UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

	For the quarterly period ended June 30, 2014

Commission File Number: 000-53771

CN DRAGON CORPORATION

(Exact Name of registrant as specified in its charter)

Nevada		98-0358149
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


8/F Paul Y Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong (Address of principal executive offices)


	(+852) 2772 9900
(Registrant’s telephone number, including area code )

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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).

[ ] Yes [ ] No

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

Large accelerated filer [ ]		Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)		Smaller reporting company [X]

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

[ ] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of June 30, 2014, there were 81,010,491 shares of our common stock [par value $0.001] issued and outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

CN DRAGON CORPORATION

CONSOLIDATED BALANCE SHEETS

AS AT JUNE 30, 2014 AND MARCH 31, 2014

(Stated in US Dollars)

			As at
	Note		June 30, 2014		March 31, 2014
ASSETS			(Unaudited)		(Audited)
Current assets
Cash and cash equivalents	2(l)	$	1,263	$	2,785
Deposits and prepaid expense			6,164		6,159
Other receivables			63,324		43,583


Total current assets			70,751		52,527
Property, plant and equipment, net	3		19,399		22,185


TOTAL ASSETS		$	90,150	$	74,712


LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	85,104	$	45,989
Accrued liabilities			252,638		252,423
Loans payable to shareholders			722,499		694,649
Other payables			1,000		1,000


Total current liabilities			1,061,241		994,061

TOTAL LIABILITIES		$	1,061,241	$	994,061

See accompanying notes to consolidated financial statements

CN DRAGON CORPORATION

CONSOLIDATED BALANCE SHEETS (Continued)

AS AT JUNE 30, 2014 AND MARCH 31, 2014

(Stated in US Dollars)

			As at
	Note		June 30, 2014		March 31, 2014
			(Unaudited)		(Audited)
STOCKHOLDERS’ EQUITY

Preferred Stock, $0.001 par value,
375,000,000 shares authorized,
no share issued and outstanding		$	-	$	-

Common stock - $0.001 par value
250,000,000 shares authorized;
81,010,491 shares issued and outstanding as of
June 30, 2014 and March 31, 2014	5	$	81,011	$	81,011

Additional paid-in capital			7,029,442		7,029,442
Accumulated deficits			(9,646,007)		(9,595,006)
Accumulated other comprehensive income			1,564,463		1,565,204


		$	(971,091)	$	(919,349)


TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY		$	90,150	$	74,712

See accompanying notes to consolidated financial statements

CN DRAGON CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013

(Stated in US Dollars)

			Periods ended June 30
	Note		2014		2013
			(Unaudited)		(Unaudited)

Net revenues		$	4,526	$	29,933
Cost of net revenues			-		-


Gross profit			4,526		29,933
Operating expenses:
General and administrative			(55,527)		(93,062)


Loss before income taxes			(51,001)		(63,129)

Income taxes	6		-		-


Net Loss			(51,001)		(63,129)
Other comprehensive income:
Foreign currency translation
adjustments			(741)		15,893


Comprehensive gain/(loss)		$	(51,742)	$	(47,236)


Basic and diluted loss per share	5	$	(0.0006)	$	(0.0006)


Weighted average number of share
outstanding	5		81,010,491		81,010,491

See accompanying notes to consolidated financial statements

CN DRAGON CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AND ACCUMULATED OTHER COMPREHENSIVE INCOME

FOR THE PERIODS ENDED JUNE 30, 2014 AND MARCH 31, 2014

(Stated in US Dollars)

	Preferred									Accumulated
	Stock	Common Stock				Additional				other
	Number of	Number of				Paid-in		Accumulated		Comprehensive
	Shares	Shares		Amount		Capital		Deficit		Income		Total

Balance, April 1, 2013	-	81,010,491	$	81,011	$	7,029,442	$	(9,403,745)	$	1,620,516	$	(672,776)
Net loss	-	-		-		-		(191,261)		-		(191,261)
Foreign currency Translation Adjustment	-	-		-		-		-		(55,312)		(55,312)

Balance, March 31, 2014	-	81,010,491	$	81,011	$	7,029,442	$	(9,595,006)	$	1,565,204	$	(919,349)

Balance April 1, 2014	-	81,010,491	$	81,011	$	7,029,442	$	(9,595,006)	$	1,565,204	$	(919,349
Net loss	-	-		-		-		(51,001)		-		(51,001)
Foreign currency Translation Adjustment	-	-		-		-		-		(741)		(741)
Balance June 30, 2014	-	81,010,491	$	81,011	$	7,029,442	$	(9,646,007)	$	1,564,463	$	(971,091)

See accompanying notes to consolidated financial statements

CN DRAGON CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013

(Stated in US Dollars)

		For the periods ended June 30,
		2014		2013
Cash flows from operating activities		(Unaudited)		(Unaudited)
Net loss	$	(51,001)	$	(63,129)
Depreciation		2,827		2,872

Adjustments to reconcile net income to net cash provided
by operating activities:
Deposits and prepaid expense		(47)		(21,117)
Other receivables		(19,741)		-
Accrued liabilities		215		(9,332)
Amount due to a director		27,851		72,895
Accounts payable		39,115		-
Net cash used in operating activities		(781)		(17,811)

Cash flows from investing activities
Purchase of plant and equipment		-		-


Net cash used in investing activities		-		-

Cash flows from financing activities
Net cash provided by financing activities		-		-

Net cash and cash equivalents sourced
(used)		(781)		(17,811)

Effect of foreign currency translation on cash and cash
equivalents		(741)		15,849

Cash and cash equivalents – beginning of period		2,785		9,446


Cash and cash equivalents – end of period	$	1,263	$	7,484

See accompanying notes to consolidated financial statements

CN DRAGON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013

(Stated in US Dollars)

1.ORGANIZATION AND PRINCIPAL ACTIVITIES

CN Dragon Corporation (“the Company”) was incorporated under the laws of the State of Nevada on August 30, 2001, under the name Infotec Business Systems, Inc. On June 8, 2007, we changed our name to Wavelit, Inc. On September 14, 2009, we changed our name to CN Dragon Corporation and began new business operations in the PRC.

On May 17, 2010, pursuant to the terms of the Agreement for Share Exchange, the Company acquired CNDC Corporation (“CNDC BVI”), and its wholly-owned subsidiaries, CN Dragon Holdings Limited (“CN Dragon Holdings”) and Zhengzhou Dragon Business Limited (“Zhengzhou Dragon”). This transaction was accounted for as a “reverse merger” with CNDC BVI deemed to be the accounting acquirer and the Company as the legal acquirer. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements for periods prior to the Share Exchange will be those of CNDC BVI, recorded at its historical cost basis. After completion of the Share Exchange, the Company’s consolidated financial statements will include the assets and liabilities of both the Company and CNDC BVI, the historical operations of CNDC BVI and the operations of the Company and its subsidiaries from the closing date of the Share Exchange. The Zhengzhou Dragon was de-registered on July 12, 2010.

CNDC BVI was established under the laws of the British Virgin Islands on March 26, 2008. The Company currently operates through itself and subsidiary, CN Dragon Holdings Limited which was incorporated in Hong Kong.

The Company and its subsidiaries (hereinafter, collectively referred to as (the “Group”) are engaged and specialized in investment, development and fund management in hospitality properties, as well as advisory and consulting services to the hospitality, tourism and real estate industries in the PRC.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Method of Accounting

The Group maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Group conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements.

(b) Principles of Consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions are eliminated in consolidation.

The Company owned its subsidiaries soon after its reverse merger and continued to own the equity’s interests through June 30, 2014. The following table depicts the identity of the subsidiaries:

			Share capital/
	Place & date of Incorporation	Attributable equity	registered
Name of subsidiary	incorporation	interest %	capital


CNDC Corporation	British Virgin Islands/
	March 26, 2008	100	US$1

CN Dragon Holdings Limited	Hong Kong/Mar 5, 2008	100	HK$1

The Group’s operations are conducted in Hong Kong and the PRC. Accordingly, the Group’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

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

(d) Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method.

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.

(e) Trade receivables

Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for uncollectible accounts is maintained for all customers in considering with a variety of factors, including the length of past due, significant one-time events and the Group’s historical experience. Bad debts are written off as incurred.

(f) Accounting for the impairment of long-lived assets

The Group periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC 360. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting period, there was no impairment loss.

(g) Foreign currency translation

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

Period ended	June 30, 2014	June 30, 2013

RMB : USD exchange rate	6.1565	6.1732
Average three-month ended
RMB : USD exchange rate	6.1658	6.2025

Period ended	June 30, 2014	June 30, 2013

HKD : USD exchange rate	7.7514	7.7557
Average three month ended
HKD : USD exchange rate	7.7530	7.7615

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

(h) Cash and cash equivalents

The Group considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Group maintains bank accounts only in Hong Kong. The Group does not maintain any bank accounts in the United States of America.

(i) Revenue Recognition

Revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller’s price to the buyer is fixed or determinable; and

- Collection is reasonably assured.

(j) Operating lease rental

The Group did not have leases which met the criteria of a capital lease. Leases which do not qualify as capital leases are classified as operating leases. Operating lease rental payment has nil and nil included in general and administrative expenses for the periods ended June 30, 2014 and 2013 respectively.

(k) Income taxes

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

(l) Cash and concentration of risk

Cash includes cash on hand and demand deposits in bank accounts maintained within Hong Kong. The Group has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

(m) Comprehensive income

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

(n) Recent accounting pronouncements

The FASB has issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the IASB has issued IFRS 15, Revenue from Contracts with Customers. The issuance of these documents completes the joint effort by the FASB and the IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS.

This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

-Step 1: Identify the contract(s) with a customer.

-Step 2: Identify the performance obligations in the contract.

-Step 3: Determine the transaction price.

-Step 4: Allocate the transaction price to the performance obligations in the contract.

-Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.

For all other entities (nonpublic entities), the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. A nonpublic entity may elect to apply this guidance earlier, however, only as of the following:

-An annual reporting period beginning after December 15, 2016, including interim periods within that reporting period (public entity effective date);

-An annual reporting period beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017; or

-An annual reporting period beginning after December 15, 2017, including interim periods within that reporting period.

An entity should apply the amendments in this ASU using one of the following two methods:

1. Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedients:

-For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period.

-For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods.

-For all reporting periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue.

2. Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. If an entity elects this transition method, it also should provide the additional disclosures in reporting periods that include the date of initial application of:

-The amount by which each financial statement line item is affected in the current reporting period by the application of this ASU as compared to the guidance that was in effect before the change.

-An explanation of the reasons for significant changes.

3. PROPERTY, PLANT AND EQUIPMENT, NET

Details of property, plant and equipment, net are as follows:

		As at		As at
		June 30, 2014		March 31, 2014
At cost
Office equipment	$	35,749	$	35,749
Motor vehicles		15,199		15,199
Exchange gain/(loss)		81		40
		51,029		50,988

Less: accumulated depreciation		(31,630)		(28,803)


	$	19,399	$	22,185

Depreciation expenses are included in the statements of income as follows:

		For the period ended		For the year ended
		June 30, 2014		March 31, 2014

General and administrative expenses	$	2,827	$	11,424

4. AMOUNT DUE TO THE RELATED COMPANY

The amount due to the related company, is unsecured, interest free and repayable on demand.

5. EARNING PER SHARE

The calculation of the basic and diluted earnings per share attributable to the share capital holder is based on the following data:

		For the periods ended June 30,
		2014		2013
Earnings (Loss):
Earnings for the purpose of basic earnings (loss) per share	$	(51,001)	$	(63,129)
Effect of dilutive potential share capital		-		-


Earnings for the purpose of diluted earnings (loss) per
share	$	(51,001)	$	(63,129)


Number of shares:
Weighted average number of share capital for the purpose
of basic earnings (loss) per share		81,010,491		45,158,291
Effect of dilutive potential share capital		-		-


Weighted average number of share capital for the purpose
of dilutive earnings (loss) per share		81,010,491		45,158,291

6. INCOME TAXES

The Company is not subject to any income tax as there are no estimated profitable or assessable profits for the quarter ended June 30, 2014 and 2013.

Pursuant to Hong Kong tax law, CN Dragon Holdings Limited is subjected to profits tax imposed at the rate of 16.5%. No Hong Kong profits tax is provided as there are no estimated assessable profits for the quarters ended June 30, 2014 and 2013.

No deferred tax has been provided as there is no material temporary difference arising for the quarters ended June 30, 2014 and 2013.

7. UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's financial statements are prepared using the generally accepted accounting principles 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 generated significant revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.

For the period ended June 30, 2014, the Company has generated revenue of $4,526 and has incurred an accumulated deficit $9,646,007. As of June 30, 2014, its current liabilities exceed its current assets by $990,490, which may not be sufficient to pay for the operating expenses in the next 9 months. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.

8. SUBSEQUENT EVENT

The Company has evaluated all other subsequent events through August 17, 2014, the date these consolidated financial statements were issued, and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.

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

THE COMPANY

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included in this report. This report contains “forward-looking statements.” The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk Factors” set forth in this report.

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

General

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these 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 these estimates, including those related to business development expenses, financing operations and contingencies and litigation. We base these estimates 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.

Critical Accounting Policies

Method of Accounting

The Company maintains its general ledger and journals with the accrual method of accounting for financial

reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements.

Principles of Consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiaries (the “Group”). All significant inter-company balances and transactions are eliminated in consolidation.

The Company owned its subsidiaries soon after its inception and continued to own the equity’s interests. The following table depicts the identity of the subsidiaries:

Name of Subsidiary	Date of Disposal (D) / Acquisition (A)	Place and Date of Incorporation	Attributable Equity Interest %	Share Registered Capital

CNDC Corporation	May 17, 2010 (A)	British Virgin Islands /	100	US$1
		March 26, 2008

CN Dragon Holdings Limited	May 17, 2010 (A)	Hong Kong / March 5, 2008	100	HK$1

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method.

Trade receivables

Accounting for impairment of long-lived assets

The Group periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC 360. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognised based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting period, there was no impairment loss.

Cash and cash equivalents

The Group considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Group maintains bank accounts only in the PRC and Hong Kong. The Group does not maintain any bank accounts in the United States of America.

Revenue recognition

Revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller’s price to the buyer is fixed or determinable; and

- Collection is reasonably assured.

Income taxes

Cash and concentration risk

Cash includes cash on hand and demand deposits in bank accounts maintained within PRC and Hong Kong. Total cash in these banks at June 30, 2014 amounted to $1,263 of which no deposits are covered by Federal Depository Insured Commission. The Group has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

Results of Operations

Comparison of the Periods ended June 30, 2014 and 2013

The following table sets forth key components of our results of operations for the Company, for the periods indicated (Stated in US Dollars).

		Periods ended June 30
		2014		2013
		(Unaudited)		(Unaudited)

Net revenues	$	4,526	$	29,933
Cost of net revenues		-		-


Gross profit		4,526		29,933
Operating expenses:
Selling and distribution		-		-
General and administrative		(55,527)		(93,062)


Loss before income taxes		(51,001)		(63,129)

Income taxes		-		-


Net loss		(51,001)		(63,129)
Other comprehensive income:
Foreign currency translation
adjustments		(741)		15,893


Comprehensive (loss)/gain	$	(51,742)	$	(47,236)


Basic and diluted loss per share	$	(0.0006)	$	(0.0006)


Weighted average number of share
outstanding		81,010,491		45,158,291

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. Our working capital is currently insufficient to sustain our current operations. Our plan is to seek additional funding and business relationships.

While management believes that revenues can be grown and that ultimately profitable operations can be attained in the future, there is no assurance that revenues will be maintained or grown or that they will ultimately be of a level required to generate profitable operations or provide positive cash follow. We are unable to predict at this time the exact amount of any additional working capital we will require to fund the implementation of our business plan and achieve cash flow sufficient to sustain operations and achieve profitability. To fund out operations and more fully implement our business plan, we may seek additional capital in the private and/or public equity markets through the sale of equity and debt securities. However, if we receive additional funds through the issuance of equity securities, our existing stockholders may experience significant dilution. If we issue new securities, they may contain certain rights, preferences or privileges that are senior to those of our common stock. Moreover, we may not be successful in obtaining additional financing when needed or on terms favorable to our stockholders. As we have no commitments from any third parties to provide additional equity or debt financing, we cannot provide any assurance that we will be successful in attaining such additional funding.

Off-balance Sheet Arrangements

We maintain no significant Off-balance Sheet Arrangements

Recent Accounting Pronouncements

CN Dragon Corp 10-Q