U. S. Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

	[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended March 31, 2019

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

		For the transition period from _____ to _____

Commission File No. 0-54112

	DONGXING INTERNATIONAL INC.
	(Exact Name of Registrant in its Charter)

Delaware		16-1783194
(State or Other Jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

Room 1001, International Finance Building, 633 Keji'er Street, Songbei District, Harbin, Heilongjiang Province, P.R. China 150028
	(Address of Principal Executive Offices)
	Issuer’s Telephone Number: 86-1394-6000887
	(Registrant's telephone number, including area code)

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

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

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

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. (Check One)

Large accelerated filer__ Accelerated filer__ Non-accelerated filer__ Smaller reporting company [X]

Emerging growth company [X]

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

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:

May 20, 2019

Common Voting Stock: 30,000,000

DONGXING INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED MARCH 31, 2019

TABLE OF CONTENTS

*Part I. Financial Information*		*Page No.*

Item 1.	Financial Statements (unaudited):	1

	Consolidated Balance Sheets (Unaudited) – March 31, 2019 and December 31, 2018	1

	Consolidated Statements of Comprehensive Loss (Unaudited) – for the Three Months Ended March 31, 2019 and 2018	2

	Consolidated Statements of Stockholders’ Deficiency (Unaudited) – for the Three Months Ended March 31, 2019 and 2018	3

	Consolidated Statements of Cash Flows (Unaudited) – for the Three Months Ended March 31, 2019 and 2018	4

	Notes to Consolidated Financial Statements (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14

Item 4.	Controls and Procedures	14

*Part II. Other Information*

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Mine Safety Disclosures	15

Item 5.	Other Information	16

Item 6.	Exhibits	16

	Signatures	16

Dongxing International Inc.
Consolidated Balance Sheets
(Unaudited)

		March 31, 2019			December 31, 2018
ASSETS
Current Assets
Cash	$	509		$	638
Accounts receivable, net of allowance of $20,441 and $20,055, respectively		41,314			42,110
Inventories		2,696			2,645
Project in progress		57,170			56,089
Other current assets		517			7,889
Total Current Assets		102,206			109,371

Other Assets
Office equipment, net of accumulated depreciation of $9,377 and $8,865, respectively		2,371			2,661
Total Assets	$	104,577		$	112,032

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Liabilities
Current Liabilities
Due to related parties	$	459,251		$	418,436
Advance from customers		57,170			56,089
Accrued expenses and other payables		59,321			70,530
Total Current Liabilities		575,742			545,055
Total Liabilities		575,742			545,055

Stockholders' Deficiency
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.0001 par value, 250,000,000 shares authorized, 30,000,000 shares issued and outstanding		3,000			3,000
Additional paid-in capital		660,041			660,041
Accumulated deficit		(1,073,629	)		(1,045,478	)
Accumulated other comprehensive income (loss)		(4,079	)		4,007
Total Stockholders' Deficiency of Dongxing International Inc.		(414,667	)		(378,430	)
Non-controlling interest		(56,498	)		(54,593	)
Total Stockholders' Deficiency		(471,165	)		(433,023	)
Total Liabilities and Stockholders’ Deficiency	$	104,577		$	112,032

The accompanying notes are an integral part of these consolidated financial statements.

Dongxing International Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)

	For the Three Months Ended
	March 31,
	2019			2018
Revenue	$	2,763		$	1,396
Cost of revenue		1,423			1,083
Gross profit		1,340			313

Operating expenses
Selling, general and administrative expense		30,970			31,117
Total operating expenses		30,970			31,117

Loss before provision for income tax		(29,630	)		(30,804	)
Provision for income tax		—			—
Net loss		(29,630	)		(30,804	)
Less: Loss attributable to non-controlling interest		(1,479	)		(1,532	)
Net loss attributable to Dongxing International Inc.		(28,151	)		(29,272	)

Other comprehensive loss
Foreign currency translation adjustment		(8,512	)		(11,750	)
Comprehensive loss		(38,142	)		(42,554	)
Less: Comprehensive loss attributable to non-controlling interest		(1,905	)		(2,119	)
Comprehensive loss attributable to Dongxing International Inc.	$	(36,237	)	$	(40,435	)

Loss per share - Basic and Diluted	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding - Basic and Diluted		30,000,000			30,000,000

The accompanying notes are an integral part of these consolidated financial statements.

Dongxing International Inc.
Consolidated Statements of Stockholders' Deficiency
(Unaudited)


	Preferred Stock				Common Stock
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Stock Subscription Receivable		Accumulated Deficit			Accumulated Other Comprehensive Income (loss)			Non- Controlling Interest			Total
Balance at December 31, 2018		—	$	—		30,000,000	$	3,000	$	660,041	$	—	$	(1,045,478	)	$	4,007		$	(54,593	)	$	(433,023	)
Net loss		—		—		—		—		—		—		(28,151	)		—			(1,479	)		(29,630	)
Foreign currency translation adjustment		—		—		—		—		—		—		—			(8,086	)		(426	)		(8,512	)
Balance at March 31, 2019		—	$	—		30,000,000	$	3,000	$	660,041	$	—	$	(1,073,629	)	$	(4,079	)	$	(56,498	)	$	(471,165	)

	Preferred Stock				Common Stock
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Stock Subscription Receivable			Accumulated Deficit			Accumulated Other Comprehensive Income (loss)			Non- Controlling Interest			Total
Balance at December 31, 2017		—	$	—		30,000,000	$	3,000	$	850,041	$	(200,000	)	$	(876,415	)	$	(14,918	)	$	(46,700	)	$	(284,992	)
Net loss		—		—		—		—		—		—			(29,272	)		—			(1,532	)		(30,804	)
Foreign currency translation adjustment		—		—		—		—		—		—			—			(11,163	)		(587	)		(11,750	)
Balance at March 31, 2018		—	$	—		30,000,000	$	3,000	$	850,041	$	(200,000	)	$	(905,687	)	$	(26,081	)	$	(48,819	)	$	(327,546	)

The accompanying notes are an integral part of these consolidated financial statements.

Dongxing International, Inc. Consolidated Statements of Cash Flows
(Unaudited)

	For the Three Months Ended
	March 31,
	2019			2018
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(29,630	)	$	(30,804	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		340			217
Reversal of bad debt provision		—			(3,300	)
Change in operating assets and liabilities:
Accounts receivable		1,604			3,300
Inventory		—			11
Lease payment receivable		—			3,929
Prepaid rent		—			9,098
Other current assets		7,510			14,498
Accrued expenses and other payables		(12,543	)		(3,549	)
Net cash used in operating activities		(32,719	)		(6,600	)

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of office equipment		—			(1,731	)
Net cash used in investing activities		—			(1,731	)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from related party loan, net of repayment		32,578			7,928
Net cash provided by financing activities		32,578			7,928

Effect of exchange rate changes on cash		12			58
DECREASE IN CASH		(129	)		(345	)
Cash - beginning of period		638			1,644
Cash - ending of period	$	509		$	1,299

Supplement disclosure information
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 - CORPORATE INFORMATION

Dongxing International Inc. (the “Company” or “Dongxing”) was incorporated in June 2010 in accordance with the laws of the State of Delaware under the name Apex 1, Inc. On November 19, 2015 the Company's corporate name was changed to “Dongxing International Inc.”

On September 30, 2016, the Company entered into and closed a share exchange agreement with Central Dynamic Holdings Limited (“Central Dynamic”) and its shareholders. Pursuant to the terms of the exchange agreement, the shareholders, who together owned 100% of the ownership rights in Central Dynamic, agreed to transfer all of the issued and outstanding shares of common stock into the Company in exchange for the issuance of an aggregate of 25,000,000 shares of the Company’s common stock, par value $0.0001 per share.

As a result of the share exchange, the Central Dynamic shareholders become the majority shareholders and have control of the Company. The acquisition of Central Dynamic was accounted for as a reverse merger effected by a share exchange agreement. Dongxing is considered the legal acquirer and Central Dynamic and its subsidiaries is considered the accounting acquirer. Accordingly, the historical financial statements presented are those of Central Dynamic and its subsidiaries.

Central Dynamic Holdings Limited is incorporated under the laws of the British Virgin Islands. Dongxing Holdings Limited (“Dongxing BVI”), which is a wholly owned subsidiary of Central Dynamic, is also incorporated under the laws of the British Virgin Islands. Dongxing Holdings Limited (“Dongxing HK”), a wholly owned subsidiary of Dongxing BVI, is incorporated under the laws of Hong Kong. Harbin Donghui Technology Co., Ltd. (“Harbin Donghui”), a wholly-owned subsidiary of Dongxing HK, is incorporated under the laws of the People's Republic of China ("PRC"). Harbin Dongxing Energy Saving Technical Service Co., Ltd. (“Harbin Dongxing”), a limited liability company incorporated under the laws of the PRC, is effectively and substantially controlled by Harbin Donghui through a series of agreements known as variable interest agreements (the “VIE agreements”) dated March 30, 2016 pursuant to which Harbin Dongxing became Harbin Donghui’s contractually controlled affiliate. The VIE Agreements provide that Harbin Donghui will receive 95% of the net profit or loss derived from the operations of Harbin Dongxing and its subsidiaries. Central Dynamic and its wholly owned subsidiaries, Dongxing BVI, Dongxing HK and Harbin Donghui, are holding companies with no business operation.

Harbin Dongxing provides Energy Diagnosis, Project Design, Project Auditing, Equipment Procurement Services, Construction Engineering, Personnel Training, and Technology Consulting to customers. Harbin Dongxing Online Technology Co., Ltd (“Dongxing Online”), which is 100% owned by Harbin Dongxing, engages in Software Development, Website Production, Systems Integration, Web Merchandise Sales, and Import and Export of Goods. Until November 4, 2016, Harbin Dongrong Business Management Consulting Co., Ltd (“Harbin Dongrong”), which is 100% owed by Harbin Dongxing, engaged in lighting design and construction for urban roads and landscapes. Since that date, the scope of Harbin Dongrong's business has entailed business consulting, marketing planning, and advertising.

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had a working capital deficit of $473,536 and an accumulated deficit of $1,073,629 as of March 31, 2019, at which time the Company's stockholders’ deficiency was $414,667. The Company has not generated cash or income from its operation since inception. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company plans to rely on the proceeds from loans from both unrelated and related parties to provide the resources necessary to fund the development of our business plan and operations. The Company also plans to raise funds from domestic and foreign banks and/or financial institutions to increase working capital in order to meet capital demands. However, no assurance can be given that the Company will be successful in raising additional capital.

NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation and Consolidation

The accompanying unaudited interim consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present fairly the financial position of the Company as of March 31, 2019 and the results of operations and cash flows for the periods ended March 31, 2019 and 2018. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. The balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on April 15, 2019.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and entities controlled through the VIE agreements. All significant inter-company accounts and transactions have been eliminated in consolidation.

Certain amounts have been reclassified to conform to current year presentation.

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

Lease

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on their balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

The new standard is effective for us on January 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before January 1, 2019. The new standard provides a number of optional expedients in transition. The Company elected the package of practical expedients which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months.

Foreign Currency

The Company and its subsidiaries maintain their books and records in their functional currency, RMB or HKD. The consolidated financial statements of the Company are translated from Renminbi (“RMB”) or Hong Kong dollars (“HKD”) into United States dollars (U.S. Dollars or “US$” or “$”). Accordingly, assets and liabilities of the Company and its subsidiaries are translated from RMB or HKD to U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statement of comprehensive income (loss) and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income (loss).

The exchange rates used to translate amounts in RMB or HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are based on the rates as published on the website of People’s Bank of China and are as follows:

	March 31, 2019	December 31, 2018
Balance sheet items, except for equity accounts	US$1=RMB6.7335	US$1=RMB6.8632
	US$1=HKD7.8498	US$1=HKD7.8329

	Three Months Ended March 31
	2019	2018
Items in the statements of comprehensive loss and cash flows	US$1=RMB6.7468	US$1=RMB6.3632
	US$1=HKD7.8458	US$1=HKD7.8278

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

Foreign Currency (continued)

No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the above rates. The value of RMB against U.S. dollars and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of U.S. dollar reporting.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard bodies that may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

NOTE 4 - RELATED PARTY TRANSACTIONS AND BALANCES

Due to related parties are non-interest bearing and due on demand. The balance of due to related parties consists of the following:

	Notes		March 31, 2019		December 31, 2018
Stockholders
Cheng, Zhao		(1)	$	417,236	$	369,702
Jufang, Yang		(3)		7,426		7,285
Other related parties
Harbin Dongke Optronics Science and Technology Co., Ltd. ("Dongke")		(2)		34,589		41,449
Total due to related parties			$	459,251	$	418,436

(1) Mr. Cheng Zhao is the Company's CEO and a stockholder. During the three months ended March 31, 2019 and 2018, Mr. Cheng advance $ 40,221 and $ 14,875 respectively to the Company. On December 29, 2018, the Company signed a lease agreement with Mr. Cheng Zhao to lease office space from Mr. Cheng Zhao in China for approximately $18,000 (RMB120,000) per annum for the rent period from January 1, 2019 to December 31, 2019. Rent expense incurred to Mr. Cheng Zhao was approximately $4,400 for the three months ended March 31, 2019.

(2) Dongke is a company organized in China. Mr. Cheng Zhao, stockholder and Chief Executive Officer of the Company, was the president of Dongke until 2015. During the three months ended March 31, 2019 and 2018, the Company made repayment of $7,645 and $6,946 respectively to Dongke on account of prior advances.

(3) Ms. Jufang Yang is a stockholder of the Company.

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 5 - ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:

	March 31, 2019		December 31, 2018
Accrued expenses	$	23,679	$	38,115
Tax payable		—		516
Deposit payable		25,321		24,843
Salary payable		9,422		6,844
Others		899		212
	$	59,321	$	70,530

NOTE 6 - INCOME TAXES

The Company was incorporated in the United States and has operations in four tax jurisdictions - the United States, the Hong Kong Special Administrative Region (“HK SAR”), the PRC, and the British Virgin Islands (“BVI”).

The Company’s BVI operations are not subject to any taxes according to BVI tax law. The Company’s HK SAR subsidiary is subject to a 16.5% profit tax based on its taxable net profit. The Company’s U.S. operations are subject to income tax according to U.S. tax law.

The Company’s three operating subsidiaries, Harbin Dongxing, Dongxing Online and Harbin Dongrong, are generally subject to PRC enterprise income tax (“EIT”). These three companies are subject to an EIT rate of 25% under China’s Unified Enterprise Income Tax Law (“New Tax Law”).

A reconciliation of the provision for income taxes determined at the U.S. statutory rate of 21% to the Company's effective income tax rate is as follows:

	Three Months ended March 31,
	2019			2018
Loss before provision for income tax	$	(29,630)		$	(30,804	)
U.S. federal corporate income tax rate		21	%		21	%
Expected U.S. income tax credit		(6,222	)		(6,469	)
Tax rate difference between U.S. and foreign operations		(1,185)			(1,226)
Change of valuation allowance		7,407			7,695
Effective tax expense	$	-		$	-

The Company had deferred tax assets as follows:
		March 31,			December 31,
		2019			2018
Net operating losses carried forward	$	223,985		$	225,558
Less: Valuation allowance		(223,985)			(225,558	)
Net deferred tax assets	$	-		$	-

DONGXING INTERNATIONAL INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 6 - INCOME TAXES (continued)

As of March 31, 2019, the Company has approximately $897,000 net operating loss carryforwards available in China and HK SAR to reduce future taxable income. The net operating loss of Chinese subsidiaries could be carried forward for a period of not more than five years from the year of the initial loss pursuant to relevant PRC tax laws and regulations. The net operating loss from Hong Kong operations can be carried forward with no time limit from the year of the initial loss pursuant to relevant Hong Kong tax laws and regulations. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entity which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets.

As of March 31, 2019 and December 31, 2018, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods, and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during the three months ended March 31, 2019 and 2018, and no provision for interest and penalties is deemed necessary as of March 31, 2019 and December 31, 2018.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion.

The U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduced the U.S. statutory tax rate for corporations from 35% to 21% and created new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires the Company to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. Since the Company’s foreign subsidiaries have not generated income since inception, the Company believes that Tax Act will not have significant impact on the Company’s consolidated financial statements.

NOTE 7 - SUBSEQUENT EVENT

The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements.

ITEM 2.

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

Accounting for Variable Interest

Dongxing International is a holding company whose only asset is an indirect 100% ownership interest in Harbin Donghui, a Wholly Foreign Owned Entity organized under the laws of the People’s Republic of China on January 13, 2016. On March 30, 2016, Harbin Donghui entered into three agreements with Harbin Dongxing and with the equity owners in Harbin Dongxing. Collectively, the VIE agreements provide Harbin Donghui exclusive control over the business of Harbin Dongxing, and provide that 95% of the gain or loss realized by Harbin Dongxing accrues to the account of Harbin Donghui.

The accounting effect of the VIE Agreements between Harbin Donghui and Harbin Dongxing is to cause the balance sheets and financial results of Harbin Dongxing to be consolidated with those of Harbin Donghui, with respect to which Harbin Dongxing is now a variable interest entity. Since the parties to the VIE Agreements were both controlled by Cheng Zhao, who is CEO of both Harbin Donghui and Harbin Dongxing, the financial statements included in this report reflect the consolidation of the results of operations and cash flows of Harbin Dongxing since its inception.

Business of the Company

Harbin Dongxing was organized in 2011 to engage in the distribution, installation and service of lighting systems, primarily for commercial enterprises. The overall goal of our business is to provide customers with programs for achieving cost-savings by reconstruction of a facility's lighting or cost-efficient programs for lighting new facilities. The customers for our services include both commercial enterprises, such as factories and office buildings, and government agencies, including hospitals, schools and roadways.

In July 2013, seeking to take advantage of the opportunities for trade with eastern Russia, we organized Harbin Dongxing Online Business Trading Co., Ltd. ("Dongxing Online") as a subsidiary of Harbin Dongxing for the purpose of effecting online distribution of Chinese lighting products into Russia. Since its organization, Dongxing Online has been engaged in developing the Mengqiao Cross-Border E-commerce Platform, a B2B website initially designed to distribute lighting products from China to commercial customers in Russia. The prototype website (URL: union-bridge.com) now includes over 5,000 products from almost 100 manufacturers.

In 2016 we began to expand the scope of the Mengqiao Platform, to make it a full-fledged participant in China's Belt and Road Initiative. The Belt and Road Initiative, launched in 2013, involves China underwriting billions of dollars of infrastructure investment in countries along the old Silk Road linking China with Europe. China is spending roughly $150bn a year in the 68 countries that have chosen to participate in the Initiative.

Our contribution to the Belt and Road Initiative, toward which we are working, will be the expansion of our Mengqiao Platform to serve as an e-commerce platform facilitating trade and cultural exchange among 64 countries along the Silk Road Economic Belt. Our expanded Mengqiao Platform will realize the principles of the Belt and Road Initiative by integrating its multi-national trading network around a Chinese focus, promoting economic and cultural exchange for the sake of a bilateral win-win. As the majority of the countries that are participating in the Belt and Road Initiative are developing countries with limited access for foreign markets, we expect a strong favorable response from the nations that we invite to participate in the Mengqiao Platform.

Dongxing Online has obtained an import/export license from the Government of China that will allow us to facilitate trade with 64 nations. We expect that initial operations of the Mengqiao Platform will commence several months after we secure the necessary financing. Our budget for initiating commercialization of the website is $2 million, to pay for the initial advertising and promotion activities as well as to build our first after-sales service centers. Full development of the Mengqiao Platform, including development of the 64 national pavilions with accompanying customer service staffing, is budgeted at $20 million.

Results of Operations

The revenue-producing business of Harbin Dongxing at this time consists entirely of the sale and installation of lighting products, primarily in new construction projects. The bulk of our expenses, however, are attributable to our efforts to develop the Mengqiao Platform to participate in the Belt and Road Initiative. For the future, we expect that online sales by Dongxing Online, the subsidiary of Harbin Dongxing responsible for the Mengqiao Platform, will produce the greater portion of our revenue. But those sales will not commence until we launch operations of the Mengqiao Platform.

Our business at this time, therefore, is very seasonal. The weather in Heilongjiang Province is very cold in the first five months of the year, with much snow and ice, making installation of lighting fixtures nearly impossible. Generally, the construction projects in which we are involved are installed during the period from June to December. Project acceptance and payment usually occurs in November and December. As a result, the bulk or our revenues are realized in the second half of the year, particularly the fourth quarter.

Our revenue for the first quarter of 2019 was nominal: $2,763 on which we recorded a gross profit of $1,340. That revenue, however, represented a 98% increase over revenue of $1,396 recorded in the first quarter of 2018, on which we realized a gross profit of $313. In both periods our attention was primarily focused on development of the Mengqiao Platform. As a result, sales revenue from our lighting business lagged. Our plan is that, when we are able to launch the Mengqiao Platform, we will use it to leverage growth in our lighting equipment business.

Our operating expenses of $30,970 and $31,117 for the first quarters of 2019 and 2018, respectively, were comprised, primarily, of professional expenses, salaries and office rent. Our labor cost is high, relative to revenue, because the majority of our employees are engaged in developing our online platform.

Our net losses of $29,630 for the three months ended March 31, 2019 and $30,804 for the three months ended March 31, 2018 were identical to our losses from operations for those periods, as we incurred no interest expense nor any other income or expense, nor had income to be taxed. Our VIE agreements, however, assign to Harbin Donghui only 95% of the profit or loss reported by Harbin Dongxing. For that reason, we reduced the net loss on the Dongxing International consolidated statements by an allocation to non-controlling interest. After that allocation, the net loss attributable to the shareholders of Dongxing International Inc. was $28,151 ($0.00 per share) for the three months ended March 31, 2019 and $29,272 ($0.00 per share) for the three months ended March 31, 2018. We expect to continue to incur losses until our online marketing business is launched, as we are paying the expenses of that business without any offsetting revenue.

Our reporting currency is the U.S. dollar. Our local currency, the Renminbi (RMB), is our functional currency. Results of operations and cash flow are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China on the balance sheet date. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the three months ended March 31, 2019 foreign currency translation adjustments yielded other comprehensive loss of $8,512, while such adjustments during the three months ended March 31, 2018 provided us other comprehensive loss of $11,750.

Liquidity and Capital Resources

The development of our company has been funded primarily by contributions to capital and loans from our equity-holders. As a result, at March 31, 2019 we had no debt other than $459,251 owed to related parties. This included $34,589 owed to Harbin Dongke Optronics Science and Technology Co., Ltd., representing lighting products sold to Harbin Dongrong in 2013 for a project that is not yet completed. The debt became consolidated with our balance sheet when our Chairman, Cheng Zhao, contributed Harbin Dongrong to Harbin Dongxing. A payment of $7,645 in reduction of the debt was made during the three months ended March 31, 2019, and the remainder will be satisfied when the project is completed, Harbin Dongrong is paid, and in turn Harbin Dongrong pays Harbin Dongke. Cheng Zhao was the General Manager of Harbin Dongke until the end of 2015.

At March 31, 2019 we had a working capital deficit of $(473,536), an increase in the deficit of $37,852 during the first quarter of 2019. Our company is viable despite the working capital deficit because the amount we owe to related parties constitutes almost 97% of the deficit, and we will not be required to satisfy the related party debts until we have sufficient cash flow.

Our operations used $32,719 in cash during the three months ended March 31, 2019 and $6,600 in cash during the first quarter of 2018. Our use of cash during the first quarter of 2019 exceeded our net loss primarily due to our amortization of our accrued expenses. During the first quarter of 2018, on the other hand, our use of cash was substantially less than our net loss primarily because we amortized prepaid rent and other current assets.

In both the first quarter of 2019 and the first quarter of 2018, the cash used in our operations (plus $1,731 used to purchase equipment in the first quarter of 2018) was funded by loans, $32,578 and $7,928 respectively, from our Chairman.

The opinion of our independent registered public accounting firm on our financial statements for the year ended December 31, 2018 expresses substantial doubt as to whether our company is a going concern, due to our limited revenue and negative cash flow. We believe that our related parties will continue to fund our operations for the foreseeable future, and so believe that we can sustain operations at our current level. However, full implementation of our business plan will require significant capital infusions or third party loans. We have no commitment for either equity or debt financing at this time.

Restrictions on Transfers of Funds

The VIE Agreements among Harbin Donghui and the Harbin Dongxing Shareholders provide that Harbin Donghui is entitled to 95% of the net profits (and will bear all losses) arising from Harbin Dongxing’s operations plus a monthly fee of RMB 10,000 ($1,485). The VIE Agreements also entitle Harbin Donghui to manage the operations and control the cash flows of Harbin Dongxing. Although Harbin Donghui is entitled to Harbin Dongxing’s profits, any distributions of such profits from Harbin Donghui to our U.S. parent company must comply with applicable Chinese laws affecting payments from foreign invested enterprises incorporated in China to their equity holders.

The sales revenue and expenses of Harbin Dongxing are denominated in RMB. The Chinese government strictly regulates conversion of RMB into foreign currencies. Currently, Harbin Dongxing and Harbin Donghui may purchase foreign currencies for settlement of current account transactions, including payments of dividends, without the approval of the State Administration of Foreign Exchange (“SAFE”), by complying with certain procedural requirements. Pursuant to applicable Chinese laws and regulations, foreign invested enterprises incorporated in China, such as Harbin Donghui, are required to apply for “Foreign Exchange Registration Certificates.” Currently, conversion within the scope of the “current account” (e.g. remittance of foreign currencies for payment of dividends, trade and service-related foreign exchange transactions, etc.) can be effected without requiring the approval of SAFE, but must be effected through authorized Chinese banks in accordance with regulatory procedures. However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE. Compliance with those procedural requirements can result in delays in obtaining foreign exchange, which could interfere with offshore activities by the Company, such as acquisitions, offshore investments, or the payment of dividends to the Company’s shareholders. Because of the effort involved in obtaining foreign currencies in exchange for RMB, the Company intends to pay most of the operating expenses of its U.S. parent from dollars loaned to the Company by related parties.

Under PRC regulations, the Company’s operating subsidiary, Harbin Dongxing, may pay dividends only out of its accumulated profits, if any, determined in accordance with the accounting standards and regulations prevailing in the PRC. In addition, Harbin Dongxing is required to set aside at least 10% of its accumulated profits each year, if any, to fund the statutory general reserve until the balance of the reserve reaches 50% of its registered capital. The amount in excess of 10% of accumulated profits that may be contributed to the statutory general reserve is at Harbin Dongxing’s discretion. The statutory general reserve is not distributable in the form of cash dividends to the Company and can be used to make up cumulative prior year losses, if any, and may be converted into share capital by the issue of new shares to shareholders in proportion to their existing shareholdings, or by increasing the par value of the shares currently held by them, provided that the reserve balance after such use is not less than 25% of the registered capital. As of March 31, 2019, no amount has been appropriated from retained earnings and set aside for the statutory reserve by Harbin Dongxing. There remains approximately 2,500,000 RMB ($371,278) to be appropriated from our future profits and set aside for the statutory reserve until we have satisfied the reserve requirement.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that have or will have a material effect on the Company’s financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. As of March 31, 2019, Cheng Zhao, our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures have the following material weaknesses:

The relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system.
Our internal financial staff lack expertise in identifying and addressing complex accounting issued under U.S. Generally Accepted Accounting Principles.
Our Chief Financial Officer is not familiar with the accounting and reporting requirements of a U.S. public company.
We have not developed sufficient documentation concerning our existing financial processes, risk assessment and internal controls.

Based on his evaluation, Mr. Cheng concluded that the Company’s system of disclosure controls and procedures was not effective as of March 31, 2019 for the purposes described in this paragraph.

Changes in Internal Controls. There was no change in internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during Dongxing International Inc.’s first fiscal quarter that has materially affected or is reasonably likely to materially affect Dongxing International Inc.’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings
	None.

Item 1A	Risk Factors
	There have been no material changes from the risk factors included in the Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2	Unregistered Sale of Securities and Use of Proceeds
	(a) Unregistered sales of equity securities
	There were no unregistered sales of equity securities by the Company during the first quarter of fiscal 2019.

	(c) Purchases of equity securities
	The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the first quarter of fiscal 2019.

Item 3.	Defaults Upon Senior Securities.
	None.

Item 4.	Mine Safety Disclosures.
	Not Applicable.

Item 5.	Other Information.
	None.

Item 6.	Exhibits.

	31	Rule 13a-14(a) Certification
	32	13a-14(b) Certification
	101.INS	XBRL Instance
	101.SCH	XBRL Schema
	101.CAL	XBRL Calculation
	101.DEF	XBRL Definition
	101.LAB	XBRL Label
	101.PRE	XBRL Presentation

SIGNATURES

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

DONGXING INTERNATIONAL INC.

Date: May 20, 2019

By: /s/ Cheng Zhao

Cheng Zhao

Chief Executive Officer and Chief Financial Officer

Dongxing International Inc. 10-Q