UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(mark one)

[X] Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, ~~2017~~2018

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission file number: __________

COLORSTARS GROUP

(Exact name of registrant as specified in its charter)

Nevada		06-1766282
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

10F, No. 566 Jung Jeng Rd. Sindian District , New Taipei City 231, Taiwan, R.O.C.

(Address of Principal Executive Offices)( Zip Code)

(~~949~~+886) ~~336~~2-~~6161~~8667-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

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 [ X] No [X ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes [ ] No [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[X ]

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 [ X] ~~(Do not check if smaller reporting company)~~ Smaller reporting 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) or the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)

Yes [ ] No [X]

~~The~~As ~~aggregate~~of June 30, 2018, the registrant had 102,274,515 shares of Common Stock, $0.001 par value, issued and outstanding. The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant on June 30, 2018 ~~2017~~ was $222,~~522~~627,~~146~~802.

As of ~~November~~March 128, ~~2018~~2019, the registrant had 102,274,515 shares of Common Stock, $0.001 par value, issued and outstanding.

NO DOCUMENTS INCORPORATED BY REFERENCE

COLORSTARS GROUP

~~2017~~2018 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PART I		1
ITEM 1.	Business	2
ITEM 1A.	Risk Factors	175
ITEM 1B.	Unresolved Staff Comments	175
ITEM 2.	Properties	175
ITEM 3.	Legal Proceedings	186
ITEM 4.	Mine Safety Disclosures	186
PART II		186
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	186
ITEM 6.	Selected Financial Data	198
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	208
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	239
ITEM 8.	Financial Statements and Supplementary Data	249
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	2612
ITEM 9A.	Controls and Procedures	2612
ITEM 9B.	Other Information	2612
PART III		2713
ITEM 10.	Directors, Executive Officers and Corporate Governance	2713
ITEM 11.	Executive Compensation	2814
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	3015
ITEM 13.	Certain Relationships and Related Transactions, and Independence	3116
ITEM 14.	Principal Accounting Fees and Services	3116
PART IV		3217
ITEM 15.	Exhibits, Financial Statement Schedules	3217

PART I

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This ~~2017~~2018 Annual Report on Form 10-K, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains “forward-looking statements” that include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to:

	●	our inability to raise additional funds to support operations and capital expenditures;

	●	our inability to achieve greater and broader market acceptance of our products and services in existing and new market segments;

	●	our inability to successfully compete against existing and future competitors;

	●	our inability to manage and maintain the growth of our business;

	●	our inability to protect our intellectual property rights; and

	●	other factors discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

ITEM 1.

BUSINESS

With respect to this discussion, the terms “we” “us” “our” and the “Company” refer to ColorStars Group.

(a)

General.

We were initially incorporated in the Province of Ontario, Canada on January 21, 2005. On November 3, 2005, we converted to a Nevada corporation.

(b)	Significant Business Transactions Overview.

On July 24, 2005, we entered into an acquisition agreement with ColorStars, Inc., a Taiwanese corporation (“ColorStars Taiwan”), pursuant to which, on February 14, 2006, the shareholders of ColorStars Taiwan were issued shares of our Company in exchange for their shares of ColorStars Taiwan. This resulted in ColorStars Taiwan becoming a wholly owned subsidiary of the Company. Specifically, for each share of common stock outstanding of ColorStars Taiwan (1,500,000 shares of ColorStars Taiwan were issued and outstanding at such time), 20 shares of our common stock were issued in exchange for each such share (the aggregate of 30,000,000 shares of our common stock).

In 2004, ColorStars, Inc. based in Taiwan acquired 20% of the outstanding common shares of Anteya Technology Corporation. Anteya provides the OEM service to us for the TRISTAR, EZSTAR, R4, LUXMAN, and HB series of product lines. On August 16, 2012, Anteya increased its share capital from 5,000,000 shares to 6,500,000 shares, and we subscribed for 300,000 additional shares at par value. The Company now holds a total of 1,300,000 shares in Anteya representing a total investment of NTD $27,304,000 (USD $910,492) representing 20% equity. Anteya Technology issued an additional of 1,000,000 shares to 7,500,000 shares during 2014 and an additional 2,000,000 shares in 2015. The Company decided not to subscribe any of these newly issued shares. As a result, the equity interest decreased to 13.68% for the period ended December 31, 2015. Anteya Technology was given cessation of operations from April 28, 2017. As a result, the investment was deducted by full impairment on December 31, 2015.

On October 13, 2008, we acquired 2,800 shares in a German company, Phocos AG. On May 27, 2013, the Company sold its 2,800 shares of Phocos AG to MUUS Horizen Fund 1, LP for $30 EU per share ($84,000 EU in total). The Company has no remaining stake in Phocos AG.

On March 20, 2009, ColorStars Taiwan acquired 50.4% of the outstanding common shares of Fin-Core Corporation, a Taiwanese corporation (“Fin-Core”) for a cash consideration of US $468,262. This resulted in Fin-Core becoming a subsidiary of ours. The purchase price for the common shares of Fin-Core was determined through private negotiations between the parties and was not based upon any specific criteria of value. Fin-Core is principally engaged in the design and manufacturing of thermal management devices, the design and manufacturing of electrical and lighting devices and trade, and the import and export of electrical and lighting devices.

On July 7, 2010, ColorStars Taiwan sold 30.4% of its common shares of Fin-Core to Meiloon Industrial Co., Ltd., a publicly traded company on the Taiwan Stock Exchange, for a cash offering of US $429,000. As a result of this transaction, ColorStars Taiwan owned only 20% of the outstanding common shares of Fin-Core.

On August 5, 2009, ColorStars Taiwan acquired a 51% equity interest in Jun Yee Industrial Co., Ltd., a Taiwanese corporation (“Jun Yee”) for a cash consideration of US $536,000. The purchase price for the equity interest in Jun Yee was determined through private negotiations between the parties and was not based upon any specific criteria of value. Upon acquiring the equity interest, Jun Yee became a subsidiary of ours. The principal activity of Jun Yee is the manufacturing of LED light.

On November 26, 2010, ColorStars Taiwan entered into two related stock purchase agreements whereby ColorStars Taiwan sold all of its shares of Jun Yee common stock to Mr. Ming-Chun Tung and Ms. Ming-Fong Tung. Pursuant to the stock purchase agreement entered into with Mr. Ming-Chun Tung, ColorStars Taiwan sold 265,000 shares of its Jun Yee common stock to Mr. Ming-Chun Tung at a price per share of NTD $23 (USD $0.76) for a total purchase price of NTD $6,095,000 (USD $200,427). Furthermore, pursuant to the stock purchase agreement entered into with Ms. Ming-Fong Tung, ColorStars Taiwan sold 500,000 shares of its Jun Yee common stock to Ms. Ming-Fong Tung at a price per share of NTD $23 (USD $0.76) for a total purchase price of NTD $11,500,000 (USD $378,165). As a result of the transactions consummated above, Jun Yee is no longer our subsidiary.

In October 2011, Fin-Core decided to increase its capital by issuing 3,000,000 new shares at par value of NTD10 per share. The Company was entitled to subscribe for up to 600,000 shares for NTD 6,000,000. However, the Company chose not to participate in the subscription of any newly issued shares of Fin-Core. As a result, on November 4, 2011, the Company’s equity interest in Fin-Core decreased to 11.43% from 20% after issuance of 3,000,000 new shares.

On Dec. 20, 2012, Fin-Core Corporation decreased its total shares from 7,000,000 to 500,000. The Company’s invested cost and percentage of shareholding were unchanged after the share consolidation. The Company held 57,143 shares in Fin-Core after the consolidation.

On December 28, 2012, Fin-Core increased its total shares to 1,100,000 shares with a new capital injection. The Company decided to not participate in the new share subscription and kept its total shares at 57,143. As a result, on December 31, 2012, the Company’s equity interest in Fin-Core decreased to 5.19%. As a result of the consolidation and subsequent increase in outstanding shares, Fin-Core is no longer deemed our subsidiary.

(c)	Business of Issuer.

Overview

The Company, through its wholly owned subsidiary, has historically been primarily engaged in manufacturing, designing and selling light-emitting diode (“LED”) and lighting equipment. We developed and ~~retrofited~~retrofitted LED lamps and bulbs for lighting fixtures designed for general and special lighting applications. Our website can be found at www.colorstarsgroup.com and www.colorstars.com.

As LED lighting business has become very competitive, during 2017 the Company began planning for a transformation into a holding company to seek investment opportunities in other business lines.

Products

~~Color Stars~~ColorStars’ historical line of products included a variety of lighting product lines and technologies for consumer and commercial applications. As we have stopped designing and manufacturing new products since late 2017, the company is asmainly ~~follows:~~selling the inventory while there is a need from the customers. The company has been negotiating the transfer of the tehcnology to an enitity in the Kingdom of Saudi Arabia and form a joint venture for the continuation of the LED lighting product lines.

Major Product Lines and Technologies:

Light Sources

1. The AMBY™-A19-WHT dimmable 12-watt A19 LED lamps with an E26/E27 or B22 base feature a new, patented aluminum housing and uniquely shaped patented optical lens that allows for a nearly 360° light distribution. The lamps are ETL and CE certified, RoHS compliant and LM-79 reports are available. Lighting Facts are also available for the U.S. market. Lumen output is 923 lumens ±10% for daylight white (5000 ±200K) and 801 lumens ±10% for warm-white (2900K ±200K). Non-dimmable 11W AMBY-A19-WHT-U7 models (90~277Vac) are also available. The AMBY-A19-WHT-W-120 now has Energy Star approval.

R5 Series. The R5 Series LED lamps are a new line of LED lighting products introduced in 2012. The series includes PAR 20, PAR 30 and PAR 38 lamps with a beautiful sleek design, MR16 lamps with a GU5.3 base and a narrow beam angle of 15°, along with beam angles of 30° and 60°, AR111 lamps for existing fixtures, and AR111X lamps with an external driver for new fixtures. Also available is the R5-AR111-GU10-WHT lamp with a GU10 base. The R5-AR111X, R5-AR111-GU10-WHT, and R5-PAR lamps are available in dimmable models that include LEDs with CREE, Nichia, or Taiwan chips. Non-dimmable models with Nichia and Taiwan LEDs are available for the R5-AR111-WHT and R5-PAR lamps. The R5-MR16-WHT lamps are non-dimmable lamps are available with either CREE or Taiwan LEDs. The dimmable 120V R5-PAR-WHT lamps are ETL certified with LM-79 reports and Lighting Facts available.

The R5-PAR38-WHT lamp won the red dot award for product design for 2012.

2. R5-AR111X-WHT: The 11W~14W R5-AR111X-WHT LED lamps have an external constant current driver and are suitable for new fixtures. The lamps are available with CREE, Nichia, or Taiwan LEDs.

<14W dimmable models with CREE LEDs are available in warm white (3000K ±200K; CRI 80+; 910 lumens) and daylight white (5200K ±200K; CRI 70+; 1,050 lumens). Beam angles available are 30° and 60°.

<14W dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 720 lumens) and daylight white (5200K ±200K; CRI 71; 1,150 lumens). Beam angles available are 30° and 60°.

11W non-dimmable models with universal voltage (100~277Vac) and Nichia LEDs are available in warm white (3000K ±200K; CRI 60; 800 lumens) and daylight white (5200K ±200K; CRI 83; 920 lumens). Beam angles available are 30° and 60°.

<14W non-dimmable models with universal voltage (100~277Vac) and CREE LEDs are available in warm white (3000K ±200K; CRI 80+; 910 lumens) and daylight white (5200K ±200K; CRI 70+; 1,050 lumens). Beam angles available are 30° and 60°

<14W non-dimmable models with universal voltage (100~277Vac) and Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 880 lumens) and daylight white (5200K ±200K; CRI 70+; 1,040 lumens). Beam angles available are 30° and 60°.

3. R5-AR111-WHT: Non-dimmable <12.5W R5-AR111-WHT lamps with a built-in driver, suitable for existing fixtures, are available with LEDs with CREE or Taiwan chips. Beam angles: 30° and 60°.

R5-AR111-WHT (12 VAC/VDC) lamps with CREE LEDs are available in warm white (3000K ±200K; CRI 80+; 680 lumens) and daylight white (5000K ±200K; CRI 70+; 980 lumens). Beam angles available are 30° and 60°.

R5-AR111-WHT-T (12 VAC/VDC) lamps with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 560 lumens) and daylight white (5000K ±200K; CRI 70; 770 lumens). Beam angles available are 30° and 60°.

4. R5-AR111-GU10-WHT: The R5-AR111-GU10-WHT LED lamps are AR111 lamps with a GU10 base.

>12W dimmable models with CREE LEDs are available in warm white (3000K ±200K; CRI 84; 724 lumens) and daylight white (5200K ±200K; CRI 76; 1,122 lumens). Beam angles available are 30° and 60°.

<13W dimmable models with Nichia LEDs are available in warm white (3000K ±200K; CRI 80; 715 lumens) and daylight white (5200K ±200K; CRI 75; 1,000 lumens). Beam angles available are 30° and 60°.

12W dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 780 lumens) and daylight white (5200K ±200K; CRI 70; 850 lumens). Beam angles available are 30° and 60°.

12.5W non-dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 76; 655 lumens) and daylight white (5200K ±200K; CRI 70; 874 lumens). Beam angles available are 30° and 60°.

5. R5-PAR20-WHT: Dimmable R5-PAR20-WHT lamps are available with CREE, Nichia or Taiwan LEDs. Non-dimmable models with universal voltage 100~277Vac) are available with Nichia or Taiwan LEDs. The 120V dimmable models are ETL certified. LM-79 is available for the lamps with CREE LEDs. Lighting Facts are available for the 120V lamps with CREE LEDs. The 230V lamps are CE certified and RoHS compliant.

<10W dimmable models with CREE LEDs are available in warm white (3000K ±200K; CRI 82; 680 lumens) and daylight white (5200K ±200K; CRI 66; 1,000 lumens). Beam angles available: are 30° and 60°.

<10W dimmable models with Nichia LEDs are available in warm white (3000K ±200K; CRI 80; 670 lumens) and daylight white (5200K ±200K; CRI 75; 810 lumens). Beam angles available: are 30° and 60°.

<11W dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 674 lumens) and daylight white (5200K ±200K; CRI 70; 750 lumens). Beam angles available: are 30° and 60°.

Non-dimmable models with universal voltage (100~277Vac) and Nichia or Taiwan LEDs are also available.

<8W non-dimmable models with universal voltage (100~277Vac) and Nichia LEDs are available in warm white (3000K ±200K; CRI 80; 600 lumens) and daylight white (5200K ±200K; CRI 75; 630 lumens). Beam angles available are 30° and 60°.

<8W non-dimmable models with universal voltage (100~277Vac) and Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 600 lumens) and daylight white (5200K ±200K; CRI 70; 630 lumens). Beam angles available are 30° and 60°.

6. R5-PAR30-WHT: Dimmable R5-PAR30-WHT lamps are available with CREE, Nichia or Taiwan LEDs. Non-dimmable models with universal voltage (100~277Vac) are available with Nichia or Taiwan LEDs. The 120V dimmable models are ETL certified. LM-79 is available for the lamps with CREE LEDs. Lighting Facts are available for the 120V lamps with CREE LEDs. The 230V lamps are CE certified and RoHS compliant. Beam angles available are 30°, 60° and 160° with diffused lens.

>12W dimmable models with CREE LEDs are available in warm white (3000K ±200K; CRI 84; 724 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 66; 1,122 lumens; beam angles: 30° and 60°).

<13W dimmable models with Nichia LEDs are available in warm white (3000K ±200K; CRI 80; 715 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 75; 1,000 lumens; beam angles: 30° and 60°).

12W dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 780 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 70; 850 lumens; beam angles: 30° and 60°).

<13W dimmable models with Nichia LEDs and a 160° beam angle are available in warm white (3000K ±200K; CRI 80; 778 lumens) and daylight white (5200K ±200K; CRI 87; 760 lumens).

12W non-dimmable models with universal voltage (100~277Vac) and Taiwan LEDs are available in warm white (3000K ±200K; CRI 71; 910 lumens) and daylight white (5200K ±200K; CRI 71; 850 lumens). Beam angles available are 30° and 60°.

Non-dimmable models with universal voltage (100~277Vac) and Nichia LEDs are also available.

7. R5-PAR38-WHT: A red dot award winner: product design 2012, the dimmable 17W R5-PAR38-WHT lamps, are available with LEDs with CREE, Nichia or Taiwan chips. Non-dimmable models with universal voltage (100~277Vac) are available with Nichia and Taiwan LEDs. The 120V dimmable models are ETL certified. LM-79 is available for the lamps with CREE LEDs. Lighting Facts are available for the 120V lamps with CREE LEDs. The 230V lamps are CE certified and RoHS compliant. Beam angles available are 30°, 60° and 160° with diffused lens.

<17W dimmable models with CREE LEDs are available in warm white (3000K ±200K; CRI 83; 1,030 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 66; 1,460 lumens; beam angles: 30° and 60°).

<16W dimmable models with Nichia LEDs are available in warm white (3000K ±200K; CRI81; 815 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 83; 900 lumens; beam angles: 30° and 60°).

<17W dimmable models with Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 900 lumens; beam angles: 30° and 60°) and daylight white (5200K ±200K; CRI 72; 1,077 lumens; beam angles: 30° and 60°).

<17W dimmable models with Nichia LEDs and a 160° beam angle are available in warm white (3000K ±200K; CRI 81; 1,143 lumens) and daylight white (5200K ±200K; CRI 76; 1,285 lumens).

Non-dimmable models with universal voltage (100~277Vac) and Nichia LEDs are available in warm white (3000K ±200K; CRI 80; <16W) and daylight white (5200K ±200K; CRI 76; <17W). Beam angles available are 30° and 60°.

Non-dimmable models with universal voltage (100~277Vac) and Taiwan LEDs are available in warm white (3000K ±200K; CRI 80; 900 lumens; <16W) and daylight white (5200K ±200K; CRI 72; 1,245 lumens; <17W). Beam angles available are 30° and 60°.

Non-dimmable models with universal voltage (100~277Vac) and Nichia LEDs are also available.

8. R5-MR16-WHT: The 6W R5-MR16-WHT lamps, with a GU5.3 bi-pin base, are available with either CREE or Taiwan LEDs. Beam angles include a narrow beam angle of 15° as well as 30° and 60°.

Models with CREE LEDs include the R5-MR16-WHT-W (3000K ±200K; CRI 77; 265 lumens) and the R5-MR16-WHT-D (5200K ±200K; CRI 64; 403 lumens).

Models with Taiwan LEDs include the R5-MR16-WHT-W-T (3000K ±200K; CRI 80; 300 lumens) and the R5-MR16-WHT-D-T (5200K ±200K; CRI 66; 377 lumens).

R4S Series. The R4S Series LED lamps are 7W lamps with E27, GU10 and MR16 bases and have up to 42% more lumen output than the R4 Series (see below). The R4S Series lamps can now be produced with either CRI70 or CRI80 chips. Caution: The R4S Series lamps should not be used in enclosed fixtures.

9. R4S-MR16-WHT: The R4S-MR16-WHT series lamps are 7W MR16 LED lamps with a GU5.3 bi-pin base got open installations. The lumen output has been increased up to 42% over the R4 Series lamps as a result of new chips. The lamps are dimmable with linear AC transformers.

The lamps are available in warm white (3000K ±200K) and daylight white (5500K ±200K), two beam angles (30°, 45° and 85°) and a color rendering index of CRI 70 or CRI 80.

Specific models with lumen output are as follows: R4S-MR16-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 70; 500 lumens); R4S-MR16-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 70; 420 lumens); R4S-MR16-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 70; 470 lumens); R4S-MR16-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 70; 400 lumens); R4S-MR16-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 80; 420 lumens); R4S-MR16-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 80; 360 lumens); R4S-MR16-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 80; 400 lumens); R4S-MR16-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 80; 340 lumens).

10. R4S-E27-WHT: The R4S-E27-WHT Series lamps are 7W E27 LED lamps with new chips that provide an increase in lumen output of up to 42% over the R4-E27-WHT Series lamps.

The lamps are available in warm white (3000K ±200K) and daylight white (5500K ±200K), two beam angles (30° and 45°) and a color rendering index of CRI 70 or CRI 80.

Specific models with lumen output are as follows: R4S-E27-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 70; 500 lumens); R4S-E27-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 70; 420 lumens); R4S-E27-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 70; 470 lumens); R4S-E27-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 70; 400 lumens); R4S-E27-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 80; 420 lumens); R4S-E27-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 80; 360 lumens); R4S-E27-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 80; 400 lumens); R4S-E27-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 80; 340 lumens).

11. R4S-GU10-WHT: The R4S-GU10-WHT Series lamps are 7W GU10 LED lamps with new chips that provide an increase in lumen output of up to 42% over the R4-GU10-WHT Series lamps.

The lamps are available in warm white (3000K ±200K) and daylight white (5500K ±200K), two beam angles (30° and 45º) and a color rendering index of CRI 70 or CRI 80.

Specific models with lumen output are as follows: R4S-GU10-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 70; 500 lumens); R4S-GU10-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 70; 420 lumens); R4S-GU10-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 70; 470 lumens); R4S-GU10-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 70; 400 lumens); R4S-GU10-WHT-D-30 (5500K ±200K; beam angle: 30°; CRI 80; 420 lumens); R4S-GU10-WHT-W-30 (3000K ±200K; beam angle: 30°; CRI 80; 360 lumens); R4S-GU10-WHT-D-45 (5500K ±200K; beam angle: 45°; CRI 80; 400 lumens); R4S-GU10-WHT-W-45 (3000K ±200K; beam angle: 45°; CRI 80; 340 lumens).

The R4 Series LED lamps include (1) 6-watt, 4-chip retrofit lamps (E10~E27, GU10 and MR16 with GU5.3 bi-pin base); (2) 12W and 24W downlights; (3) 8W A19 lamps and (4) an 8W G24 lamp. They are available in warm white and daylight white. Note: The R4-MR16-WHT lamps can be used in semi-enclosed fixtures.

12. R4-MR16-WHT: This 6-watt lamp has a GU5.3 bi-pin base and features a heatsink that allows for high lumen output. It is dimmable with linear AC transformers. It is available in warm white and daylight white and 5 beam angles: 30°, 45° and 85°. Specific models with beam angles and lumen output are as follows: R4-MR16-WHT-W-30 (3000k ±200k; 30° and 285 lumens ±10%), R4-MR16-WHT-W-45 (3000k ±200k; 45° and 270 lumens ±10%), R4-MR16-WHT-W-85 (3000k ±200k; 85° and 245 lumens ±10%), R4-MR16-WHT-D-30 (5500k ±200k; 30° and 350 lumens ±10%), R4-MR16-WHT-D-45 (5500k ±200k; 45° and 330 lumens ±10%), R4-MR16-WHT-D-85 (5500k ±200k; 85° and 260 lumens ±10%). Length: 38mm; Diameter: 49.5mm.

13. R4-GU10-WHT: This 6-watt lamp has a GU10 base and features a new heatsink that allows for higher lumen output. It is available in warm white and daylight white and 5 beam angles: 30°, 45°, and 85°. Specific models with beam angles and lumen output are as follows: R4-GU10-WHT-W-30 (lens) (3000k ±200k; 30° and 285 lumens ±10%), R4-GU10-WHT-W-45 (3000k ±200k; 45° and 270 lumens ±10%), R4-GU10-WHT-W-85 (lens) (2700k ±200k; 85° and 245 lumens ±10%), R4-GU10-WHT-D-30 (5500k ±200k; 30° and 350 lumens ±10%), R4-GU10-WHT-W-45 (5500k ±200k; 45° and 330 lumens ±10%), R4-GU10-WHT-D-85 (5500k ±200k; 85° and 260 lumens ±10%). Length: 46.2mm; Diameter: 49.5mm.

14. R4-E27-WHT: This 6-watt lamp is available in E10, E11, E14, E17, E26 and E27 base and features a new heatsink that allows for higher lumen output. It is available in warm white (3000k ±200k) and daylight white and 5 beam angles: 30°, 45°, and 85°. Specific models with beam angles and lumen output are as follows: R4-E27-WHT-W-30 (lens) (3000k ±200k; 30° and 285 lumens ±10%), R4-E27-WHT-W-45 (3000k ±200k; 45° and 270 lumens ±10%), R4-E27-WHT-W-85 (lens) (2700k ±200k; 85° and 245 lumens ±10%), R4-E27-WHT-D-30 (5500k ±200k; 30° and 350 lumens ±10%), R4-E27-WHT-W-45 (5500k ±200k; 45° and 330 lumens ±10%), R4-E27-WHT-D-85 (5500k ±200k; 85° and 260 lumens ±10%) Length: 62.1mm; Diagram: 49.5mm.

R4 Single-Color Lamps

R4-MR16 lamps are available in single colors: red, blue, green and amber. There is an MOQ of 250 pcs.

R4-E27 and R4-GU10 lamps are available in red and blue. For green and amber, there is a minimum order quantity of at least 1,000 pcs because the LEDs have to be specially packaged with phosphor. (Because the color can vary from batch to batch, the order quantity should be sufficient to handle a given project.)

15. R4-DL6-WHT Downlight: The 12W R4-DL6-WHT is a lightweight and thin 6-inch downlight requiring only 10cm of ceiling space. Equal to 60W incandescent lamps, the lights have a single light source with no dark spots. Lumen output ranges from 610 lm ±10% for warm-white (3000K ±300K) to 720 lm ±10% for daylight white (5500K ±500K). Beam angle is 150°. Dimmable models are also available. Dimensions: 67 x Ø175mm.

16. R4-DL8-WHT Downlight: The 24W R4-DL8-WHT is a lightweight and thin 8-inch downlight requiring only 10cm of ceiling space. The lights have a single light source with no dark spots. Lumen output ranges from 1,220 lm ±10% for warm-white (3000K ±300K; CRI 80) to 1,440 lm ±10% for daylight white (5500K ±500K; CRI 80). Beam angle is 150°. Dimensions: 84 x Ø240mm.

17. R4-DL6-RGB Downlight: The R4-DL6-RGB is a 12W color-changing RGB lamp with a single light source that results in no dark spot. It has an IR receiver that allows the lamp to be activated by the TRISTAR-IR1627 remote controller as well as a line switch. It is lightweight and thin, requiring only 10cm of ceiling space.

18. R4-A19-WHT: Two types of LED A19 lamps are available in the R4 Series – the 6W R4-A19-WHT-6U and the 10W R4-A19-WHT-10U. The ‘U’ refers to universal voltage (100~240Vac). The R4-A19-WHT-6U lamps are lightweight, only 50g, have a uniform light source and provide the same brightness as a 40W incandescent lamp with up to 85% power savings.

Models are available in daylight white (5500K ±500K; CRI>70; 450 lumens) and warm-white (3000K ±300K; CRI>70; 380 lumens). The base is E27.

The R4-A19-WHT-10U lamps are lightweight, 75g, have a uniform light source and provide the same brightness as a 60W incandescent lamp with up to 85% power savings. Models are available in daylight white (5500K ±500K; CRI>70; 850 lumens) and warm-white (3000K ±300K; CRI>70; 720 lumens).

The R4-A19-WHT-120 (110Vac; <100mA) and R4-A19-WHT-230 (220Vac; <50mA) lamps are dimmable with a TRIAC dimmer. Models are available in daylight white (5500K ±500K; CRI>70; 850 lumens) and warm-white (3000K ±300K; CRI>70; 720 lumens).

Dimmable and non-dimmable models of the R4-A19-WHT-10 are also available with CRI80. Dimmable models are available in daylight white (5500K ±500K; CRI>80; 720 lumens) and warm-white (3000K ±300K; CRI>80; 610 lumens).

Non-dimmable models are available in daylight white (5500K ±500K; CRI>80; 720 lumens) and warm-white (3000K ±300K; CRI>80; 610 lumens).

The R4-A19-WHT-10U and the dimmable lamps are available with an E26, E27 or B22 base.

19. R4-G24-WHT-8: The R4-G24-WHT-8 is an 8W G24 lamp with CREE or Taiwan LEDs. It has a beam angle of 270° and a rotary angle. With CREE LEDs it is available in daylight-white (5300K ±300K; CRI >70; 550 lumens ±10%) and warm-white (3000K ±300K; CRI >80; 500 lumens ±10%). With Taiwan LEDs it is available in daylight-white (5300K ±300K; CRI >70) and warm-white (3000K ±300K; CRI >80).

20. R3-MR16-WHT: The 5W R3-MR16-WHT lamp can be used in enclosed fixtures. The 5-watt MR16 LED lamp has a GU5.3 bi-pin base. It is dimmable with AC linear transformers. Specific models with beam angles and lumen output are as follows: R3-MR16-WHT-W-30 (3000k ±200k; 30° and 250 lumens ±10%), R3-MR16-WHT-W-45 (3000k ±200k; 45° and 235 lumens ±10%), R3-MR16-WHT-D-30 (5500k ±200k; 30° and 300 lumens ±10%), R3-MR16-WHT-D-45 (5500k ±200k; 45° and 285 lumens ±10%). Length: 38mm; Diameter: 49.5mm.

21. R1-MR16-WHT: The R1-MR16-WHT LED lamps are economical 4-watt MR16 lamps with a GU5.3 bi-pin base. They are available in daylight white (5500k ±200K; CRI 70) and warm-white (3000K ±200K; CRI 70). Lumen output and beam angles are as follows: R1-MR16-WHT-30 (WHT-D: 250 lm ±10%; WHT-W: 200 lm ±10%; Beam angle: 30°) and the R1-MR16-WHT-45 (WHT-D: 240 lm ±10%; WHT-W: 190 lm ±10%; Beam angle: 45°)

22. COZY-A19-WHT: The COZY-A19-WHT Series are dimmable 5W weatherproof lamps with an IP65 rating for outdoor use. The lamps feature the same patented optical lens design as the AMBY-A19-WHT that provides nearly a 360° light distribution. Dimmable with TRIAC dimmers, the lamps are available in warm white (3000K ±200K; CRI 83; 290 lm ±10%; power factor: 0.94) and daylight white (5000K ±200K; CRI 82; 322 lm ±10%; power factor 0.92).

23. CANDLE Series. The 3W CANDLE-E12-WHT-110/220 and CANDLE-E14-WHT-110/220 lamps are lightweight (31g), candelabra LED lamps available in CANDLE (CA) and CRYSTAL (CR) models. Lumen output is as follows: CANDLE-E12/E14-WHT-D-110/220-CA (5500K ±500K) 200 lumens; CANDLE-E12/E14-WHT-D-110/220-CR (5500K ±500K) 170 lumens; CANDLE-E12/E14-WHT-W-110/220-CA (3000K ±300K) 170 lumens; CANDLE-E12/E14-WHT-W-110/220-CR (3000K ±300K) 140 lumens;

24. TRISTAR®-IR1627 Remote Controllers: These provide a remote control function and are available in a large (L) or small (S) size. The remote can activate four color-changing patterns, 16 single colors and four color-intensity levels.

Other Light Sources:

25. AQUA™-RGB Series: The AQUA™-RGB Series are lamps with an IP68 rating for underwater applications. The AQUA™-RGB-60 is a 24V, 60-watt, IP68 rated RGB lamp suitable for pool lighting. This 90mm (dia.) x 120 mm (H) lamp has a 60 ° beam angle.

The AQUA™-RGB-30 and the AQUA™-RGB-15 are 12V 30-watt and 15-watt lamps respectively.

26. AQUA™-WHT Series: The AQUA™-WHT Series are lamps with an IP68 rating for underwater applications. The AQUA™-WHT-60 is a 24V, 60-watt, IP68 rated lamp suitable for pool lighting. This 90mm (dia.) x 120 mm (H) lamp has a 60 ° beam angle and a lumen output of 4,200~4,800 lumens. The AQUA™-WHT-30 is a 12V, 30-watt, IP68 rated lamp suitable for pool lighting. This 63.5mm (dia.) x 95 mm (H) lamp has a 60 ° beam angle and a lumen output of 2,100~2,400 lumens. The AQUA™-WHT-15 is a 12V, 15-watt, IP68 rated lamp suitable for pool lighting. This 50mm (dia.) x 65mm (H) lamp has a 60 ° beam angle and a lumen output of 1,050~1,200 lumens. Color temperatures available are warm white (3300K ±100K) and daylight white (5500K ±250K). The lamps come with a 5-meter cable and mounting brackets.

27. BOBBY™-AR111-RGB-40-DMX. The BOBBY™-AR111-RGB-40-DMX is a 24-watt AR111 RGB color-changing spot light with a 40° beam angle together with the CCD350-DMX-24 – 350mA Constant Current Driver (24VDC, 24W Max.; with auto DMX address setting).

28. EZSTAR™-RGB LED Modules: EZSTAR™-RGB LED modules are suitable for cabinet, accent and cove lighting and are available in 10 cm and 30 cm lengths. EZSTAR™-RGB waterproof models with an IP67 protection rating are available.

29. EZSTAR™-Single-Color LED Modules: EZSTAR™-Single-Color LED modules are suitable for cabinet, accent and cove lighting and are available in red, green, blue and amber, plus warm white (2900k ±100k) and daylight white (5500k), and in lengths of 15 cm and 30 cm. EZSTAR™—WHT waterproof models with an IP67 protection rating are available.

30. HIGH-BAY Series: This series of LED high-bay lamps are available in 120W, 150W and 180W models with either an E39 and E40 base, a foundation base (with UL and ETL approval), a ring and bare wires, or a foundation base with a ring and bare wires. They are available with CREE, Nichia or local Taiwan LED chips. The lamps are lightweight and easily installed and have an automatic protection shut-off when the temperature rises above 105° C. The 180W models outperform 450W metal halide bulbs. The high-bay lamps are suitable for factories, warehouses, auditoriums and convention centers.

The HB-F-WHT-XXX lamps with stand are now UL and ETL certified.

The lamps are available with either a diffused lens to reduce glare or a transparent lens for maximum lumen output. The following lumen output figures are based on lamps with the transparent lens.

HB-XXX-WHT-120: 120W high-bay lamps with Nichia chips (CRI 80) and a lumen output of 11,500 lumens.

HB-XXX-WHT-150: 150W high-bay lamps with Nichia chips (CRI 80) and a lumen output of 14,500 lumens.

HB-XXX-WHT-180: 180W high-bay lamp with Nichia chips (CRI 80) and a lumen output of 17,200 lumens.

HB-XXX-WHT-120: 120W high-bay lamps with CREE chips (CRI 80) and a lumen output of 9,600 lumens.

HB-XXX-WHT-150: 150W high-bay lamps with CREE chips (CRI 80) and a lumen output of 13,200 lumens.

HB-XXX-WHT-180: 180W high-bay lamp with CREE chips (CRI 80) and a lumen output of 14,200 lumens.

HB-XXX-WHT-120-T: 120W high-bay lamps with Taiwan chips (CRI 70) and a lumen output of 9,200 lumens.

HB-XXX-WHT-150-T: 150W high-bay lamps with Taiwan chips (CRI 70) and a lumen output of 11,500 lumens.

HB-XXX-WHT-180-T: 180W high-bay lamp with Taiwan chips (CRI 70) and a lumen output of 13,800 lumens.

The High-Bay Series are also available in waterproof models with IP65 protection factor.

31. HIGH-BAY with DMX dimming: Now available are the HB-F-WHT-D-120-DMX and the HB-F-WHT-D-150-DMX that can be controlled by the iDIMMER-DMX. The lamps come with the iDRIVER-DMX that communicates with the controller for DMX dimming. The lamps are available with either CREE, Nichia or local Taiwan chips. Multiple lamps can be connected for zone dimming.

32. LOW-BAY Series. 60W and 90W low-bay LED lamps with an E40 base or a ring with bare wires are available with CREE or Nichia LEDs. The 60W LB-XXX-WHT-60 LED lamp with Nichia chips (5500K ±200K) has 5,700 lumens and a CRI of 70. The 90W LB-XXX-WHT-90 LED lamp with Nichia chips (5500K ±200K) has 8,600 lumens and a color rendering index of 70.

The 60W LB-XXX-WHT-60 LED lamp with CREE chips (5500K ±200K) has 5,230 lumens and a CRI of 70. The 90W LB-XXX-WHT-90 LED lamp with CREE chips (5500K ±200K) has 7,850 lumens and a CRI of 70.

33. LUXMAN™-12 Commercial Flood Light: The 30-watt LUXMAN™-12 commercial flood light has 12 x 2.5-watt LEDs and a lumen output of 1,600 lumens for warm white and 1,680 lumens for daylight white. It is suitable for gas station, parking lot, entryway or lobby lighting.

34. LUXMAN™- WHT Wall Washer Series. LUXMAN™-WHT Wall Washers with an IP67 rating are now available in both warm white and daylight white. Models include the 30-watt LUXMAN™-12-WHT (1,600 lumens for warm white and 1,680 lumens for daylight white), the 40-watt LUXMAN™-16-WHT (2,130 lumens for warm white and 2,240 lumens for daylight white), the 60-watt LUXMAN™-24-WHT (3,200 lumens for warm white and 3,360 lumens for daylight white) and the 90-watt LUXMAN™-36-WHT (4,800 lumens for warm white and 5,040 lumens for daylight white).

35. LUXMAN™-SL V2.0 Series Street Lights: The LUXMAN™-SL V2.0 Series LED Street Lights with 2.5W LEDs are IP67 rated and provide lighting for streets, alleys, courtyards, parks and walkways. Ten models are available: the LUXMAN™-SL-3x4 (30 watts; 2,4000 lumens), LUXMAN™-SL-3x5 (37 watts; 2,960 lumens), LUXMAN™-SL-3x6 (45 watts; 3,600 lumens), LUXMAN™-SL-3x7 (52 watts; 4,160 lumens), LUXMAN™-SL-6x3 (45 watts; 3,600 lumens), LUXMAN™-SL-6x4 (60 watts; 4,800 lumens), LUXMAN™-SL-6x6 (90 watts; 7,200 lumens), LUXMAN™-SL-6x8 (120 watts; 9,600 lumens), LUXMAN™-SL-6x10 (150 watts; 12,000 lumens) and LUXMAN™-SL-6x12 (180 watts; 14,400 lumens).

36. LUXMAN™-SL V2.2 Series Street Lights: The LUXMAN™-SL V2.2 Series LED Street Lights feature new heatsinks allowing for higher 3.3W LEDs. They are IP67 rated and provide lighting for streets, alleys, courtyards, parks and walkways. Four models are available: the LUXMAN™-SL-6x5 (100 watts; 8,000 lumens), LUXMAN™-SL-6x6 (120 watts; 9,600 lumens), LUXMAN™-SL-6x8 (160 watts; 11,200 lumens) and the LUXMAN™-SL-6x10 (200 watts; 12,800 lumens).

37. SunSumLite. The SunSumLite is a 1W solar-powered LED lamp with 90~100 lumens and an optional mobile phone charger. It can be used as a flashlight or as a light-source while camping or in rural areas in developing countries with minimal electrical power. The SumSumLite comes with a solar module for charging. There are three light settings that provide continuous lighting for periods of 4 hours (high), 10 hours (medium) and 200 hours (low).

38. STARSTREAM™24 Single-Color Light Strips: The STARSTREAM™24 Single-Color light strip is a 24VDC flexible strip available in warm white (3000k) and daylight white (5000k), red, green, blue and amber. The maximum usable length of the single-color light strips is 30 meters.

39. STARSTRIP™-24-RGB Light Strips: The STARSTRIP™-24-RGB light strips are 24V color-changing light strips with 14 x SMD RGB LED in each 30 cm length of rigid aluminum alloy. Each 30 cm length has a power consumption of 3.4 watts. They are available in lengths of 32, 62, 92 and 122 cm. Waterproof models with an IP67 protecting rating are also now available.

40. STARSTRIP™-24 Single-Color Light Strips: The STARSTRIP™-24-WHT light strips are 24V light strips with 16 x SMD single-color LED in each 30 cm length of rigid aluminum alloy. Each 30 cm of length has 5 watts of power consumption and a lumen output of 180 lumens. They are available in warm white (3300k) and daylight white (5000k). They are available in lengths of 32, 62, 92 and 122 cm. Waterproof models with an IP67 protection rating are also now available.

41. T5™ . The T5™ is a 24V strip light 58 cm in length with 21 LEDs x 0.4W for a total of 8.4 watts. Available in both warm white (3000k) and daylight white (6000k), the T5™ is ideal for office lighting, cabinet lighting or other small area lighting. Up to four T5™ light strips can be connected together.

42. TB600 LED Ceiling Panels: These 40W T-bar 60x60 LED light panels are ultra-thin (10 mm) and feature a uniform light source with no hot spot and no stacking shadow. They are ideal for offices, conference rooms, hotels, factories or other commercial lighting applications.

The panels are available in warm white (3000K ±300K; CRI 80; 3,000 lumens) and daylight white (5500K ±500K; CRI 80; 3000 lumens). Non-dimmable, dimmable and CCT changing (2700K~5500K) models are available.

43. TB600 series LED panel light with UL certification – The ultra-think (10mm) panels available are the TB-2x2-WHT (50W), TB-1x2-WHT (50W) and the TB-2x4-WHT (75W). They are available in 3000K, 4000K and 5000K color temperatures, or the warm-white, natural-white and day-light white.

44. TRISTAR-T8 Series: The TRISTAR-T8 Series are 60cm (10W) and 120cm (20W) T8 tubes with diffused lens. These LED T8 replacements are available in either daylight-white (5000~5500K) or warm-white (2600~3300K). Lumen output for the 60cm models are 800 lumens for daylight-white and 650 lumens for warm-white. Lumen output for the 120cm models are 1,800 lumens for daylight-white and 1,500 lumens for warm-white.

45. ZZ-BRIGHT™-WHT Channel Letter LEDs: ZZ-BRIGHT™ channel-letter LEDs are suitable for tube lights, box signage, 3D letters, decoration lighting and indirect lighting. The ZZ-BRIGHT™-215-WHT has 2 high-brightness SMD-type LEDs on each PCB and the ZZ-BRIGHT™-415-WHT has 4 high-brightness SMD-type LEDs on each PCB. Both models have a constant current regulating IC to provide the same level of brightness, protect against power surges and extend the lifetime of the LEDs. The PCBs have a water resistant coating that prevents water from entering the PCB and causing corrosion. They are available in warm white (3200k), daylight white (4000k) and cool white (6500k), as well as red, blue, green and amber.

46. ZZ-BRIGHT™ -RGB Channel Letter LEDs: ZZ-BRIGHT™-RGB channel-letter LEDs are suitable for tube lights, box signage, 3D letters, decoration lighting, indicating lighting and indirect lighting. Each PCB has 3 SMD-type RGB LEDs. Operating voltage is 12V, maximum power consumption is 1.7W per foot (15.2 cm) and the beam angle is 120º.

Manufacturers

WeThe ~~have~~Company ~~historically~~currently ~~designed~~has ~~and~~no ~~developed our LED lighting products using our own engineers, and then out-source the~~ manufacturing to ~~vendors~~activities ~~of different disciplines. These various vendors are all located~~ in ~~Taiwan.~~the InLED ~~order~~ligthing toproduct ~~secure~~lines ~~a long-term supply~~ and ~~strategic~~ ~~partnership,~~is weonly ~~also~~selling make substantial investments or acquire equity in these vendors as well. We have made investments in manufacturers through our wholly owned subsidiary, ColorStars Taiwan. The manufacturers we are currently invested in are Anteya Technology Corporation, a Taiwanese corporation (“Anteya”) and Fin-Core. Furthermore, we also utilize Jun Yee as a contract manufacturer to manufacture certain products of ours. As described in further detail under the ~~Significant~~existing ~~Business Transactions~~inventory ~~Overview~~on ~~paragraph under the Description of Business section, we no longer own any equity interest in Jun Yee~~demand. ~~We have not entered into a written agreement for the manufacturing of our products with any of these manufacturers.~~

Since 2004, we have invested in Anteya Technology Corporation. Anteya provides the OEM service to us for the TRISTAR, EZSTAR, R4, LUXMAN, and HB series of product lines. Anteya is an important strategic manufacturer for us as we rely upon Anteya for its expertise of LED packaging, electronic engineering and software design. However, Anteya ceased operation due to financial difficulties in April of 2017. The Company is seeking other suppliers as alternative sources for manufacturing and product development.

As described in further detail in the Significant Business Transactions Overview paragraph under the Description of Business section, we own 5.19% of the outstanding common shares of Fin-Core. Fin-Core produces the BOBBY series of LED lamps for us. Additionally, Fin-Core develops high quality thermal management technology which is an integral part of LED lighting applications.

While we do not own any equity interest in Jun Yee, Jun Yee currently serves as an important contract manufacturer for us. Jun Yee produces the T5, TB, ZZ-BRITE, JEDSTAR and STARSTRIP series of LED lamps for us. Jun Yee provides a strategic advantage to us as Jun Yee’s manufacturing plants have state of the art surface mount device machines, testing labs, burn-in chambers, and complete assembly lines which allows for Jun-Yee to effectively and efficiently produce LED lighting products.

We are highly dependent upon the above mentioned manufacturers to produce our LED lighting products. If production at any one of our manufacturers’ manufacturing plants is disrupted for any number of reasons, manufacturing yields may be adversely affected and we may be unable to meet our customer’s requirements. Consequently, our customers may purchase LED lighting products from our competitors. This could result in significant loss of revenues and damage to our customer relationships, which could have a material adverse effect on our business, results of operations, and financial condition.

Distributors and Suppliers

We granted a small number of certain distributors the right in defined territories to distribute our products. We have not entered into any written agreements with these distributors. As such, if our distributors are not adequately performing, we have the option to terminate our relationship at any time with them. Our distributors could also discontinue marketing and distributing our products with little or no notice. If our distributors were to discontinue marketing and distributing our products for any reason, we believe that, due to an abundance of distributors in the LED lighting product sector, we could find an alternative distributor within a short duration of time; however, until we locate another distributor, our business and results of operations could be adversely impacted.

We are not dependent on, nor expect to become dependent on, any one or a limited number of suppliers for essential raw materials or other items. Our manufacturing operations, which are outsourced to various companies, are located in Taiwan where there is an extensive infrastructure of companies supplying raw materials to the LED lighting industry. ~~Our~~As ~~largest~~the ~~supplier~~company ~~accounted~~is transforming ~~for~~to ~~approximately~~a ~~66%~~holding ofcompany ~~total~~there ~~purchases~~is bynone ~~the~~or ~~Company~~limited manufacturng activities in ~~2017~~2018.

Customers

We have historically sold our products primarily to professional wholesale lighting distribution companies, some of whom are companies with many years of experience distributing traditional lighting products and some of whom are strictly distributors of LED lighting products and have fewer years of experience. We also distribute our LED lighting to lighting engineers engaged in specific lighting projects. Typically, we do not sell our products directly to end-users. ~~Our largest customer accounted for approximately 29% of the total revenue in 2017.~~O

As the company is transforming to a holding company and seeking a joint venture for the continuation of the LED lighting product lines. The company will also re-direct its customers to this joint venture company in the very near future.

Since 2015 we began to experience an overall decrease in the number of customers globally, as global competition increased. At this time, the LED market is being flooded with low-priced products from China. Many of our customers are either evaluating or switching to low-priced suppliers as opposed to opting for premium quality products with superior engineering and design.

Product Research and Development

We are not currently engaged in any research and development activities.

Competition

We have historically sold our products globally primarily to lighting distributors selling LED lamps and lighting fixtures for commercial lighting. Competition in the market in which we sell our products is primarily based on price and the frequent introduction of new products to the market using the latest available technology. Our outsourced manufacturing operations in Taiwan, as well as the location of our research and development staff in Taiwan, allows us to take full advantage of a well-developed infrastructure of high-technology companies and well-trained engineers in the SSL industry.

Our principal competitors are Revolution Lighting Technologies, Inc. (NASDAQ: RVLT) and Lighting Science Group (OTC: LSCG) in U.S.A., Philips and Osram in Europe, and Toshiba, and Panasonic in Japan. We also expect increased competition from major traditional lighting companies such as General Electric (NYSE: GE), Westinghouse, and Acuity Brands who have or are developing LED lighting products.

Strategy

As low-priced competitors from China greatly affected our ~~2017~~2018 performance, we have been more conservative in selecting projects and have attempted to avoid transactions with low margins and high risk. We have also decreased our promotional and selling expenses, such as costs associated with attending trade shows. Further, we have decided not to sell our products through retail channels, since payment terms can be long, and the shelf life of our products may be limited as less expensive products follow us into the same stores.

Intellectual Property

(a)

Patents.

We have been issued patents for “high power LED color bulb with infrared remote function” in Taiwan, UK, Germany, France, and the USA. This patent covers the technology in the TriStar series of RGB lamp. We designed a new line of the R5 series of LED lamps in 2011. All of the associated safety marks and certificates were granted for the R5s for their sales into the North American European markets. A total of three different patents were awarded around the new R5 series of lamps in various countries. The R5-PAR38 lamp was also awarded with the reputable Red Dot Award in Germany. We would expect the new R5 to replace the old BOBBY lines. There are a total of 22 patents filed and granted in various countries as of to date.

There are a total of 22 patents filed and granted in various countries as of to date.

(b)	Trademarks and Service Marks.

We use the trademarks “ColorStars”, “TriStar”, “StarStream”, and “PAVO” which are registered trademarks in various countries worldwide. All trademarks, service marks and copyright registrations associated with the business are registered in the name ColorStars Group and expire over various periods of time. We intend to vigorously defend against infringements of our trademarks, service marks and copyrights.

Government Regulations and Standards

The largest segment of the lighting industry consists of incandescent light bulbs. Governments, throughout the world, have passed measures to phase out incandescent light bulbs. In some jurisdictions, this has been done through legislation, while others, through voluntary measures. The aim is to encourage the use of more energy efficient lighting alternatives such as the CFL and the LED lamps.

CFL’s, like all fluorescent lamps contain small amounts of mercury as vapor inside the glass tubing. This does have an element of environmental concern and although it does not pose any significant health risk to exposed adults or children, there has been some worry within the lighting industry with respect to this matter. We claim our overall compliance costs to not be material and are similar to our competitors. Because our products are designed to meet energy efficiency targets greater than are now in effect in our markets, we expect tighter environmental and energy regulations to increase demand for our products.

Environmental Regulations

~~ENERGY~~Our products are subject to the ENERGY STAR program. ENERGY STAR is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy efficient products and practices. The Energy Star is awarded to only certain bulbs that meet strict efficiency, quality, and lifetime criteria. ~~Energy Star Qualified LED Lighting:~~

● Reduces energy costs — uses at least 75% less energy than incandescent lighting, saving on operating expenses. ● Reduces maintenance costs — lasts 35 to 50 times longer than incandescent lighting and about 2 to 5 times longer than fluorescent lighting. There are no bulb-replacements, no ladders, no ongoing disposal program. ● Reduces cooling costs — LEDs produce very little heat. ● Is guaranteed — comes with a minimum three-year warranty — far beyond the industry standard. ● Offers convenient features — available with dimming on some indoor models and automatic daylight shut-off and motion sensors on some outdoor models. ● Is durable — won’t break like a bulb. ● To qualify for Energy Star certification, LED lighting products must pass a variety of tests to prove that the products will display the following characteristics: ● Brightness is equal to or greater than existing lighting technologies (incandescent or fluorescent) and light is well distributed over the area lighted by the fixture. ● Light output remains constant over time, only decreasing towards the end of the rated lifetime (at least 35,000 hours or 12 years based on use of 8 hours per day). ● Excellent color quality. The shade of white light appears clear and consistent over time. ● Efficiency is as good as or better than fluorescent lighting. ● Light comes on instantly when turned on. ● No flicker when dimmed. ● No off-state power draw. The fixture does not use power when it is turned off, with the exception of external controls, whose power should not exceed 0.5 watts in the off state.

Employees

As of December 31, ~~2017~~2018, we had a total of 2 full-time employees and 1 part-time employee. There are no collective bargaining agreements between us and our employees. We do not have any supplemental benefits or incentive arrangements for employees at the present time.

Reports to Security Holders

We are a reporting company and will comply with the requirements of the Exchange Act. We will file quarterly and annual reports and other information with the SEC, and we will post a copy of our annual report together with audited consolidated financial statements on our website.

The public may read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

ITEM 1A.

RISK FACTORS

As we are a smaller reporting company, we are not required to provide the information required by this item.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

We do not own any property, real or otherwise. We currently lease the following properties:

We lease our principal office from Mr. Wei-Rur Chen, our president, at a consideration of NTD $120,000 (USD $3,933) per month (NTD $1,440,000 (USD $47,196) annually). The initial lease term for the agreement was from November 2005 to November 2010. The lease was extended for another five (5) years to November 2015. The lease was then extended for another five (5) years to November 2020. This office is the main operational office in Taiwan with the address of 10F, No. 566 and 568 Jungjeng Road, Sindian District, New Taipei City, Taiwan 231.

We believe that our current facilities are adequate for our needs through the next twelve months, and that, should it be needed, suitable additional space will be available to accommodate expansion of our operations on commercially reasonable terms, although there can be no assurance in this regard. There are no written agreements. We have no plans to acquire any property in the immediate future.

175

ITEM 3.

LEGAL PROCEEDINGS

There are no legal proceedings that have occurred within the past year concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

On September 17, 2018, the U.S. Securities and Exchange Commission (“Commission”) announced the temporary suspension of trading in the securities of the Company, commencing at 9:30 a.m. EDT on September 18, 2018 and terminating at 11:59 p.m. EDT on October 1, 2018. The Commission temporarily suspended trading in the securities of the Company due to a lack of current and accurate information about the Company because it has not filed certain periodic reports with the Commission. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”) and was accompanied by an Order Instituting Administrative Proceedings and Notice of Hearing (the “Proceeding”) pursuant to Section 12(j) of the Exchange Act. The stated purpose of the order and hearing is for the Commission to determine whether it is necessary and appropriate to continue the suspension in the trading of the securities of the Company for a period not exceeding twelve months, or to revoke the registration of the Company’s securities pursuant to Section 12 of the Exchange Act. The Company filed an Answer in the Proceeding on September 26, 2018.

On October 18, 2018, the Company had a pre-hearing telephone conference with the Commission regarding the Proceeding. During the pre-hearing conference, it was agreed that the Commission’s motion for summary disposition against the Company ~~would~~was be due on November 15, 2018; the Company’s opposition brief ~~would~~was be due on December 13, 2018; and that the Commission’s reply brief was ~~would be~~ due on December 20, 2018, and such filings were made. The Commission ~~has~~ offered the Company the alternative to consent to the ~~revocation~~ revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act to avoid the time and cost associated with contesting the Proceeding. If the Company were to consent to the revocation of its registration, the Company would then need to file a registration statement (with two years of audited financials) with the Commission and cause that registration statement to become effective in order to reinstate the registration of the Company’s securities. It is the Company’s understanding from the pre-hearing conference with the Commission that the only remedy the Commission has for delinquent filers such as the Company, even if the filer becomes current by the date of the hearing, is the revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act. Therefore, the Company cannot provide any assurances that it will be able to avoid the revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act due to the Company becoming delinquent in its filings. If the registration of the Company’s securities is revoked, the Company intends to file a registration statement with the Commission to reinstate the registration of the Company’s securities. The Company cannot provide any assurances as to the timing of the filing and effectiveness of such a registration statement.

ITEM 4.

MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our Common Stock ~~trades~~was trading on the OTC Bulletin Board under the symbol “CSTU”. ~~The~~On ~~following~~September ~~table~~17, ~~sets forth~~2018, ~~for~~the U.S. Securities and Exchange Commission (“Commission”) announced the ~~periods~~temporary suspension of trading in the securities of the Company, ~~indicated~~commencing at 9:30 a.m. EDT on September 18, 2018. The Commission temporarily suspended trading in the ~~high~~securities ~~and~~of ~~low~~the ~~bid~~Company due to a lack of current and accurate information ~~for~~about ~~our~~the ~~Common~~Company ~~Stock~~because asit ~~determined~~has ~~from~~not ~~sporadic~~filed ~~quotations~~certain onperiodic reports with the Commission. ~~OTC~~This ~~Bulletin~~order ~~Board.~~was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”) and was accompanied by an Order Instituting Administrative Proceedings and Notice of Hearing pursuant to Section 12(j) of the Exchange Act. The ~~following~~stated ~~quotations~~purpose ~~reflect~~of ~~inter-dealer~~the ~~prices,~~order ~~without~~and ~~retail~~hearing ~~mark-up,~~is ~~mark-down~~for orthe ~~commission~~Commission to determine whether it is necessary and ~~may~~appropriate to continue the suspension in the trading of the securities of the Company for a period not ~~represent~~exceeding ~~actual~~twelve months, or to revoke ~~transactions~~the registration of the Company’s securities pursuant to Section 12 of the Exchange Act. The Company filed an Answer in the Proceeding on September 26, 2018.

The following table sets forth, for the periods indicated, the high and low bid information for our Common Stock as determined from sporadic quotations on the OTC Bulletin Board. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

	High		Low

Year Ended December 31, 2018
First Quarter	$	1.05	$	0.251
Second Quarter	$	1.03	$	0.101
Third Quarter	$	0.255	$	0.11
Fourth Quarter (Trading Suspended)	$	N.A.	$	N.A.

	High		Low

Year Ended December 31, 2017
First Quarter	$	0.02	$	0.011
Second Quarter	$	0.039	$	0.019
Third Quarter	$	0.382	$	0.023
Fourth Quarter	$	1.25	$	0.11

	High		Low
Year Ended December 31, 2016
First Quarter	$	0.06	$	0.01
Second Quarter	$	0.02	$	0.004
Third Quarter	$	0.61	$	0.003
Fourth Quarter	$	0.04	$	0.01

Security Holders

As of December 31, ~~2017~~2018, there were ~~327~~555 record holders of 90102,274,515 shares of our Common Stock

Dividends

Dividends, if any, will be contingent upon our revenues and earnings, capital requirements and financial conditions. The payment of dividends, if any, will be within the sole discretion of our Board of Directors. We presently intend to retain all earnings, if any, for use in our business operations.

Securities authorized for issuance under equity compensation plans

We have never and have no current plans to issue securities under any equity compensation plans.

Common Stock

The authorized capital stock of our Company consists of 450,000,000 shares of Common Stock, par value $0.001 per share, of which there are 90102,274,515 issued and outstanding as of December 31, ~~2017~~2018.

All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of our stockholders. Our stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available. In the event of liquidation, the holders of our Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. Our stockholders do not have cumulative or preemptive rights.

Preferred Stock

Our Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of Preferred Stock, par value $0.001 per share, with designations, rights and preferences including rights to dividend, liquidation, conversion, voting, or other rights determined from time to time by our Board of Directors, without shareholder approval. Up to this point in time, we have not designated or issued any shares of Preferred Stock.

Recent Sales of Unregistered Securities

None.

ITEM 6.

SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 7.

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

(a)	Liquidity and Capital Resources.

Our revenues are primarily derived from sales of the LED devices and systems described above. Although our financial results are mainly dependent on sales, general and administrative, compensation and other operating expenses, our financial results have also been dependent on the level of market adoption of LED technology as well as general economic conditions.

~~LED lighing~~ Lighting products ~~become mature~~remained ~~and~~relatively ~~affordable~~static infor ~~the~~50 ~~past~~years ~~few~~until ~~years~~recently, ~~and~~when ~~are~~lighting ~~well~~became ~~adopted~~one inof the ~~developped~~last ~~and~~major ~~developing~~markets ~~countries.~~to ~~The~~be ~~Chinese manufacturers~~transformed ~~have~~substantially ~~been~~by ~~penetrating~~new ~~into~~technology. ~~the~~Because ~~global~~LED ~~market~~technology ~~with~~remains ~~low~~an ~~price~~emerging ~~commodity~~and ~~type~~expensive oftechnology ~~LED~~that ~~lighting~~has ~~products~~only ~~since~~recently ~~2015.~~become more ~~Now~~economically ~~the~~viable, ~~LED~~market ~~lighting business~~adoption ishas ~~very~~been ~~competitive~~slow. ~~Many~~Given of the ~~product~~current ~~and~~economic ~~part~~downturn, ~~suppliers~~liquidity ofhas ~~the~~been ~~Company~~constrained ~~have~~forcing institutions ~~closed~~and ~~their~~individuals ~~operations due~~ to ~~competition. The~~substantially ~~Company~~reduce ~~has~~capital ~~been~~spending ~~seeking~~to ~~new~~focus ~~product~~only ~~lines~~on ~~and~~critical ~~alternative~~path ~~suppliers~~expenditures. ~~for the continuation of the~~ LED lighting ~~business. The~~ ~~Company~~products ishave ~~currently~~been ~~negotiating with~~ a ~~party~~discretionary inrather ~~the~~than ~~Kingdom~~mandatory ofinvestment, ~~Saudi Arabia (KSA) for LED lighting technology transfer~~ and ~~joint venture.~~as ~~Initial~~a ~~negotiation~~result, ~~include~~sales ~~the transfer~~ of ~~the~~our ~~LED~~devices ~~lighting~~and ~~product~~systems ~~design,~~have ~~manufacturing,~~been negatively ~~patents,~~impacted. ~~trade~~We ~~mark,~~believe ~~from the~~that ~~Company~~as to the ~~new~~global ~~joint~~economy ~~venture~~grows ~~entity.~~and ~~The~~provides ~~Company~~institutions ~~will also assist the design~~ and ~~construction~~individuals ofwith ~~the~~greater ~~manufacturing facilities~~liquidity, tosales beof ~~built~~our indevices ~~KSA~~ and ~~the~~systems ~~training~~will ~~of its operations~~increase.

~~The~~Increased market ~~Company~~awareness isof ~~also~~the ~~seeking~~benefits ~~opportunities in~~of LED lighting, increasing energy prices and the ~~green~~social movement influencing individuals and institutions towards greater investment in energy-efficient ~~sectors~~products and services will have, ~~including~~we ~~the~~believe, ~~solar~~an ~~power~~increasingly ~~project~~positive impact ~~development~~on our sales in the future. Additionally, ~~waste-tire-~~we intend to~~-oil~~ utilize our strategic partnerships to help us reduce the component ~~technology~~and production costs of our devices and ~~project~~systems ~~development~~in order to offer them at competitive prices. Further, we believe our ability to provide attractive financing options to our clients with respect to the purchase of our devices and ~~LNG~~systems ~~trading~~will ~~business~~positively affect our sales.

Net cash (used in) provided by operating activities. During the fiscal year ended December 31, ~~2017~~2018, net cash used in operating activities was $(73500,~~744~~320) compared with $(~~230~~73,~~611~~744) used in operating activities for the fiscal year ended December 31, ~~2016~~2017. The cash flow used in operating activities in the fiscal year ended December 31, ~~2017~~2018 was primarily the result of increase in net loss and decrease in accounts payable and transfer of temporarily held proceeds from new issuance of shares. The cash flow used in operating activities in the fiscal year ended December 31, ~~2016~~ 2017 was primarily the result of net loss and accounts payable.

20Net cash (used in) provided by investing activities. During the fiscal year ended December 31, 2018, net cash used in investing activities was $0 compared with $7,917 used in investing activities for the fiscal year ended December 31, 2017.

Net cash (used in) provided by ~~investing~~financing activities. During the fiscal year ended December 31, ~~2017~~2018, net cash ~~used~~provided inby ~~investing~~financing activities was $0159,400 compared with $0403,307 ~~used~~provided inby ~~investing~~financing activities for the fiscal year ended December 31, 2017. Net cash flow generated in financing activities in the fiscal year ended December 31, 2018 was primarily from the completion of a private placement of Company common stock in February 2018 resulting in $410,258 of proceeds to the Company and the Company made a repayment of $260,818 to shareholder loans. Net cash flow generated in financing activities in the fiscal year ended December 31, 2017 was primarily from the completion of a private placement of Company common stock in November 2017 resulting in $669,856 of proceeds to the Company.

~~Net cash (used in) provided by financing~~The ~~activities.~~Company ~~During~~needs ~~the~~to ~~fiscal~~raise ~~year~~additional ~~ended~~capital ~~December~~from ~~31,~~external ~~2017,~~sources ~~net~~or ~~cash~~from ~~provided~~shareholder byloans ~~financing~~to ~~activities~~support ~~was~~its ~~$403,307 compared with $202,444 provided by financing activities for the fiscal year ended December 31, 2017~~operation. ~~Net~~There ~~cash~~is ~~flow generated~~no inassurance ~~financing~~that ~~activities in~~ the ~~fiscal year ended December 31, 2017 was primarily from the private placement of the~~ Company ~~common stocks~~will inbe ~~October~~able ~~and~~to ~~November~~obtain ~~2017~~funding ~~resulting~~with inacceptable ~~$669,856 of increase in capital to the Company~~terms.

The Company need to raise additional capital from external sources or from shareholder loans to support its operation. There is no assurance that the Company will be able to obtain funding with acceptable terms.

(b)	Results of operations.

Comparison of Fiscal Year Ended December 31, ~~2017~~2018 to Fiscal Year Ended December 31, ~~2016~~2017

Net Sales. Net sales decreased to $183,~~851~~291 for the year ended December 31, ~~2017~~2018 from $~~369~~18,~~953~~851 for the year ended December 31, ~~2016~~2017. The decrease in sales was due to market share loss and uncompetitive product range.

Cost of Goods Sold. Cost of goods sold decreased to $21,840 for the year ended December 31, 2017 from $259,818 for the year ended December 31, 2016. The decrease in cost of goods sold was due to decrease in overall sales.8

~~Gross~~Cost ~~Profit~~of Goods Sold. ~~Gross~~Cost ~~profit~~of goods sold decreased to $~~(2,989)~~583 for the year ended December 31, ~~2017~~2018 from $~~110~~21,~~035~~840 for the year ended December 31, ~~2016~~2017. The decrease ~~was due to decrease~~ in ~~overall~~cost ~~sales.~~of ~~The~~goods ~~Company’s~~sold ~~gross~~was ~~profit~~due ~~margin percentage decreased~~ to ~~(15.86)% for the year ended December 31, 2017 compared to 29.7% for the year ended December 31, 2016. The~~ decrease in ~~gross~~overall ~~profit margin is due to the price erosion of the product range~~sales.

21Gross Profit. Gross profit increased to $2,708 for the year ended December 31, 2018 from $(2,989) for the year ended December 31, 2017. The increase was due to reclaim of written-off inventory items. The Company’s gross profit margin percentage increased to 82.28% for the year ended December 31, 2018 compared to (15.86)% for the year ended December 31, 2017. The increase in gross profit margin is due to reclaim of written-off inventory items.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~decreased~~increased to $~~184~~321,~~288~~ 918 for the year ended December 31, ~~2017~~2018 from $~~236~~219,~~213~~159 for the year ended December 31, ~~2016~~2017. The ~~decrease~~increase in selling, general and administrative ~~expenses~~ expenses was primarily related to ~~decrease~~payment inof ~~bad~~professional ~~debt,~~fees ~~head~~for ~~counts,~~the ~~office~~review ~~rent~~and audit of fiscal years of 2015, 2016 and ~~marketing~~2017. ~~expenses~~The total professional fees paid in 2018 for such reviews and audits was $180,353.

Research and Development. R&D expense ~~decreased~~was to $0 for the year ended December 31, ~~2017~~2018 ~~from~~and $~~1,401~~0 for the year ended December 31, ~~2016~~2017.

Depreciation, Amortization, and Depletion. Depreciation, amortization, and depletion decreased to $61,~~277~~704 for the year ended December 31, ~~2017~~2018 from $256,~~108~~277 for the year ended December 31, 2017, mainly due to less overall value of fixed property after years of use.

Interest Expense. Interest expense ~~increased~~decreased to $2011,~~627~~077 for the year ended December 31, ~~2017~~2018 compared with $1320,~~917~~627 for the year ended December 31, ~~2016~~2017. The ~~increase~~decrease in interest expense was due to ~~increase~~decrease of ~~additional~~a ~~financings~~long-term ~~during the year~~loan.

Net Loss. For the year ended December 31, ~~2017~~2018, we incurred a net loss of $(~~239~~334,~~594~~986) as compared to a net loss of $(~~162~~239,~~479~~594) for the year ended December 31, ~~2016~~2017. The net loss was primarily a result of insufficient revenue from sales and low profit margin due to competition and price erosion.

Product revenues for the fiscal year ended December 31, 2017 are as follows:

Regions	Sales Amount (US$)		Percentage (%)
Europe		10,995		58.32
Asia		2,337		12.40
USA		5,519		29.27
Others		-		-
Total		18,851		100

Product revenues for the fiscal year ended December 31, 2016 are as follows:

Regions	Sales Amount (US$)		Percentage (%)
Europe		107,580		29
Asia		24,379		6.6
USA		233,244		63.1
Others		4,650		1.3
Total		369,853		100

Product

Our revenue reported in fiscal year 2017 and 2016 is the consolidated revenue according to GAAP for the Company and its subsidiaries. The “Others” regions presented in the 2016 revenue breakdown were for the sales generated from the Middle East (Israel), Australia and New Zealand.

Inflation

We do not believe that inflation in the cost of our raw materials has had in the past or will have in the future any significant negative impact on our operations. However, no assurance can be given that we will be able to offset such inflationary cost increases in the future.

(c)	Off-balance sheet arrangements.

Financial instruments that potentially expose concentrations of credit risk primarily consist of cash and cash equivalents, investments and accounts receivable. Management believes there are no significant off-balance-sheet risks such as those associated with foreign exchange contracts, option contracts or other foreign exchange hedging arrangements. With respect to concentration of credit risk, the Company has cash investment policies which, among other things, limit investments to investment-grade securities. Ongoing credit evaluations of the customers are performed and allowances for potential credit losses are maintained.

(d)	Contractual Obligations.

Below is a table which presents our contractual obligations and commitments as of December 31, ~~2017~~2018:

Contractual Obligation

Less than 1 Year (US$)

1-3 years (US$)

3-5 years (US$)

After 5 years (US$)

Operating Leases(1)

6447,~~676~~916

8736,~~826~~626

Total contractual cash obligations

6447,~~676~~916

8736,~~826~~626

(1) Operating Leases: Office leases (main office ~~and branch office~~) in Taiwan.

Foreign Currency Exchange Rates

The financial statements of our foreign operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of foreign operations, as well as the equity accounts whose functional currencies are not in U.S. dollars are translated at the period-end exchange rates, while revenues and expenses are translated at weighted-average exchange rates during the fiscal year. The cumulative translation effects are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

COLORSTARS GROUP

CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2018

2410

COLORSTARS GROUP

CONSOLIDATED FINANCIAL STATEMENTS

(Audited)

TABLE OF CONTENTS

	PAGE NO.	~~PAGE NO.~~
Report of Independent Registered Public Accounting Firm	F-1	~~F-1~~
Consolidated Balance Sheets As of December 31, 2017 and December 31, 2016		F-2
Consolidated Balance Sheets As of December 31, 2018 and December 31, 2017	F-2
Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2017 and 2016		F-3
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017	F-3
Consolidated Statement of Stockholders’ (Deficit) Equity for the year ended December 31, 2017 and 2016		F-4
Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2018 and 2017	F-4
Consolidated Statement of Cash Flows for the year ended December 31, 2017 and 2016		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017	F-5
Notes to Consolidated Financial Statements	F-6~F-15	~~F-6 - F-16~~

2511

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of ColorStars Group

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ColorStars Group, ~~Inc.~~ (“the Company”) as of December 31, 2018 and 2017, and ~~2016~~ ~~and~~ the related consolidated ~~statement~~statements of operations and comprehensive loss, stockholders’ (deficit) equity, and cash flows for the two years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2018 and ~~2016~~2017, and the results of its operations and its cash flows for the two years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~Consideration of the Company’s Ability to Continue as a~~ Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has arecurring ~~history of~~ operating losses resulting in aincreased ~~significant~~working ~~accumulated~~capital ~~deficit~~deficits and ~~has~~lack ~~increasing~~of ~~working~~operational ~~capital deficits~~funding. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

~~Fruci & Associates II, PLLC~~ We have served as the Company’s auditor since 2017. Spokane, Washington April 12, 2019

Spokane, WA November 5, 2018

F-1

COLORSTARS GROUP

CONSOLIDATED BALANCE SHEETS

(IN US$)

	December 31, 2017			December 31, 2016
	December 31, 2018			December 31, 2017
Assets
Current assets:
Cash and equivalents	$	~~359~~18,~~403~~054		$	32359,~~433~~403
Accounts receivable, net of allowance for doubtful accounts of $152,883 at December 31, 2017 and $152,710 at December 31, 2016.		-			-
Accounts receivable, net of allowance for doubtful accounts of $148,336 at December 31, 2018 and $152,883 at December 31, 2017.		-			-
Prepaid expenses and other current assets		183,~~056~~025			5318,~~699~~056
Total current assets		~~377~~21,~~459~~079			86377,~~132~~459
Equipment, net of accumulated depreciation		3641,~~057~~554			4644,~~328~~554
Other assets		~~20,299~~982			811,~~735~~802
Total assets	$	~~433~~63,~~815~~615		$	~~141~~433,~~195~~815
Liabilities and stockholders’ equity
Current liabilities:
Short term loan	$	-		$	526,591
Accounts payable		20,537			15,524
Accounts payable		15,524			44,968
Advance from shareholder		269,198			441,603
Advance from shareholder		441,603			74,379
Accrued expenses- related party		5,614			3,708
Accrued expenses		3,708			12,516
Other current liabilities		159			199,967
Other current liabilities		199,967			19,165
Notes Payable - Current		-			87,538
Current portion of long term loan		87,538			67,651
Total current liabilities		295,508			748,340
Total current liabilities		748,340			745,270
Total liabilities	$	295,508		$	748,340
Long term loan		-			80,414
Commitments and contingencies		-			-
Total liabilities	$	748,340		$	825,684
Commitments and contingencies
Stockholders’ equity
Common Stock ––Par Value $0.001 90,274,515 and 67,448,890 shares issued and outstanding, 450,000,000 shares are authorized at December 31, 2017 and December 31, 2016		90,275			67,449
Common Stock –Par Value $0.001 102,274,515 and 90,274,515 shares issued and outstanding, 450,000,000 shares are authorized at December 31, 2018 and December 31, 2017		102,275			90,275
Additional paid in capital		34,~~759~~157,~~260~~518			3,~~112~~759,~~230~~260
Accumulated other comprehensive income		~~139~~147,~~825~~185			~~200~~139,~~123~~825
Accumulated deficit		(4,~~303~~638,~~885~~871	)		(4,~~064~~303,~~291~~885	)
Total stockholders equity		(~~314~~231,~~525~~893	)		(~~684~~314,~~489~~525	)
Total liabilities and stockholders’ equity	$	~~433~~63,~~815~~615		$	~~141~~433,~~195~~815

The accompanying notes are an integral part of the financial statements.

F-2

COLORSTARS GROUP

CONSOLIDATED STATEMENTS OF ~~OPERATION~~OPERATIONS AND COMPREHENSIVE LOSS

(IN US$)

	For the year ended December 31,
	2017			2016
	2018			2017
Net sales	$	183,~~851~~291		$	~~369~~18,~~853~~851
Cost of goods sold		~~21,840~~583			~~259~~21,~~818~~840
Gross profit		(2,~~989~~708	)		~~110~~(2,~~035~~989	)
Operating expenses
Selling, general and administrative		~~184~~111,~~288~~149			~~236~~151,~~213~~658
Bad debt Selling		-			-
Professional fees		180,353			32,630
Rent		28,~~594~~712			4428,~~641~~594
Depreciation & Amortization		61,~~277~~704			256,~~108~~277
Research and development		-			1,401
Total operating expenses		321,918			219,159
Total operating expenses		219,159			307,363
Loss from operations		(319,210	)		(222,148	)
Loss from operations		(222,148	)		(197,328	)
Other income (expenses)
Interest expense (net)		(2011,~~627~~077	)		(1320,~~917~~627	)
Share of investees operating results (net)		-			-
Loss on impairment of investments		-			7,058
Loss on inventory write-off		-			-
Gain (loss) on foreign exchange, net		(3,906	)		-
Loss on impairment of investments		7,058			-
Gain on reversal of bad debts		-			12,982
Gain (loss) on foreign exchange, net		-			(13,154	)
Other income		7			15,595
Gain on reversal of bad debts		12,982			61,920
Other expenses		-			(29,056	)
Other income		15,595			-
Loss before income tax		(334,186	)		(236,196	)
Other expenses		(29,056	)		-
Income tax benefit (expense)		(800	)		(3,398	)
Loss before income tax		(236,196	)		(162,479	)
Net loss		(334,986	)		(239,594	)
Income tax benefit (expense)		(3,398	)		-
Net loss		(239,594	)		(162,479	)
Earnings per share attributable to common stockholders:
Basic and diluted per share	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding:
Basic and diluted		71101,~~883~~274,~~561~~515			6771,~~448~~883,~~890~~561
Comprehensive gain/(loss):
Net loss		(~~239~~334,~~594~~986	)		(~~162~~239,~~479~~594	)
Other comprehensive gain/(loss):
Other comprehensive loss:
Foreign currency translation gain/(loss), net of taxes		(60,298	)		(28,586	)
Foreign currency translation gain(loss), net of taxes		7,360			(60,298	)
Comprehensive loss	$	(~~299~~327,~~892~~626	)	$	(~~133~~299,~~893~~892	)

The accompanying notes are an integral part of the financial statements.

F-3

COLORSTARS GROUP

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(IN US$)

	Shares		Value		Additional Paid in capital		Accumulated deficit			Accumulated other comprehensive income			Total Stockholder’s equity
Balance, December 31, 2015		67,448,890	$	67,449	$	3,112,230	$	(3,901,812	)	$	171,537		$	(550,596	)
Foreign currency translation		-		-		-		-			28,586			28,586
Net loss		-		-		-		(162,479	)		-			(162,479	)
Balance, December 31, 2016		67,448,890	$	67,449	$	3,112,230	$	(4,064,291	)	$	200,123		$	(684,489	)
Capital increase		22,825,625		22,826		647,030		-			-			669,856
Foreign currency translation		-		-		-		-			(60,298	)		(60,298	)
Net loss		-		-		-		(239,594	)		-			(239,594	)
Balance, December 31, 2017		90,274,515	$	90,275	$	3,759,260	$	(4,303,885	)	$	139,825		$	(314,525	)
Capital increase		12,000,000		12,000		398,258		-			-			410,258
Foreign currency translation		-		-		-		-			7,360			7,360
Net loss		-		-		-		(334,986	)		-			(334,986	)
Balance, December 31, 2018		102,274,515	$	102,275	$	4,157,518	$	(4,638,871	)	$	147,185		$	(231,893	)

The accompanying notes are an integral part of the financial statements.

F-4

COLORSTARS GROUP

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(IN US$)

	For the year ended December 31,
	2017			2016
	2018			2017
Cash flows from operating activities
Net (loss)	$	(~~239~~334,~~594~~986	)	$	(~~162~~239,~~479~~594	)
Depreciation and amortization		61,~~277~~704			256,~~108~~277
Loss on inventory write-off		-			-
Loss on disposal of investments		-			(7,058	)
Loss on disposal of investments		(7,058	)		-
Gain on reversal of bad debts					(12,982	)
Gain on reversal of bad debts		(12,982	)		(61,920	)
Accounts receivable					12,982
Share of investment loss (profit)		-			-
Prepaid expenses and other current assets		25,851			24,080
Changes in operating assets and liabilities:
Accounts payable		5,013			(29,444	)
Accounts receivable		12,982			83,776
Accrued expenses		1,906			(8,807	)
Inventories		-			-
Receipts in advance and other current liabilities		(199,808	)		180,802
Prepaid expenses and other current assets		24,080			(17,547	)
Cash flows ( used in ) operating activities		(500,320	)		(73,744	)
Accounts payable		(29,444	)		(107,174	)
Accrued expenses		(8,807	)		(481	)
Receipts in advance and other current liabilities		180,802			10,106
Cash flows ( used in ) operating activities		(73,744	)		(230,611	)
Cash flows from investing activities
Addition to fixed assets		7,917			-
Sale of fixed assets		-			7,917
Cash flows ( used in ) investing activities		7,917			-
Cash provided by investing activities		-			7,917
Cash flows from financing activities
Advance from shareholder		~~367~~97,~~224~~498			54367,~~379~~224
Increase (decrease) in short-term loans		(573,246	)		-
Repay advance from shareholder		(260,818	)		-
Increase (decrease) in long-term loans		(60,527	)		148,065
Increase (decrease) in short-term loans		(87,538	)		(573,246	)
Increase (decrease) in capital		669,856
Increase (decrease) in long-term loans		-			(60,527	)
Cash flows provided from financing activities		403,307			202,444
Increase (decrease) in capital		410,258			669,856
Effect of exchange rate changes on cash and cash equivalents		(10,510	)		36,471
Cash flows provided from financing activities		159,400			403,307
Net (decrease) in cash and cash equivalents		326,970			8,304
Effect of exchange rate changes on cash and cash equivalents		(429	)		(10,510	)
Beginning cash and cash equivalents		32,433			24,129
Net increase(decrease) in cash and cash equivalents		(341,349	)		326,970
Ending cash and cash equivalents	$	359,403			32,433
Beginning cash and cash equivalents		359,403			32,433
Ending cash and cash equivalents	$	18,054			359,403
Supplemental disclosure of cash flow information Cash paid during the period for:
Interest	$	2011,~~674~~113		$	1320,~~958~~674
Tax paid	$	800		$	-800

The accompanying notes are an integral part of the financial statements.

F-5

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Nature of Business and Basis of Presentation

Nature of Business – Circletronics Inc., now ColorStars Group (“the Company”), was incorporated in Canada on January 21, 2005. Circletronics Inc.- was redomiciled to Nevada and its name changed to ColorStars Group on November 3, 2005. ColorStars Group owns 100% of the shares of ColorStars Inc.

Color Stars Inc. (“Color Stars TW”, “the Subsidiary”) was incorporated as a limited liability company in Taiwan, Republic of China in April 2003 and commenced its operations in May 2003. The Company through its wholly owned Subsidiary is mainly engaged in manufacturing, designing and selling light-emitting diode and lighting equipment. ~~As LED lihting busines has become very competitve the company has been transformed into a holding company and start to seek investment opportunities in other business lines.~~

The company will be transformed into a holding company due to environmental changes in 2018. The company is seeking investment opportunities in various business lines, including solar power projects, waste tire to oil systems, and LNG trading projects.

Basis of Presentation - The accompanying audited consolidated financial statements of ColorStars Group and Color Stars Inc. (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States for annual financial information and with the instructions to the Annual Report on Form 10-K and Rule 10-01 of Regulation S-X. Accordingly, they include all of the information and footnotes required by accounting principles generally accepted in the United States for a complete presentation of the financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair statement of the financial position, results of operations and cash flows for the year ended December 31, ~~2017~~2018 and ~~2016~~2017 have been included. Operating results for the year ended December 31, ~~2017~~2018 are not necessarily indicative of the results to be expected for any subsequent interim period.

Basis of Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Going Concern - The Company incurred a loss of approximately $~~239~~334,~~594~~986 in 2018 ~~2017~~ and continued to experience certain decreases in working capital. As a result, the Company may lack operational ~~fund~~funding to continue as a going concern ~~for~~at ~~the~~least ~~next~~ 12 ~~month~~months” from the date the financial ~~statement is~~statements ~~issued~~are ~~for the period~~issued. The Company is evaluating the disposal of certain assets and inventory, raising new capital for future operations, and seeking short-term loans from shareholders or banks. However, there can be no assurance that the Company will be successful in achieving its objectives. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require 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. The Company evaluates these estimates on a regular basis and bases them on historical experience and on various assumptions that the Company believes are reasonable. Actual results could differ from the estimates.

F-6

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash and Cash Equivalents – Cash and cash equivalents include cash on hand, cash on deposits and all short-term highly liquid investments purchased with remaining maturities of three months or less. The Company currently maintains substantially all of its day-to-day operating cash balances with major financial institutions.

Plant and Equipment – Equipment is recorded at cost. Provision for depreciation is computed using the straight-line method on all depreciable assets over the estimated useful lives of the related assets (five years for machinery equipment, three and half years for transportation equipment and three years for computer and office equipment and other equipment).The depreciable base of the assets = cost – estimated scrap value. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization is eliminated from the respective amounts and any resulting gains or losses are reflected in operations. Expenditures for repairs and maintenance costs are expensed as incurred.

FAccounts Receivable and Allowance for Doubtful Accounts -6 Accounts receivable are recorded at net realizable value. The Company provides for the possibility of customers’ inability to make required payments by recording an allowance for doubtful accounts. The Company writes-off an account when it is considered to be uncollectible. The Company evaluates the collectability of its accounts receivable on an on-going basis. The Company records an allowance for doubtful accounts based on the length of time the receivables are past due, the current business environment and the Company’s historical experience. As of December 31, 2018 and 2017, the allowance for doubtful accounts was $148,336 and $152,883 respectively.

~~Accounts~~Inventory – ~~Receivable~~Inventory ~~and~~is ~~Allowance~~stated ~~for~~at ~~Doubtful~~the ~~Accounts~~lower -of ~~Accounts~~cost ~~receivable~~or ~~are~~market ~~recorded~~(weighted ataverage ~~net~~method). ~~realizable~~Any ~~value.~~write-down ~~The~~of ~~Company~~inventory ~~provides for~~to the ~~possibility~~lower of cost ~~customers’~~or ~~inability~~market toat ~~make~~the ~~required~~close ~~payments~~of bya ~~recording~~fiscal anperiod ~~allowance~~creates ~~for~~a ~~doubtful~~new ~~accounts.~~cost ~~The Company~~basis ~~writes-off~~that ansubsequently ~~account~~would ~~when~~not itbe ismarked ~~considered~~up tobased beon changes ~~uncollectible.~~in ~~The~~underlying ~~Company~~facts ~~evaluates~~and ~~the~~circumstances. ~~collectability~~Inventories ofon ~~its~~hand ~~accounts receivable~~are evaluated on an on-going basis. ~~The~~to ~~Company~~determine ~~records~~if anany items ~~allowance~~are ~~for~~obsolete ~~doubtful~~or ~~accounts~~in ~~based~~excess onof ~~the~~future ~~length~~needs. ofItems ~~time~~determined ~~the~~to ~~receivables~~ be obsolete are ~~past~~reserved ~~due,~~for. The Company provides for the ~~current~~possible ~~business~~inability ~~environment~~to ~~and~~sell ~~the~~its ~~Company’s~~inventories ~~historical~~by ~~experience~~providing an excess inventory reserve. As of December 31, ~~2017~~2018 and ~~2016~~2017, the allowance for ~~doubtful~~obsolete ~~accounts~~inventory was $~~152~~776,~~883~~441 and $~~152~~800,~~710~~246 respectively.

Inventory – Inventory is stated at the lower of cost or market (weighted average method). Any write-down of inventory to the lower of cost or market at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As of December 31, 2017 and 2016, the allowance for obsolete inventory was $800,246 and $741,787 respectively.

Intangible Assets - Intangible assets with finite lives are amortized over their respective estimated useful lives. The amount of intangible assets to be amortized shall be the amount initially assigned to that asset less any residual value. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used to evaluate long-lived described below.

Investments – If the Company determines an unrealized loss is other-than-temporary, the Company recognizes the loss in earnings.

At December 31, ~~2017~~2018 and ~~2016~~2017, the Company has investments stated at cost method, and further discussions at Note 7.

Impairment of long-lived assets - The Company reviews the recoverability of its long-lived assets, such as property and equipment and intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows, undiscounted and without interest charges, of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets.

F-7

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments - The Company values financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued liabilities, and other current liabilities in the Consolidated Financial Statements approximates fair value because of the short-term nature of the instruments.

The Company adopted the provisions of ASC 820, which require us to determine the fair value of financial assets and liabilities using a specified fair-value hierarchy. The objective of the fair-value measurement of our financial instruments is to reflect the hypothetical amounts at which we could sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (exit price).

FRevenue Recognition -7 Revenue is recognized in connection with sales of products.To achieve the core principle, an entity should apply the following five-step model:

~~Revenue~~Step ~~Recognition - Revenue is recognized in connection with sales of products when all of the following conditions are met~~1: ~~(1) there~~Identify ~~exists persuasive evidence of an arrangement with~~ the ~~customer, typically consisting of a purchase order or~~ contract; ~~(2) products~~with ~~have been delivered and title and risk of loss has passed to~~ the customer~~, which occurs when a product is shipped under customary terms; (3) the amount of revenue is fixed or determinable; and (4) collectability is reasonably assured~~.

~~Income~~Step ~~taxes~~2: -Identify ~~The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for~~ the ~~expected~~performance ~~tax~~obligations ~~consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts~~ in the ~~financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse~~contract. ~~Valuation allowances are provided against deferred tax assets that are not likely to be realized.~~

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 its performance obligations.

In addition to the five-step model, the standard provides implementation guidance on warranties, customer options, licensing, and other topics discussed in ASC 606-10-55-3. In 2017 and 2018, the FASB issued some ASUs to clarify certain matters related to FASB ASC 606, the modified retrospective adoption did not have a material effect because there were no contracts outstanding at the end of the reporting period. The Company had immaterial revenue during 2018 and will evaluate the potential recognition impacts of ASC 606 as it continues to evaluate its current business model and potential projects.

Income taxes - The Company adopted the provisions of ASC 740,which the asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements using enacted tax rates and laws that will be in effect when the difference is expected to reverse. Valuation allowances are provided against deferred tax assets that are not likely to be realized.

Foreign Currency - The financial statements of the company’s foreign operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of foreign operations whose functional currencies are not in U.S. dollars are translated at the period-end exchange rates, and equity accounts at historical exchange rates, while revenues and expenses are translated at weighted-average exchange rates during the fiscal year. The cumulative translation effects are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity in the consolidated balance sheets.

Comprehensive income - Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The primary components of comprehensive income for the Company include net income and foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries.

Net income per common share - Net income per common share-basic is computed by dividing the net income attributable to the Company less any preferred dividends for the period by the basic weighted-average number of outstanding common shares. Diluted EPS is computed by dividing the net income less any preferred dividends, divided by the weighted average number of shares outstanding, plus diluted shares, which is the total of convertible preferred shares, options, warrants, and any other dilutive securities. The company does not have any preferred stocks, options, warrants, or any other form of dilutive securities.

The calculation of net income per common share attributable to the Company is presented in Note 5.

F-8

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shipping and Handling Costs - Shipping and handling costs incurred by the Company for the delivery of products to customers are included in selling, general and administrative expenses.

Advertising Costs - Advertising costs are expensed when incurred and are included in selling, general, and administrative expenses. The Company incurred advertising costs of $0 and $0 during 2017 and 2018, respectively

Research and development costs — Research and development costs are expensed as incurred. The Company incurred research and development costs of $0 and $0 during 2017 and 2018, respectively

Note 3 - Recently Issued Accounting Pronouncements

Income tax - In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU No. 2015-17 is a new accounting standard on the financial statement presentation of unrecognized tax benefits. The new standard provides that to simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The new standard becomes effective for the Company on December 15, 2017 and it should be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The adoption of this new standard did not have a material impact to the Company.

F-8

Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which creates a single, comprehensive revenue recognition model for all contracts with customers. Under this ASU and subsequently issued amendments, an entity should recognize revenue to reflect the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods and services. ASU 2014-9 may be adopted either retrospectively or on a modified retrospective basis. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. The FASB permits early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is currently evaluating the impact of ASU 2014-9 on the Company’s condensed consolidated financial statements and related disclosures.

Lease - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity to recognize a right-of-use asset and a lease liability on the balance sheet for all leases, including operating leases, with a term greater than twelve months. Expanded disclosures with additional qualitative and quantitative information will also be required. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The new standard must be adopted using a modified retrospective transition. The Company is currently evaluating the impact of ASU 2016-02 on its condensed consolidated financial statements and related disclosures. The company believes there will have a significant impact on the condensed consolidated balance sheets.

Share-based payments for non-employees - The FASB has issued Accounting Standards Update (ASU) No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting.” The ASU 2018-07 supersedes ASC 505-50 and explains the scope of ASC 718 to account for awards to nonemployees in the same manner as awards granted to employees for goods and services. Public companies must adopt the ASU by the first fiscal year beginning after December 15, 2018 including interim periods within those fiscal years. ASU 2018-07 generally requires the company to use a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year, for all liability-classified nonemployee awards that have not been settled as of the adoption date and equity-classified nonemployee awards for which a measurement date has not been established. The company believes there is no significant impact for adopting this ASU at the reporting period.

Note 4 – Concentration of Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of accounts receivable, cash and cash equivalents. The Company’s cash and cash equivalents are maintained with high quality institutions, the compositions and maturities of which are regularly monitored by management. Through December 31, ~~2017~~2018, the Company had not experienced any losses on such deposits.

Accounts receivable include amounts due from customers primarily in the manufacturing industry. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral. The Company also maintains allowances for potential credit losses. In estimating the required allowances, the Company takes into consideration the overall quality and aging of the receivable portfolio, the existence of a limited amount of credit insurance and specifically identified customer risks. Through December 31, 2017, such losses have been within management’s expectations.F-9

~~For~~COLORSTARS ~~the~~GROUP ~~year~~AND ended December 31, 2017, products sold to largest customers accounted for approximately 29% of total revenue. Products purchased from two suppliers accounted for approximately 66% and 28% of the total purchases during the year ended December 31, 2017.SUBSIDIARIES

~~For~~NOTES ~~the~~TO ~~year~~CONSOLIDATED ~~ended~~FINANCIAL December 31, 2016, products sold to largest customers accounted for approximately 61% of total revenue. Products purchased from two suppliers accounted for approximately 52% and 21% of the total purchases during the year ended December 31, 2016.STATEMENTS

Accounts receivable include amounts due from customers primarily in the manufacturing industry. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral. The Company also maintains allowances for potential credit losses. In estimating the required allowances, the Company takes into consideration the overall quality and aging of the receivable portfolio, the existence of a limited amount of credit insurance and specifically identified customer risks. Through December 31, 2018, such losses have been within management’s expectations.

For the year ended December 31, 2018, products sold to the largest one customer accounted for approximately 60% of total revenue. Products purchased from the largest (only one) supplier accounted for approximately 100% of the total purchases during the year ended December 31, 2018.

For the year ended December 31, 2017, products sold to the largest one customer accounted for approximately 29% of total revenue. Products purchased from two suppliers accounted for approximately 66% and 28% of the total purchases during the year ended December 31, 2017.

Note 5 - Earnings Per Share

Basic net loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period.

F-9

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:

	The year ended December 31,
	2017			2016
	2018			2017
Net loss attributable to common stockholders	$	(~~239~~334,~~594~~986	)	$	(~~162~~239,~~479~~594	)
Weighted average common stock outstanding – Basic and diluted		71101,~~883~~274,~~561~~515			6771,~~448~~883,~~890~~561
Earnings per share attributable to common stockholder Basic and diluted	$	(0.00	)	$	(0.00	)

Note 6 - Accumulated Other Comprehensive loss

The components of accumulated other comprehensive losses were as follows:

	Foreign currency translation
Balance, December 31, 2015		171,537
Foreign currency translation, net of taxes		28,586
Balance, December 31, 2016	$	200,123
Balance, December 31, 2016		200,123
Foreign currency translation, net of taxes		(60,298	)
Balance, December 31, 2017	$	139,825
Balance, December 31, 2017		139,825
Foreign currency translation, net of taxes		7,360
Balance, December 31, 2018	$	147,185

Note 7 - Long Term Investments

		December 31, 2017		December 31, 2016
Cost-method investment – Anteya Technology Corp
Carrying value of investment at the beginning	$	-	$	-
Share of associate’s loss		-		-
Exchange difference		-		-
Loss on disposal of investments		-		-
Carrying value at the end		-		-
Net value	$	-	$	-

F-10

~~The~~COLORSTARS ~~Company~~GROUP ~~adopted~~AND the provisions of SFAS 157, which require us to determine the fair value of financial assets and liabilities using a specified fair-value hierarchy. The objective of the fair-value measurement of our financial instruments is to reflect the hypothetical amounts at which we could sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS 157 describes three levels of inputs that may be used to measure fair value, as follows:SUBSIDIARIES

~~Level~~NOTES 1TO ~~inputs~~CONSOLIDATED ~~are~~FINANCIAL ~~quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.~~STATEMENTS

~~Level~~Note 27 ~~inputs~~- ~~are~~Long ~~inputs~~Term ~~other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.~~Investments

~~Level~~The 3Company ~~inputs~~adopted ~~are~~the ~~unobservable~~provisions ~~inputs~~of ~~for~~ASC ~~the~~820, ~~asset~~which orrequire ~~liability~~us ~~that~~to ~~are~~determine ~~supported~~the byfair ~~little~~value orof nofinancial ~~market~~assets ~~activity~~ and ~~that~~liabilities ~~are significant~~using toa ~~the~~specified fair-value hierarchy. The objective of the fair-value measurement of our financial instruments is to reflect the ~~underlying~~hypothetical amounts at which we could sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (exit price). ASC 820 describes three levels of inputs that may be used to measure fair value, as follows:

~~Anteya~~Level ~~Technology~~1 ~~Corp~~value ~~(Anteya)~~ is abased ~~private~~on ~~company~~observable ~~incorporated~~inputs inthat ~~Taiwan.~~reflect ~~The~~quoted ~~equity~~prices ~~interest~~(unadjusted) ~~held~~for byidentical ~~the~~assets ~~Company~~or isliabilities ~~13.68%~~in onactive ~~December 31, 2015~~markets.

~~Anteya~~Level ~~Technology issued an additional of~~ 2~~,000,000~~ ~~shares~~value tois ~~9,500,000~~based ~~shares~~on ~~during~~inputs ~~2015.The~~other ~~Company~~than ~~decided~~quoted ~~not~~market toprices ~~subscribe~~included ~~any~~in ~~of these~~Level ~~newly~~1 ~~issued~~that ~~shares.~~are Asobservable afor ~~result,~~ the ~~equity~~asset ~~interest~~or ~~decreased~~liability either todirectly ~~13.68%~~or ~~from 17~~indirectly.~~33% after the issuance of 2,000,000 new shares.~~

~~Anteya~~Level ~~Technology~~3 ~~was~~values ~~given~~are ~~cessation~~driven ofby ~~operations~~models ~~from~~with ~~April~~one ~~28,~~or ~~2017.~~more Assignificant ainputs ~~result,~~or ~~the~~significant ~~investment~~value ~~was~~drivers ~~fully impaired~~that asare ~~of December 31, 2016 and 2017~~unobservable.

~~Fin-Core~~Anteya Technology Corp (~~holding~~Anteya) ~~roughly~~is ~~57,000~~a ~~shares)~~private ~~had~~company noincorporated ~~actual~~in ~~operating~~Taiwan. ~~behavior~~The ~~and~~equity ~~the~~interest ~~investment~~held ~~was~~by ~~fully~~the ~~impaired~~Company asis of13.68% ~~December~~on December 31, ~~2015 and 2016~~2018.

~~F-11~~Anteya Technology ceased operations in April 2017 and, as a result, no future economic benefit was considered realizable by the Company and, as a result, the investment was fully impaired in the year ended December 31, 2015 resulting in a loss of $113,177.

Note 8- Inventory

Inventories stated at the lower of cost or market value are as follows:

	December 31, 2017			December 31, 2016
	December 31, 2018			December 31, 2017
Finished goods	$	~~800~~776,~~246~~441		$	~~741~~800,~~787~~246
Allowance for Inventory Valuation and Obsolescence Losses		(~~800~~776,~~246~~441	)		(~~741~~800,~~787~~246	)
Total	$	-		$	-

The Company decided to shift in operational focus and that it was determined the remaining inventory had little-to-no value, thus was fully impaired on December 31, ~~2017~~2018 and ~~2016~~2017.

F-11

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 – Equipment

Equipment and the related accumulated depreciation consisted of the following at December 31:

	2017		2016
	2018		2017
Plant and equipment:
Machinery equipment	$	~~173~~168,~~632~~468	$	~~159~~173,~~501~~633
Transportation equipment		-		20,946
Office equipment		70,631		72,796
Office equipment		72,796		66,872
* Leasehold improvements		49,465		50,981
Other		109,~~016~~718		910,~~201~~016
Total cost		~~256~~298,~~445~~282		~~256~~307,~~520~~426
Accumulated depreciation:
Machinery equipment		~~149~~145,~~809~~353		~~136~~149,~~013~~809
Transportation equipment		-		11,055
Office equipment		64,257		66,131
Office equipment		66,131		60,535
Leasehold improvements		41,221		42,484
Other		45,~~448~~897		24,~~589~~448
Total accumulated depreciation		~~229~~256,~~388~~728		~~210~~262,~~192~~872
Plant and equipment – net	$	3641,~~057~~554	$	4644,~~328~~554

~~F-12~~Depreciation was $1,704 and $6,277 for the years ended December 31, 2018 and 2017 respectively.

~~Depreciation~~Straight ~~was~~line ~~$6,277~~depreication method is used for calculating fixed assets depreciation. For office equipment and ~~$25~~general machinery,~~108~~ the useful life time is 3 to 5 years. If improvements or extra maintenance is applied for the ~~years~~extension ~~ended~~of ~~December~~its 31useful life of certain assets, the ~~2017~~extra cost may be added to its initial acquisition cost and ~~2016~~the ~~respectively~~total cost will be used as basis for depreciation calculation.

~~For~~*Leasehold ~~expenses~~improvements ~~related~~was toclassified ~~the~~as ~~acquisition~~“other ~~of fixed~~ assets” orprior ~~major renovations~~ to ~~increase~~year ~~the durability of fixed assets are all classified as assets. For recurring expenses~~2018, and ~~general~~is ~~maintenance~~reclassified ~~expense are classified~~ as ~~expenses. For~~ “fixed assets~~, the depreciation~~” ~~expense is amortized annually by the straight-line method~~ in ~~accordance~~this ~~with~~reporting ~~the Taiwanese fixed assets durability schedule~~period.

Note 10 - Income Taxes

The Company is subject to U.S. federal income tax as well as income tax in states and foreign jurisdictions(Taiwan). For the major taxing jurisdictions, the tax years ~~2014~~ 2016 through ~~2016~~ 2018 remain open for state and federal examination. The Company believes assessments, if any, would be immaterial to its consolidated financial statements. The effects of the Tax Cuts and Jobs Act on our business have not yet been fully analyzed and could have an adverse effect on our net income. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. We are in the process of analyzing the Act and its possible effects on the Company. The Act reduces the corporate tax rate to 21 percent from 35 percent, among other things. It could also require us to write down our deferred tax assets, which would reduce our net income during the first quarter of fiscal 2018. We cannot determine at this time the amount of any such write down, or the full effects of the Act on our business and financial results. With respect to the foreign jurisdiction, the Company is no longer subject to income tax audits for the year ~~2015 to~~ 2017 (inclusive).

The effects of the Tax Cuts and Jobs Act on our business have not yet been fully analyzed and could have an adverse effect on our net income.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. We are in the process of analyzing the Act and its possible effects on the Company and the Bank. The Act reduces the corporate tax rate to 21 percent from 35 percent, among other things. It could also require us to write down our deferred tax assets, which would reduce our net income during the first quarter of fiscal 2018. We cannot determine at this time the amount of any such write down, or the full effects of the Act on our business and financial results.

F-12

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The income tax provision information is provided as follows:

	For the year ended December 31,
	2017			2016
	2018			2017
Component of income (loss) before income taxes:
United States	$	(14186,~~325~~769	)	$	(5914,~~655~~325	)
Foreign		(~~221~~147,~~871~~417	)		(~~102~~221,~~824~~871	)
Net loss	$	(236,196	)	$	(162,479	)
Net loss before taxes	$	(334,186	)	$	(236,196	)
Provision for income taxes
Current
U.S. federal		-			-
State and local		(800	)		-(800	)
Foreign		~~(2,598~~-	)	$	-(2,598	)
Income tax benefit	$	(3,398	)	$	-
Income tax benefit/(loss)	$	(800	)	$	(3,398	)

The income tax section listed above are taxes charged by the US federal, State and Local, and Foreign authorities for income taxes and taxes associated with doing business in the region. The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes. The sources and tax effects of the differences, for the years ended December 31, ~~2017~~2018 and ~~2016~~2017 are as follows:

	2017			2016
	2018			2017
Federal income taxes at applicable statutory rates Adjustment resulting from the tax effect of:	$	(18,454	)	$	(105,157	)
Federal income taxes at applicable statutory rates	$	(116,965	)	$	(18,454	)
State income tax		(800	)		-
Adjustment resulting from the tax effect of:
Foreign tax rate differential		8,133			43,343
State income tax		(800	)		(800	)
Decrease in deferred tax assets		(2,598	)
Foreign tax rate differential		26,535			8,133
Loss with no tax benefit provided		28,550			17,930
Decrease in deferred tax assets		-			(2,598	)
Non-deductible expenses and other		(18,229	)		43,884
Loss with no tax benefit provided		90,430			28,550
	$	(3,398	)	$	-
Non-deductible expenses and other		-			(18,229	)
	$	(800	)	$	(3,398	)

~~F-13~~As of December 31, 2017, there was gross U.S. federal net operating loss carry forwards of $1,293,039, which may be available to offset future federal income tax liabilities. The net operational loss of 2018 is estimated to $334,186. As of December 31, 2018, the total gross U.S. Federal net operating loss carry forwards is approximately $1,627,225, which may be available to offset future federal income tax liabilities. All of the gross federal net operating losses are limited by certain provisions of the U.S. tax code which restricts their utilization in the future. Given the uncertainty of the future benefit from the utilization of the Company’s NOL carryforwards, a full valuation allowance has been recorded.

As of December 31, 2017, there was gross U.S. federal net operating loss carry forwards of approximately $1,200,000, which may be available to offset future federal income tax liabilities. All of the gross federal net operating losses are limited by certain provisions of the U.S. tax code which restricts their utilization in the future.

The federal net operating losses expire at various dates through 2027 to 2035.

Note 11 - Bank Short Term Debt

	December 31, 2017		December 31, 2016
	December 31, 2018		December 31, 2017
Bank loan payable to Taiwan banks	$	-	$	~~526,591~~-

The Company signed revolving credit agreements with a lending institution.. ~~for~~All aloans ~~total~~were ~~amount~~fully ofrepaid ~~NTD$15,800,000~~on ~~New~~December ~~Taiwan Dollars (US$517~~5,~~863).~~ ~~The term is from Oct. 24,~~ 2017 ~~to Jan~~. ~~23, 2018 and the interest rate 1.91% per annum. The short term debt is secured by:~~

	1.	personal guarantee from directors
	2.	the realty property of shareholder

F-13

~~The~~COLORSTARS ~~Company~~GROUP ~~made~~AND ~~an overall repayment of the short-term loan on December 5, 2017. There is no more short-term loan as of December 31, 2017.~~SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 - Long Term Loan

The Company signed sales with buyback agreement of 5 million New Taiwan Dollars (US$~~163~~164,~~883~~542) with Chailease Finance Co., Ltd. in July 2016. The loan is amortized to 36 months and the monthly repayment amount is based on the remaining principal at the beginning of each 12 months. The interest rate is fixed at 6.37% per annum over the term of the agreement. For the first 12 months of the term the monthly repayment was $196,000 NTD (US$6,~~424~~450) beginning in July 2016, and fixed for the ~~next~~following 12 months until June 2017. The monthly repayment was reduced to $168,000 NTD (US$5,~~506~~529) beginning in July 2017, and fixed for the ~~next~~following 12 months until June 2018. However, the ~~Company~~company made an overall repayment of the remaining amounts due of $2,283,954 NTD (US$7475,~~860~~161) on Feb. 13, 2018 and terminated this loan agreement. AsAn aimputed ~~result~~effective interest of ~~the~~$11,113 ~~full~~on ~~repayment~~this inpay ~~Feb~~off ~~2018,~~was ~~all~~recognized ~~amounts~~as ~~under~~interest expense for the ~~buyback~~reporting ~~agreement~~period ~~are considered~~ended ~~and~~December ~~classified~~31, as2018. ~~current~~There ~~liabilities~~is no more long term loans as of December 31, ~~2017~~2018.

Note 13 – Issuance of New Shares and Proceeds

The Company issued a total of 12,~~825~~000,~~625~~000 shares of Company common stock to 1323 investors at a price per share of US $0.~~0264~~034188 for a ~~total~~ total proceeds of US $~~337~~410,~~961~~256.13 38 on ~~October~~ February 5, ~~2017,~~2018. ~~and~~Part aof this total proceeds of 10$199,~~000,000~~967 ~~shares~~was ofcollected and deposited by the Company ~~common~~in ~~stock~~the toreporting 11period ~~investors~~ended atDecember a31, ~~price~~2017 ~~per~~and ~~share~~was ofrecorded USas $0current liabilities.~~033~~ ~~for a~~Upon ~~total~~the ~~proceeds~~issuance of USthese ~~$331,895.12~~new shares tothe current liabilities were reduced by the ~~Company~~same onamount ~~November~~for ~~13,~~this ~~2017~~reporting period. ~~These~~The proceeds were used for the repayment of the short-term loan and ~~the~~some ~~inter-company~~of ~~loan~~the ~~from~~shareholder’s ~~its~~personal ~~wholly-owned~~loan ~~subsidiary,~~to ~~Color~~the ~~Stars,~~Company ~~Inc.~~ and fund for operations.

Note 14 – Account Payable, Accrued Expenses and Other Current Liabilities

The Account Payable (AP) of $20,537 as of December 31, 2018 was mainly for the payments due to a street light pole manufacturer (DongShieShin Limited) and accrued legal fees. The Account Payable (AP) of $15,524 as of December 31, 2017 was mainly for the payment due to a PRstreet ~~company~~light pole manufacturer (DongShieShin Limited).

The Accrued Expenses of $5,614 and 3,708 as of December 31, 2018 and 2017 consist mainly the salary to Mr. Wei-Rur Chen and health insurance fees.

The Other Current Liabilities of $199,967 as of December 31, 2017 consist mainly the temporary deposit of proceeds from shareholders subscribing new shares.

Note 15 - Geographic Information

Product revenues for the year ended December 31, ~~2017~~2018 and ~~2016~~2017 are as follows:

	2017		2016
	For the year ended December 31,
	2018		2017
Customers based in:
Europe	$	~~10,995~~-	$	~~107~~10,~~580~~995
Asia		2,~~337~~133		242,~~379~~337
United States		51,~~519~~158		~~233~~5,~~244~~519
Others		-		~~4,650~~-
	$	183,~~851~~291	$	~~369~~18,~~853~~851

F-14

COLORSTARS GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 - Related Party Transactions

The Company has recorded expenses for the following related party transactions for the year ended December 31, ~~2017~~2018 and ~~2016~~2017:

	For the year ended December 31,
	2017		2016
	2018		2017
Purchase from Anteya Technology Corp	$	~~8,331~~-	$	808,~~091~~331
Rent paid to Mr. Wei-Rur Chen		2311,~~599~~979		4423,~~641~~599

Mr. Chen was willing to exempt the rent payment of the Company for the 9-month period ended September 30, 2018, as the Company was going through transformation and seeking new business opportunities. The rent payment will be forgiven only for the 9-month period ended September 30, 2018.

As of the balance sheet date indicated, the Company had the following receivable and liabilities recorded with respect to related party transactions:

	December 31, 2017			December 31, 2016
	December 31, 2018			December 31, 2017
Anteya Technology Corp
Due from affiliate (liabilities)	$	(13,774	)	$	(355	)
Due (to) from affiliate	$	13,365		$	13,774
Mr. Wei-Rur Chen
Payable to Shareholder	$	(~~441~~269,~~603~~198	)	$	(74441,~~379~~603	)
Accrued expenses (wages paid to Mr. Chen)		(4,709	)		(2,664	)

The Company ~~leases~~conducted ~~office~~business ~~space~~with ~~from~~a Mrrelated party company Anteya Technology Corp. ~~Wei-Rur~~The ~~Chen~~Company ~~which~~owns 13.68% of the ~~term~~outstanding ~~for~~common stock ~~the~~of ~~agreement~~Anteya isTechnology ~~from~~Corp ~~November~~as ~~2015~~of toDecember ~~November~~31, ~~2020~~2018. All transactions were at market-based prices.No (or very little) business activity took place between the Company and Anteya in the 2 years presented

~~The~~Mr. ~~Company~~Wei-Rur ~~conducted~~Chen ~~business~~made ~~with~~various aadvances ~~related~~to ~~party~~the ~~company~~Company ~~Anteya~~as ~~Technology~~personal ~~Corp~~loan. ~~The~~This ~~Company~~personal ~~owns~~loan 13carried no interest and was payable upon request.~~68%~~ ofFor the ~~outstanding~~year ~~common~~ended December 31, 2018, advances from Mr. Chen was $97,498 and repayment to Mr. Chen totaled $260,818 and ~~stock~~the ofnet ~~Anteya~~repayment ~~Technology~~was ~~Corp~~$163,320. asThe balance of ~~December~~advance ~~31,~~from ~~2017~~Mr. ~~All~~Chen ~~transactions~~was ~~were~~$269,198 atas ~~market-based~~of ~~prices~~December 31, 2018.

Note 17 - Commitments

The company leases offices in Taiwan. The main office is relocated in New Taipei City with monthly rental of NTD$120,000, and the term is from 11-7-2015 to 10-6-2020. The company rented a branch office located in Taipei City with a monthly rental of NTD$160,000 on 11-11-2017, and the term is from 12-1-2017 to 11-30-2019. However this branch office is closed on April 10, 2018 and the lease is cancelled. The minimum future rental payments due under non-cancelable operating leases with remaining terms at December 31, 2017 are as follows:

	For the year ended December 31,
	2018		2017

Rent expenses	$	28,712	$	28,594

	For the year ended December 31,
2018	$	64,676
2019		47,196
2020	$	40,630
Total		152,502

The company leases offices in Taiwan. The main office is relocated in New Taipei City with monthly rental of NTD$120,000, and the term is from 11-7-2015 to 10-6-2020 . The company rented a branch office located in Taipei City with a monthly rental of NTD$160,000 on 11-11-2017, and the term is from 12-1-2017 to 11-30-2019. However this branch office is closed on April 10, 2018 and the lease is cancelled. The lease of the main office remains in effect.

		For the year ended December 31, 2017				Twelve months ended December 31, 2016
Rent expenses		$	28,594			$	44,641

Below is a table which presents our contractual obligations and commitments as of December 31, 2018:

F-15

Contractual Obligation

Less than 1 Year (US$)

1-3 years (US$)

3-5 years

(US$)

After 5 years (US$)

Operating Leases

47,916

36,626

Total contractual cash obligations

47,916

36,626

Note 18 - Subsequent Events

OnThe ~~February~~Company 5,evaluated ~~2018,~~all ~~the~~events ~~Company~~subsequent ~~completed~~to ~~the~~December ~~sale~~31, of2018 athrough ~~total~~the date of ~~12,000,000~~the ~~shares~~issuance of ~~Company~~the ~~common~~financial ~~stock~~statements, ~~to 23 investors at a~~there ~~price~~are ~~per~~no ~~share~~other ofsignificant USor ~~$0.034188~~material ~~for~~transactions ato ~~total~~be ofreported USexcept ~~$410,256.38~~as ~~in proceeds to the Company.~~follows:

On ~~February~~ 14Feb. 26, ~~2018~~2019, ~~Ms.~~the ~~Chiu~~company ~~Mei-Ying~~signed ~~resigned~~a asjoint venture aagreement ~~Director~~(JVA) ~~and~~with an entity in the ~~Secretary~~Kingdom of ~~the~~Saudi ~~Company~~Arabia (KSA). ~~Her~~According ~~resignations~~to ~~were~~this ~~not~~JVA, the ~~result~~company shall make transfer of ~~any~~its ~~disagreements~~patents, ~~with~~trade marks, and customer list to the ~~Company~~new joint company to be formed. ~~Effective~~The ~~February~~company 21will also help to build an electronic manufacturing facilities in the KSA, ~~2018~~and to provide training of its staff and operators for the engineering, manufacturing, and selling of LED lighting products. For the ~~remaining~~IPs ~~two~~and ~~directors~~trade marks granted in the JVA, the company shall be compensated with US$1.5 million dollars. For the technology and training support, the company shall be awarded with US$2.65 million dollars in the form of shares in the new joint venture company, calculated based on fair price. The closing conditions for the ~~Board~~cash payment and the shares greanted for the joint venture company are mainly (1) government approvals for the investment in the joint venture company for both parties, (2) formation of ~~Directors~~the joint company, and (3) board approval of the joint venture company to undertake ~~Company~~activities ~~appointed~~in Mrthe JVA. ~~Wilson~~We ~~Chen~~are tonot sure when the ~~Board~~Company ofwill ~~Directors~~start tothe ~~fill~~execution of the ~~vacancy~~JVA ~~created~~and bywill receive the ~~resignation~~cash payment and share grants of ~~Ms.~~the ~~Chiu~~joint ~~Mei-Ying~~venture company.

On September 17, 2018, the U.S. Securities and Exchange Commission (“Commission”) announced the temporary suspension of trading in the securities of the Company, commencing at 9:30 a.m. EDT on September 18, 2018 and terminating at 11:59 p.m. EDT on October 1, 2018. The Commission temporarily suspended trading in the securities of the Company due to a lack of current and accurate information about the Company because it has not filed certain periodic reports with the Commission. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”) and was accompanied by an Order Instituting Administrative Proceedings and Notice of Hearing pursuant to Section 12(j) of the Exchange Act. The stated purpose of the order and hearing is for the Commission to determine whether it is necessary and appropriate to continue the suspension in the trading of the securities of the Company for a period not exceeding twelve months, or to revoke the registration of the Company’s securities pursuant to Section 12 of the Exchange Act. The Company filed an Answer in the Proceeding on September 26, 2018.F-15

On October 18, 2018, the Company had a pre-hearing telephone conference with the Commission regarding the Proceeding. During the pre-hearing conference, it was agreed that the Commission’s motion for summary disposition against the Company would be due on November 15, 2018; the Company’s opposition brief would be due on December 13, 2018; and that the Commission’s reply brief would be due on December 20, 2018. The Commission has offered the Company the alternative to consent to the revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act to avoid the time and cost associated with contesting the Proceeding. If the Company were to consent to the revocation of its registration, the Company would then need to file a registration statement (with two years of audited financials) with the Commission and cause that registration statement to become effective in order to reinstate the registration of the Company’s securities. It is the Company’s understanding from the pre-hearing conference with the Commission that the only remedy the Commission has for delinquent filers such as the Company, even if the filer becomes current by the date of the hearing, is the revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act. Therefore, the Company cannot provide any assurances that it will be able to avoid the revocation of the registration of the Company’s securities pursuant to Section 12 of the Exchange Act due to the Company becoming delinquent in its filings. If the registration of the Company’s securities is revoked, the Company intends to file a registration statement with the Commission to reinstate the registration of the Company’s securities. The Company cannot provide any assurances as to the timing of the filing and effectiveness of such a registration statement.

F-16

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

At this time, we do not have any changes in and disagreements with accountants and financial disclosure to report.

ITEM 9A.

CONTROLS AND PROCEDURES

(a)	Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of that date.

(b)	Management’s annual report on internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s chief executive and chief financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external purposes in accordance with the U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only a management’s report in its annual report.

(c)	Changes in internal control over financial reporting.

There was no change in our internal control over financial reporting during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

2612

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The following persons are our executive officers and directors. Directors are elected to hold offices until the next annual meeting of shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.

NAME	AGE	OFFICES HELD
Wei-Rur Chen	57	Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President and Director
Wilson Chen	44	Secretary and Director, Chief Strategic Officer
Hsiu-Fu Liu	63	Director
Michael W. Chung	63	Director

~~WEI~~Wei ~~RUR~~Rur ~~CHEN,~~Chen ~~age 57,~~ has served as our Chief Executive Officer and President since 2003. Prior to joining us, Mr. Chen was Executive ~~Vice~~ Vice President of Primo Lite Co., Ltd. from 2002 to 2003, Executive Vice President of Tinya Engineering Co., Ltd. from 2000 to 2002, Vice President of Hi-Doer Power Co., Ltd. from 1997 to 2000, Manager of Sales and Marketing of Westinghouse Elec. from 1991 to to 1997 and Manufacturing Engineer of Westinghouse Elec. from 1984 to 1989. Mr. Chen earned a Master of Science, Industrial Engineering from Clemson University SC, USA in 1990 and resides in Taipei, Taiwan.

~~Mr.~~Wilson ~~WILSON~~Chen ~~CHEN, age 44,~~ serves on the Company’s Board of Directors and Chief Strategic Officer commencing on February 21, 2018. Mr. Chen is the founder and owner of YuSen Int’l Co., Ltd, an import & export and distribution company of kitchen equipment. Mr. Chen is also the co-founder of Wilson Int’l Holding Company. Mr. Chen has worked as the Sr. manager of business development & strategic planning for Xpress Holding (Singapore company) from Jan. 2007 to Dec. 2010. Mr. Chen was the founder and owner of European Imports & Performance (US company) from Dec. 2005 to Oct. 2006. Mr. Chen worked as the associated Asia Pacific business manager for IDEXX, Taiwan (US company) from Jan. 2003 to Mar. 2004 and the sales executive of greater China for Rhodia, Taiwan (French company) from Jan. 1998 to Dec. 2002. Prior to that, Mr. Chen had held various sales positions in Bridgewood Textile, Taiwan, and DaiShong America, USA companies. Mr. Chen graduated from University of Southern California with a Bachelor’s degree of Science, majoring in Economics in 1995 and a Bachelor’s degree of Arts majoring in Architecture from University of Cal Poly Pomona in 1993.

~~HSIU-FU~~Michael ~~LIU,~~W. ~~age~~Chung 63 has ~~been~~served ~~serving~~as ona ~~our~~director ~~board~~ since ~~December~~November ~~2008~~29, 2018. Mr. ~~Liu~~Chung ~~currently~~is ~~serves~~the asco-founder and owner of Number ONE Seafood Company, an import and export and distribution company of seafood, which he co-founded in October 1995. Mr. Chung is also the co-founder and currently co-chairman of ~~Hsuhta~~XL ~~Industrial~~Investment Group, which is an international investment company he co-founded in September. Since aAugust 2018, Mr. Chung has also been the Chief Executive Officer of International Markets of Glauben Besitz, LLC, an LNG exporting company ~~that~~located ~~owns~~in Tampa, Florida. Mr. Chung’s career experience includes over 13 years in the finance industry, providing solutions for business development and ~~operates~~helping ~~many~~to ~~precision~~build ~~plastic~~portfolios ~~moulding~~for small business’ to expand; over 13 years as Co-Founder and ~~injection~~Chief ~~companies~~Financial Officer, International Trading, in ~~Taiwan~~the seafood market which did business across 10 countries; 11 years as founder and ~~China.~~Chief ~~Mr.~~Executive ~~Liu~~Officer ~~graduated~~in the trucking business with truck fleets of over 60 trucks; and over 17 years as an operator ~~from~~in ~~Hsinchu~~the ~~Technical~~logistics ~~high~~and ~~school~~warehousing business with a Japanese Company located in ~~1973~~New York.

The business address for each of our officers and directors is 10F, No. 566 ~~JungJeng~~Jung Jeng Rd., Sindian ~~City~~District, New Taipei ~~County~~City 231, Taiwan, R.O.C.

Our bylaws authorize no less than one (1) and no more than seven (7) directors. We currently have three (3) Directors.

Involvement in Certain Legal Proceedings.

There have been no events under any bankruptcy act, criminal proceedings, judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of our Company during the past five years.

Significant Employees.

None.

ITEM 11.

EXECUTIVE COMPENSATION

Board of Directors

All of our directors hold office until the next annual meeting of stockholders and the election and qualification of their successors. Our executive officers are elected annually by the board of directors to hold office until the first meeting of the board following the next annual meeting of stockholders and until their successors are chosen and qualified.

Directors’ Compensation

We reimburse our directors for expenses incurred in connection with attending board meetings but we do not pay our directors fees or other cash compensation for services rendered as a director

Our executive officers are currently earning compensation. Set forth below is the aggregate compensation for services rendered in all capacities to us during our fiscal years ended December 31, ~~2017~~2018 and ~~2016~~2017 by our executive officers. Except as indicated below, none of our executive officers were compensated in excess of $100,000.

On March 1, 2007, we entered into an employment agreement with our CEO, Mr. Wei-Rur Chen (the “Original Employment Agreement”). The Original Employment Agreement was for a term of five years from the effective date, March 1, 2007. Under the Original Employment Agreement, Mr. Chen agreed to serve as our Chairman, President, and CEO. Mr. Chen was granted such authority and responsibility as may reasonably be assigned to him by our board of directors. Pursuant to the Original Employment Agreement, Mr. Chen was eligible to receive a salary no higher than $120,000 per annum, and Mr. Chen was entitled to participate in any and all deferred compensation, 401(k) or other retirement plans, medical insurance, dental insurance, group health, disability insurance, pension and other benefit plans that are made generally available by us to our executives who have similar responsibilities and perform similar functions as Mr. Chen.

As the term of the ~~Original~~ Employment Agreement expired, ~~on March 1, 2012,~~ we entered into a new employment agreement (the “Employment Agreement”) with Mr. Chen on on May 1, 2018. The Employment Agreement has a term of five years from the effective date, ~~March~~May 1, ~~2012~~2018, subject to the termination provisions contained therein. Under the Employment Agreement, Mr. Chen shall have such authority and responsibility as may be assigned to him by the Company’s board of directors. Furthermore, under the Employment Agreement, Mr. Chen is subject to certain non-competition, non-solicitation and confidentiality covenants, the terms and conditions of which are described in further detail therein. Pursuant to the Employment Agreement, Mr. Chen shall receive the following compensation in exchange for his services: (i) an annual base salary in the amount of US$120,000.

Mr. Chen shall also be entitled to participate in any and all deferred compensation, 401(k) or other retirement plans, medical insurance, dental insurance, group health, disability insurance, pension and other benefit plans that are made generally available by the Company to such executives who have similar responsibilities and perform similar functions as Mr. Chen

We have no pension, health, annuity, bonus, insurance, stock options, profit sharing or similar benefit plans. No stock options or stock appreciation rights were granted to any of our directors or executive officers. We have no equity incentive plans.

As the Company is undergoing difficult conditions and transforming into other business areas, Mr. Chen was willing to accept a lower compensation with annual salary in total of US$1936,~~666~~ 164 without any other bonus, vehicle allowance or stock options in ~~2017. The Company signed an Employment Agreement with Mr. Chen on May 1,~~ 2018 ~~with the same terms and conditions outlined above~~. ~~The effective date is May 1, 2018 for a term of 5 years.~~

SUMMARY COMPENSATION TABLE

Name and Principal Position (a)

Year (b)

Salary ($)(c)

Bonus ($) (d)

Stock Awards ($)(e)

Option Awards ($) (f)

Non-Equity Incentive Plan Compensation ($) (g)

Nonqualified Deferred Compensation Earnings ($) (h)

All Other Compensation ($) (i)

Total ($)(j)

Wei-Rur Chen— CEO,

~~2017~~2018

1936,~~666~~164

—

1936,~~666~~164

President and

~~2016~~2017

1819,~~586~~666

—

1819,~~586~~666

CFO

Mei-Ying (Easter)

~~2017~~2018

~~24,582~~0

—

~~24,582~~0

Chiu—Secretary

~~2016~~2017

24,~~161~~582

—

24,~~161~~582

and Director

Options/SAR Grants In the Last Fiscal Year

None.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values

None.

Compensation Committee

At this time, we do not have a compensation committee. The salaries of our executive officers are determined by our board of directors. Our board of directors determines the compensation of our executive officers based on our financial and operating performance and success. As we continue to grow, we may form a compensation committee charged with the oversight of our executive compensation plans, policies and programs, and the authority to determine and approve the compensation of our executive officers and make recommendations with respect to the same.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of December 31, ~~2017~~2018 by:

	●	all persons who are beneficial owners of five percent (5%) or more of our common stock;

	●	each of our directors;

	●	each of our executive officers; and

	●	all current directors and executive officers as a group.

Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares of common stock held by them.

Applicable percentage ownership in the following table is based on 90102,274,515 shares of common stock outstanding as of December 31, ~~2017~~2018.

Title of Class

Name and Address of Owner

Title

Amount of Beneficial Ownership

Percentage of Common Stock Owned

Common Stock

Wei-Rur Chen 7, Mayhua 1 st Road Sindian District, New Taipei City 231, Taiwan, R.O.C.

President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board

11,299,800

12.52

Common Stock

~~Hsui-Fu~~Michael ~~Liu~~Chung 10F, No. ~~232,~~566 ~~Zhongzheng~~Jung Jeng Rd., ~~Shulin~~Sindian City, Taipei County ~~238~~231, Taiwan, R.O.C.

Director

~~4,000,000~~0

~~4.43~~0

Common Stock

Wilson Chen 8F-5 No. 222, ZhiYu Road Section 1, Taipei, Taiwan

Secretary and Director

100,000

0.11

Common Stock

All executive officers and directors as a group

Executive officers and directors as a group

1511,399,800

1712.0663

3015

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company leases office space from Mr. Wei-Rur Chen. Mr. Wei-Rur Chen is the President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of the Company, as well as beneficial owner of more than five percent (5%) of the Company’s common stock. The current term for the lease agreement is from November 2015 to November 2020. During ~~2017~~2018, the Company paid USD $2311,~~599~~979 in rent pursuant to this lease agreement. Mr. Wei-Rur Chen owns one hundred percent (100%) interest in the lease agreement.

The Company also conducted business with a related party company Anteya Technology Corp. The Company owns 13.68% of the outstanding common stock of Anteya Technology Corp as of December 31, ~~2017~~2018. All transactions were at market-based prices. For the year ended December 31, ~~2017~~2018, the Company has purchased from Anteya for a total of USD$~~8,331~~0 and has sold to Anteya for a total of USD$0 of goods and services.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the aggregate fees billed to us by Fruci & Associates II, PLLC, the Company’s independent registered public accountant, for fiscal years ended December 31, ~~2017~~2018 and ~~2016~~2017:

	2017		2016
	2018		2017
Audit Fees (1)	$	079,996	$	018,375
Audit Related Fees (2)		0		0
Tax Fees (3)		0		0
All Other Fees (4)				0
Total Fees paid to auditor	$	079,996	$	018375

(1) Audit fees consist of fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services in connection with statutory and regulatory filings or engagements.

(2) Audit-Related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees”.

(3) Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning.

(4) There were no fees that were classified as All Other Fees as of the fiscal years ended December 31, ~~2017~~2018 and ~~2016~~2017.

As the Company does not have a formal audit committee, the services described above were not approved by the audit committee under the de minimus exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. Further, as the Company does not have a formal audit committee, the Company does not have audit committee pre-approval policies and procedures.

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PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)	1. The information required by this item is included in Item 8 of Part II of this annual report.

	2. The information required by this item is included in Item 8 of Part II of this annual report.

	3. Exhibits: See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this annual report.

(b)	Exhibits. See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this annual report.

(c)	Not applicable.

INDEX TO EXHIBITS

Exhibit		Description

31.1		Certification of our Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2		Certification of our Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1		Certification of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

32.2		Certification of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase 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

3217

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	ColorStars Group
Dated: November 5, 2018	By:	/s/ Wei-Rur Chen
Dated: April 12, 2019	By:	/s/ Wei-Rur Chen
		Wei-Rur Chen
		President and Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures	Title(s)	Date
/s/ Wei-Rur Chen	President and Chief Executive Officer	~~November~~April 512, ~~2018~~2019
Wei-Rur Chen	(principal executive officer), Chief Financial Officer (principal financial officer and principal accounting officer), Chairman of the Board of Directors
/s/ Hsiu-Fu Liu	Director	November 5, 2018
/s/ Michael W. Chung	Director	April 12, 2019
Hsiu-Fu Liu
Michael W. Chung
/s/ Wilson Chen	Secretary and Director	~~November~~April 512, ~~2018~~2019
Wilson Chen

3318

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