ~~hired~~shareholders aof ~~consultant~~PBG ~~for~~Water ~~investor~~Solutions ~~relations and strategic planning,~~ pursuant to ~~an agreement whereby the Company shall issue~~ toPBG ~~the~~SEA. ~~consultant~~The 2019,000 shares of ~~the~~Series ~~Company’s~~A ~~common~~Convertible ~~stock~~Preferred ~~each~~Stock ~~month.~~were ~~The~~converted ~~service~~into ~~was terminated in February 2020. As of June 30~~19, ~~2020~~000, ~~the Company has issued 15,~~000 shares of common stock ~~to the consultant. Cost for the consulting service was~~upon ~~measured~~increase ~~based~~in on the ~~fair~~number ~~value~~ of ~~the~~shares ~~Company’s common stock at the date~~ of ~~the~~authorized ~~consulting agreement since the~~ common ~~stock~~ ~~was vested and non-forfeitable upon the entry into the agreement. The fair value of the common~~ stock ~~was estimated to be $0~~.4075, and resulted in $617,550 for the fair value of the 1,515,000 common shares issued. $152,813 and $313,775 consulting expense was incurred during the three and six months ended June 30, 2019, respectively.

In October 2018, the Company hired certain consultants to provide general advisory services relating to the Company operating as a publicly traded enterprise, strategic planning and execution, corporate governance and financial reporting. Pursuant to each agreement, the service term is 12 months and the Company shall pay the Consultants an aggregate of 1,500,000 shares of the Company’s common stock which was delivered at inception of the Agreements. The shares were issued in December 2018. In November 2018, the Company ~~issued~~hired 6a consultant for investor relations and strategic planning,~~655~~ pursuant to an agreement whereby the Company shall issue to the consultant 20,~~750~~000 shares of the Company’s common stock each month. The service was terminated in February 2020. As of September 30, 2020, the Company has issued 15,000 shares of common stock to the consultant. Cost for the consulting service was measured based on the fair value of the Company’s common stock at the date of the consulting agreement since the common stock was vested and non-forfeitable upon the entry into the agreement. The fair value of the common stock was estimated to be $0.4075, and resulted in $617,550 for the ~~aggregate~~fair ~~consideration~~value of the 1,515,000 common shares issued. $2152,~~196~~813 and $466,~~500~~588 consulting expense was incurred during the three and nine months ended September 30, 2019, respectively.

~~Warrants~~In December 2018, the Company issued 6,655,750 shares of the Company’s common stock for aggregate consideration of $2,196,500.

On May 1, 2018, the Company issued warrants to a shareholder pursuant to the Credit Loan Agreement (See Note 6). The warrants issued by the Company are classified as equity. The fair value of the warrants was recorded as additional-paid-in-capital, and no further adjustments are made.Warrants

AOn May 1, 2018, the Company issued warrants ~~summary~~to ofa shareholder pursuant to the ~~status~~Credit ofLoan Agreement (See Note 6). The warrants issued by the Company’s ~~warrants~~are classified as equity. The fair value of ~~June~~the 30warrants was recorded as additional-paid-in-capital, ~~2020~~and isno ~~presented~~further ~~below:~~adjustments are made.

	Number of
	warrants
	(Unaudited)
Warrants as at December 31, 2019		50,000,000
Warrants granted		-
Exercised, forfeited or expired		-
Outstanding at June 30, 2020		50,000,000
Exercisable at June 30, 2020		50,000,000

A summary of the status of the Company’s warrants as of September 30, 2020 is presented below:

The following table summarizes information about the Company’s warrants as of June 30, 2020:

	Number of
	warrants
	(Unaudited)
Warrants as at December 31, 2019		50,000,000
Warrants granted		-
Exercised, forfeited or expired		-
Outstanding at September 30, 2020		50,000,000
Exercisable at September 30, 2020		50,000,000

Warrants outstanding

Warrants exercisable

Exercise price

Number outstanding

Weighted average remaining contractual life (in years)

Weighted average exercise price

Number exercisable

Weighted average exercise price

(Unaudited)

0.01

50,000,000

1.92

0.01

50,000,000

0.01

The following table summarizes information about the Company’s warrants as of September 30, 2020:

Warrants outstanding

Warrants exercisable

Exercise
price

Number
outstanding

Weighted
average
remaining
contractual
life (in years)

Weighted average
exercise price

Number
exercisable

Weighted
average
exercise
price

(Unaudited)

0.01

50,000,000

1.67

0.01

50,000,000

0.01

~~Equity Incentive Plan~~9

~~In July 2018, the Company adopted the 2018~~ Equity Incentive ~~Plan (the “2018 Plan”) which provides for the grant of stock~~ options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards and performance awards. The maximum aggregate number of shares that may be subject to awards under the 2018 Plan ~~is 10,000,000.~~

~~Following~~In July 2018, isthe aCompany ~~reconciliation~~adopted ofthe 2018 Equity Incentive Plan (the “2018 Plan”) which provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards and performance awards. The maximum aggregate number of shares ~~available~~that tomay be ~~issued~~subject to awards under the 2018 Plan asis ~~of June 30~~10, ~~2020:~~000,000.

	Shares Available for Grant
	(Unaudited)
Balance as of December 31, 2019		8,485,000
Stock awards granted		-
Stock awards forfeited		-
Balance as of June 30, 2020		8,485,000

Following is a reconciliation of the shares available to be issued under the 2018 Plan as of September 30, 2020:

8. Income taxes

	Shares Available for Grant
	(Unaudited)
Balance as of December 31, 2019		8,485,000
Stock awards granted		-
Stock awards forfeited		-

Balance as of September 30, 2020		8,485,000

~~The Company did not provide any current or deferred U~~8.S. ~~federal~~Income income tax provision or benefit for any of the periods presented because it has experienced operating losses. When it is more likely than not that a tax asset cannot be realized through future income, the Company must take a full valuation allowance for this future tax benefit. The Company provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carryforward period.taxes

The Company ~~has~~ did not ~~taken~~provide aany ~~tax~~current ~~position~~or ~~that,~~deferred ifU.S. ~~challenged,~~federal ~~would~~income ~~have~~tax aprovision ~~material~~or ~~effect~~benefit onfor any of the ~~financial~~periods ~~statements~~presented ~~for~~because ~~the~~it ~~three~~has ~~and~~experienced ~~six~~operating ~~months~~losses. ~~ended~~When ~~June~~it ~~30,~~is ~~2020,~~more orlikely ~~during~~than ~~the~~not ~~prior~~that ~~three~~a ~~years~~tax ~~applicable~~asset ~~under~~cannot ~~FASB~~be ~~ASC~~realized ~~740.~~through ~~The~~future ~~Company~~income, ~~did~~the ~~not recognize~~Company ~~any~~must ~~adjustment~~take toa ~~the~~full ~~liability~~valuation allowance for ~~uncertain~~this future tax ~~position~~benefit. ~~and~~The ~~therefore~~Company ~~did~~provided ~~not~~a ~~record~~full ~~any~~valuation ~~adjustment~~allowance toon the ~~beginning~~net ~~balance~~deferred tax asset, consisting of ~~accumulated~~net ~~deficit~~operating onloss ~~the~~carryforwards, ~~balance~~because ~~sheet.~~management ~~All~~has ~~tax~~determined ~~returns~~that ~~have~~it ~~been~~is ~~appropriately~~more ~~filed~~likely bythan not that the Company will not earn income sufficient to realize the deferred tax assets during the carryforward period.

Income tax provision at the federal statutory rate	21	%
Effect of operating losses	(21	)%
	-	%

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the three and nine months ended September 30, 2020, or during the prior three years applicable under FASB ASC 740. The Company did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns have been appropriately filed by the Company.

Net deferred tax assets consist of the following:

Income tax provision at the federal statutory rate	21	%
Effect of operating losses	(21	)%
	-	%

	June 30, 2020			December 31, 2019
	(Unaudited)
Net operating loss carry forward	$	359,031		$	274,926
Valuation allowance		(359,031	)		(274,926	)
Net deferred tax asset	$	-		$	-

Net deferred tax assets consist of the following:

A reconciliation of income taxes computed at the statutory rate is as follows:

	September 30, 2020			December 31, 2019
	(Unaudited)
Net operating loss carry forward	$	401,058		$	274,926
Valuation allowance		(401,058	)		(274,926	)
Net deferred tax asset	$	-		$	-

	Three Months ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Tax at statutory rate (21%)	$	42,239		$	76,427		$	84,105		$	121,398
Non-deductible expenses		-			(32,091	)		-			(65,893	)
Increase in valuation allowance		(42,239	)		(44,336	)		(84,105	)		(55,505	)
Income tax expenses	$	-		$	-		$	-		$	-

A reconciliation of income taxes computed at the statutory rate is as follows:

The Company did not pay any income taxes during the three and six months ended June 30, 2020 and 2019.

	Three Months ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Tax at statutory rate (21%)	$	42,027		$	86,880		$	126,132		$	208,277
Non-deductible expenses		-			(32,091	)		-			(97,984	)
Increase in valuation allowance		(42,027	)		(54,789	)		(126,132	)		(110,294	)
Income tax expenses	$	-		$	-		$	-		$	-

10The Company did not pay any income taxes during the three and nine months ended September 30, 2020 and 2019.

~~9. Other income~~10

In April 2020, PBG Water Solutions executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the Small Business Association under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the coronavirus (“COVID-19”) pandemic on the Company’s business9. InOther ~~connection therewith, PBG Water Solutions received a $7,000 advance, which does not have to be repaid.~~income

10In April 2020, PBG Water Solutions executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the Small Business Association under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the coronavirus (“COVID-19”) pandemic on the Company’s business. In connection therewith, PBG Water Solutions ~~Subsequent~~received ~~events~~a $7,000 advance, which does not have to be repaid.

~~In accordance~~10. ~~with~~Subsequent ~~FASB standards, the Company evaluated subsequent~~ events through the date it filed this report with the Securities and Exchange Commission (“SEC”) and no subsequent events occurred that required disclosure in the accompanying consolidated financial statements except below.

~~The impact~~In ~~of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future~~accordance ~~developments,~~with ~~including~~FASB the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended periodstandards, the Company’s ~~results~~evaluated ofsubsequent ~~operations,~~events ~~financial~~through ~~position and~~the ~~cash flows may be materially adversely affected. To~~ date, ~~the~~it ~~Company~~filed ~~has~~this ~~been~~report ~~able~~with ~~to avoid layoffs and furloughs of employees. The Company is not able to estimate~~ the ~~duration~~Securities ~~of the pandemic~~ and ~~potential impact on the business if disruptions or delays~~Exchange inCommission ~~business~~(“SEC”) ~~developments~~ and ~~shipments~~no ofsubsequent ~~product~~events ~~occur.~~occurred Tothat ~~date,~~required ~~the~~disclosure ~~Company is not aware of any such disruptions. In addition, a severe prolonged economic downturn could result~~ in ~~a variety of risks to~~ the ~~business,~~accompanying ~~including~~consolidated ~~weakened the Company’s~~financial ~~ability~~statements toexcept ~~develop potential businesses and a decreased ability to raise additional capital when needed on acceptable terms, if at all~~below. ~~As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.~~

11The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected. To date, the Company has been able to avoid layoffs and furloughs of employees. The Company is not able to estimate the duration of the pandemic and potential impact on the business if disruptions or delays in business developments and shipments of product occur. To date, the Company is not aware of any such disruptions. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including weakened the Company’s ability to develop potential businesses and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~11

~~The following~~ITEM discussion of our financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”)2. ~~This~~MANAGEMENT’S ~~discussion~~DISCUSSION ~~contains~~AND ~~forward-looking~~ANALYSIS ~~statements~~OF ~~that~~FINANCIAL ~~involve~~CONDITION ~~risks~~AND ~~and~~RESULTS ~~uncertainties.~~OF You should specifically consider the various risk factors identified in Item 1A of our 2019 Form 10-K that could cause actual results to differ materially from those anticipated in these forward-looking statements.OPERATIONS

~~Management’s~~The following discussion of our financial ~~Discussion~~condition and ~~Analysis~~results orof ~~Plan~~operations should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in Item 1A of ~~Operations~~our 2019 Form 10-K that could cause actual results to differ materially from those anticipated in these forward-looking statements.

PBG Water Solutions International Inc. (“PBG”) was organized in August 2016 to explore the market in the United States for wastewater treatment solutions and subsequently expanded its focus to markets outside the United States. In November 2017, we, now known as QHY Group (f/k/a “Yakun International Investment & Holding Group”) entered into a Share Exchange Agreement (the “PBG SEA”) with PBG and its shareholders, pursuant to which we acquired 100% of the outstanding shares of PBG in exchange for 46,839,439 shares of our common stock and 19,000 shares of our Series A Convertible Preferred Stock (each Series A Convertible Preferred Stock has been converted into 1,000 shares of our common stock), which constituted approximately 83% of QHY GroupManagement’s ~~issued~~Discussion and ~~outstanding capital stock on a fully-diluted basis as of and immediately after the consummation~~Analysis ~~of the PBG SEA. Except where the context otherwise requires the “Company,” “we,” “us,” and “our” refer to the business of (i) PBG for periods ending on~~ or ~~prior~~Plan ~~to the consummation in January 2018~~ of ~~the PBG SEA and (ii) the combined businesses of us and PBG from and after the consummation of the PBG SEA.~~Operations

OnPBG Water Solutions International Inc. ~~April~~(“PBG”) 3,was organized in August 2016 to explore the market in the United States for wastewater treatment solutions and subsequently expanded its focus to markets outside the United States. In November 2017, we, now known as QHY Group (f/k/a “Yakun International Investment & Holding Group”) entered into a ~~License~~Share Exchange Agreement ~~with~~(the ~~Beijing~~“PBG ~~QHY~~SEA”) with ~~Environment~~PBG ~~S&T~~and ~~Co.~~its ~~Ltd.~~shareholders, apursuant ~~corporation~~to ~~organized~~which ~~under the~~we ~~laws~~acquired 100% of the ~~People’s~~outstanding ~~Republic~~shares of ~~China~~PBG in exchange for 46,839,439 shares ~~pursuant~~of toour common stock and 19,000 shares of our Series A Convertible Preferred Stock (each Series A Convertible Preferred Stock has been converted into 1,000 shares of our common stock), which weconstituted ~~were~~approximately ~~granted~~83% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the ~~exclusive~~consummation ~~right~~of the PBG SEA. Except where the context otherwise requires the “Company,” “we,” “us,” and “our” refer to ~~outside~~the business of ~~China~~(i) 21PBG ~~patents~~for ~~and~~periods ~~related~~ending ~~technologies~~on ~~related~~or prior to ~~wastewater~~the ~~treatment~~consummation ~~solutions.~~in ~~The~~January ~~License~~2018 ~~was~~of ~~amended~~the inPBG ~~June~~SEA ~~2017~~and (ii) the combined businesses of us and PBG from and after the consummation of the PBG SEA.

~~To date~~On April 3, 2017, we ~~have~~entered ~~not~~into ~~been~~a ~~adequately~~License Agreement ~~capitalized~~with ~~and~~Beijing ~~have~~QHY ~~relied~~Environment ~~upon~~S&T ~~loans~~Co. ~~from~~Ltd., ~~our~~a ~~principal~~corporation ~~shareholders~~organized ~~and~~under ~~sales~~the ~~and~~laws ~~issuances~~ of ~~our~~the ~~common~~People’s ~~stock~~Republic of toChina, ~~pay~~pursuant ~~expenses. Our ability~~ to ~~continue~~which aswe awere ~~going~~granted ~~concern~~the isexclusive ~~dependent~~right ~~on obtaining adequate capital~~ to ~~fund~~ ~~operating~~outside ~~losses~~of ~~until~~China we21 ~~become~~patents ~~cash~~and ~~flow~~related ~~positive.~~technologies ~~If we are unable~~ related to ~~obtain~~wastewater ~~adequate~~treatment ~~capital,~~solutions. weThe ~~could~~License bewas ~~forced~~amended toin ~~cease operations~~June 2017.

~~Upon receiving~~To ~~an order for one or more of our systems~~date, we ~~intend~~have tonot ~~seek~~been toadequately ~~raise~~capitalized and ~~the~~have ~~necessary~~relied ~~capital~~upon toloans ~~recruit~~from ~~the personnel to expand~~ our ~~sales~~principal ~~efforts~~shareholders and ~~enter~~sales ~~the market in the United States,~~ and toissuances ~~begin~~of ~~performing under such contracts as we may be granted. Until such time, we will likely rely upon~~ our ~~principal~~common ~~shareholders~~stock to ~~introduce~~pay ~~our products to potential customers and distributors~~expenses. Our ~~revenues~~ability to ~~will~~continue beas ~~determined~~a bygoing ~~the~~concern ~~prices~~is ~~negotiated~~dependent ~~with~~on ~~those~~obtaining ~~parties~~adequate ~~that~~capital ~~choose~~ to ~~employ~~fund ~~our~~operating ~~water treatment~~losses ~~systems~~until ~~and~~we ~~further,~~become ~~will~~cash beflow ~~determined by the scope of the products and services agreed to be provided~~positive. ~~Our expenses~~ ~~will~~If bewe ~~determined~~are ~~principally~~unable byto ~~the~~obtain ~~costs~~adequate ~~incurred in performing under any contract~~capital, ~~and~~we ~~the~~could ~~amount~~be ~~devoted~~forced to ~~expenses~~cease ~~related to being a public company, such as accounting and legal expenses~~operations.

~~During the~~As ~~next~~a 12result ~~months,~~of wethe ~~anticipate~~impact ~~incurring~~of ~~costs~~ Covid-19, for ~~sales~~the ~~and~~past ~~marketing~~two ~~efforts~~quarters, ~~costs~~our ~~related~~marketing toefforts ~~initial~~primarily ~~performance~~have ~~under any~~focused ~~contract~~on ~~entered~~the ~~into,~~market ~~costs~~for ~~associated~~wastewater ~~with~~systems ~~our~~in ~~personnel~~China. ~~and~~Upon ~~costs~~receiving an ~~incurred~~order tofor ~~file~~one ~~Exchange~~or ~~Act~~more ~~reports.~~of Weour ~~believe~~systems, we ~~will~~ beintend ~~able~~ to ~~meet~~seek ~~these~~to ~~costs~~raise ~~through~~the ~~amounts, as~~ necessary, capital to berecruit ~~loaned~~the bypersonnel orto ~~invested~~expand ~~in us by~~ our ~~principal stockholders~~ orsales ~~other~~efforts ~~investors.~~and, Weif ~~have~~then nopractical ~~specific~~given ~~plans,~~the ~~understandings~~effects orof ~~agreements~~the ~~with~~Covid-19 ~~respect~~pandemic, toenter the ~~raising~~market ofin ~~such~~the ~~funds~~United States, ~~except~~and to ~~for~~begin aperforming ~~credit~~under ~~loan~~such ~~agreement~~contracts as we ~~entered~~may ~~with~~be ~~a 20~~granted.8% ~~shareholder~~Until ~~for~~such ~~$500~~time,~~000~~ onwe ~~May~~will 1,likely ~~2018,~~rely ~~and~~upon our ~~issuance~~principal ~~of 6,655,750 shares~~shareholders ~~for~~to ~~$2.2~~introduce ~~million~~our inproducts ~~December~~to ~~2018.~~potential ~~Beijing~~customers ~~QHY~~and ~~collected~~distributors ~~the~~in $2China.2 ~~million~~Our onrevenues ~~our~~will ~~behalf~~be indetermined ~~China~~by as the ~~monies~~prices ~~were paid in RMB.~~negotiated ~~The~~with ~~monies~~those ~~are~~parties ~~considered~~that ~~held~~choose byto ~~Beijing~~employ ~~QHY~~our ~~for~~water ~~our~~treatment ~~benefit~~systems and ~~are~~further, towill be ~~used~~determined toby ~~pay~~the toscope ~~manufacturers~~of ~~in China for~~ the ~~wastewater~~products ~~treatment~~and ~~equipment~~services weagreed ~~would~~to ~~purchase~~be ~~if we received an order~~provided. ItOur isexpenses ~~likely that the funds~~ will ~~not~~ be ~~available~~determined toprincipally ~~pay~~by ~~expenses incurred~~the ~~outside~~costs ~~China.~~incurred Wein ~~may~~performing ~~seek~~under ~~to raise~~ any contract, ~~capital~~and ~~required to continue our business through~~ the ~~issuance~~amount ofdevoted ~~equity~~to orexpenses ~~debt securities~~related ~~or by other means. Since we have no such arrangements or plans currently in effect, our inability~~ to ~~raise~~being ~~funds may have~~ a ~~severe~~public ~~negative~~company, ~~impact~~such onas ~~our~~accounting ~~ability~~and tolegal ~~become a viable company~~expenses.

During the next 12 months, we anticipate incurring costs for sales and marketing efforts, costs related to initial performance under any contract entered into, costs associated with our personnel and costs incurred to file Exchange Act reports. We believe we will be able to meet these costs through amounts, as necessary, to be loaned by or invested in us by our principal stockholders or other investors. We have no specific plans, understandings or agreements with respect to the raising of such funds, except for a credit loan agreement we entered with a 20.8% shareholder for $500,000 on May 1, 2018, and our issuance of 6,655,750 shares for $2.2 million in December 2018. Beijing QHY collected the $2.2 million on our behalf in China as the monies were paid in RMB. The monies are considered held by Beijing QHY for our benefit and are to be used to pay to manufacturers in China for the wastewater treatment equipment we would purchase if we received an order. It is likely that the funds will not be available to pay expenses incurred outside China. We may seek to raise any capital required to continue our business through the issuance of equity or debt securities or by other means. Since we have no such arrangements or plans currently in effect, our inability to raise funds may have a severe negative impact on our ability to become a viable company.

~~Results of Operations~~ 12

~~Three Months~~Results ~~Ended~~of ~~June~~Operations ~~30 2020 as compared to Three Months Ended June 30, 2019~~

~~PBG was~~Three ~~organized~~Months inEnded ~~August~~September ~~2016.~~30 ~~Since~~2020 ~~its~~as ~~organization,~~compared ~~its activities were limited~~ to ~~the exploration of the markets for wastewater~~Three ~~treatment~~Months ~~within~~Ended ~~and~~September ~~outside the United States. We sold no products and performed no services during such period~~30, other than in connection with the assembly and installation of a pilot wastewater treatment unit to be installed in a facility in New Zealand which project was abandoned and consequently, generated no revenues. Expenses incurred by us to date primarily related to those costs and expenses incurred by us in exploring the market, and meeting with prospective customers to determine their interest in using the products available pursuant to the License Agreement, and professional fees incurred in connection with our organization, initial activities, and fees and costs related to being a public company since the PBG Share Exchange. 2019

~~Total~~PBG was organized in August 2016. Since ~~operating~~its ~~expenses~~organization, its activities were ~~$197,947~~limited ~~and~~to ~~$356,354~~the exploration of the markets for wastewater treatment within and outside the United ~~three~~States. ~~months~~We ~~ended~~sold ~~June,~~no ~~2020~~products and ~~2019~~performed no services during such period and consequently, ~~respectively~~generated no revenues. ~~The~~Expenses incurred ~~decrease~~by inus ~~operating~~ to date primarily related to those costs and expenses ~~for~~incurred ~~the~~by ~~three~~us ~~months~~in ~~ended~~exploring ~~June~~the 30market, ~~2020~~and ~~compared~~meeting with prospective customers to ~~2019~~determine istheir ~~attributable~~interest ~~principally~~in tousing the ~~decrease~~products ofavailable ~~$152~~pursuant to the License Agreement,~~813~~ inand professional ~~consulting~~fees ~~expenses~~incurred ~~related~~in toconnection ~~the~~with ~~consultant~~our weorganization, ~~engaged~~initial inactivities, ~~October~~and ~~2018~~fees and ~~whose~~costs ~~services~~related ~~were~~to ~~completed~~being ina ~~2019~~public company since the PBG Share Exchange.

~~During~~Total operating expenses were $189,666 and $404,871 for the three months ended ~~June~~September 30, 2020, weand ~~incurred $10~~2019,~~193~~ ~~interest~~respectively. ~~expense~~The todecrease ain ~~20.8%~~operating ~~shareholder~~expenses for athe three ~~2-year~~months ~~$500,000~~ended ~~credit loan.~~September ~~This~~30, ~~shareholder~~2020 ~~provided~~compared ~~loans~~to ~~without~~2019 ~~any~~is ~~interest~~attributable ~~since~~principally to the ~~inception~~decrease of ~~PBG~~$152,814 ~~for~~in ~~its~~consulting ~~operations~~expenses related ~~and~~ to usthe ~~since~~consultant ~~the~~we ~~PBG Share~~engaged ~~Exchange.~~in ~~Interest~~October ~~expense~~2018 ~~accrued~~and ~~for~~whose ~~the~~services ~~same~~were ~~period~~completed in ~~year~~ 2019 ~~was $7,583~~. ~~During~~In ~~the three months ended June 30~~addition, ~~2020, we~~there ~~received~~was a decrease of $727,~~000~~069 ~~Small~~in ~~Business~~professional ~~Association~~fee ~~(“SBA”)~~since ~~Disaster~~we ~~Loan~~had ~~and~~less ~~the~~activities ~~advanced~~in ~~amount~~2020 ~~was~~due ~~forgiven~~to ~~per~~ the ~~program~~ COVID-19.

~~Net loss~~During ~~for~~ the three months ended ~~June~~ September 30, 2020, ~~was~~we incurred $~~201~~10,~~140,~~459 asinterest ~~compared~~expense to a ~~net~~20.8% ~~loss~~shareholder offor a 2-year $~~363~~500,~~937~~000 credit loan. Interest expense accrued for the ~~three~~same ~~months~~period ~~ended~~in ~~June 30,~~year 2019 was $8,842.

~~Six Months~~Net ~~Ended~~loss ~~June~~for the three months ended September 30, 2020 was $200,125, as compared to ~~Six~~a ~~Months~~net ~~Ended~~loss ~~June~~of $413,713 for the three months ended September 30, 2019.

~~Total operating~~Nine ~~expenses~~Months ~~were~~Ended ~~$387,829~~September ~~and $563,471 for the six months ended June, 2020 and 2019, respectively. The decrease in operating expenses for the six months ended June~~ 30, 2020 as compared to ~~2019 is attributable principally to the decrease of $313,775 in consulting~~Nine ~~expenses~~Months ~~related~~Ended toSeptember ~~the consultant we engaged in October 2018 and whose services were completed in 2019, offset by the $142,500 increase in accrued payroll expenses in the six months ended June~~ 30, ~~2020 for services rendered by our officers and additional personnel we engaged from April~~ 2019 ~~to perform various functions. We had no personnel except for our CEO and Executive Director until April 2019.~~

~~During~~Total operating expenses were $577,495 and $968,342 for the ~~six~~nine months ended ~~June~~September 30, 2020, weand ~~incurred $19~~2019,~~673~~ ~~interest~~respectively. ~~expense~~The todecrease ain ~~20.8%~~operating ~~shareholder~~expenses for athe ~~2-year~~nine months ~~$500,000~~ended ~~credit~~September ~~loan. This~~30, ~~shareholder~~2020 ~~provided~~compared ~~loans~~to ~~without~~2019 ~~any~~is ~~interest~~attributable ~~since~~principally to the ~~inception~~decrease of ~~PBG~~$466,589 ~~for~~in ~~its~~consulting ~~operations~~expenses related ~~and~~ to usthe ~~since~~consultant ~~the~~we ~~PBG~~engaged ~~Share Exchange.~~in ~~Interest~~October ~~expense~~2018 ~~accrued~~and ~~for~~whose ~~the~~services ~~same~~were ~~period~~completed in ~~year~~ 2019, ~~was~~offset by the $14142,~~613.~~500 ~~During~~increase in accrued payroll expenses in the ~~six~~nine months ended ~~June~~September 30, 2020, wefor services rendered by our officers and additional personnel ~~received~~we aengaged ~~$7,000~~from ~~Small~~April ~~Business~~2019 ~~Association~~to ~~(“SBA”)~~perform ~~Disaster~~various ~~Loan~~functions. ~~and~~We ~~the~~had ~~advanced~~no ~~amount~~personnel ~~was~~except ~~forgiven~~for ~~per~~our ~~the~~CEO ~~program~~and Executive Director until April 2019.

~~Net loss~~During ~~for~~ the ~~six~~nine months ended ~~June~~September 30, 2020, ~~was~~we incurred $~~400~~30,~~502,~~132 asinterest ~~compared~~expense to a ~~net~~20.8% ~~loss~~shareholder offor a 2-year $~~578~~500,~~084~~000 credit loan. Interest expense accrued for the ~~six~~same period in year 2019 was $23,455. During the nine months ended ~~June~~September 30, 2020, we received a $7,000 Small Business ~~2019~~Association (“SBA”) Disaster Loan and the advanced amount was forgiven per the program.

~~Liquidity~~Net loss for the nine months ended September ~~and~~30, ~~Capital~~2020 ~~Resources~~was $600,627, as compared to a net loss of $991,797 for the nine months ended September 30, 2019.

Liquidity is ~~the ability of a company to generate funds to support its current~~ and ~~future~~Capital ~~operations,~~Resources satisfy its obligations, and otherwise operate on an ongoing basis. As of June 30, 2020 and December 31, 2019, we had an insignificant amount of cash except for $2.20 million held by a related party and designated to be used in China for the purchase of wastewater treatment equipment. We have not generated revenues to fund our operating expenses since formation and have had to rely upon the efforts of two of our stockholders on our behalf and contributions from our stockholders and the proceeds from the sale of our securities. In all likelihood, we will remain dependent upon our management and stockholders and the proceeds from the sale of our securities to fund our cash needs until we generate meaningful revenues.

~~We anticipate~~Liquidity ~~incurring~~is athe ~~minimum~~ability of ~~$800~~a company to generate funds to support its current and future operations,~~000~~ insatisfy ~~expenses~~its ~~over~~obligations, ~~the~~and ~~next~~otherwise ~~twelve~~operate ~~months~~on an ongoing basis. As ~~Further~~of September 30, ~~should~~2020 ~~our~~and ~~marketing~~December ~~efforts~~31, ~~prove successful~~2019, we ~~will~~had ~~require~~an ~~additional~~insignificant ~~working~~amount ~~capital~~of cash except for $2.20 million held by a related party and designated to ~~perform~~be ~~any~~used ~~contracts~~in weChina ~~are~~for ~~awarded~~the purchase of wastewater treatment equipment. ~~The~~We ~~absence~~have ofnot ~~capital~~generated ~~will~~revenues ~~likely~~to befund aour ~~limiting~~operating ~~factor~~expenses onsince ~~our~~formation ~~ability~~and have had to ~~grow~~rely ~~until~~upon ~~such~~the ~~time~~efforts asof wetwo ~~raise~~of aour ~~significant~~stockholders ~~amount~~on ofour ~~equity~~behalf orand contributions ~~long-term~~from ~~debt~~our stockholders and the proceeds from the sale of our securities. ~~Even after~~In all likelihood, we ~~raise~~will ~~capital,~~remain dependent upon our ~~ability~~management toand ~~grow~~stockholders ~~may~~and ~~still~~the beproceeds ~~impeded~~from bythe asale ~~lack~~ of ~~adequate~~our ~~working~~securities ~~capital~~ to ~~simultaneously~~fund ~~perform under~~our ~~multiple~~cash ~~contracts~~needs until we generate meaningful revenues.

13We anticipate incurring a minimum of $800,000 in expenses over the next twelve months. Further, should our marketing efforts prove successful we will require additional working capital to perform any contracts we are awarded. The absence of capital will likely be a limiting factor on our ability to grow until such time as we raise a significant amount of equity or long-term debt. Even after we raise capital, our ability to grow may still be impeded by a lack of adequate working capital to simultaneously perform under multiple contracts.

In May 2018, we entered into a Credit Loan Agreement with Dragon & Tiger Holding Limited (“D&T”), one of our shareholders, which is controlled by one of our directors. Pursuant to the agreement, D&T has agreed to lend us up to $500,000. All amounts borrowed are to bear interest at the rate of 10% per annum. Accrued interest through the end of 2018 and 2019 is to be paid no later than 90 days after the end of each year. All amounts borrowed are to be repaid in full on or before May 1, 2020. In addition to interest, D&T was issued warrants to purchase 50,000,000 shares of our common stock at a price of $0.01 per share. The warrants have an expiration date of May 31, 2022 or such earlier date as the Company (i) raises more than $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. As of June 30, 2020 and December 31, 2019, D&T has provided $411,955 and $375,822 to us, respectively. During the three months ended June 30, 2020 and 2019 the Lender provided $8,284 and $28,092 to us, respectively. During the six months ended June 30, 2020 and 2019 the Lender provided $36,133 and $46,266 to us, respectively.13

In ~~April~~ ~~2020~~May 2018, ~~PBG~~we ~~Water~~entered ~~Solutions~~into ~~executed~~a ~~the~~Credit Loan ~~standard~~Agreement ~~loan~~with ~~documents~~Dragon ~~required~~& ~~for~~Tiger ~~securing~~Holding aLimited ~~loan~~ (the “~~EIDL Loan~~Lender”), one of our shareholders, which is controlled ~~from~~by one of our directors. Pursuant to the ~~Small~~agreement, ~~Business~~D&T ~~Association~~has ~~under~~agreed ~~its~~to ~~Economic~~lend ~~Injury~~us ~~Disaster~~up ~~Loan~~to ~~(“EIDL”)~~$500,000. ~~assistance~~All ~~program~~amounts inborrowed ~~light~~are to bear interest at the rate of 10% per annum. Accrued interest through the end of 2018 and 2019 is to be paid no later than 90 days after the ~~impact~~end of each year. In addition to interest, D&T was issued warrants to purchase 50,000,000 shares of our common stock at a price of $0.01 per share. The warrants have an expiration date of May 31, 2022 or such earlier date as the ~~coronavirus~~Company (~~“COVID-19”~~i) ~~pandemic~~raises more onthan $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. As of September 30, 2020 and December 31, 2019, the Lender has provided $418,519 and $375,822 to the Company’s, ~~business~~respectively. InDuring ~~connection~~the ~~therewith,~~three ~~PBG~~months ended September ~~Water~~30, ~~Solutions~~2020 ~~received~~and a2019 the Lender provided $76,~~000~~564 ~~advance~~and $25,103 ~~which~~to ~~does~~the ~~not~~Company, ~~have~~respectively. During the nine months ended September 30, 2020 and 2019 the Lender provided $42,697 and $71,369 to bethe ~~repaid~~Company, respectively. During the three months ended September 30, 2020 and 2019, the Company recorded $10,459 and $8,842 interest expense incurred from the loan, respectively. During the nine months ended September 30, 2020 and 2019, the Company recorded $30,132 and $23,455 interest expense incurred from the loan, respectively.

~~The~~In April 2020, ~~following~~PBG ~~table~~Water ~~summarizes~~Solutions executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the Small Business Association under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the coronavirus (“COVID-19”) pandemic on the Company’s ~~cash~~business. ~~flows~~In ~~for~~connection ~~the~~therewith, ~~six~~PBG ~~months~~Water ~~ended~~Solutions received ~~June~~a 30$7,000 ~~2020~~advance, ~~and~~which ~~2019:~~does not have to be repaid.

	Six Months Ended Six,
	2020			2019
	(Unaudited)			(Unaudited)
Net cash used in operating activities	$	(36,208	)	$	(46,156	)
Net cash provided by investing activities		-			-
Net cash provided by financing activities		43,133			46,266
Net increase in cash and cash equivalents	$	6,925		$	110

The following table summarizes the Company’s cash flows for the nine months ended September 30, 2020 and 2019:

Going Concern Consideration

	Nine Months Ended September 30,
	2020			2019
	(Unaudited)			(Unaudited)
Net cash used in operating activities	$	(42,772	)	$	(71,303	)
Net cash provided by investing activities		-			-
Net cash provided by financing activities		49,697			71,368
Net increase in cash and cash equivalents	$	6,925		$	65

~~The Company’s~~Going ~~unaudited~~Concern financial statements are prepared using accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.Consideration

InThe Company’s ~~order~~unaudited tofinancial ~~continue~~statements asare aprepared ~~going~~using ~~concern,~~accounting ~~the~~principles ~~Company~~generally ~~will~~accepted ~~need,~~in ~~among~~the ~~other~~United ~~things,~~States ~~additional~~of ~~capital~~America ~~resources~~(“U.S. GAAP”) ~~Successful~~applicable ~~execution of~~to ~~the~~a ~~Company’s~~going ~~plan~~concern towhich ~~enter~~contemplates the ~~water~~realization ~~solutions~~of ~~business~~assets and ~~its~~liquidation ~~transition~~of toliabilities ~~attaining~~in ~~profitable operations, is dependent~~the ~~upon~~normal ~~obtaining~~course ~~additional~~of ~~financing~~business. The Company ~~plans~~has tonot ~~improve~~yet ~~its~~established ~~future~~an ~~liquidity~~ongoing bysource ~~obtaining~~of ~~additional~~revenues ~~financing~~sufficient ~~through the~~to ~~issuance~~cover ofits ~~financial~~operating costs ~~instruments~~and ~~such~~allow asit ~~equity~~to ~~and~~continue ~~warrants~~as ora ~~through~~going ~~credit loans~~concern. ~~Additional~~The ~~financing~~ability ~~may~~of ~~not~~the beCompany ~~available on~~to ~~acceptable~~continue ~~terms~~as ora atgoing ~~all.~~concern Ifis ~~the~~dependent on the Company’s ~~issues~~obtaining ~~additional~~adequate ~~equity~~capital ~~securities~~ to ~~raise~~fund ~~funds,~~operating ~~the~~losses ~~ownership~~until ~~percentage~~it ~~of existing~~becomes ~~stockholders~~profitable. ~~would~~If bethe ~~reduced.~~Company ~~New~~is ~~investors~~unable ~~may~~to ~~demand~~obtain adequate ~~rights~~capital, ~~preferences~~it orcould ~~privileges~~be ~~senior~~forced to ~~those~~cease ~~of existing holders of common stock~~operations.

~~The~~In order to continue ~~ability~~as a going concern, the Company will need, among other things, additional capital resources. Successful execution of the Company’s plan to ~~continue~~enter asthe awater ~~going~~solutions ~~concern~~business and its transition to attaining profitable operations, is dependent upon ~~its~~obtaining additional ~~ability~~financing. The Company plans to ~~successfully~~improve ~~accomplish~~its ~~the~~future ~~plans~~liquidity ~~described in~~by obtaining additional financing through the ~~preceding~~issuance of ~~paragraph~~financial instruments such as equity and ~~eventually~~warrants ~~secure~~or ~~other~~through ~~sources~~credit ofloans. Additional financing ~~and~~may ~~attain~~not ~~profitable~~be ~~operations.~~available ~~The~~on ~~accompanying~~acceptable ~~financial~~terms ~~statements~~or doat ~~not~~all. ~~include~~If ~~any~~the ~~adjustments~~Company ~~that~~issues ~~might~~additional beequity ~~necessary~~securities ifto raise funds, the ~~Company~~ownership ispercentage ~~unable~~of existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to ~~continue~~those asof aexisting ~~going~~holders ~~concern~~of common stock.

14The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

~~Critical Accounting Policies~~14

~~The discussion~~Critical ~~and~~Accounting analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.Policies

~~Management~~The discussion and analysis of our financial ~~believes~~condition ~~the~~and ~~following~~results ~~critical~~of ~~accounting~~operations ~~policies~~are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the ~~significant~~reported ~~judgments~~amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates ~~used~~based inon historical experience and on various other assumptions that are believed to be reasonable under the ~~preparation~~circumstances, the results of which form the ~~financial~~basis ~~statements~~for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~Use~~Management believes the following critical ofaccounting policies affect the significant judgments and estimates used in the preparation of the financial statements.

~~The preparation~~Use of ~~financial statements in conformity with generally accepted accounting principles 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 period. Actual results could differ from those estimates.

~~Management~~The preparation ~~makes~~of ~~these~~financial statements in conformity with generally accepted accounting principles requires management to make estimates ~~using~~and assumptions that affect the ~~best~~reported ~~information~~amounts ~~available~~of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ~~time~~financial statements and the ~~estimates~~reported ~~are~~amounts ~~made;~~of ~~however,~~revenues ~~actual~~and ~~results~~expenses during the reporting period. Actual results could differ from those estimates.

~~Income~~Management makes ~~Taxes~~these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates.

~~Current income~~Income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the assets and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.Taxes

~~The~~Current income ~~Company~~taxes ~~adopts~~are aprovided ~~more~~for ~~likely~~in ~~than~~accordance ~~not~~with ~~threshold~~the ~~and~~laws aof ~~two-step approach for~~ the ~~tax~~relevant ~~position~~taxing ~~measurement~~authorities. ~~and~~As ~~financial~~part ~~statement recognition.~~of ~~Under~~ the ~~two-step~~process ~~approach~~of preparing financial statements, the ~~first~~Company ~~step~~ is required to ~~evaluate~~estimate ~~the~~its ~~tax~~income ~~position~~taxes ~~for~~in ~~recognition~~each byof ~~determining if~~ the ~~weight~~ ofjurisdictions ~~available~~in ~~evidence~~which ~~indicates that~~ it isoperates. ~~more~~The ~~likely~~Company accounts ~~than~~for ~~not~~income ~~that~~taxes using the ~~position~~assets ~~will~~and beliability ~~sustained,~~method. ~~including~~Under ~~resolution of~~this ~~related~~method, ~~appeals~~deferred orincome ~~litigation~~taxes ~~process,~~are ifrecognized ~~any.~~for ~~The~~tax consequences ~~second~~in ~~step~~future isyears toof ~~measure~~differences between the tax ~~benefit~~bases asof ~~the~~assets ~~largest~~and ~~amount~~liabilities ~~that~~and ~~is more~~their ~~than~~reported ~~50%~~amounts ~~likely~~in ofthe financial ~~being~~statements ~~realized~~at ~~upon~~each ~~settlement~~year-end. AsDeferred oftax ~~June~~assets ~~30,~~and ~~2020~~liabilities ~~and~~are ~~December~~measured ~~31,~~using ~~2019,~~enacted tax rates applicable for the ~~Company~~differences ~~did~~that ~~not~~are ~~have~~expected ~~any uncertain~~to ~~tax~~affect ~~positions~~taxable income.

~~Functional~~The Company adopts ~~currency~~a more likely than not threshold and ~~foreign~~a ~~currency~~two-step ~~translation~~approach for the tax position measurement and ~~transactions~~financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation process, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. As of September 30, 2020 and December 31, 2019, the Company did not have any uncertain tax positions.

~~The~~Functional ~~Company’s~~currency ~~functional~~ and ~~reporting~~foreign currency istranslation the U.S. dollar (“US$”). Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the late date of the months the transactions occurred. The Company had no monetary assets and ~~liabilities denominated in foreign currencies at the balance sheet dates.~~ transactions

~~Related~~The Company’s functional and reporting ~~parties~~currency is the U.S. dollar (“US$”). Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the late date of the months the transactions occurred. The Company had no monetary assets and liabilities denominated in foreign currencies at the balance sheet dates.

~~Parties are~~Related considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, stockholder, or a related corporation.parties

~~Off-Balance~~Parties are considered ~~Sheet~~to ~~Arrangements~~be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, stockholder, or a related corporation.

~~The Company has no off~~Off-~~balance~~Balance ~~sheet~~Sheet ~~arrangements.~~Arrangements

15The Company has no off-balance sheet arrangements.

~~Recent Accounting Pronouncements~~ 15

~~The Company~~Recent ~~reviews~~Accounting ~~new~~Pronouncements ~~accounting standards as issued. The Company does not expect the adoption of any recent accounting standards to have a material impact on its financial statements except for:~~

~~In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes.~~ The ~~guidance~~Company ~~removes~~reviews ~~the~~new following exceptions: 1) exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting ~~for income taxes by: 1) requiring that an entity recognize a franchise tax~~standards ~~(or similar tax) that is partially based on income~~ as anissued. ~~income-based~~The ~~tax~~Company ~~and~~does account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not ~~required~~expect ~~to allocate~~ the ~~consolidated~~adoption ~~amount~~ of ~~current~~any ~~and~~recent ~~deferred~~accounting ~~tax~~standards ~~expense~~ to ahave ~~legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for~~ a ~~legal~~material entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020. Different components of the guidance require retrospective, modified retrospective or prospective adoption, and early adoption is permitted. We are currently assessing whether we will early adopt this guidance, and the impact on ~~our~~its financial statements isexcept ~~not currently estimable.~~for:

In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes. The guidance removes the following exceptions: 1) exception to the incremental ~~Company~~approach ~~does~~for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not ~~expect~~to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the ~~adoption~~general ofmethodology ~~any~~for ~~recently~~calculating ~~issued~~income taxes ~~accounting~~in ~~pronouncements~~an interim period when a year-to-date ~~have~~loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a ~~significant~~franchise ~~impact~~tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal ~~position~~entity that is both not subject to tax and disregarded by the taxing authority), ~~results~~4) requiring that an entity reflect the effect of ~~operations~~an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020. Different components of the guidance require retrospective, modified retrospective or ~~cash~~prospective ~~flows~~adoption, and early adoption is permitted. We are currently assessing whether we will early adopt this guidance, and the impact on our financial statements is not currently estimable.

~~ITEM~~The Company does not expect the adoption ~~3. QUANTITATIVE~~of ~~AND~~any ~~QUALITATIVE~~recently ~~DISCLOSURES~~issued ~~ABOUT~~accounting ~~MARKET~~pronouncements ~~RISK~~to have a significant impact on its financial position, results of operations, or cash flows.

~~We are~~ITEM a3. ~~smaller~~QUANTITATIVE ~~reporting~~AND ~~company~~QUALITATIVE ~~and~~DISCLOSURES ~~are~~ABOUT ~~not~~MARKET ~~required to provide the information under this item pursuant to Regulation S-K~~RISK.

~~ITEM~~We are a smaller reporting company and ~~4. CONTROLS~~are ~~AND~~not ~~PROCEDURES~~required to provide the information under this item pursuant to Regulation S-K.

~~Disclosure Controls~~ITEM ~~and~~4. ~~Procedures~~CONTROLS –AND Our management, with the participation of our Chief Executive Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this ReportPROCEDURES.

~~These controls~~Disclosure ~~are~~Controls ~~designed~~and toProcedures – ~~ensure~~Our ~~that~~management, ~~information~~with ~~required to be disclosed in~~ the ~~reports~~participation weof ~~file~~our orChief ~~submit~~Executive ~~pursuant~~Officer, tohas evaluated the ~~Securities Exchange~~effectiveness ~~Act~~ of our ~~1934~~disclosure iscontrols ~~recorded, processed, summarized~~ and ~~reported~~procedures ~~within~~(as ~~the~~such ~~time~~term ~~periods~~is ~~specified~~defined in ~~the~~Rules ~~rules~~13a-15(e) and ~~forms of~~15d-15(e) under the Securities ~~and~~ Exchange Act ~~Commission~~of 1934, ~~and~~as ~~that~~amended ~~such~~(the ~~information~~“Exchange isAct”)) ~~accumulated~~as ~~and~~of ~~communicated~~the toend ~~our~~of ~~management,~~the ~~including our~~period ~~CEO~~covered toby ~~allow~~this ~~timely decisions regarding required disclosure~~Report.

~~Mao Xu,~~These incontrols ~~his~~are ~~capacity~~designed asto ~~our~~ensure that ~~chief~~information ~~executive~~required ~~officer~~to ~~and~~be ~~chief~~disclosed ~~financial~~in ~~officer~~the ~~(our~~reports ~~principal~~we ~~executive~~file ~~officer,~~or ~~principal~~submit ~~financial officer~~pursuant ~~and~~to ~~principal accounting officer), evaluated~~ the ~~effectiveness~~Securities ofExchange ~~our~~Act ~~disclosure controls and procedures as~~ of ~~June~~1934 ~~30,~~is ~~2020. Based on this evaluation~~recorded, ~~Mr. Mao concluded that~~processed, assummarized ~~of the end of such period, our disclosure controls~~ and ~~procedures~~reported ~~were not~~within ~~effective~~the ~~due~~time ~~to a~~periods ~~lack~~specified ofin ~~accounting personnel with~~ the ~~requisite~~rules ~~knowledge of U.S. GAAP~~ and ~~the~~forms ~~financial reporting requirements~~ of the Securities and Exchange Commission;, ~~insufficient written policies~~ and ~~procedures~~that tosuch ~~ensure~~information ~~the~~is ~~correct~~accumulated ~~application of accounting~~ and ~~financial~~communicated ~~reporting with respect~~ to ~~the~~our ~~current~~management, ~~requirements~~including ofour ~~GAAP~~CEO ~~and~~to ~~SEC~~allow ~~disclosure~~timely ~~requirements; and a~~decisions ~~lack~~regarding ofrequired ~~segregation of duties, in that we only had one person performing all accounting-related duties~~disclosure.

~~Inherent Limitations~~Mao ~~– Our management~~Xu, ~~including~~in ~~our~~his ~~Chief~~capacity ~~Executive~~as ~~Officer, do not expect that~~ our ~~disclosure~~chief ~~controls~~executive officer and ~~procedures~~chief ~~will~~financial ~~prevent~~officer ~~all~~(our ~~error~~principal ~~and~~executive ~~all fraud. A control system~~officer, noprincipal ~~matter~~financial ~~how~~officer ~~well conceived~~ and ~~operated,~~principal ~~can~~accounting ~~provide~~officer), ~~only~~evaluated ~~reasonable, not absolute, assurance that~~ the ~~objectives~~effectiveness of ~~the~~our ~~control~~disclosure ~~system are met. The design of any system of~~ controls isand ~~based~~procedures inas ~~part upon certain assumptions about the likelihood~~ of ~~future~~September ~~events~~30, ~~and~~2020. ~~there~~Based ~~can~~on bethis noevaluation, ~~assurance that~~Mr. ~~any~~Mao ~~design~~concluded ~~will succeed in achieving its stated goals under all potential future conditions. Further~~that, ~~the~~as ~~design~~ of a ~~control system must reflect~~ the ~~fact~~end ~~that~~of ~~there~~such ~~are resource constraints~~period, ~~and~~our ~~the~~disclosure ~~benefits of~~ controls ~~must~~and beprocedures ~~considered~~were ~~relative to~~not ~~their~~effective ~~costs.~~due ~~Because~~to a lack of ~~the~~accounting ~~inherent~~personnel ~~limitations~~with inthe ~~all~~requisite ~~control~~knowledge ~~systems, no evaluation~~ of ~~controls~~U.S. ~~can~~GAAP ~~provide~~and ~~absolute~~the ~~assurance that~~financial ~~all~~reporting ~~control~~requirements ~~issues and instances~~ of ~~fraud,~~the ifSecurities ~~any,~~and Exchange ~~within~~Commission; ~~our~~insufficient ~~company~~written ~~have~~policies ~~been~~and ~~detected. These~~procedures ~~inherent~~to ~~limitations include~~ensure the ~~realities~~correct ~~that~~application ~~judgments~~of inaccounting ~~decision-making can be faulty,~~ and ~~that~~financial reporting ~~breakdown~~with ~~can~~respect ~~occur~~to ~~because~~the ofcurrent ~~simple~~requirements ~~error or mistake. In particular, many~~ of ~~our~~GAAP ~~current~~and ~~processes~~SEC ~~rely~~disclosure ~~upon~~requirements; ~~manual reviews~~ and ~~processes~~a tolack ~~ensure~~of ~~that~~segregation ~~neither~~of ~~human error~~duties, ~~nor~~in ~~system~~that ~~weakness~~we ~~has~~only ~~resulted~~had inone ~~erroneous~~person ~~reporting~~performing ofall ~~financial~~accounting-related ~~data~~duties.

~~Changes~~Inherent Limitations in– ~~Internal~~Our ~~Control~~management, ~~over~~including ~~Financial~~our ~~Reporting~~Chief –Executive ~~There~~Officer, ~~were~~do nonot ~~changes~~expect inthat our ~~internal~~disclosure ~~control~~controls ~~over~~and ~~financial~~procedures will ~~reporting~~prevent ~~during~~all ~~our~~error ~~six~~and ~~month~~all ~~period~~fraud. A ~~ended~~control ~~June~~system, 30no matter how well conceived and operated, ~~2020~~can provide only reasonable, not ~~which~~absolute, ~~were~~assurance ~~identified~~that inthe ~~conjunction~~objectives ~~with~~of ~~management’s~~the ~~evaluation~~control system are met. The design of any system of controls is ~~required~~based byin ~~paragraph~~part ~~(d)~~upon certain assumptions about the likelihood of ~~Rules~~future ~~13a-15~~events, and ~~15d-15~~there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the ~~Exchange~~design ~~Act~~of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that ~~have~~all control ~~materially~~issues ~~affected~~and instances of fraud, orif ~~are~~any, ~~reasonably~~within our company have been detected. These inherent limitations include ~~likely~~the torealities ~~materially~~that ~~affect~~judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our ~~internal~~current ~~control~~processes ~~over~~rely ~~financial~~upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.

16Changes in Internal Control over Financial Reporting – There were no changes in our internal control over financial reporting during nine month period ended September 30, 2020, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~PART II. OTHER INFORMATION~~16

~~ITEM 1~~PART II. ~~LEGAL~~ ~~PROCEEDINGS~~OTHER INFORMATION

~~None~~ITEM 1. LEGAL PROCEEDINGS

~~ITEM 1A. RISK FACTORS~~None

~~Reference is~~ITEM ~~made to the risks and uncertainties disclosed in Item~~ 1A ~~of our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”), which is incorporated by reference into this report~~. ~~Prospective~~RISK investors are encouraged to consider the risks described in our 2019 Form 10-K, our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.FACTORS

~~ITEM~~Reference is made to the risks and uncertainties 2disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”), which is incorporated by reference into this report. ~~UNREGISTERED~~ ~~SALES~~Prospective OFinvestors ~~EQUITY~~are ~~SECURITIES~~encouraged ~~AND~~to ~~USE~~consider OFthe ~~PROCEEDS~~risks described in our 2019 Form 10-K, our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

~~We have~~ITEM ~~not~~2. ~~issued~~UNREGISTERED ~~any~~SALES ~~unregistered~~OF ~~equity~~EQUITY ~~securities~~SECURITIES ~~since~~AND ~~January~~USE 1,OF ~~2020.~~PROCEEDS

~~ITEM~~We have not issued any unregistered equity ~~3. DEFAULTS~~securities ~~UPON~~since ~~SENIOR~~January ~~SECURITIES~~1, 2020.

~~None~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~ITEM 4. MINE SAFETY DISCLOSURES~~None

~~Not applicable~~ITEM 4. MINE SAFETY DISCLOSURES

~~ITEM 5. OTHER~~Not ~~INFORMATION~~applicable

~~Not applicable~~ITEM 5. OTHER INFORMATION

~~ITEM 6. EXHIBITS~~Not applicable

Exhibit No.		Description
2.1		Exchange Agreement (incorporated herein by reference to Exhibit 2.2 to Form 10 Registration Statement)
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1/A Amendment No. 1 filed February 29, 2008).
3.2		Certificate of Amendment to Articles of Incorporation changing the name of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Report on Form 10-K filed March 30, 2012).
3.3		Certificate of Amendment to Articles of Incorporation increasing the number of authorized shares of capital stock ((incorporated by reference to Exhibit 3.3 to the Registrant’s Report on Form 10-Q filed August 9, 2018).
3.4		Certificate of Designation authorizing the issuance of Series A Preferred Stock (incorporated by reference to Exhibit 3.4 to the Registrant’s Report on Form 10-Q filed August 9, 2018).
3.5		Certificate of Amendment to Articles of Incorporation changing the name of the Company to QHY Group (incorporated herein by reference to Exhibit 3.5 to the Company’s Report on Form 10-Q filed August 9, 2018).
3.6		Amended and Restated By Laws Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Report on Form 10-K filed March 30, 2012).
31.1		Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of Exchange Act.
32.1		Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(18 U.S.C. Section 1350).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

ITEM 6. EXHIBITS

Exhibit No.		Description
2.1		Exchange Agreement (incorporated herein by reference to Exhibit 2.1 to Form 10 Registration Statement)
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1/A Amendment No. 1 filed February 29, 2008).
3.2		Certificate of Amendment to Articles of Incorporation changing the name of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Report on Form 10-K filed March 30, 2012).
3.3		Certificate of Amendment to Articles of Incorporation increasing the number of authorized shares of capital stock (incorporated by reference to Exhibit 3.3 to the Registrant’s Report on Form 10-Q filed August 9, 2018).
3.4		Certificate of Designation authorizing the issuance of Series A Preferred Stock (incorporated by reference to Exhibit 3.4 to the Registrant’s Report on Form 10-Q filed August 9, 2018).
3.5		Certificate of Amendment to Articles of Incorporation changing the name of the Company to QHY Group (incorporated herein by reference to Exhibit 3.5 to the Company’s Report on Form 10-Q filed August 9, 2018).
3.6		Amended and Restated By Laws Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Report on Form 10-K filed March 30, 2012).
31.1		Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of Exchange Act.
32.1		Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(18 U.S.C. Section 1350).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

~~SIGNATURES~~17

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on July 21, 2019.SIGNATURES

~~QHY~~Pursuant ~~Group~~to ~~By:~~the ~~/s/~~requirements ~~Mao~~of XuSection ~~Mao~~12 of Xuthe ~~President~~Securities and Exchange Act of 1934, ~~Chief~~the ~~Executive~~Registrant ~~Officer~~has ~~(principal~~duly ~~executive~~caused ~~and~~this ~~financial~~Report ~~officer)~~to be signed on its behalf by the undersigned, thereunto duly authorized on November 5, 2020.

18QHY Group By: /s/ Mao Xu Mao Xu President, Chief Executive Officer (principal executive and financial officer)

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