UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2017

o	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: 021-165129

SAN LOTUS HOLDING INC.

(Exact name of registrant as specified in its charter)

California	45-2960145
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2387 S HACIENDA BLVD HACIENDA HEIGHTS CA 91745
(Address of principal executive office and zip code)

626-961-6522 (phone)
(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (229.405 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 x No o

Indicate by checkmark 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 o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company x

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



As of March 31, 2017, 39,725,558 shares of the Registrant's common stock, $1 par value, were outstanding.

SAN LOTUS HOLDING INC.

FORM 10-Q

For the quarter ended March 31, 2017

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements.
		Condensed Consolidated Balance Sheets as of March 31, 2017 (Unaudited) and December 31, 2016 (Audited)
		Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2017 and 2016 (Unaudited)
		Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (Unaudited)
		Notes to Unaudited Consolidated Financial Statements.
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3		Quantitative and Qualitative Disclosures About Market Risk.
Item 4		Controls and Procedures.

PART II - OTHER INFORMATION
Item 1.		Legal Proceedings.
Item 1A.		Risk Factors.
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3.		Defaults Upon Senior Securities.
Item 4.		Mine Safety Disclosures.
Item 5.		Other Information.
Item 6.		Exhibits.

CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Report") contains "forward-looking statements." Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as "anticipate," "believe," "estimate," "intend," "could," "should," "would," "may," "seek," "plan," "might," "will," "expect," "predict," "project," "forecast," "potential," "continue," negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Report.

SAN LOTUS HOLDING INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31, 2017	December 31, 2016
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	1,252,128	7,805,660
Accounts receivable	108,832	0
Prepaid expense and other current assets	514,084	149,925
Current assets held for divesture	0	0
Total Current Assets	1,875,044	7,955,585
Due from related parties	156,822	156,000
Property and equipment, net	6,364,478	5,956,385
Long term receivable	8,692,243	8,148,290
Other assets	10,588	7,844
Total Assets	17,099,175	22,224,104

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and Accrued liabilities	141,548	38,061
Due to related party	0	7,023
Current liabilities held for divesture	0	0
Total Current Liabilities	141,548	45,084

Stockholders' Equity
Common stock, shares issued	42,003,333	42,003,333
Additional paid-in capital	24,000	24,000
Treasury Stock	-2,277,775	-2,277,775
Common stock, outstanding	39,749,558	39,749,558
Accumulated deficit	-22,687,466	-16,482,355
Accumulated other comprehensive loss	-52,956	-1,088,183
Total San Lotus Holding Inc. stockholders' equity	17,009,136	22,179,020
Noncontrolling interest	-51,509	0
Total Equity	16,957,627	22,179,020
Total Liabilities and Equity	17,099,175	22,224,104
Stockholders' Equity
Common stock, shares authorized	150,000,000	150,000,000
Common stock, par value	1.00	1.00
Treasury Stock, shares	-2,277,775	-2,277,775
Common stock, outstanding shares	39,725,558	39,725,558

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

SAN LOTUS HOLDING INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE NINE MONTHS ENDED MARCH 31, 2017 AND 2016

(UNAUDITED)

	2017	2016
	(Unaudited)	(restated)
Revenue	0	0
Cost of sales	0	0
Gross profit	0	0
General and administrative expenses	180,938	67,890
Profit (Loss) from Operations	-180,938	-67,890

Other income (expenses)
Interest income	0	1
Other Income (Loss)	1,094	0
Impairment loss	-6,022,700	0
Foreign exchange loss	-2,896	0
Total other income (expense)	-6,024,502	1
Loss before income taxes	-6,205,440	-67,889
Income taxes expense	0	0
Net Income (Loss)	-6,205,440	-67,889
Loss attributable to noncontroling interest	-329	0
Consolidated net Income	-6,205,111	-67,889

Loss from continuing operations	-6,205,111	-67,889
Income from discontinued operations	0	87,031
Net income (loss) for the year	-6,205,111	19,142

Net Loss Per Share
Basic and Diluted	-0.16	0.00
Weighted Average Shares Outstanding:
Basic and Diluted	39,725,558	39,725,558

Net Loss	-6,205,111	19,142
Foreign exchange translation	1,035,227	549,131
Total comprehensive loss	-5,169,884	568,273

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

SAN LOTUS HOLDING INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE NINE MONTHS ENDED MARCH 31, 2017 AND 2016

(UNAUDITED)

	2017	2016
	(Unaudited)	(restated)
Cash Flows from Operating Activities
Net income (loss)	-6,205,111	19,142
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	9,387	24,687
Impairment Loss	6,022,700	0
Changes in operating assets and liabilities:
Accounts receivable	-108,116	-167
Prepaid and other current assets	-325,314	699
Assets held for divesture	0	227,744
Accounts payable	-6,087,599	12,417
Due to related party	0	-153,284
Liabilities held for divesture	0	-127,367
Net cash used in operating activities	-6,694,053	3,871
Cash Flows from Investing Activities
Acquistion of AHI Film	111,702	0
Acquisition of AHI Record	1,973	0
Acquisition of San Lotus (BVI)	100	0
Disposal of property and equipment	0	0
Proceeds from sale of collateralized land	0	0
Net cash provided by (used in) investing activities	113,775	0
Cash Flows from Financing Activities
Due from/to related party	0	0
Net cash provided by financing activities	0	0
Effect of exchange rate changes on cash and cash equivalents	26,746	0
Net increase (decrease) in cash and cash equivalents	-6,553,532	3,871
Cash and cash equivalents, beginning of the year	7,805,660	7,681
Cash and cash equivalents, ending of the year	1,252,128	11,552
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest expense	0	0
Income tax	0	0
Supplemental disclosure of noncash financing activities
Issuance of note payable to acquire land	0	0
Issuance of Common stock in settlement of note payable	0	0
Issuance of note payable to acquire receivables	0	0
Issuance of common stock in settlement of note payable	0	0

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

SAN LOTUS HOLDING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Nature of Operations

San Lotus Holding Inc. (the“Company”or“San Lotus”),was incorporated on June 21, 2011 in the State of Nevada and changed our state of incorporation from the State of Nevada to the State of California (the "Conversion") on July 21, 2015.The Company’s principal address of business is in Taiwan.

The Company acquired several parcels of undeveloped land and is holding these parcels of land for future development of destination real estate. Through the acquisition of Mao Ren International Inc. (“Mao Ren”) in fiscal 2015, the Company acquired the liquidation rights to certain properties collateralized by a Taiwanese company. The Company is being compensated by the creditors of this Taiwanese company to use the proceeds from the sale of the collateralized land to re-invest or develop the collateralized land to construct and then re-sell the real estate.

In fiscal 2015 and part of fiscal 2016, the Company, through the acquisition of XO Experience Inc. (“XO”) from the former Chairman, was engaged in the provision of travel services, including hotel reservation services, airline ticketing, and travel package in the United States. In December 2016, the Company decided to dissolve XO.

The Company have begun to acquire the ancillary assets and know-how to augment the two main segments to our main businesses. These ancillary assets and know-how include as follows: (1) intellectual property rights on media assets and media production capabilities and (2) proprietary research knowledge on tourism development in Japan and holding structure for future overseas development. These intellectual property rights on media assets and media production capabilities were acquired as a result of the significant transaction to purchase AHI Film Inc. and AHI Records Inc. on August 31, 2016.These transactions were closed on January 1, 2017. The said media assets, which are held under these two companies and their subsidiaries, include, but are not limited to, a feature motion picture; professional-grade photographs; professional-grade video footages; two completed music albums; and one semi-completed music album as well as other miscellaneous items. Through these acquisitions, key personnel have been retained to ensure that crucial functions to media production are kept in house for future development. The Company have concluded that these transactions were asset acquisitions. Separately, due to significant projected capital investments into Japan, the substantial efforts, in both time and resources, are devoted to develop and acquire the knowledge on the Japanese economy as a whole. Through the significant transaction on August 31, 2016 closed on January 1, 2017 to purchase San Lotus Holding Inc. registered in British Virgin Islands (the “San Lotus Holding Inc. (BVI)”), the Company have acquired proprietary research knowledge on tourism development in Japan. The said proprietary knowledge includes, but is not limited to, historical research; economic statistics report; geographic analysis; real estate investment analysis; and most notably tourism specific research with particular focus on destination real estate development. Additionally, San Lotus Holding Inc. (BVI) will be used as a holding structure for future overseas development.

The Company has not conducted business operations nor had significant revenues from operations since its inception.

The Company’s year-end is December 31.

These unaudited financial statements are those of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying Consolidated Financial Statements of the Company, contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state its financial position as of March 31, 2017 and December 31, 2016 and its results of operations and cash flows for the three and six month periods ended March 31, 2017 and March 31, 2016 in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”). Operating results for the three month period ended March 31, 2017 are not necessarily indicative of the results that may be experienced for the fiscal year ending December 31, 2017.

Basis of Presentation and Measurement

The accompanying consolidated financial statements of the Company have been prepared in conformity with U.S. GAAP. The Company’s consolidated financial statements have been prepared on a historical basis except for certain financial assets and liabilities measured at fair value.

Consolidation Policy

The consolidated financial statements of the Company include the accounts of San Lotus Holding, Inc. and its subsidiaries, Green Forest Management Consulting Inc. (“Green Forest”), Da Ren International Development Inc. (“Da Ren”), Mao Ren International Inc. and XO Experience Inc. Intercompany accounts and transactions have been eliminated uponconsolidation. The following companies have been consolidated as at March 31, 2017 and December 31, 2016:

Consolidated companies

Company name	Registered	Purpose of entity
Green Forest	Taiwan	Land holding company
Da Ren	Taiwan	Land holding company
Mao Ren	Taiwan	Liquidation rights to collateralized land
XO	U.S.A.	Travel services
AHI Film	U.S.A.	Media production company
AHI Record	U.S.A.	Music production company
San Lotus (BVI)	British Virgin Islands	Overseas holding company

Going Concern

The accompanying consolidated financial statements were prepared on a going concern basis, which assumes the realization of assets and discharge of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit of $22,687,466 as of March 31, 2017.

The Company faces all the risks common to companies at the development stage, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams and difficulties in managing growth. The Company's losses raise substantial doubt about its ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

The Company is currently addressing its liquidity issue by continually seeking investment capital through private placements of common stock and debt. The Company’s expected cash receipts to fund its liabilities is through the realization of its long term receivable (note 5).The Company believes its current and future plans enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities other than the normal course of business and at amounts which may differ from those in the accompanying consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates incorporated into the Company’s consolidated financial statements include the estimated recoverable amount of the long term receivable, the estimated useful lives for depreciable and amortizable assets and litigation contingencies and claims. Actual results could differ from those estimates.

Revenue recognition

The Company’s revenues are principally derived from providing hotel reservation, air ticketing, other travel and non-travel services. The Company recognizes revenues when all of the following have occurred: persuasive evidence of arrangement with the customer, services have been performed, fees are fixed or determinable and collectability of the fees is reasonably assured, as prescribed by ASC 605-10, Revenue Recognition, Overall. These criteria as related to revenues are considered to have been met as follows:

Packaged-tour: The Company receives referral fees from travel product providers for packaged -tour products and services through its service platform and branch offices. Referral fees are recognized as commissions on a net basis after the packaged-tour service are rendered and collections are reasonably assured .

In cases where these entities undertake the majority of the business risks and acts as principal related to the travel tour services provided, revenues are recognized at gross amounts received from customers after the services are rendered. Revenue from such principal arrangement is minimal in the past.

Air ticketing services: Commissions from air ticketing services rendered are recognized upon the issuance of air tickets, net of estimated cancellations. Customers purchase the air tickets, and the Company remits the net amount less base commission to the airlines. Estimated cancellations were insignificant for the years ended March 31, 2017 and December 31, 2016. The Company presents revenues from such transactions on a net basis in the consolidated statements of operations, as the Company acts as an agent, does not assume any inventory risk, and has no obligations for cancelled airline ticket reservations. The Company sometimes also receives additional discretionary commissions from certain airlines when performance targets are met. Such discretionary commissions are recognized on a cash basis because the Company cannot reasonably estimate the amount, or timing of receipt, of such commissions in advance.

Other travel services: Other travel services are mainly commissions from insurance companies for the sale of travel insurance. Customers purchase the travel insurance, and the Company remits the net amount less commission to the insurance companies. The Company recognizes revenue when the travel insurance is issued to the customer, net of estimated cancellations.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Property and Equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

Estimated useful life

Property and equipment	Estimated Useful Life
Building	40 years
Vehicles	5 years
Equipment	3~5 years

Net Income (Loss) Per Share

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which specifies the computation, presentation and disclosure requirements of earnings per share information. Basic earnings per share have been calculated based upon the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of the diluted loss per share if their effect would be anti-dilutive. For the years ended December 31, 2016 and 2015, the Company did not have any common equivalent shares.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Management has determined that no impairments of long-lived assets currently exist.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting, which requires the Company to record assets acquired, liabilities assumed and any non-controlling interest in the acquire at their respective fair values as of the acquisition date in the Company's consolidated financial statements.

Goodwill and intangible assets

Goodwill represents the excess of costs over fair value of the net assets of businesses acquired. The Company follows ASC subtopic 350-20, Intangibles-Goodwill and Other: Goodwill. Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist. The Company performs its annual impairment assessment for goodwill and indefinite-lived intangible assets in December of each year.

The Company adopted ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which amends the guidance in ASC subtopic 350-30 on testing indefinite-lived intangible assets, other than goodwill, for impairment. ASU 2012-02 provides an entity testing an indefinite-lived intangible asset for impairment the option of performing a qualitative assessment before calculating the fair value of the asset. Although ASU 2012-02 revises the examples of events and circumstances that an entity should consider in interim periods, it does not revise the requirements to test indefinite-lived intangible assets (1) annually for impairment and (2) between annual tests if there is a change in events or circumstances. If the Company determines, on the basis of qualitative factors, that the fair value of indefinite-lived intangible assets is more likely than not less than the carrying amount, further testing is required. Under the further testing, the impairment test on indefinite-lived intangible assets that are not subject to amortization consists of a comparison of the fair value of each intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Assets with definite lives are carried at cost less accumulated amortization. Intangible assets with definite lives are amortized using the straight-line method over the estimated economic life.

Discontinued Operations

The Company follows the policy of segregating the assets and liabilities of subsidiaries or lines of business on its balance sheet from the assets and liabilities of continuing subsidiaries or lines of business when it has decided to close or dispose of a subsidiary or line of business. The Company also follows the policy of separately disclosing the assets and liabilities and the net operations of a subsidiary or line of business in its financial statements when it is decided to close or dispose of a subsidiary or line of business.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Financial Instruments

The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments for which it is practicable to estimate such values:

Cash and cash equivalent – the carrying amount approximates fair valule because the amounts consist of cash held at banks.

Accounts payable and accrued liabilities – the carrying amounts approximate fair value due to the short-term nature of the obligations.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 - Inputs that are not based on observable market data.

Cash and cash equivalent is measured at level 1 inputs.

Foreign Currency Translation Adjustment

The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currencies are the U.S. Dollar for its U.S. based operations and New Taiwan Dollar (NTD) for its Taiwanese based operations. Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the statements of operations. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of operations.

In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD into U.S. dollar are recorded in stockholders’ equity as part of accumulated other comprehensive income (loss). The exchange rates used for financial statements in accordance with ASC 830, Foreign Currency Matters, are as follows:

Foreign currency exchange rates

	Mar. 31, 2017	Dec. 31, 2016
Average Exchange Rate, TWD	31.063	31.911
Instant Exchange Rate, TWD	30.336	32.279
Average Exchange Rate, USD	1.000	1.000
Instant Exchange Rate, USD	1.000	1.000

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update, (“ASU”)No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers. This update provides further guidance on applying collectability criterion to assess whether the contract is valid and represents a substantive transaction on the basis whether a customer has the ability and intention to pay the promised consideration. The requirements of this standard include an increase in required disclosures. Management has not yet selected a transition method and is currently analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. The Company believes that the adoption of the standard will not have a significant impact on its consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.”The new guidance is intended to provide specific guidance on cash flow classification issues such as debt prepayment or debt extinguishment costs, settlement of zero coupon debt instruments or cases where the coupon interest rate is insignificant compared to the effective interest rate of the borrowing, contingent consideration payments in a business combination, proceeds from insurance claim settlements and distributions received by equity method investees. The standard is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. The amendments should be applied using a retrospective transition method to each period presented. The Company believes there will be no impact on the consolidated financial statements as a result of the adoption of the new accounting standard.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, “Business Combinations (Topic 805).” The amendments in this Update are intended to clarify the definition of business. The current guidance specifies three elements of a business – inputs, processes, and outputs. The new guidance provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that needs to be further evaluated. The standard is effective to annual periods beginning after December 15, 2017, including interim periods within those periods. The Company believes that the adoption of the standard will not have a significant impact on its consolidated financial statements.

NOTE 2. PROPERTY AND EQUIPMENT

Property and equipment

	Mar. 31, 2017 (USD)	Dec. 31, 2016 (USD)
Land	6,280,233	5,902,201
Vehicles	72,313	67,960
Equipment	146,008	55,069
Property and equipment - gross	6,498,544	6,025,230
Accumulated depreciation	(134,076)	(68,845)
Property and equipment - net	6,364,478	5,956,385

Depreciation Expense

Three Months Ended

Mar. 31, 2017 (USD)

Three Months Ended

Mar. 31, 2016 (USD)

Depreciation Expense

9,387

24,687

In June 2016, The Company has sold vehicles, details of which are listed below.

Vehicle Sale

	June 30, 2016 (USD)
Sale proceeds	44,000
Net book value	34,215
Realized gain on disposal	9,785

NOTE 3. ACQUISITION AND DIVESTURE OF XO EXPERIENCE INC. (“XO”)

On August 14, 2015, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Chen-Tseng, Chih-Ying and Chen, Li Hsing, our former CEO and former Chairman respectively, for the acquisition of XO EXPERIENCE INC. (“XO”) to acquire all of the issued and outstanding common stock of XO in exchange for$1.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of the acquisition:

Fair value of XO Experience acquisition

	Aug. 14, 2015 (USD)
Cash	216,402
Accounts receivable	250,740
Prepaid expenses and other current assets	21,915
Goodwill	121,793
Accounts payable	(583,257)
Other current liabilities	(13,154)
Unearned revenue	(14,438)
Consideration paid	1

The acquisition of XO is considered to be a business acquisition; accordingly goodwill (refer to above table) was recognized on the acquisition date. As at December 31, 2015, the Company performed an impairment test on its goodwill and determined that an impairment existed due to negative expected cash flows that will be generated in the business. Accordingly, the Company recorded an impairment charge equal to the full amount of its goodwill (refer to above table).

On December 31, 2016, the Company decided to dissolve XO EXPERIENCE INC. pursuant to Section 1900 (a) of California Corporations Code. The Company follows the policy of segregating the assets and liabilities of subsidiaries or lines of business on its balance sheet from the assets and liabilities of continuing subsidiaries or lines of business when it decided to close or dispose of a subsidiary or line of business. As a result of the decision to dissolve XO, XO’s assets, liabilities, revenues and expenses have been classified as discontinued operations on the consolidated balance sheets and statement of operations. The components of discontinued operations summarized on the statement of operations arising from the decision to dissolve XO are as follows:

Discontinued Operations

	Three Months Ended Mar. 31, 2017 (USD)	Three Months Ended Mar. 31, 2016 (USD)
Revenue	0	187,426
General and administrative expenses	0	(100,395)
Income tax	0	0
Net income (loss) from discontinued operations	0	87,031

The components of discontinued operations summarized on the balance sheets arising from the decision to dissolve XO are as follows:

Discontinued Operations

	Mar. 31, 2017 (USD)	Dec. 31, 2016 (USD)
Current assets
Cash	0	0
Accounts receivable and other current assets	0	0
Due from former related parties	0	0
Total assets held for divesture	0	0
Current liabilities
Accounts payable and accrued liabilities	0	0
Unearned revenue	0	0
Total liabilities held for divesture	0	0

As at December 31, 2016, the Company wrote off the residual net receivable due from companies owned by our former CEO and Chairman totaling $27,836.

NOTE 4. ACQUISITION OF MAO REN INTERNATIONAL INC.

On March 31, 2015 (the acquisition date), Green Forest Management Consulting Inc. ("Green Forest"), our wholly-owned subsidiary, entered into a stock purchase agreement with Chiu, Pao-Chi, Chiun Jing Inc., Haug Inc., Jiu Bang Inc., and Wan Fu Inc., (collectively the "Mao Ren Sellers") for the acquisition of Mao Ren International Inc., a Taiwan (R.O.C.) company ("Mao Ren"). Green Forest acquired all of the issued and outstanding common stock of Mao Ren from the Mao Ren Sellers in exchange for $1.

The main assets and liabilities acquired from Mao Ren included the liquidation rights to proceeds from collateralized land totaling US$18,190,911 and the related promissory notes payable totaling US$18,190,911 respectively. See Note 5.

NOTE 5. LONG-TERM RECEIVABLES

In February 2010, Mao Ren took on debt from the creditors of a Taiwanese based company in exchange for the creditors’ rights to the proceeds from the sale of collateralized land pledged by this Taiwanese company. Pursuant to the assumption agreements, the creditors agreed with Mao Ren to enforce and execute the auction by the court or itself against the debtor’s remaining assets which are the collateralized land.

The above mentioned creditors of the Taiwanese company are segregated into three groups. In response to the three groups of creditors, three private companies were incorporated by Chen, Kuan Yu, our Chairman, and Yu, Chien Yang, our former Director to facilitate further development. Prior to the acquisition date of March 31, 2015, these three private companies assumed the debt which Mao Ren owed to the three groups of creditors respectively and in turn accepted promissory notes from Mao Ren as consideration. On June 12, 2015, the first group of creditors, represented by the first of the three private companies, agreed to take common stock of the Company as settlement for cancellation of the promissory notes from Mao Ren. The common stock issued was recorded at the par value of $1/common share. The difference between the carrying amount(that being the cost of the seller) and the par value was recorded in deficit. The Company issued those shares to our Chairman in trust for those individual creditors. The second group of creditors, who wish to collect cash proceeds from the sale of collateralized land, settled with the second private company (owned by our former Director) whereby the former director would be personally liable to settle the amounts with the creditors. The Company could not locate the remaining third group creditors and could not settle any of their debts.

The Company has hired an independent appraiser to appraise the collateralized land and recorded the long-term receivable based on the potentially realizable value NT$913,401,823 of the collaterals at initial recognition. The realizable value constitutes the carrying amount of the seller because the agreements with the creditors stipulated that the maximum amount the creditors could recover is limited to the proceeds received from the sale of the collateralized land relative to their proportionate investment. Further to realization of some of the liquidation rights to the debtor’s remaining assets during fiscal 2016, the Company has re-assessed our remaining rights to the debtor’s remaining assets as follow:

Land Fair Value

	Mar. 31, 2017 (USD)	Dec. 31, 2016 (USD)
Fair Value (NT$)	263,018,668	263,018,668
Land Area (square meter)	532,228	532,228

As of March 31, 2017 and December 31, 2016, the Company’s receivable amounts are shown below.

Receivables

	Mar. 31, 2017 (USD)	Dec. 31, 2016 (USD)
Loan receivable	8,692,243	8,148,290

During fiscal 2016, three parcels of the debtor’s land were sold for the following amounts:

Land Sales Proceeds

	Year Ended Dec. 31, 2016
Yilan	258,999,970
Tainan	15,681,799
Pingtung	30,110,734
Total	304,792,503

No gain or loss was recognized upon sale of the debtor’s land because the initial carrying value was adjusted to its fair value as agreements with the first group of the creditors stipulated that the cost of the seller to equal to the estimated expected proceeds from the sales.

NOTE 6. ACQUISITION OF AHI FILM INC.

On August 31, 2016, the Company entered into an agreement to purchase all outstanding shares of AHI Film Inc. from Chang, Hsin-Yu (the “Seller”), the sole shareholder of AHI Film and AHI Film’s creditor’s right from Yu, Chien-Yang, a former director and major shareholder. This transaction closed on January 1, 2017.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of the acquisition:

Fair value of AHI Film acquisition

	Jan 1, 2017 (USD)
Cash	111,702
Accounts receivable	716
Prepaid expenses and other current assets	17,310
Fixed Assets	31,635
Media Assets	4,268,341
Accounts payable	(12,801)
Other payable	(4,395,112)
Other current liabilities	(21,790)
Consideration paid	1

The Company performed an impairment test on the assets acquired after acquisition and determined that the full balance of the assets are to be impaired due to the uncertainty in the ultimate benefit to the Company. The Company decided to purchase these assets to reimburse the original creditors for their advances and expenses paid on behalf of these companies.

NOTE 7. ACQUISITION OF AHI RECORD INC.

On August 31, 2016, the Company entered into an agreement to purchase all outstanding shares of AHI Records Inc. from Chang, Hsin-Yu (the “Seller”), the sole shareholder of AHI Records Inc. (“AHI Records”) and AHI Records’ creditor’s right from Yu, Chien-Yang, a former director and major shareholder. This transaction closed on January 1, 2017.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of the acquisition:

Fair value of AHI Record acquisition

	Jan 1, 2017 (USD)
Cash	1,973
Media Assets	440,509
Other payable	(442,481)
Consideration paid	1

NOTE 8. ACQUISITION OF SAN LOTUS HOLDING INC (BVI)

On August 31, 2016, the Company entered into an agreement to purchase all outstanding shares of San Lotus Holding Inc. registered in British Virgin Islands (the “BVI Company”) from Chang, Hsin-Yu (the “Seller”), the sole shareholder of the BVI Company and the BVI Company’s creditor’s right from Yu, Chien-Yang, a former director and major shareholder. This transaction closed on January 1, 2017.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of the acquisition:

Fair value of San Lotus Holding Inc. (BVI) acquisition

	Jan 1, 2017 (USD)
Cash	100
Intangible Assets	1,313,849
Other payable	(1,313,948)
Consideration paid	1

NOTE 9. RELATED PARTY TRANSACTIONS

The principal related party transactions for the three months ended March 31, 2017 and year ended March 31, 2016 were as follows:

a) Purchase of vehicle

During fiscal 2016, the Company purchased two vehicles from a private company controlled by Yu, Chien-Yang , our former Director for total purchase price of $39,600

b) Amounts due from/to related parties

Amounts Due From or To Related Parties

	Mar. 31, 2017 (USD)	Mar. 31, 2016 (USD)
Amount due from Chen, Kuan Yu, Chairman	78,411	78,000
Amount due from Yu, Chien Yang, former Director	78,411	78,000
Amount due to Yu, Chien Yang, former Director	0	7,023

The amounts due from/to related parties are non-interest bearing, unsecured and have no fixed terms of repayment.

c) Acquisitions

The acquisitions of XO, Mao Ren, AHI Film Inc., AHI Records Inc. and San Lotus Holding Inc. (BVI) as outlined in notes 3, 4, 6, 7 and 8 are considered to be transactions with related parties.

NOTE 10. CAPITAL STOCK

Common Stock

Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividend on its common stock. The Company has not declared any dividend since incorporation.

There are no capital transactions during the three months period ended March 31, 2017 or fisical year ended December 31, 2016.

NOTE 11. COMMITMENTS AND CONTINGENCIES

a) The Company has several operating leases, primarily for offices and employee dormitories. Payments under operating leases, including periodic rent escalation and rent holidays, are expensed on a straight-line basis over the lease term.

Future minimum lease payments under non-cancellable operating leases as of March 31, 2017 are as follows:

Minimum lease payments

	Year Ended Dec. 31, 2017 (USD)	Year Ended Dec. 31, 2018 (USD)	Total
Minimum lease payments	39,561	52,748	92,309

Rental expenses

	Three months Ended Mar. 31, 2017 (USD)	Three months Ended Mar. 31, 2016 (USD)
Rental expenses	13,187	18,624

b) As outlined in Note 5, the Company could not locate the third group of creditors and could not settle any of their debts. Should these creditors come forward to claim their debt, there is a risk that the Company would be obligated to settle with these creditors and the potential obligation could result in a liability to the Company. As at the date of these financial statements, the Company cannot reasonably estimate the amount of any contingent payments to these creditors.

NOTE 12. SEGMENTED INFORMATION

The Company has two principal reportable segments, one of which is considered to be discontinued operations as at March 31, 2017. These reportable segments were determined based on the nature of products and services offered. Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Business Segments

	Three months ended Mar. 31, 2017 (USD)	Three months ended Mar. 31, 2016 (USD)
Travel Services	0	87,031
Real Estate	(182,411)	(67,889)
Impairment of ancillary assets	(6,022,700)	0
Net income (loss)	(6,205,111)	19,142

The following table lists the Company’s capital assets by geographical area:

Geographical Areas

	Mar. 31, 2017 (USD)	Dec. 31, 2016 (USD)
U.S.A.	30,519	0
Taiwan	6,333,659	5,956,385
Capital assets	6,364,478	5,956,385

NOTE 13. CONCENTRATIONS

Credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents. The Company places its cash with high quality financial institutions. The majority of the Company’s cash is deposited with banks in Taiwan. The government-owned Central Deposit Insurance Corporation in Taiwan provides deposit insurance coverage limit of up to NTD3,000,000 per depositor.

NOTE 14. RESTATEMENT AND CORRECTION OF ERRORS

Subsequent to the issuance of the Company’s 2015consolidated financial statements on May 6, 2016, the Company became aware of errors in its determination of certain previously reported amounts in its 2015consolidated financial statements related to the acquistion of XO and Mao Ren and the application of its revenue recognition policy. These errors were related to the measurement of the purchase price allocation on acquistion dates and the subsequent measurement of these amounts as well as the recognition policy of the revenue from the travel services business. The Company has also identified other adjustments that have been corrected as part of this restatement, including classification of related party balances, and adjustments to accounts receivable and unearned revenue related to errors in revenue recognition. The errors in revenue recognition are related to the fact that the Company booked revenue on a gross basis instead of net basis in accordance with ASC 605-45 Revenue Recognition: Principal Agent Considerations. The purchase price allocation has been adjusted to reflect the carrying amounts to the seller of Mao Ren.The Company determined its previously issued consolidated financial statements should be restated to correct these errors. The following tables summarize the impact of the restatement on our previously reported consolidated balance sheets as at March 31, 2016, consolidated statementof comprehensive loss, and consolidated statementof cash flows for the three months period ended March 31, 2016.

Consolidated balance sheets

	Mar. 31, 2016	Mar. 31, 2016	Mar. 31, 2016
	As previously reported	Adjustments	As currently reported (Restated)
	(USD)	(USD)	(USD)
Current assets
Cash	14,184	800	14,984
Accounts receivable	0	112,160	112,160
Prepaid expenses and other current assets	1,045,752	(1,009,690)	36,062
Current assets	1,059,936	(896,730)	163,206
Goodwill	1,167,726	(1,167,726)	0
Due from related parties	0	172,409	172,409
Long term receivables	27,079,270	(9,314,579)	17,764,691
Fixed assets	6,008,269	0	6,008,269
Other assets	7,049	0	7,049
Total assets	35,322,250	(11,206,626)	24,115,624
Current liabilities
Accounts payable and accrued liabilities	296,744	58,491	355,235
Unearned revenue	207,580	(125,283)	82,297
Current liabilities	504,324	(66,792)	437,532

Share capital	42,003,333	0	42,003,333
Additional paid-in capital	24,000	0	24,000
Treasury stock	(1,815,415)	(462,360)	(2,277,775)
Deficit	(3,763,235)	(11,211,236)	(14,974,471)
Accumulated other comprehensive loss	(1,630,757)	533,762	(1,096,995)
Liabilities and Equity	35,322,250	(11,206,626)	24,115,624

Consolidated statements of loss and comprehensive loss

	Three Months Ended Mar. 31, 2016	Three Months Ended Mar. 31, 2016	Three Months Ended Mar. 31, 2016
	As previously reported	Adjustments	As currently reported (Restated)
	(USD)	(USD)	(USD)
Revenue	279,402	(91,977)	187,425
Cost of sales	64,724	(64,724)	0
Gross profit	214,678	(27,253)	187,425
General and administrative expenses	164,034	4,250	168,284
Gain (Loss) from operations	50,644	(31,503)	19,141

Interest income	1	(1)	0
Loss before income taxes	50,645	(31,504)	19,141
Income tax expense	0	0	0
Consolidated net Income	50,645	(31,504)	19,141


Net income (loss) for the year	50,645	(31,504)	19,141
Basic and diluted loss per share	0.00	(0.00)	(0.00)
Weighted average number of common shares outstanding	10,723,343	29,002,215	39,725,558
Net income (loss)	50,645	(31,504)	19,141
Foreign exchange translation	880,793	(331,662)	549,131
Total comprehensive loss	931,438	(363,166)	568,272

Consolidated statements of stockholder’s equity

	Mar. 31, 2016	Mar. 31, 2016	Mar. 31, 2016
	As previously reported	Adjustments	As currently reported (Restated)
	(USD)	(USD)	(USD)

Share capital	42,003,333	0	42,003,333
Additional paid-in capital	24,000	0	24,000
Treasury stock	-1,815,415	-462,360	-2,277,775
Deficit	-3,763,235	-11,211,236	-14,974,471
Accumulated other comprehensive loss	-1,630,757	533,762	-1,096,995
Total Equity	34,817,926	-11,139,834	23,678,092

Consolidated statements of cash flows

	Three Months Ended Mar. 31, 2016	Three Months Ended Mar. 31, 2016	Three Months Ended Mar. 31, 2016
	As previously reported	Adjustments	As currently reported (Restated)
	(USD)	(USD)	(USD)
Net cash used in operating activities	(121,336)	195	(121,141)
Net cash from investing activities	0	0	0
Net cash from financing activities	0	0	0
Effect of exchange rate on cash	(605)	605	0
Change in cash during the year	(121,941)	800	(121,141)
Cash, beginning of the year	136,125	0	136,125
Cash, end of the year	14,184	800	14,984

NOTE 15. SUBSEQUENT EVENTS

On December 31, 2016, the Company entered into a stock purchase agreement (“Agreement IV”) with Wu, Ting-Kuang (the “Seller”), the sole shareholder of Da Ren International Insurance Brokers Co. Ltd. (the “Da Ren Insurance”), to purchase the outstanding 300,000 shares of Da Ren Insurance (the “Da Ren Insurance Shares”) in exchange for NTD$10,500,000, and the transaction has not yet been closed. The Company determined that the acquisition of Da Ren Insurance will be an asset acquisition upon closing of the transaction.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

This Quarterly Report on Form 10-Q contains "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements consist of information relating to the Company that is based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein and in other filings made by the Company with the Securities and Exchange Commission. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward-looking statements.

BUSINESS OVERVIEW

San Lotus Holding Inc was incorporated in the State of Nevada on June 21, 2011. We changed our state of incorporation from the State of Nevada to the State of California (the "Conversion") on July 21, 2015. There are two main segments to our business - (1) travel services and (2) development of destination real estate.

Travel Services - this part of our business aims to market travel products to the growing "retired baby boomer" market, which an initial focus on the Asian market, via developing and operating a global travel and leisure agency business. We also had plans to develop joint ventures with partners in Asia to develop further potential travel related services to the market.

The significant transaction to enter the travel business ultimately occurred on August 14, 2015, when we purchased XO Experience Inc. ("XO"), a company based in Rosemead, California. We purchased XO for $1 and a cash infusion of $150,000 into the business. XO was incorporated at the end of fiscal year 2013, although it had carried nominal business until the time of the purchase. This was a related party transaction because the owner of the travel business was also the Chairman of our Company at the time. He has resigned in January 2016. Our then chairman owned several other travel businesses at the time and the purpose of this transaction was to enable our Company to enter the travel market. In conjunction with the acquisition of XO, we had a series of various letter of intent with other travel agencies in both Canada and the US to acquire their locations through our then Chairman's connections, including those travel agencies owned by him. We also explored setting up travel agencies in Taiwan and purchasing travel agencies in other countries in our quest to enter the international travel business. These ultimately did not complete once our former chairman resigned in January 2016, and accordingly, our sole entrance into the market included only the purchase of XO.

XO provided two types of services - (1) Customers would purchase tour packages to their travel destinations through XO, including accommodation, ground transportation and arranged tours, etc. We would then purchase the actual tours from local tour operators who provide the services and we would mark up our services accordingly. Effectively, we act as agents to our customer. (2) We retail travel products, such as plane tickets, and earn commission from our suppliers. After the departure of our former Chairman in January 2016, we continued to operate XO, although experiencing challenges in operating the business without our former Chairman, who was also the previous owner of XO. During the fourth quarter of 2016, we ultimately decided to dissolve XO and are in the process of dissolving the company. We have therefore considered XO to be a discontinued operation.

XO was a brick and mortar location in 9368 Valley Boulevard, Suite 2, Rosemead California. Up until our exit of that business, that location also served as our principal executive office. Since the end of 2016, the location of the principle office has been moved, by virtue of our executive team, to Taiwan under the address of 3F B302C, No. 185 Kewang Road, Longtan District, Taoyuan City, Taiwan.

We have currently exited the travel business and are focusing on our current assets, being the rights to land proceeds as described below.

Development of Destination Real Estate - Prior to the acquisition of XO, we also acquired several parcels of land as described in Item 2 Properties. We have not developed these properties, nor have we entered into any contracts with developers. Until we have adequate cash for development work or obtain additional financing, we will hold the land until such time.

Although there have been a number of attempts to acquire more land in the past, our landmark event occurred on March 31, 2015 when we purchased Mao Ren International Inc. ("Mao Ren"), a company incorporated under the laws of Taiwan (R.O.C.). Mao Ren was set up as an entity, by and on behalf of creditors, to recover the remaining assets to a Taiwanese company out of Taiwan. The Taiwanese company relates to funds raised by a Taiwanese company, approximately $300 million (including all interest and penalties), to invest in real estate deals in Taiwan. This scheme promised above-market monthly returns to close to 3,000 investors and after several years of rapid expansion, it became evident that the scheme was unsustainable and resulted in its eventual collapse. After the collapse, these investors/creditors neither had the power nor the resources to recover their share of the money owed. After several attempts, Mao Ren was ultimately incorporated as a brand new entity to seek the liquidation to the properties of debtor for and on behalf of the investors/creditors. Accordingly, Mao Ren owned the liquidation rights to the properties of debtor. While owning the liquidation rights to the properties of debtor, Mao Ren was obligated to pay the creditors NTD$913,401,823. After our acquisition of Mao Ren, we assumed the obligation paying the creditors the NTD$913,401,823 on June 12, 2015. The obligation was settled by issuing to them and their designees 29,464,575 shares of our common stock on June 12, 2015. While the obligation was settled by the issuance of shares, we retain the liquidation rights aforementioned. Mao Ren had initially assessed the value of the liquidation rights as NTD$913,401,823 prior to acquisition. But, we have reassessed the value of the liquidation rights as NTD$568,111,416 which incorporated the cash proceeds received from the land sales that occurred in 2016.

Courts in Taiwan have recognized our liquidation rights to the properties of debtor, and therefore administer the actual liquidation of the lands of the debtor with Mao Ren that has the priority to receive the proceeds from such liquidation. During 2016, the courts liquidated a large plot of land and realized proceeds of NTD$304,792,503. The courts did not set aside any amount for the creditors that cannot be reached and have not come forward to place the claim during the process, and therefore we believe Mao Ren does not have a resulting financial liability to such creditor as of the date of this report.

Currently, the courts are in the process of liquidating the remaining land parcels and we expect to realize cash from those sales during fiscal year 2017 and going forward. Once we realize the cash, our plans are to look at other plots of land in Asia, with a focus on the real property in Japan.

We have begun to acquire the ancillary assets and know-how to augment the two main segments to our main businesses. These ancillary assets and know-how include as follows: (1) intellectual property rights on media assets and media production capabilities and (2) proprietary research knowledge on tourism development in Japan and holding structure for future overseas development. These intellectual property rights on media assets and media production capabilities were acquired as a result of the significant transaction to purchase AHI Film Inc. and AHI Records Inc. on August 31, 2016.These transactions were closed on January 1, 2017. The said media assets, which are held under these two companies and their subsidiaries, include, but are not limited to, a feature motion picture; professional-grade photographs; professional-grade video footages; two completed music albums; and one semi-completed music album as well as other miscellaneous items. Through these acquisitions, key personnel have been retained to ensure that crucial functions to media production are kept in house for future development. We have concluded that these transactions were asset acquisitions. Separately, due to significant projected capital investments into Japan, the substantial efforts, in both time and resources, are devoted to develop and acquire the knowledge on the Japanese economy as a whole. Through the significant transaction on August 31, 2016 and subsequently closed on January 1, 2017 to purchase San Lotus Holding Inc. registered in British Virgin Islands (the “San Lotus Holding Inc. (BVI)”), we have acquired proprietary research knowledge on tourism development in Japan. The said proprietary knowledge includes, but is not limited to, historical research; economic statistics report; geographic analysis; real estate investment analysis; and most notably tourism specific research with particular focus on destination real estate development. Additionally, San Lotus Holding Inc. (BVI) will be used as a holding structure for future overseas development.

EMERGING GROWTH COMPANY STATUS

We qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act (the "JOBS Act"). As a result, we are permitted to rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

●	have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

●	comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

●	submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency"; and

●	disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

RESULTS OF OPERATIONS

The following table summarizes our historical condensed consolidated statements of operations data.

SAN LOTUS HOLDING INC. AND SUBSIDIARIES

FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	2017	2016
	(Unaudited)	(restated)
Revenue	0	0
Cost of sales	0	0
Gross profit	0	0
General and administrative expenses	180,938	67,890
Profit (Loss) from Operations	-180,938	-67,890

Other income (expenses)
Interest income	0	1
Other Income (Loss)	1,094	0
Impairment loss	-6,022,700	0
Foreign exchange loss	-2,896	0
Total other income (expense)	-6,024,502	1
Loss before income taxes	-6,205,440	-67,889
Income taxes expense	0	0
Net Income (Loss)	-6,205,440	-67,889
Loss attributable to noncontroling interest	-329	0
Consolidated net Income	-6,205,111	-67,889

Loss from continuing operations	-6,205,111	-67,889
Income from discontinued operations	0	87,031
Net income (loss) for the year	-6,205,111	19,142

Net Loss Per Share
Basic and Diluted	-0.16	0.00
Weighted Average Shares Outstanding:
Basic and Diluted	39,725,558	39,725,558

Net Loss	-6,205,111	19,142
Foreign exchange translation	1,035,227	549,131
Total comprehensive loss	-5,169,884	568,273

Comparison of Three Months Ended March 31, 2017 and 2016

Revenues. We incurred revenue of $0 during the three months ended March 31, 2017 and 2016.

General and Administrative Expenses. We incurred general and administrative expenses of $180,938 and $67,890 during the three months ended March 31, 2017 and 2016, respectively. The increase was mainly attributable to combination of AHI FILM INC.

Income (loss) from operations. Loss from operations is $180,938and $67,890 for the three months ended March 31, 2017 and 2016. This decrease was attributable to the combination of AHI FILM INC.

Other Income (expenses). Other loss was $6,024,502 for the three months ended March 31, 2017 and other income was $1 for the three months ended March 31, 2016. It was attributable to the impairment loss of the acquisition on January 1,2017.

Net Income (loss) Before Income Taxes. Loss before income taxes is $6,205,440 and $67,889 for the three months ended March 31, 2017 and 2016. The decrease was mainly attributable to the impairment loss of the acquisition on January 1, 2017.

Provision for Income Taxes. We have$0 income tax expense for the three months ended March 31, 2017 and 2016.

Net Income (loss) As a result of the above factors, we experienced a net loss of approximately $6,205,440 and $67,889 for the three months ended March 31, 2017 and 2016, representing a decrease of approximately $6,137,551. This decrease was primarily for the impairment loss of the acquisition on January 1, 2017.

Net Loss Attributable to Non-controlling Interest. Net loss attributable to non-controlling interest was $329 and $0 for the three months ended March 31, 2017 and 2016

Liquidity and Capital Resources

Excluding our planned acquisitions, we expect the running of San Lotus Holding Inc.; Green Forest Management Consulting Inc.; Da Ren International Development Inc.; Mao Ren International Inc.; XO Experience Inc.; AHI Film Inc.; AHI Records Inc.; and San Lotus Holding Inc. in British Virgin Islands to require approximately $ 600,000 to carry out planned operations for the next 12 months. This includes as follows:

We expect our monthly expenses to continue at the rate of $50,000 after December 31, 2016, not including the costs we will incur in running any of our planned acquisitions or embarking on any real estate development activities. To meet our needs for cash required for sustain our businesses and completing our planned acquisitions, we will need to generate sufficient revenues or require additional funding.

As of March 31, 2017, we had $1,252,128 cash in the bank; $806,988cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Green Forest Management Consulting Inc.; $327 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary, Da Ren International Development Inc.; $106,840 cash held by our wholly-owned Taiwan (R.O.C.) subsidiary Mao Ren International Inc.; $99,798 cash held by our wholly-owned California subsidiary, AHI Film Inc.; $2,954 cash held by our wholly-owned California subsidiary, AHI Record Inc, and $44,218 cash held by our wholly-owned British Virgin Island subsidiary, San Lotus Holding Inc. (BVI).

If we require additional funding to complete our planned acquisitions, we will actively seeking additional funding by completing a private placement of our equity securities and/or mortgage our land. But, there can be no assurance we will be funded as such. And, there can be no assurance that our existing shareholders will provide us with additional capital. Finally, if we are unable to generate sufficient revenue and/or obtain additional funding, we may have to cease operations entirely. We cannot guarantee that our operations and proceeds from any funding will be sufficient for us to continue as going concern.

Tabular disclosure of contractual obligations

Contractual obligations	Payments due by period			3-5 years	More than 5 years
Contractual obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
[Long-Term Debt Obligations]
[Capital Lease Obligations]
[Operating Lease Obligations]	$92,309	$39,561	$52,748
[Purchase Obligations]
[Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP]
Total	$92,309	$39,561	$52,748

Going Concern

The accompanying consolidated financial statements were prepared on a going concern basis, which assumes the realization of assets and discharge of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, we had an accumulated deficit of $22,687,466 as of March 31, 2017.

We face all the risks common to companies at the development stage, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams and difficulties in managing growth. Our losses raise substantial doubt about its ability to continue as a going concern. Our consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

In addition, we advanced an additional $6,047,831 to AHI Film Inc. (“AHI Film”), a company that was acquired subsequent to December 31, 2016.

We are currently addressing its liquidity issue by continually seeking investment capital through private placements of common stock and debt. Our expected cash receipts to fund its liabilities are through the realization of its long term receivable. We believe our current and future plans enable it to continue as a going concern. Our ability to achieve these objectives cannot be determined at this time. These consolidated financial statements do not give effect to any adjustments which would be necessary should we are unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities other than the normal course of business and at amounts which may differ from those in the accompanying consolidated financial statements.

Critical Accounting Polices

It is our goal to clearly present our financial information in a manner that enhances the understanding of our sources of earnings and cash flows, as well as our financial condition. We do this by including the information required by the SEC, as well as providing additional information that gives further insight into our financial operations. Our financial report includes a discussion of our accounting principles, as well as methods and estimates used in the preparation of our financial statements. We believe these discussions and statements fairly represent the financial position and operating results of our company. The purpose of this portion of our discussion is to further emphasize some of the more critical areas where a significant change in facts and circumstances in our operating and financial environment could cause a change in future reported financial results.

Impact of Accounting Pronouncements

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

Recently Issued Accounting Policies

We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

OFF-BALANCE SHEET ARRANGEMENTS

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

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

We do not take positions or engage in transactions in risk-sensitive market instruments in any substantial degree, nor as defined by SEC rules and instructions. Based on the nature of our current operations, we have not identified any issues of market risk at this time.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company's management, including the Chairman and Chief Financial Officer, evaluated the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of March 31, 2017. Based on this evaluation, the Chairman and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. There were no changes in our internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors and (3) 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 financial statements.

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

Management assessed the effectiveness of our internal control over financial reporting and organizational governance as of March 31, 2017. In making this assessment, Management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Management's assessment included an evaluation of the design of the Company's internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of the Board of Directors. Based on our assessment, we believe that our internal controls over financial reporting and organizational governance were not effective because of following deficiencies as of March 31, 2017: (i) the lack of U.S. GAAP expertise of our chief financial officer, (ii) the lack of U.S. GAAP expertise of our internal accounting staff, and (iii) the company’s failure to have a board of directors consisting of a majority of independent directors and our lack of a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Because of these deficiencies, it is reasonably possible that our internal controls over financial reporting may not have prevented or detected errors from occurring that could have been material, either individually or in the aggregate. We will be addressing these deficiencies in the near term as the Company develops.

The Company's independent registered public accounting firm, Davidson & Company LLP, has not audited the Company's internal control over financial reporting as of March 31, 2017.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Our management knows of no material existing or pending legal proceeding, litigation or claim against us, nor are we involved as a plaintiff in any material existing legal proceeding or pending legal proceeding, litigation or claim. In November 2015, after an auction administered by the court in Taiwan, our debtor’s land in Yilan County, Taiwan was sold for NTD$546,656,000 (“Auction Price”). The portion of Auction Price to which Mao Ren International Inc. (“Mao Ren”) is entitled is NTD$301,252,556. But, in fact, in December 2016, NTD$ 259,000,000 was paid to Mao Ren and the remainder amount of NTD$42,252,556 is still subject to an objection. Collectability of the NTD$42,252,556 is uncertain; accordingly we have not recorded this amount as a receivable.

Item 1A. Risk Factors.

There is no any material changes from risk factors as previously disclosed in our Form 10-K.

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

None.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number		Description
31.1	*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of Chief Executive Officer and 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 Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

* Filed herewith.

** This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

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

	SAN LOTUS HOLDING INC.

Date: May 22, 2017	By:	/s/Chen, Kuan-Yu
		Chen, Kuan-Yu Chairman

Date: May 22, 2017

By:

/s/Lin, Mu-Chen

Lin, Mu-Chen

Chief Financial Officer and

Principal Accounting Officer

San Lotus Holding Inc 10-Q