UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

FOR THE ~~QUARTERLY~~ QUARTERLY PERIOD ENDED ~~JULY~~JANUARY 31, ~~2018~~2019

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

Commission File Number 000-54288

PRIME GLOBAL CAPITAL GROUP INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

NEVADA		26-4309660
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

E-5-2, Megan Avenue 1, Block E

Jalan Tun Razak

50400 Kuala Lumpur, Malaysia

603 2162 0773

(Address of Principal Executive Offices and Issuer’s
Telephone Number, including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~smaller reporting company,~~ or ana ~~emerging~~smaller ~~growth~~reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, and “smaller reporting company”~~, and~~ ~~“emerging growth company”~~ in Rule 12b-2 of the Exchange Act. (Check one) :

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company x
(Do not check if smaller reporting company)
Emerging growth company o

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

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

As of ~~September~~March 68, ~~2018~~2019, the issuer had ~~outstanding~~ outstanding 512,682,393 shares of common stock.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	2
ITEM 1	Financial Statements	2
	Condensed Consolidated Balance Sheets as of July 31, 2018 (Unaudited) and October 31, 2017 (Audited)	1
	Condensed Consolidated Balance Sheets as of January 31, 2019 (Unaudited) and October 31, 2018 (Audited)	2
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Nine Months Ended July 31, 2018 and 2017 (Unaudited)	2
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three Months Ended January 31, 2019 and 2018 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2018 and 2017 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended January 31, 2019 and 2018 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	45
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2725
ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	4340
ITEM 4	Controls and Procedures	4442
PART II	OTHER INFORMATION	42
ITEM 1	Legal Proceedings	4542
ITEM 1A	Risk Factors	4542
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	45442
ITEM 3	Defaults upon Senior Securities	45442
ITEM 4	Mine Safety Disclosures	4542
ITEM 5	Other Information	4542
ITEM 6	Exhibits	4643
SIGNATURES		4744

PART I FINANCIAL INFORMATION

ITEM 1 Financial Statements

PRIME GLOBAL CAPITAL GROUP INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

	July 31, 2018			October 31, 2017
	January 31, 2019			October 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	~~186~~155,~~712~~845		$	~~294~~503,~~261~~197
Marketable securities, available-for-sale		~~223~~172,~~191~~650			~~221~~172,~~198~~532
Rental concession		2726,~~121~~898			26,~~009~~304
Accounts receivable, net		13,~~018~~448			~~154~~15,~~619~~990
Deposits and other receivables		1621,~~223~~989			2426,~~742~~804
Total current assets		~~454~~380,~~265~~830			~~720~~744,~~829~~827
Rental concession, non-current		~~659~~641,~~944~~073			~~678~~633,~~402~~484
Deferred development costs		~~156~~262,~~174~~120			94241,~~822~~670
Construction in progress		~~317~~426,~~994~~840			~~304~~417,~~956~~409
Property, plant and equipment, net		4443,~~179~~797,~~612~~541			42,~~720~~935,~~697~~354
TOTAL ASSETS	$	45,~~767~~508,~~989~~404		$	44,~~519~~972,~~706~~744
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	620,866		$	~~322~~30,797
Amount due to a related party		86,420			86,420
Rental deposits from tenants		~~429~~426,~~709~~178			~~409~~416,~~963~~762
Income tax payable		~~575~~410,~~997~~228			~~684~~572,~~287~~825
Short-term bank borrowings		3,429,610			3,501,799
Current portion of long-term bank loans		620,591			598,795
Current portion of long-term bank loans		974,761			919,638
Accrued liabilities and other payables		320,119			330,827
Deferred tax liabilities, current		–			6,242
Total current liabilities		1,884,402			2,036,426
Accrued liabilities and other payables		312,008			419,236
Total current liabilities		5,808,511			6,027,907
Long-term liabilities:
Long-term bank loans		813,~~281~~606,~~535~~878			813,~~609~~460,~~795~~618
Amount due to a director		32,~~544~~256,~~540~~607			2,~~427~~270,~~767~~089
Deferred tax liabilities		~~166~~162,~~407~~053			~~164~~160,~~265~~050
Total liabilities		17,~~800~~909,~~993~~940			17,~~229~~927,~~734~~183
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 100,000,000 shares authorized; no shares issued and outstanding		–			–
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 512,682,393 shares issued and outstanding, as of July 31, 2018 and October 31, 2017		512,683			512,683
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 512,682,393 shares issued and outstanding, as of January 31, 2019 and October 31, 2018		512,683			512,683
Additional paid-in capital		41,934,476			41,934,476
Accumulated other comprehensive loss		(910,~~995~~254,~~334~~350	)		(1110,~~187~~876,~~912~~629	)
Accumulated loss		(4,~~222~~342,~~638~~929	)		(34,~~744~~277,~~805~~137	)
Total stockholder’s equity		2827,~~229~~849,~~187~~880			27,~~514~~293,~~442~~393
Non-controlling interest		(~~262~~251,~~191~~416	)		(~~224~~247,~~470~~832	)
Total equity		27,~~966~~598,~~996~~464			27,~~289~~045,~~972~~561
TOTAL LIABILITIES AND EQUITY	$	45,~~767~~508,~~989~~404		$	44,~~519~~972,~~706~~744

See accompanying notes to condensed consolidated financial statements

PRIME GLOBAL CAPITAL GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

(Currency expressed in US$, except for number of shares)

(Unaudited)

	Three months ended July 31,						Nine months ended July 31,
	Three months ended January 31,
	2018			2017			2018			2017
	2019			2018
Revenues, net:
Plantation business	$	2836,~~291~~399		$	1262,~~287~~058		$	~~133,715~~		$	~~96,305~~
Rental income		~~425~~409,~~082~~089			~~276~~278,~~393~~862			~~950,576~~			~~818,147~~
Total revenues, net		~~453~~445,~~373~~488			~~288~~340,~~680~~920			~~1,084,291~~			~~914,452~~
Cost of revenues		(~~150~~146,~~834~~925	)		(~~121~~161,~~751~~505	)		~~(500,133~~	)		~~(428,101~~	)
Gross profit		~~302~~298,~~539~~563			~~166~~179,~~929~~415			~~584,158~~			~~486,351~~
Operating expenses:
General and administrative		(~~116~~122,~~405~~934	)		(~~180~~97,~~347~~448	)		~~(381,979~~	)		~~(459,877~~	)
Income/(loss) from operations		186,134			(13,418	)		202,179			26,474
Income from operations		175,629			81,967
Other (expense) income
Other (expense) / income
Interest expense		(~~215~~189,~~659~~276	)		(~~212~~216,~~161~~751	)		~~(592,780~~	)		~~(629,726~~	)
Other income		–			(990	)		–			1,789
Loss before income taxes		(13,647	)		(134,784	)
Forgiveness of debts		–			184,435			–			184,435
Income tax (expense) / benefit		(50,161	)		8,118
Impairment loss on available-for-sale securities		–			(248	)		–			(25,007	)
NET LOSS	$	(63,808	)	$	(126,666	)
Loss before income taxes		(29,525	)		(42,382	)		(390,601	)		(442,035	)
Net (profit) / loss attributable to non-controlling interest		(1,984	)		8,676
Income tax expense		(55,826	)		945			(115,820	)		(55,150	)
NET LOSS ATTRIBUTABLE TO THE COMPANY	$	(65,792	)	$	(117,990	)
NET LOSS	$	(85,351	)	$	(41,437	)	$	(506,421	)	$	(497,185	)
Other comprehensive income / (loss):
Net loss attributable to non-controlling interest		(1,946	)		(10,937	)		(28,588	)		(39,973	)
- Foreign exchange adjustment gain / (loss)		622,279			2,344,877
NET LOSS ATTRIBUTABLE TO THE COMPANY	$	(83,405	)	$	(30,500	)	$	(477,833	)	$	(457,212	)
COMPREHENSIVE INCOME (LOSS)	$	556,487		$	2,226,887
Other comprehensive income (loss):
Net loss per share – Basic and diluted*	$	(0.00	)	$	(0.00	)
– Unrealized holding loss on available-for-sale securities		–			(15,252	)		–			(40,011	)
Weighted average common stock outstanding – Basic and diluted		512,682,393			512,682,393
– Impairment loss on available-for-sale securities		–			–			–			24,759
– Foreign exchange adjustment gain (loss)		(972,187	)		392,501			1,192,578			(594,304	)
COMPREHENSIVE INCOME (LOSS)	$	(1,055,592	)	$	346,749		$	714,745		$	(1,066,768	)
Net loss per share – Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average common stock outstanding – Basic and diluted		512,682,393			512,682,393			512,682,393			512,682,393

* Less than $0.01 per share

See accompanying notes to condensed consolidated financial statements.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in US$)

(Unaudited)

	Nine months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Cash flows from operating activities:
Net loss	$	(~~506~~63,~~421~~808	)	$	(~~497~~126,~~185~~666	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property, plant and equipment		~~401~~119,~~740~~942			~~363~~130,~~759~~590
Gain on disposal of property, plant and equipment		–			(1,789	)
Forgiveness of debts		–			(184,435	)
Impairment loss on available-for-sale securities		–			25,007
Changes in operating assets and liabilities:
Accounts receivable		~~162~~12,~~857~~701			(324,~~437~~065	)
Deposits and other receivables		95,~~736~~337			132,~~241~~786
Accounts payable		(~~335~~10,460	)		(~~15,110~~333	)
Rental concession		486,~~246~~619			1833,~~841~~825
Income tax payable		(~~139~~172,~~817~~789	)		(~~200~~94,~~396~~664	)
Rental deposit from tenants		~~2,256~~–			42,~~796~~214
Deferred taxation		(111,~~579~~589	)		(108,~~084~~118	)
Accrued liabilities and other payables		(~~116~~13,~~969~~403	)		(~~51,701~~123	)
Net cash used in operating activities		(~~150~~117,~~286~~450	)		(~~538~~36,~~493~~424	)
Cash flows from investing activities:
Addition of plantation development cost		(5814,~~245~~756	)		(911,~~043~~468	)
Payment on construction in progress		–			(7,262	)
Purchase of property, plant and equipment		(13,720	)		(631	)
Proceeds from disposal of property, plant and equipment		–			3,882
Net cash used in investing activities		(28,476	)		(12,099	)
Purchase of property, plant and equipment		(28,168	)		(3,174	)
Net cash used in investing activities		(86,413	)		(15,597	)
Cash flows from financing activities:
Advances from related parties		1(59,~~037,234~~909	)		~~660~~325,~~544~~957
Repayments on bank loans		(~~917~~147,~~348~~265	)		(~~593~~296,~~553~~917	)
Payments on finance lease		–			(3,078	)
Net cash (used in) / provided by financing activities		(207,174	)		29,040
Net cash provided by financing activities		119,886			63,913
Foreign currency translation adjustment		5,748			18,666
Foreign currency translation adjustment		9,264			(20,195	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(347,352	)		(817	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(107,549	)		(510,372	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		503,197			294,261
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		294,261			685,876
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	155,845		$	293,444
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	186,712		$	175,504
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income tax	$	~~267~~224,~~216~~539		$	~~278~~94,~~395~~664
Cash paid for interest	$	~~592~~189,~~780~~276		$	~~629~~216,~~724~~750

See accompanying notes to condensed consolidated financial statements.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE–1 BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended October 31, ~~2017~~2018. All significant intercompany balances and transactions have been eliminated on consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the periods presented have been included in the interim period. Operating result for the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019 is not necessarily indicative of the results that may be expected for other interim periods or the year ending October 31, ~~2018~~2019. The condensed consolidated financial data at October 31, ~~2017~~2018 is derived from audited financial statements included in our Annual Report on Form 10-K for the year ended October 31, ~~2017~~2018, filed on January 3129, ~~2018~~2019.

NOTE–2 ORGANIZATION AND BUSINESS BACKGROUND

Prime Global Capital Group Incorporated (formerly Home Touch Holding Company) (“PGCG” or “the Company”) was incorporated in the State of Nevada on January 26, 2009. On January 25, 2011, the Company changed its name to Prime Global Capital Group Incorporated.

Currently, the Company, through its subsidiaries, is principally engaged in the operation of oil palm and durian plantation, leasing of commercial properties and development of residential real estate properties in Malaysia.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JULY 31, 2018

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

Summary of the Company’s subsidiaries

	Name of entities	Place of incorporation	Date of incorporation	Issued capital	Nature of business

1.	Union Hub Technology Sdn. Bhd. (“UHT”)	Malaysia	February 22, 2008	1,000,000 issued shares of ordinary shares of MYR 1 each	Provision of corporate services to group companies

2.	Virtual Setup Sdn. Bhd. (“VSSB”)	Malaysia	July 19, 2010	4,000,000 issued shares of ordinary shares of MYR 1 each	Operation of oil palm and durian plantation

3.	PGCG Assets Holdings Sdn. Bhd. (“PGCG Assets”)	Malaysia	March 21, 2012	50,000,000 issued shares of ordinary shares of MYR 1 each	Investment in land & buildings

4.	PGCG Development Sdn. Bhd. (“PGCG Development”)	Malaysia	March 21, 2012	250,000 issued shares of ordinary shares of MYR 1 each	Inactive operation

5.	PGCG Plantations Sdn. Bhd. (“PGCG Plantation”)	Malaysia	October 4, 2011	2 issued shares of ordinary shares of MYR 1 each	Holding company of VSSB

6.	Dunford Corporation Sdn. Bhd.	Malaysia	October 4, 1990	242,000 issued shares of ordinary shares of MYR 1 each	Property holding land

7.	Impiana Maksima Sdn. Bhd.	Malaysia	March 15, 2013	2 issued shares of ordinary shares of MYR 1 each	Property development

8.	PGCG Constructions Sdn. Bhd.	Malaysia	April 16, 2013	2 issued shares of ordinary shares of MYR 1 each	Construction of properties

9.	Fiesta Senada Sdn Bhd	Malaysia	November 28, 2012	2 issued shares of ordinary shares of MYR 1 each	Inactive operation

10.	Havana Avenue Sdn Bhd	Malaysia	April 4, 2014	2 issued shares of ordinary shares of MYR 1 each	Inactive operation

PGCG and its subsidiaries are hereinafter referred to as (the “Company”).

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE–3 GOING CONCERN UNCERTAINTIES

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

For the ~~nine~~three months ended ~~July~~January 31, ~~2018,~~ 2019, the Company reported a loss of $~~506~~63,~~421~~808 and working capital deficit of $51,~~354~~503,~~246~~572 as of ~~July~~January 31, ~~2018~~2019.

In order to continue as a going concern, the Company will expect, among other things, to generate more profitable operations in the future and/or additional capital resources. Management’s plan is to raise adequate resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing.

These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

NOTE–4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

·	Use of estimates

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

·	Basis of consolidation

The condensed consolidated financial statements include the accounts of PGCG and its subsidiaries. All significant inter-company balances and transactions between the Company and its subsidiaries have been eliminated upon consolidation.

·	Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

·	Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. Based upon the aforementioned criteria, the Company did not write off accounts receivable on uncollectible rental receivable at January 31, 2019 and October 31, 2018.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

· Accounts receivable

·	Available-for-sale equity securities

Available-for-sale marketable securities are reported at fair value using the market approach based on the quoted prices in active markets at the reporting date. The Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. Any unrealized losses that are deemed other-than-temporary are included in current period earnings and removed from accumulated other comprehensive income (loss).

Realized gains and losses on marketable securities are included in current period earnings. For purposes of computing realized gains and losses, the cost basis of each investment sold is generally based on the weighted average cost method.

The Company regularly evaluates whether the decline in fair value of available-for-sale securities is other-than-temporary and objective evidence of impairment could include:

	·	The severity and duration of the fair value decline;
	·	Deterioration in the financial condition of the issuer; and
	·	Evaluation of the factors that could cause individual securities to have an other-than-temporary impairment.

During the ~~nine~~three months ended ~~July~~January 31, ~~2018,~~ 2017, the Company invested in equity securities listed on Bursa Malaysia with a total cost of $265,606 and escrow funds (which ~~invested~~ invested in equity securities listed in the U.S.) with a total cost of $200,000. The Company entered into an escrow agreement with ~~Peijin~~ Peijin Wu Hoppe (“Hoppe”), the Company’s former director, to set up an escrow fund up to $500,000 as a reserve to indemnify Hoppe from any claim of liability until July 29, 2022, the seventh year anniversary of the termination of Director Retainer Agreement, or any mutual agreement with the Company and Hoppe. The unrealized loss representing the change in fair value of $nil and $40,011 was charged against accumulated other comprehensive income (loss) for the nine months ended July 31, 2018 and 2017, respectively.

·	Deferred development costs

Deferred development costs consist of replanting costs of durian such as soil amendments, cultivation, fertilization and purchase costs of sapling. Costs related to durian development projects at the Company’s plantation land are capitalized during the sapling, developing and planting durian fruit tree and until the harvests are substantially available for commercial sale, and deferred development costs will then commence to be amortized as components of plantation costs and expenses.

·	Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:

Categories	Location of properties	Expected useful life
Freehold plantation land and orchard	Oil palm and durian plantation in Malaysia	Indefinite, as per land titles
Leasehold land under development	Leasehold land in Puncak Alam, Malaysia	Remaining lease life of 88 years, as per land titles
Freehold land under development	Freehold land in Sungai Long, Cheras, Selangor, Malaysia	Indefinite, as per land titles
Freehold land and land improvement for rental purpose commercial building	Land portion of 15 storey buildings in Kuala Lumpur, Malaysia	Indefinite, as per property titles
Building structure and improvements	Building structure of commercial buildings in Kuala Lumpur, Malaysia, including: 12 storey building “Megan Avenue” and 15 storey building	33 years
Office furniture and equipment		3-10 years
Motor vehicle		5 years

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

· Property, plant and equipment

Categories	Location of properties	Expected useful life
Freehold plantation land and orchard	Oil palm and durian plantation in Malaysia	Indefinite, as per land titles
Leasehold land under development	Leasehold land in Puncak Alam, Malaysia	Remaining lease life of 88 years, as per land titles
Freehold land under development	Freehold land in Sungai Long, Cheras, Selangor, Malaysia	Indefinite, as per land titles
Freehold land and land improvement for rental purpose commercial building	Land portion of 15 storey buildings in Kuala Lumpur, Malaysia	Indefinite, as per property titles
Building structure and improvements	Building structure of commercial buildings in Kuala Lumpur, Malaysia, including: 12 storey building “Megan Avenue” and 15 storey building	33 years
Office furniture and equipment		3-10 years
Motor vehicle		5 years

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of property, plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.

Deferred development costs for oil palm that had been capitalized as part of freehold plantation land were not amortized over the useful life of the oil palms since these costs were not separately identifiable from the cost of freehold plantation land and buildings when the whole oil palm plantation was purchased in July 2011.

Long-lived assets primarily include freehold plantation land, leasehold land held for development, freehold land and land improvement for rental purpose and building structure and improvements. In accordance with the provision of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the periods presented.

The Company has separately identified the portion of freehold land and building structure, in which freehold land is not subject to amortization and buildings are to be amortized over 33 years on a straight-line method, based on applicable local laws and practice.

Policy for Capitalizing Development Cost

The cost of buildings and improvements includes the purchase price of property, legal fees and other acquisition costs. Costs directly related to planning, developing, initial leasing and constructing a property are capitalized and classified as Real Estate in the consolidated balance sheets. Capitalized development costs include interest, and other direct project costs incurred during the period of development. As of ~~July~~January 31, ~~2018~~ 2019 and October 31, ~~2017~~2018, there was no such capitalized interest.

A variety of costs are incurred in the acquisition, development and leasing of properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. The Company adopts the capitalization policy on development properties, which is guided by ASC Topic 835-20 “Interest – Capitalization of Interest” and ASC Topic 970 “Real Estate - General”. The costs of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, salaries and related costs and other costs incurred during the period of development. The Company considers a construction project as substantially completed and held available for occupancy upon the receipt of certificates of occupancy, but no later than one year from cessation of major construction activity. The Company ceases capitalization on the portion (1) substantially completed and (2) occupied or held available for occupancy, and we capitalize only those costs associated with the portion under construction.

The Company capitalizes leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. The Company allocates these costs to individual tenant leases and amortizes them over the related lease term.

·	Revenue recognition

Revenue recognition applicable from 1 November 2018

The Company recognizes its revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”. Revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer, usually upon delivery of palm oil fruit bunches and durian fruits. There are no significant payments terms, no significant financing component or any variable consideration. All of the company’s revenue from contracts with customers in the scope of ASC 606 is recognised in one geographical market in Malaysia, and one major product line, and plantation sales are transferred at a point in time.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

ARevenue ~~variety~~recognition ofapplicable ~~costs are incurred in the~~until ~~acquisition,~~31 ~~development~~October and leasing of properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. The Company adopts the capitalization policy on development properties, which is guided by ASC Topic 835-20 “Interest – Capitalization of Interest” and ASC Topic 970 “Real Estate - General”. The costs of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, salaries and related costs and other costs incurred during the period of development. The Company considers a construction project as substantially completed and held available for occupancy upon the receipt of certificates of occupancy, but no later than one year from cessation of major construction activity. The Company ceases capitalization on the portion (1) substantially completed and (2) occupied or held available for occupancy, and we capitalize only those costs associated with the portion under construction.2018

· Revenue recognition

The Company recognizes its revenue in accordance with ASC Topic 605, “Revenue Recognition”, upon the delivery of its plantation products when: (1) title and risk of loss are transferred; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable. The Company’s sale arrangements do not contain general rights of return.

(a) Plantation sales

Revenue from ~~the~~plantation sales include the sale of palm oil fruit bunches and sale of durian. The sale is recognized upon confirmation of the weight of ~~fresh~~produces ~~fruit bunches~~ and transported to the customer, when there is persuasive evidence of an arrangement, delivery has occurred and risk of loss has passed, the sales price is fixed or determinable at the date of sale, and collectability is reasonably assured. For the three months ended ~~July~~ January 31, ~~2018~~2019 and ~~2017~~2018, ~~sale~~sales offrom ~~palm~~plantation ~~oil fruits~~ was $2836,~~291~~399 and $1262,~~287~~058, respectively. ~~For the nine months ended July 31, 2018 and 2017, sale of palm oil fruits was $133,715 and $96,305, respectively.~~

(b) Rental income

The Company generally leases the units under operating leases with terms of two years or less. For the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, we have recorded $~~950~~409,~~576~~ 089 and $~~818~~278,~~147~~862 in lease revenue, based upon its annual rental over the life of the lease under operating lease, using the straight-line method in accordance with ASC Topic 970-605, “Real Estate – General – Revenue Recognition” (“ASC Topic 970-605”).

As of ~~July~~January 31, ~~2018~~2019, the commercial ~~buildings~~ buildings for lease are as follows:

Name of Commercial building

Number of units

(by floor)

Footage area

(square feet)

Vacancy percentage

Megan Avenue

19,987

33%

Le Apple Boutique Hotel KLCC

(fka “Menara CMY”)

91,848

The Company expects to record approximately $1.765 million in annual lease revenue under the operating lease arrangements in the next twelve months through ~~July~~January 31, ~~2019~~2020.

·	Rental concession

The Company leases store location and office spaces to the tenants under operating lease arrangements. The Company receives rental income from the real estates it owns for a stated period of times. Rental income is recognized over the life of the operating lease agreement as it is earned in the period under ASC Topic 970-605. The typical leases contain initial terms of one to two years with renewal options and do not contain escalating rent amounts. Under the lease agreement of Le Apple Boutique Hotel KLCC (fka “Menara CMY”), the initial term of lease is one year. Provided that there are no existing breaches by the tenant, an irrecoverable annual renewal option is granted for up to twenty-nine years, with a maximum aggregate term of thirty years. Six-months’ rent-free period under the operating lease agreement is treated as long-term rent concession, which is being amortized as an offset to revenues collected over the term of the underlying lease of 30 years on a straight-line basis.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

· Rental concession

	January 31, 2019		October 31, 2018
Rental concession:
Current portion	$	26,898	$	26,304
Non-current portion		641,073		633,484

Total	$	667,971	$	659,788

	July 31, 2018		October 31, 2017
Rental concession:
Current portion	$	27,121	$	26,009
Non-current portion		659,944		678,402
Total	$	687,065	$	704,411

The estimated amortization on long-term rent concession in the next five years and thereafter is as follows:

Period ending July 31:
Period ending January 31:
	2019			$	27,121
2020		$	26,898
	2020				27,121
2021			26,898
	2021				27,121
2022			26,898
	2022				27,121
2023			26,898
	2023				27,121
2024			26,898
Thereafter	~~Thereafter~~		533,481		~~551,460~~
Total	~~Total~~	$	667,971	$	~~687,065~~

As of ~~July~~January 31, ~~2018~~2019, the minimum future rental receivables on the commercial properties to be collectible in the next five years and thereafter are as follows:

Period ending July 31:
Period ending January 31:
	2019			$	1,635,716
2020		$	1,649,835
	2020				1,605,439
2021			1,624,404
	2021				1,600,138
2022			1,586,991
	2022				1,600,138
2023			1,586,991
	2023				1,600,138
2024			1,586,991
Thereafter	~~Thereafter~~		31,475,323		~~32,536,141~~
Total	~~Total~~	$	39,510,535	$	~~40,577,710~~

The Company also records operating costs directly attributable to the leasing properties, such as real estate taxes, depreciation of the leased properties and maintenance fees, which are charged as expenses when incurred.

·	Cost of revenues

Cost of revenue on plantation sales includes material supplies, subcontracting costs and transportation costs incurred for planting, fertilizing and harvesting. Transportation and handling costs associated with the distribution to the customers are also included in cost of revenues.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

· Cost of revenues

Cost of revenue on plantation sales includes material supplies, subcontracting costs and transportation costs incurred for planting, fertilizing and harvesting the palm oil tree. Transportation and handling costs associated with the distribution of fresh fruit bunches to the customers are also included in cost of revenues.

Cost related to real estate business shown on the accompanying statements of operations include costs associated with land tax, on-site and property management personnel, repairs and maintenance, property insurance, marketing, landscaping and other on-site and related administrative costs. Utility expenses are paid directly by tenants.

·	Comprehensive income

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

·	Non-controlling interests

Non-controlling interests represent the equity interest in the capital contributions, income and loss of less than wholly-owned and consolidated entities that is not attributable to the Company.

·	Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

The Company conducts major businesses in Malaysia and is subject to tax in its own jurisdiction. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the local and foreign tax authorities.

·	Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company maintains its books and record in a local currency, and Malaysian Ringgit (“MYR”) ~~and Hong Kong Dollars (“HK$”)~~, which is functional currency as being the primary currency of the economic environment in which the entity operates.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity. The gains and losses are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective periods:

	As of and for the period ended July 31,
	As of and for the period ended January 31,
	2018		2017
	2019		2018
Period-end HK$ : US$1 exchange rate		–		7.8099
Period-end MYR : US$1 exchange rate		4.0895		3.8991
Period-average HK$ : US$1 exchange rate		–		7.7736
Period-average MYR : US$1 exchange rate		4.1546		4.0651
Period-end MYR : US$1 exchange rate		4.0559		4.2790
Period-average MYR : US$1 exchange rate		3.9900		4.3788

·	Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

·	Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. During the period ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, the Company operates in two reportable operating segments in Malaysia.

·	Fair value of financial instruments

The carrying value of the Company’s financial instruments (excluding obligation under finance lease, long-term bank loans and available-for-sale marketable securities): cash and cash equivalents, accounts receivable, deposits and other receivables, amount due to a related party and other payables approximate at their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and long-term bank loans approximates the carrying amount.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

·	Level 1 : Observable inputs such as quoted prices in active markets;

·	Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

·	Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

The following table summarizes information on the fair value measurement of the Company’s financial assets as of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018, measured at ~~fair~~ fair value, grouped by the categories described above:

Quoted prices in active markets (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

As of July 31, 2018

As of January 31, 2019

Marketable securities, available-for-sale

~~223~~172,~~191~~650

–

As of October 31, 2017

As of October 31, 2018

Marketable securities, available-for-sale

~~221~~172,~~198~~532

–

As of ~~July~~January 31, ~~2018~~2019, the Company did ~~not~~ not have any non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at ~~least~~ least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

·	Adoption of new accounting standards

On 1 November 2018, the company adopted ASU 2014-09 Revenue from Contracts with Customers.

The adoption of this Topic does not have a material impact on our consolidated financial statements. There have been no significant judgements or changes in judgements made in applying the guidance in this Topic. There were no contract assets or liabilities recognised at year end.

The adoption of the other new accounting standards did not have a material impact on our consolidated financial statements.

·	Recent accounting pronouncements

In ~~May~~June ~~2014~~2016, the FASB issued Accounting Standards Update ("ASU") ~~2014~~2016-0913, ~~Revenue~~ ~~from~~Financial ~~Contracts~~Instruments-Credit ~~with~~Losses ~~Customers~~(Topic 326), which requires anentities ~~entity~~ to ~~recognize~~measure all ~~the~~expected ~~amount~~credit oflosses ~~revenue~~for tofinancial ~~which~~assets itheld ~~expects~~at tothe bereporting ~~entitled for~~date ~~the~~based ~~transfer~~on ofhistorical ~~promised~~experience, ~~goods~~current orconditions, and ~~services~~reasonable toand ~~customers~~supportable forecasts. ~~ASU~~This ~~2014-09~~replaces ~~will~~the ~~replace most~~ existing ~~revenue~~incurred ~~recognition~~loss ~~guidance in~~model ~~U.S.~~and ~~GAAP~~is ~~when~~applicable itto ~~becomes effective. In July 2015,~~ the ~~FASB~~measurement ~~approved a one-year deferral~~ of credit ~~the~~losses ~~effective~~on ~~date~~financial ofassets ~~the~~measured ~~new~~at ~~revenue recognition~~amortized ~~standard~~cost. ~~The~~This ~~amendments~~guidance inis ~~ASU 2014-09 are~~ effective for ~~public companies for~~ fiscal years ~~beginning after December 15~~, ~~2017,~~and ~~including~~ interim periods within those fiscal years~~. The standard permits the use of either the retrospective or cumulative effect transition method. In March 2016~~, ~~the~~beginning ~~FASB~~after ~~issued~~December ~~ASU 2016-08~~15, ~~Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)~~2019. InEarly ~~April~~application ~~2016,~~will ~~the~~be ~~FASB~~permitted ~~issued~~for ~~ASU~~all ~~2016-10,~~entities ~~Revenue~~for ~~from~~fiscal ~~Contracts with Customers (Topic 606)~~years, ~~Identifying Performance Obligations and Licensing. In May 2016, the FASB issued ASU 2016-11, Revenue~~ ~~from Contracts with Customers (Topic 606)~~ and ~~Derivatives~~interim ~~and~~periods ~~Hedging~~within ~~(Topic~~those ~~815)~~fiscal ~~- Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16~~years, ~~and~~beginning ~~ASU~~after ~~2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedients. In~~ December ~~2016~~15, ~~the FASB issued ASU2016-20; Technical Corrections and Improvements to Topic 606~~2018. ~~These~~We ~~ASUs~~do ~~clarify~~not ~~the~~anticipate ~~implementation guidance~~that ~~on a few narrow areas and adds some practical expedients to~~ the ~~guidance~~adoption ~~Topic~~of ~~606. The Company is evaluating the effect~~this ~~the~~ASU ~~ASUs~~to ~~will~~ have ~~on its consolidated financial statements and related disclosures. We have not yet selected~~ a ~~transition~~significant ~~method nor~~impact ~~have we determined the effect of these standards~~ on our ~~ongoing~~consolidated financial ~~reporting~~statements.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

In ~~January~~February ~~2016~~2017, ~~the~~ FASB issued ~~ASU 2016-01,~~Accounting ~~“Financial~~Standards ~~Instruments~~Update 2017-06; ~~Overall~~Plan Accounting: Defined Benefit Pension Plans (~~Subtopic~~Topic ~~825-10~~960):, ~~Recognition~~Defined ~~and~~Contribution ~~Measurement~~Pension ofPlans ~~Financial~~(Topic 962), ~~Assets~~Health and ~~Financial~~Welfare ~~Liabilities.” The~~Benefit ~~amendments~~Plans in(Topic ~~this~~965): ~~update~~Employee ~~require~~Benefit ~~all~~Plan ~~equity~~Master ~~investments~~Trust toReporting be(a ~~measured~~consensus atof ~~fair~~the ~~value~~Emerging ~~with~~Issues Task ~~changes~~Force). inThe ~~the~~amendments ~~fair~~in ~~value~~this ~~recognized through~~ASU ~~net~~requires ~~income~~an ~~(other~~employee ~~than~~benefit ~~those~~plan ~~accounted~~within ~~for~~the ~~under~~scope ~~equity~~of ~~method~~Topic of960,1 ~~accounting~~962,2 or ~~those~~9653 ~~that~~to ~~result~~present its interest in ~~consolidation~~a ofmaster ~~the investee).~~trust ~~The~~and ~~amendments~~the change in ~~this~~its ~~update~~interest ~~also~~in ~~require~~that anmaster ~~entity~~trust toas ~~present~~single ~~separately~~line items in ~~other~~the ~~comprehensive~~statement ~~income~~of ~~the portion~~net ofassets ~~the~~available ~~total~~for ~~change~~benefits inand the ~~fair~~statement ~~value~~ of achanges ~~liability~~in ~~resulting~~net ~~from~~assets aavailable ~~change~~for inbenefits, ~~the~~respectively. ~~instrument-specific~~In ~~credit~~addition, ~~risk when~~ the ~~entity~~ ~~has~~amendments ~~elected~~update toand ~~measure~~align the ~~liability~~disclosure atrequirements ~~fair~~for ~~value~~an interest in ~~accordance~~a ~~with~~master ~~the~~trust ~~fair~~across ~~value~~Topics ~~option~~960, ~~for~~962, ~~financial~~and ~~instruments~~965. The ~~amendments~~ amendments in this ASU ~~2016-01~~ are effective for ~~public~~interim ~~companies~~and ~~for~~annual ~~fiscal~~periods ~~years~~ beginning after December 15, ~~2017,~~2018. ~~including~~Early ~~interim~~adoption ~~periods~~is permitted. ~~within~~The ~~those~~amendments ~~fiscal~~in ~~years~~the ASU should be adopted on a retrospective basis. We do not expect that ~~the~~ adoption ~~will~~of this ASU to have a material effect ~~impact~~ on our consolidated financial statements.

In ~~June~~March ~~2016~~2017, ~~the~~ FASB issued Accounting ~~Standards~~ Standards Update ~~("ASU") 2016~~2017-~~13,~~08; ~~Financial~~Receivables—Non ~~Instruments-Credit~~refundable ~~Losses~~Fees and Other Costs (~~Topic~~Subtopic ~~326~~310-20),: ~~which~~Premium ~~requires~~Amortization ~~entities~~on toPurchased ~~measure~~Callable ~~all~~Debt ~~expected~~Securities. ~~credit~~The ~~losses~~amendments ~~for~~in ~~financial~~this ~~assets~~ASU ~~held~~shortens at the ~~reporting~~amortization ~~date~~period ~~based~~for oncertain ~~historical~~purchased ~~experience,~~callable ~~current~~debt ~~conditions,~~securities held ~~and~~at ~~reasonable~~a ~~and supportable forecasts~~premium. ~~This~~Specifically, ~~replaces~~it requires the ~~existing~~premium ~~incurred~~to ~~loss~~be ~~model~~amortized ~~and~~to isthe ~~applicable~~earliest tocall ~~the~~date. ~~measurement~~The ~~of credit~~amendments ~~losses~~do onnot ~~financial~~require ~~assets~~an accounting ~~measured~~change for securities held at ~~amortized~~a ~~cost~~discount. ~~This~~The ~~guidance~~discount iscontinues ~~effective~~to ~~for~~be ~~fiscal~~amortized ~~years,~~to ~~and~~maturity. ~~interim~~The ~~periods~~amendments in this ~~within~~ASU ~~those~~are ~~fiscal~~effective ~~years,~~for interim and annual periods beginning after December 15, ~~2019~~2018. Early ~~application~~adoption ~~will~~is be permitted. ~~for~~If ~~all~~an ~~entities~~entity ~~for~~early adopts ~~fiscal~~the ~~years, and~~amendments in an interim ~~periods~~period, ~~within~~any ~~those~~adjustments ~~fiscal~~should ~~years,~~be reflected as of the beginning ~~after~~of ~~December~~the ~~15,~~fiscal ~~2018~~year that includes that interim period. We ~~are~~do ~~currently~~not ~~evaluating~~expect the ~~impact~~adoption ~~that~~of ~~the standard~~this ~~will~~ASU to have a material effect on our consolidated financial statements ~~and related disclosures~~.

In ~~August~~July ~~2016~~2017, ~~the~~ FASB issued ~~ASU~~Accounting ~~No.~~Standards ~~2016~~Update 2017-1511; Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, ~~Classification~~(Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain ~~Cash~~Non ~~Receipts~~public Entities and ~~Cash~~Certain ~~Payments~~Mandatorily Redeemable Non controlling Interests with a Scope Exception. ~~ASU~~The ~~2016-15~~guidance ~~clarifies~~is intended to reduce the ~~presentation~~complexity ~~and~~associated ~~classification~~with ofissuers’ accounting for certain ~~cash~~financial ~~receipts~~instruments with characteristics of liabilities and ~~cash~~equity. ~~payments~~Specifically, ina ~~the~~down ~~statement~~round offeature ~~cash~~(as ~~flows.~~defined) ~~This~~would no ~~ASU~~longer iscause ~~effective~~a ~~for~~freestanding ~~public~~equity-linked ~~business~~financial ~~entities~~instrument (or an embedded conversion option) to be accounted for as a derivative ~~fiscal~~liability ~~years,~~at ~~and~~fair ~~interim~~value ~~periods~~with ~~within~~changes ~~those~~in ~~years,~~fair value recognized in current earnings. The amendments in this ASU are effective for interim and annual periods beginning after December 15, ~~2017~~2018. Early adoption is permitted. We ~~are~~do ~~currently assessing~~not expect the ~~potential~~adoption ~~impact~~ of this ASU ~~2016-15~~to have a material effect on our consolidated financial statements ~~and related disclosures~~.

In ~~October~~August ~~2016~~2017, ~~the~~ FASB issued ~~ASU No.~~Accounting ~~2016~~Standards Update 2017-~~16—Income~~12; ~~Taxes~~Derivatives and Hedging (Topic ~~740~~815): ~~Intra-Entity~~Targeted ~~Transfers~~Improvements ofto ~~Assets~~Accounting ~~Other~~for ~~Than~~Hedging ~~Inventory~~Activities. ~~This~~The guidance in this ASU ~~improves~~will result in the simplification of certain accounting requirements for hedging activities, resolve hedge accounting practice issues that have arisen under the ~~income~~current ~~tax~~guidance, ~~consequences~~and ofbetter ~~intra-entity~~align ~~transfers~~hedge ofaccounting ~~assets~~with ~~other~~an ~~than~~organization’s risk ~~inventory~~management activities. ~~This~~The amendments in this ASU isare effective for ~~fiscal~~interim ~~years~~ and ~~interim~~annual periods ~~within those years~~ beginning after December 15, ~~2017~~ 2018. Early ~~adoption~~application is permitted in any interim period after issuance of the amendments for existing hedging relationships on the date of adoption. We do not ~~anticipate~~expect ~~that~~ the adoption of this ASU to have a ~~significant~~material ~~impact~~effect on our consolidated financial statements.

In ~~November~~December ~~2016~~2017, ~~the~~ FASB issued Accounting Standards Update ~~2016~~2017-1815; ~~(ASU~~Codification ~~2016-18),~~Improvements ~~Statement~~to ofTopic ~~Cash~~995, ~~Flows~~U.S. Steamship Entities: ~~Restricted~~Elimination ~~Cash~~of Topic 995. ~~This~~The amendments in this ASU ~~provides~~affect ~~guidance~~all onentities ~~the~~that ~~classification~~have unrecognized deferred taxes related to statutory reserve deposits that were made on or ofbefore ~~restricted~~December ~~cash~~15, in1992. Entities are required to recognize the ~~statement~~unrecognized ofincome ~~cash~~taxes ~~flows~~in accordance with Topic 740. The amendments in this ASU are effective for interim and annual periods beginning after December 15, ~~2017~~2018. Early adoption is permitted. ~~The amendments in the ASU should be adopted on a retrospective basis.~~ We do do not ~~expect~~anticipate that the adoption of this ASU to have a ~~material~~significant ~~effect~~impact on our consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update 2017-01; Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU revises the definition of a business. To be considered a business, an acquisition would have to include, at a minimum, an input and a substantive process that together contribute to the ability to create outputs. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. The amendments in this Update should be applied prospectively on or after the effective date. No disclosures are required at transition. Early adoption is permitted. We do not expect that adoption of this ASU to have a material effect on our consolidated financial statements.

In February 2017, FASB issued Accounting Standards Update 2017-05; Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The amendments in this ASU was issued to clarify the scope of ASC 610-20, including what constitutes an “in substance nonfinancial asset,” and provide guidance on partial sales of nonfinancial and in substance assets. The effective date and transition requirements for ASU 2017-05 are the same as the effective date and transition requirements of Topic 606, and must be applied at the same date that Topic 606 is initially applied, which is effective for interim and annual reporting periods beginning after December 15, 2017. Consistent with Topic 606, early adoption is permitted.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

In February ~~2017~~2018, FASB issued Accounting Standards Update ~~2017~~2018-0602; ~~Plan~~Income ~~Accounting:~~Statement—Reporting ~~Defined~~Comprehensive ~~Benefit~~Income ~~Pension Plans~~ (Topic ~~960~~220),: ~~Defined Contribution Pension Plans (Topic~~Reclassification ~~962),~~of ~~Health~~Certain ~~and~~Tax ~~Welfare~~Effects ~~Benefit~~from ~~Plans~~Accumulated ~~(Topic~~Other ~~965):~~Comprehensive ~~Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force)~~Income. The amendments in ~~this~~the ASU ~~requires~~addresses ~~an employee benefit plan within~~ the ~~scope~~accounting issue ofpertaining ~~Topic 960,1 962,2 or 9653~~ to ~~present its~~the ~~interest~~deferred intax aamounts ~~master~~that ~~trust~~are ~~and~~“stranded” ~~the change~~ in ~~its~~accumulated ~~interest~~other incomprehensive ~~that~~income ~~master trust~~ as ~~single~~a ~~line~~result of ~~items in~~ the ~~statement~~Tax ofCuts ~~net assets~~and ~~available~~Jobs ~~for~~Act ~~benefits and~~ (the ~~statement of changes in net assets available for benefits, respectively~~Act). InWe ~~addition,~~do ~~the amendments~~not ~~update~~expect ~~and~~that ~~align~~ the ~~disclosure~~adoption ~~requirements~~will ~~for~~have ~~an interest in~~ a ~~master~~material ~~trust~~impact ~~across~~on ~~Topics~~our ~~960,~~consolidated ~~962, and 965~~financial statements. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. ~~Early~~and ~~adoption is permitted.~~interim ~~The~~periods ~~amendments~~within inthose ~~the~~fiscal ~~ASU~~years. ~~should~~Early beadoption ~~adopted~~is ~~on a retrospective basis~~permitted. We do not expect that the adoption ofwill ~~this ASU to~~ have a material ~~effect~~ impact on our consolidated financial statements.

In ~~March~~May ~~2017~~2018, FASB issued Accounting ~~Standards~~standards Update ~~2017~~2018-0706; ~~Compensation—Retirement~~Codification ~~Benefits~~Improvements (to Topic ~~715):~~942 ~~Improving~~Financial ~~the~~Services ~~Presentation~~– ofDepository ~~Net~~and ~~Periodic~~Lending ~~Pension~~which ~~Cost~~supersedes ~~and~~outdated ~~Net~~guidance ~~Periodic~~related ~~Postretirement Benefit Cost. The amendments in this ASU requires sponsors of benefits plans~~ to ~~present service cost in~~ the ~~same~~office ~~line~~of ~~item or items as other current employee compensation costs and present~~ the ~~remaining~~Comptroller ~~components~~ of ~~net~~the ~~benefit cost~~Currency’s inBaking ~~one~~Circular ~~or more separate line items outside of income from operations (if that subtotal is presented)~~202, ~~and~~Accounting ~~limit~~for ~~the~~Net ~~components~~Deferred Tax ofCharges ~~net benefit cost eligible to be capitalized~~ (~~for~~Circular ~~example, as a cost of inventory or self-constructed assets~~202) ~~to service cost~~. The amendments in this ~~ASU~~update ~~are~~remove ~~effective~~outdated ~~for~~guidance ~~interim~~related ~~and annual periods beginning after December 15, 2017. Early adoption is permitted. These amendments are~~ to beCircular ~~applied~~202 ~~retrospectively for the presentation of service cost~~ and ~~other~~is ~~components~~effective ofupon ~~net benefit costs,~~issuance ~~and prospectively for the capitalization~~ of ~~service~~this ~~cost~~update. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In ~~March~~June ~~2017~~2018, the FASB issued ~~Accounting~~ASU ~~Standards Update 2017~~2018-~~08; Receivables~~07—~~Non~~Compensation—Stock Compensation ~~refundable Fees and Other Costs~~ (~~Subtopic~~Topic ~~310-20~~718): ~~Premium~~Improvements ~~Amortization~~to onNonemployee ~~Purchased~~Share-Based ~~Callable Debt~~Payment ~~Securities.~~Accounting ~~The~~which ~~amendments~~is inintended ~~this~~to ~~ASU~~reduce ~~shortens~~cost ~~the~~and ~~amortization period for certain purchased callable debt securities held~~complexity atand ~~a premium. Specifically, it requires the premium~~ to beimprove ~~amortized~~financial toreporting ~~the earliest call date. The amendments do not require an accounting change~~ for ~~securities~~nonemployee ~~held~~share-based ~~at a discount~~payments. The ~~discount~~amendment ~~continues~~is ~~to be amortized to maturity. The amendments in this ASU are~~ effective for ~~interim~~fiscal ~~and~~years ~~annual periods~~ beginning after December 15, 2018., ~~Early~~including ~~adoption~~interim isperiods ~~permitted.~~within Ifthat anfiscal ~~entity~~year. ~~early adopts~~Early ~~the~~adoption ~~amendments~~is ~~in an interim period~~permitted, ~~any~~but ~~adjustments~~no ~~should~~earlier bethan ~~reflected~~an entity’s asadoption ofdate ~~the beginning~~ of ~~the~~Topic ~~fiscal year that includes that interim period~~606. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In ~~May~~July ~~2017~~2018, the FASB issued ~~Accounting~~ASU ~~Standards Update 2017~~2018-~~09; Compensation~~08—~~Stock~~Not-For-Profit Entities ~~Compensation~~ (Topic ~~718~~958): Clarifying the Scope ofand ~~Modification~~the Accounting. ~~The~~Guidance ~~amendments~~for inContributions ~~this~~Received ~~ASU~~and Contributions Made which ~~amends~~clarifies and improves the scope ofand ~~modification~~ accounting ~~for~~guidance ~~share-based~~around ~~payment~~contributions ~~arrangements,~~of ~~provides~~cash ~~guidance~~and onother ~~the~~assets ~~types~~received ofand ~~changes~~made toby not-for-profit ~~the~~organizations ~~terms~~and orbusiness ~~conditions~~enterprises. ofThe ~~share-based~~amendment ~~payment~~is ~~awards~~effective anfor ~~entity~~fiscal isyears ~~required~~beginning toafter ~~apply~~June ~~modification~~15, ~~accounting~~2018 ~~under~~(serving ~~ASC~~as ~~718. The~~resource ~~amendments~~recipient) inand ~~this~~December ~~ASU~~15, ~~are~~2018 ~~effective~~(serving ~~for~~as ~~interim~~resource ~~and~~provider), ~~annual~~including interim periods ~~beginning~~within ~~after~~that ~~December~~fiscal ~~15, 2017~~year. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In ~~May~~July ~~2017~~2018, ~~FASB issued Accounting Standards Update 2017-10; Service Concession Arrangements (Topic 853): Determining~~ the ~~Customer of the Operation Services (a consensus of the~~ FASB ~~Emerging~~issued ~~Issues Task Force). The amendments in this~~ ASU ~~eliminates the current diversity in the determination of the identity~~2018-09—Codification ofImprovements ~~the~~which ~~“customer” in service concession arrangements. The customer will be the “grantor”~~clarifies, ~~rather~~corrects ~~than~~errors ~~any third-party users of the services provided by the operating entity. Further~~in, the operating entity should expense the cost of major maintenance as incurred because the grantor’s infrastructure is not an asset of the operating entity. The amendments in this ASU is the same effective date for Topic 606 which is effective for interim and ~~annual~~makes ~~periods~~improvements ~~beginning~~to ~~after~~several ~~December~~Codification 15Topics, ~~2017. We~~including ~~do not expect that adoption of this ASU~~ to ~~have a material effect on our consolidated financial statements.~~:

-	Clarify when excess tax benefits should be recognized for share-based compensation awards

-	Remove inconsistent guidance in income tax accounting for business combinations

-	Clarify the circumstances when derivatives may be offset

-	Clarify the measurement of liability or equity-classified financial instruments when an identical asset is held as an asset

-	Allow portfolios of financial instruments and nonfinancial instruments accounted for as derivatives to use the portfolio exception to valuation

The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this Update do not require transition guidance and will be effective upon issuance of this Update. However, many of the amendments in this Update do have transition guidance with effective dates for annual periods beginning after December 15, 2018. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In July 2018, the FASB issued ASU 2018-10—Codification Improvements to Topic 842, Leases which clarifies and corrects unintended application of narrow aspects of the lease accounting guidance. For entities that have not adopted Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in Topic 842. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

In ~~July~~August ~~2017~~2018, the FASB issued ~~Accounting~~ASU ~~Standards Update 2017~~2018-11~~; Earnings Per Share~~ —Leases (Topic ~~260~~842);: ~~Distinguishing~~Targeted ~~Liabilities~~Improvements ~~from~~which ~~Equity~~simplifies ~~(Topic~~transition ~~480):~~requirements ~~Derivatives~~ and, ~~Hedging (Topic 815): (Part I) Accounting~~ for ~~Certain~~lessors, ~~Financial~~provides ~~Instruments~~a ~~with~~practical ~~Down~~expedient ~~Round~~for the ~~Features,~~non ~~(Part~~separation ~~II) Replacement~~ of ~~the~~non-lease ~~Indefinite~~components ~~Deferral for~~from ~~Mandatorily~~lease ~~Redeemable~~components ~~Financial~~if ~~Instruments~~certain ofconditions ~~Certain~~are ~~Non~~met. ~~public~~For ~~Entities~~entities ~~and~~that ~~Certain~~have ~~Mandatorily~~not ~~Redeemable Non controlling~~adopted ~~Interests~~Topic ~~with~~842 abefore ~~Scope~~the ~~Exception.~~issuance ~~The~~of ~~guidance~~this isUpdate, ~~intended to reduce~~ the ~~complexity~~effective ~~associated~~date ~~with~~and ~~issuers’~~transition ~~accounting~~requirements for ~~certain~~ ~~financial~~the ~~instruments~~amendments ~~with~~in ~~characteristics~~this ofUpdate related ~~liabilities~~to ~~and~~separating ~~equity.~~components ~~Specifically,~~of a ~~down~~contract ~~round~~are ~~feature~~the (same as ~~defined)~~the ~~would no~~effective ~~longer~~date ~~cause~~and atransition ~~freestanding~~requirements ~~equity-linked~~in ~~financial~~Update ~~instrument~~2016-02. The ~~(or~~practical anexpedient ~~embedded~~may ~~conversion option) to~~ be ~~accounted~~elected ~~for~~either asin athe ~~derivative liability~~first atreporting ~~fair~~period ~~value~~following ~~with~~the ~~changes~~issuance inof ~~fair~~this ~~value~~Update ~~recognized~~or inat ~~current~~the ~~earnings.~~original effective ~~The~~date ~~amendments~~of inTopic ~~this~~842 ~~ASU are effective~~ for ~~interim~~ ~~and~~that ~~annual~~entity. ~~periods~~The ~~beginning~~practical ~~after~~expedient ~~December~~may ~~15,~~be ~~2018.~~applied ~~Early~~either ~~adoption~~retrospectively isor ~~permitted~~prospectively. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August ~~2017~~2018, the FASB issued ~~Accounting Standards~~ASU ~~Update 2017~~2018-12;—Financial Services—Insurance ~~Derivatives and Hedging~~ (Topic ~~815~~944): Targeted Improvements to the Accounting for ~~Hedging~~Long-Duration ~~Activities.~~Contracts ~~The guidance~~which inimproves ~~this~~financial reporting ~~ASU will result in the simplification of certain accounting requirements~~ for ~~hedging~~insurance ~~activities,~~companies ~~resolve hedge accounting practice issues~~ that ~~have~~issue ~~arisen~~long-duration ~~under the current guidance~~contracts, ~~and~~such ~~better~~as ~~align~~life ~~hedge~~insurance, ~~accounting~~disability ~~with~~income, anlong-term ~~organization’s~~care, ~~risk~~and ~~management activities~~annuities. The amendments in this ~~ASU~~Update are effective for ~~interim~~fiscal years, and ~~annual~~interim periods ~~beginning~~within those fiscal years, beginning after December 15, ~~2018~~ 2020. Early application ~~is permitted in any interim period after issuance~~ of the amendments ~~for~~is ~~existing hedging relationships on the date of adoption~~permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In ~~December~~August ~~2017~~2018, the FASB issued ~~Accounting~~ASU 2018-13—Fair ~~Standards~~Value ~~Update~~Measurement ~~2017-15;~~(Topic ~~Codification~~820): ~~Improvements~~Disclosure Framework—Changes to ~~Topic~~the ~~995,~~Disclosure ~~U.S.~~Requirements ~~Steamship~~for ~~Entities:~~Fair ~~Elimination~~Value ofMeasurement ~~Topic~~which improves ~~995.~~the ~~The~~disclosure ~~amendments~~ requirements on fair value measurements in ~~this~~Topic ~~ASU~~820, ~~affect~~Fair ~~all~~Value ~~entities~~Measurement. ~~that~~Effective ~~have~~for ~~unrecognized~~all ~~deferred~~entities for ~~taxes~~fiscal ~~related~~years, toand ~~statutory~~interim ~~reserve~~periods ~~deposits~~within ~~that~~those ~~were~~fiscal ~~made~~years, onbeginning ~~or before~~after December 15, ~~1992~~2019. ~~Entities~~The ~~are~~amendments ~~required~~on tochanges ~~recognize~~in unrealized gains and losses, the ~~unrecognized~~range ~~income~~and ~~taxes~~weighted inaverage ~~accordance~~of ~~with~~significant ~~Topic~~unobservable ~~740.~~inputs ~~The~~used ~~amendments~~to develop Level 3 fair value inmeasurements, ~~this~~and ~~ASU~~the ~~are~~narrative ~~effective~~description of measurement uncertainty should be applied prospectively for only the most recent interim ~~and~~or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods ~~beginning~~presented ~~after~~upon ~~December~~their ~~15,~~effective ~~2018~~date. Early adoption is permitted upon issuance of this Update. We ~~are currently~~do ~~assessing~~not expect the ~~potential~~adoption ~~impact~~ of this ASU ~~2017-15~~to have a material effect on our consolidated financial statements ~~and related disclosures~~.

In ~~February~~August 2018, the FASB issued ~~Accounting Standards~~ASU ~~Update~~ 2018-~~01;~~14—Compensation—Retirement Benefits—Defined ~~Leases~~Benefit Plans—General (Topic ~~842~~715-20): ~~Land~~Disclosure ~~Easement~~Framework—Changes ~~Practical Expedient for Transition~~ to ~~Topic~~the ~~842~~Disclosure ~~which clarifies~~Requirements ~~the~~for ~~application~~Defined ofBenefit ~~the~~Plans ~~new~~which ~~leases~~improves ~~guidance~~disclosure torequirements ~~land~~for ~~easements~~employers ~~and~~that ~~eases~~sponsor ~~adoption~~defined ~~efforts~~benefit ~~for~~pension ~~some~~or ~~land~~other ~~easements~~postretirement plans. This ~~guidance in~~standard ~~ASU 2018-01~~ is effective for ~~annual~~fiscal ~~periods~~years ending after December 15, ~~2016~~2020, ~~including~~for ~~interim~~public ~~period~~business ~~within~~entities. ~~those~~Early ~~fiscal years~~adoption ~~and~~is ~~interim~~permitted ~~periods~~for ~~within~~all ~~annual periods beginning after December 15, 2016~~entities. An entity ~~that early adopted Topic 842~~ should apply the amendments in this Update ~~upon~~on ~~issuance.~~a retrospective basis to all periods presented. We do not expect ~~that~~ the adoption ~~will~~of this ASU to have a material ~~impact~~effect on our consolidated financial statements.

In ~~February~~August 2018, the FASB issued ~~Accounting Standards~~ASU ~~Update~~ 2018-~~02;~~15—Intangibles—Goodwill and ~~Income Statement~~Other—~~Reporting~~Internal-Use ~~Comprehensive~~Software ~~Income~~ (~~Topic~~Subtopic ~~220~~350-40): ~~Reclassification of~~Customer’s ~~Certain~~Accounting ~~Tax~~for ~~Effects~~Implementation ~~from~~Costs ~~Accumulated~~Incurred ~~Other~~in ~~Comprehensive~~a ~~Income.~~Cloud Computing ~~The~~Arrangement ~~amendments~~That inIs ~~the~~a ~~ASU~~Service ~~addresses~~Contract ~~the~~(a ~~accounting issue~~consensus ~~pertaining~~of to the ~~deferred~~FASB ~~tax~~Emerging ~~amounts~~Issues ~~that~~Task ~~are~~Force) ~~“stranded”~~which inaligns ~~accumulated~~the ~~other~~requirements for ~~comprehensive~~capitalizing ~~income~~implementation ascosts athat ~~result of~~are ~~the~~incurred ~~Tax~~in ~~Cuts~~a ~~and~~hosting ~~Jobs~~arrangement ~~Act~~that ~~(the~~is ~~Act).~~a Weservice docontract ~~not~~or ~~expect~~incurred ~~that~~to ~~the~~develop or ~~adoption~~obtain ~~will~~internal-use ~~have~~software a(and ~~material~~hosing ~~impact~~arrangements onthat ~~our~~include ~~consolidated~~an ~~financial statements.~~internal ~~The~~–use ~~amendments~~software inlicense). ~~this~~This ~~ASU~~standard ~~are~~ is effective for ~~interim~~public ~~and~~business ~~annual~~entities ~~periods~~for fiscal years beginning after December 15, ~~2018~~2019, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities. The amendments in this Update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We do not expect ~~that~~ the adoption ~~will~~of this ASU to have a material ~~impact~~ effect on our consolidated financial statements.

In ~~February~~October 2018, FASB issued Accounting Standards Update 2018-~~03;~~16, ~~Technical~~Derivaties ~~Corrections~~ and ~~Improvements~~Hedging ~~to Financial Instruments—Overall~~ (~~Subtopic~~Topic ~~825-10~~805): ~~Recognition~~Inclusion ~~and Measurement~~ of ~~Financial Assets and Financial Liabilities. The technical corrections and improvements intended to clarify certain aspects of~~ the ~~guidance~~Secured onOvernight ~~recognizing~~Financing ~~and~~Rate ~~measuring~~(SOFR) ~~financial assets and liabilities~~Overight inIndex ~~ASU~~Swap ~~2016-01.~~(OIS) ~~This~~Rate ~~includes~~as ~~equity securities without~~ a ~~readily~~Benchmark ~~determinable~~Interest ~~fair~~Rate ~~value, forward contracts and purchased options, presentation requirements~~ for ~~certain~~Hedge ~~fair~~Accounting ~~value option liabilities, fair value option liabilities denominated in foreign currency and transition guidance for equity securities without a readily determinable fair value~~Purposes. The ~~amendments in this~~ ASU ~~are~~amends ~~effective for~~ASC ~~interim~~815 ~~and~~to ~~annual~~add ~~periods~~the ~~beginning~~OIS ~~after~~rate ~~December 15, 2017. Early application is permitted in any interim period after issuance~~based ofon the ~~amendments~~SOFR as ~~long~~a asfifth ~~ASU~~US ~~2016-01~~benchmark isinterest ~~also adopted~~rate. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

In ~~May~~October 2018, FASB issued Accounting ~~standards~~ Standards Update 2018-~~06;~~17: ~~Codification~~Consolidation ~~Improvements~~(Topic to810): ~~Topic~~Targeted ~~942~~Improvements ~~Financial~~to ~~Services~~Related –Party ~~Depository~~Guidance ~~and~~for ~~Lending~~Variable ~~which~~Interest ~~supersedes~~Entities. ~~outdated~~This ~~guidance~~standard ~~related~~expands to the ~~office~~application of ~~the~~a ~~Comptroller~~specific ofprivate ~~the~~company ~~Currency’s~~accounting ~~Baking~~alternative ~~Circular~~related ~~202,~~to ~~Accounting~~VIEs ~~for~~and ~~Net~~changes ~~Deferred~~the ~~Tax Charges (Circular 202). The amendments in this update remove outdated~~ guidance ~~related~~for todetermining ~~Circular~~whether ~~202~~a ~~and~~decision-making fee is ~~effective upon~~a ~~issuance~~variable ~~of this update~~interest. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In November 2018, FASB issued Accounting Standards Update 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. The ASU amends ASC 808 to clarify ASC 606 should apply in entirety to certain transactions between collaborative arrangement participants. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In November 2018, FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The ASU changes the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Thus, the effective date for such entities’ annual financial statements is now aligned with that for these interim financial statements. We are currently evaluating the impact that the standard will have on our consolidated financial statements and related disclosures.

In December 2018, FASB issued Accounting Standards Update 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. The amendments are designed to make lessors adoption of the new leases standard easier such as accounting policy election on sales tax, exclude variable payments for all lessor costs, and clarification on lessor costs. We are currently evaluating the impact that the standard will have on our consolidated financial statements and related disclosures.

The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

NOTE–5 PROPERTY, PLANT AND EQUIPMENT

	July 31, 2018			October 31, 2017
	January 31, 2019			October 31, 2018
Freehold plantation land	$	7,845,805		$	7,845,805
Leasehold land under development		4,276,764			4,276,764
Freehold land under development		18,091,173			18,091,173
Freehold land and land improvement for rental purpose commercial building		15,191,123			15,191,123
Building structure and improvements		15,857,410			15,857,410
Office furniture, fixture and equipment		157,~~327~~084			~~129~~157,~~159~~084
Motor vehicles		~~162~~176,~~300~~020			162,300
Foreign translation difference		(14,~~465~~852,~~478~~134	)		(1615,~~395~~884,~~642~~845	)
		47,116,424			45,158,092
		46,743,245			45,696,814
Less: accumulated depreciation		(3,~~342~~368,~~692~~905	)		(23,~~940~~248,~~952~~963	)
Less: foreign translation difference		~~405~~423,~~880~~201			~~503~~487,~~557~~503
	$	44,179,612		$	42,720,697
		43,797,541		$	42,935,354

Depreciation expense for the three months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018 was $~~133~~119,~~856~~942 and $~~121~~130,~~964~~590, respectively.

~~Depreciation~~Both ~~expense~~commercial ~~for~~buildings ~~the~~in ~~nine~~Kuala ~~months~~Lumpur, ~~ended~~Malaysia ~~July~~are ~~31,~~pledged ~~2018~~against ~~and~~the ~~2017~~bank ~~was~~loans ~~$401,740~~(note ~~and $363,759, respectively~~7).

Both commercial buildings in Kuala Lumpur, Malaysia are pledged against the bank loans (note 7 and 8).

In April 2015, the Company’s development order regarding the development of 21.8921 hectares (54.10 acres) leasehold land located in Puncak Alam, Malaysia was approved by the Kuala Selangor District Council. The approved order allows the Company to proceed with its plans to construct its Shah Alam 2 Eco Residential Development project. In November 2015, the Company submitted a request to convert some of its planned semi-detached and bungalow home parcels into cluster semi-detached homes to improve the marketability of the Company’s proposed development. On March 4, 2016, the Company received notification from the Kuala Selangor District Council that its revised Development Order relating to the Puncak Alam land was approved on February 24, 2016.

Pursuant to an 8-K filed on July 1, 2016, PGCG Assets entered into a memorandum of understanding (“MOU”) with Yong Tai Berhad, a public listed corporation in the main market of Bursa Malaysia Berhad (“YTB”) engaged in the business of commercial and residential property development, to jointly develop the land (the “Land”) located at Puncak Alam (the “Proposed JV”). The parties terminated the MOU on February 15, 2017, in accordance with the terms of a Mutual Termination of Memorandum of Understanding (the “Termination MOU”). The parties further confirmed that there was no monetary payment due to either party pursuant to the MOU or the Termination MOU.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

In light of the termination of the Proposed JV with YTB, the Company plans to develop, market, promote and complete the construction on its own. As at the date of this report, clearing of the land for development is underway. The Company hopes to begin construction in the fourth calendar quarter of 2019 and complete construction by the end of calendar 2021. The Company believes that it will require approximately RM5 to RM10 million in the aggregate to market, promote and complete construction of each phase of our Shah Alam 2 Eco Residential Development Project

During the course of the Company’s strategic review of its operations, the Company assessed the recoverability of the carrying value of its property, plant and equipment. The impairment charge, if any, represented the excess of carrying amounts of the Company’s property, plant and equipment over the fair values of the assets. The Company believes that there was no impairment of its property, plant and equipment as of ~~July~~January 31, ~~2018~~2019.

NOTE–6 AMOUNTS DUE TO RELATED PARTIES

	July 31, 2018		October 31, 2017
	January 31, 2019		October 31, 2018
Current portion:
Amount due to a related party, which were unsecured, interest-free and repayable on demand,
Mr. Kok Wai Chai, a director of UHT	$	86,420	$	86,420
Non-current portion:
Amount due to a related party, where was unsecured, interest-free and not expected to be repaid in the next twelve months
Mr. Weng Kung Wong, the Company’s director	$	32,~~544~~256,~~540~~607	$	2,~~427~~270,~~767~~089

NOTE–7 BANK LOANS

	July 31, 2018			October 31, 2017
	January 31, 2019			October 31, 2018
Bank loans from financial institutions in Malaysia
Bank of China (Malaysia) Berhad	$	7,117,710		$	7,432,487
Public Islamic Bank Berhad	$	12,138,591		$	12,001,461
RHB Bank Berhad		2,~~138~~088,~~586~~878			2,~~096~~057,~~946~~952
		9,256,296			9,529,433
		14,227,469			14,059,413
Less: current portion		(~~974~~620,~~761~~591	)		(~~919~~598,~~638~~795	)
Bank loans, net of current portion	$	813,~~281~~606,~~535~~878		$	813,~~609~~460,~~795~~618

15 Storey Bank Loan

In December 2014, the Company, through PGCG Assets obtained a loan in the principal amount of RM40,000,000 from Bank of China (Malaysia) Berhad, which bears interest at a rate of 1% per annum over the lending rate, currently 6.6% per annum, with 120 monthly installments of RM476,898 each (including interests) over a period of 10 years or until full settlement. The loan will mature in December 2024.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

~~The~~15 ~~loan~~Storey ~~from~~ Bank of China (Malaysia) Berhad is secured by the first party charge over 15-storey commercial office building Le Apple Boutique Hotel KLCC (fka Menara CMY”) in Kuala Lumpur, Malaysia, deed of assignment of rental proceeds over the rights and interest to the rental of the 15-storey commercial office building and is personally guaranteed by the director and chief executive officer of the Company, Mr. Weng Kung Wong and a subsidiary of the Company, UHT. The loan is also secured by a debenture incorporating fixed and floating charge for RM55 million plus interest thereon over the assets of PGCG Assets. The cost of funds was 7.6% per annum for the period ended July 31, 2018.Loan

In December 2014, the Company, through PGCG Assets obtained a loan in the principal amount of RM40,000,000 from Bank of China (Malaysia) Berhad, a financial institution in Malaysia to finance the acquisition of a fifteen story office building property, which bears interest at a rate of 1% per annum over the lending rate, with 120 monthly installments of RM476,898 each (including interests) over a period of 10 years and will mature on December 2024. The outstanding amount was fully repaid by a new loan of RM50,000,000 refinanced by Public Islamic Bank Berhad in August 2018, which bears interest at a rate of 1.50% per annum below the base financing rate, currently 6.97% per annum, with 180 monthly installments of RM407,750 each (including interests) over a period of 15 years or until full settlement and will mature in September 2033.

The loan from Public Islamic Bank Berhad is secured by the first party charge over 15-story commercial office building in Kuala Lumpur, Malaysia, deed of assignment of rental proceeds over the rights and interest to the rental of the 15-story commercial office building and is personally guaranteed by the director and chief executive officer of the Company, Mr. Weng Kung Wong and a subsidiary of the Company, UHT. The loan is also secured by a debenture incorporating fixed and floating charge for RM50 million plus interest thereon over the assets of PGCG Assets. The cost of funds was 5.47% per annum for the period ended January 31, 2019.

12 Storey Bank Loan

In May 2013, the Company, through PGCG Assets obtained a loan in the aggregate amount of RM9,840,000 from RHB Bank Berhad, a financial institution in Malaysia to finance the acquisition of the 12-storey office building property, which bears interest at a rate of 1.90% per annum below the lending rate, variable rate quoted by the bank, with 288 monthly installments of ~~RM58~~RM57,~~317~~045 each (including interests) over a period of 24 years and will mature in 2037.

The loan is secured by the 12-storey commercial office building “Megan Avenue” in Kuala Lumpur, Malaysia and is personally guaranteed by the director and chief executive officer of the Company, Mr. Weng Kung Wong and a director of the Company’s subsidiary, Mr. Kok Wai Chai and a subsidiary of the Company, UHT. The cost of funds was 4.7095% for the periods ended ~~July~~January 31, ~~2018~~2019.

As of ~~July~~January 31, ~~2018~~2019, the minimum ~~future~~ future payments of the aggregate bank borrowings in the next five years and thereafter are as follows:

Period ending July 31:
Period ending January 31:
	2019			$	974,761
2020		$	620,591
	2020				1,049,217
2021			654,800
	2021				1,129,424
2022			690,899
	2022				1,215,830
2023			728,993
	2023				1,308,918
2024			769,191
Thereafter	~~Thereafter~~		10,762,995		~~3,578,146~~
Total:	~~Total:~~	$	14,227,469	$	~~9,256,296~~

NOTE–8 SHORT-TERM BANK BORROWINGS

The revolving line of credit was granted concurrent with the term loans and pursuant to the same facility letter by Bank of China (Malaysia) Berhad to the Company, which provided for up to RM15,000,000 (equal to $3,388,047) for its working capital purpose. The line bears interest at an annual rate of 1.5% above the bank’s cost of funds on a daily basis. The line is repayable on demand or at rollover options of 1, 3, 6 & 12 months. The effective interest rate was 5.30% per annum for the period ended July 31, 2018.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE–98 INCOME TAXES

The local (United States) and foreign components of loss before income taxes were comprise the following:

	Nine months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Tax jurisdictions from:
– Local	$	(4516,~~587~~569	)	$	(~~111~~12,~~273~~132	)
– Foreign, representing:
Malaysia		~~(345~~2,~~014~~922	)		(~~515~~122,~~197~~652	)
Hong Kong		–			164,668
Loss before income taxes	$	(13,647	)	$	(134,784	)
BVI		–			19,767
Loss before income taxes	$	(390,601	)	$	(442,035	)

Income tax expense ~~consisted~~/ (benefit) consisted of the following:

	Nine months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Current:
– Local	$	–		$	–
– Foreign, representing:
Malaysia		~~127~~51,~~399~~750			~~65,234~~–
Deferred:
– Local		–			–
– Foreign		(111,~~579~~589	)		(108,~~084~~118	)
Income tax expense	$	115,820		$	55,150
Income tax expense / (benefit)	$	50,161		$	(8,118	)

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the periods presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which its subsidiaries operate, as follows:

United States of America

PGCG is registered in the State of Nevada and is subject to United States of America tax law. As of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018, the operations in the United States of America incurred $~~915~~1,~~616~~051,748 and $~~870~~1,~~029~~035,179, respectively, of cumulative net operating losses which can be carried forward to ~~offset~~ offset future taxable income. The net operating loss carryforwards begin to expire in 2031, if unutilized. The Company has provided ~~for~~ for a full valuation allowance of $~~320~~368,~~466~~112 (October 31, ~~2017~~2018: $~~304~~362,~~510~~313) against the deferred tax assets on the expected future ~~tax~~ tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets ~~will~~ will not be realized in the future.

The Company has adopted ASC 740-10 “Accounting for Income Taxes” and recorded a liability for an uncertain income tax position, tax penalties and any imputed interest thereon. The amount, recorded as an obligation, is $135,000 at January 31, 2019 and October 31, 2018 (included in accrued liabilities and other payables) in respect of potential tax penalty of the late filing of IRS return and, if recognized, will affect the Company’s effective tax rate.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

The Company has adopted ASC 740-10 “Accounting for Income Taxes” and recorded a liability for an uncertain income tax position, tax penalties and any imputed interest thereon. The amount, recorded as an obligation, is $135,000 at July 31, 2018 and October 31, 2017 (included in accrued liabilities and other payables) in respect of potential tax penalty of the late filing of IRS return and, if recognized, will affect the Company’s effective tax rate.

Malaysia

All of the Company’s subsidiaries operating in Malaysia subject to the Malaysia Corporate Tax Laws at a progressive income tax rate starting from 1918% on the assessable income for its tax year (for company with paid up capital not more than RM2.5 million and on the first RM 500,000 income) and 24% (on all income for Company with paid up capital more than RM2.5 million and on the remaining balance of income after the first RM500,000 income charged at 20% for Company with paid up capital not more than RM2.5 million) on the assessable income for its tax year. Any unutilized losses can be carried forward indefinitely to be utilized against income from any business source. The Company has no valuation allowance as of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018, respectively.

A reconciliation of loss before income taxes to the effective tax rate as follows:

	Nine months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Loss before income taxes	$	~~(345~~2,~~014~~922	)	$	(~~515~~122,~~197~~652	)
Statutory income tax rate		24%	%		24%	%
Income tax at statutory tax rate		~~(82,803~~701	)		(~~123~~29,~~647~~436	)
Tax effect of non-deductible expenses		4317,~~685~~246			~~107~~4,~~157~~026
Tax effect of different tax rate		–			1,947
Tax effect of non-business source rental income		32,214			17,292
Tax effect of non-business source rental income		154,938			38,524
Income tax expense / (benefit)	$	50,161			(8,118	)
Net operating loss		–			31,169
Income tax expense	$	115,820		$	55,150

During fiscals ~~2018~~2019 and ~~2017~~2018, the Company revisited the facts and circumstances and determined that rental income at “Megan Avenue” and “Le Apple” should be more appropriately taxed as a non-business source under Section 4(d) of the Income Tax Act.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018:

	July 31, 2018			October 31, 2017
	January 31, 2019			October 31, 2018
Deferred tax assets:
Net operating loss carryforwards:
- United States of America	$	~~320~~368,~~466~~112		$	~~304~~362,~~510~~313
Total deferred tax assets		320,466			304,510
- Malaysia		157,039			162,104
Less: valuation allowance		(320,466	)		(304,510	)
Total deferred tax assets		525,151			524,417
Less: valuation allowance		(525,151	)		(524,417	)
Deferred tax assets	$	–		$	–
Deferred tax liabilities, non-current
Property, plant and equipment		1,740			1,701
Rent concession		160,313			158,349
	$	162,053		$	160,050

Deferred tax liabilities, current
Rent concession	$	–	$	6,242
Deferred tax liabilities, non-current
Property, plant and equipment		1,511		1,448
Rent concession		164,896		162,817
	$	166,407	$	164,265

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE–109 STOCKHOLDERS’ EQUITY

As of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017,~~ 2018, the number of shares of the Company’s common stock issued and outstanding is 512,682,393 shares. There are no shares of preferred stock issued and outstanding.

NOTE–1110 SEGMENT INFORMATION

(a)	Business segment reporting

The Company currently operates two reportable business segments, as defined by ASC Topic 280:

·	Plantation business –oil palm and durian plantation in Malaysia

·	Real estate business – acquisition and development of commercial and residential real estate properties in Malaysia

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 4). Summarized financial information concerning the Company’s reportable segments is shown as below:

	Three months ended July 31, 2018
	Three months ended January 31, 2019
	Plantation Business			Real Estate Business			Corporate			Total
Revenues from external customer	$	28,291		$	431,781		$	–		$	460,072
Revenues	$	36,399		$	415,544		$	–		$	451,943
Inter-segment revenue		–			(6,~~699~~455	)		–			(6,~~699~~455	)
Revenues, net		2836,~~291~~399			~~425~~409,~~082~~089			–			~~453~~445,~~373~~488
Cost of revenues		(1821,~~216~~183	)		(~~132~~125,~~618~~742	)		–			(~~150~~146,~~834~~925	)
Gross profit		1015,~~075~~216			~~292~~283,~~464~~347			–			~~302~~298,~~539~~563
Depreciation		1,~~703~~654			~~130~~116,~~128~~336			21,~~025~~952			~~133~~119,~~856~~942
Net loss		(9,627	)		2,391			(78,115	)		(85,351	)
Net (loss) / profit		(9,564	)		16,600			(70,844	)		(63,808	)
Total assets		6,~~204~~273,~~571~~696			39,~~309~~034,~~386~~844			~~254~~199,~~032~~864			45,~~767~~508,~~989~~404
Expenditure for long-lived assets	$	~~546~~13,720		$	~~(45~~–	)	$	–		$	~~501~~13,720

	Three months ended July 31, 2017
	Three months ended January 31, 2018
	Plantation Business			Real Estate Business			Corporate			Total
Revenues from external customer	$	12,287		$	282,639		$	–		$	294,926
Revenues	$	62,058		$	285,460		$	–		$	347,518
Inter-segment revenue		–			(6,~~246~~598	)		–			(6,~~246~~598	)
Revenues, net		1262,~~287~~058			~~276~~278,~~393~~862			–			~~288~~340,~~680~~920
Cost of revenues		(1022,~~801~~056	)		(~~110~~139,~~950~~449	)		–			(~~121~~161,~~751~~505	)
Gross profit		140,~~486~~002			~~165~~139,~~443~~413			–			~~166~~179,~~929~~415
Depreciation		51,~~032~~652			~~120~~126,~~135~~943			(31,~~203~~995	)		~~121~~130,~~964~~590
Net loss		(39,861	)		(117,246	)		115,670			(41,437	)
Net (loss) / profit		22,001			(81,782	)		(66,885	)		(126,666	)
Total assets		56,~~823~~448,~~333~~697			3741,~~879~~329,~~921~~759			~~345~~284,~~870~~138			4448,~~049~~062,~~124~~594
Expenditure for long-lived assets	$	–631		$	–		$	~~2,900~~–		$	~~2,900~~631

All long-lived assets are located in Malaysia.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2018~~ 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

	Nine months ended July 31, 2018
	Plantation Business			Real Estate Business			Corporate			Total
Revenues from external customer	$	133,715		$	970,741		$	–		$	1,104,456
Inter-segment revenue		–			(20,165	)		–			(20,165	)
Revenues, net		133,715			950,576			–			1,084,291
Cost of revenues		(58,811	)		(441,322	)		–			(500,133	)
Gross profit		74,904			509,254			–			584,158
Depreciation		5,094			390,550			6,096			401,740
Net loss		6,716			(288,240	)		(224,897	)		(506,421	)
Total assets		6,204,571			39,309,386			254,032			45,767,989
Expenditure for long-lived assets	$	1,579		$	26,589		$	–		$	28,168

NOTE–11 CONCENTRATIONS OF RISK

	Nine months ended July 31, 2017
	Plantation Business			Real Estate Business			Corporate			Total
Revenues	$	96,305		$	836,521		$	–		$	932,826
Inter-segment revenue		–			(18,374	)		–			(18,374	)
Revenues, net		96,305			818,147			–			914,452
Cost of revenues		(42,580	)		(385,521	)		–			(428,101	)
Gross profit		53,725			432,626			–			486,351
Depreciation		9,448			353,494			817			363,759
Net loss		(43,036	)		(337,857	)		(116,292	)		(497,185	)
Total assets		5,823,333			37,879,921			345,870			44,049,124
Expenditure for long-lived assets	$	274		$	–		$	2,900		$	3,174

All long-lived assets are located in Malaysia.

NOTE–12 CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a) Major customers

23For the three and nine months ended January 31, 2019 and 2018, the customers who accounted for 10% or more of the Company’s revenues is presented as follows:

PRIME GLOBAL CAPITAL GROUP INCORPORATED

Three months ended January 31, 2019

January 31, 2019

Business segment

Revenues

Percentage
of revenues

Trade accounts
receivable

Le Apple Boutique Hotel (KLCC) Sdn. Bhd

Real estate

390,531

88%

1,198

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Three months ended January 31, 2018				January 31, 2018
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable

Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	261,371		77%	$	112,846
Lim Joo Soon Enterprise	Plantation Business		62,058		18%		17,177
		$	323,429		95%	$	130,023

FOR THE NINE MONTHS ENDED JULY 31, 2018

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

For the three and nine months ended July 31, 2018 and 2017, the customers who accounted for 10% or more of the Company’s revenues is presented as follows:

		Three months ended July 31, 2018				July 31, 2018
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	406,642		90%	$	–
Lim Joo Soon Enterprise	Plantation Business		28,291		6%		–
		$	434,933		96%	$	–

		Three months ended July 31, 2017				July 31, 2017
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	273,080		93%	$	–
Lim Joo Soon Enterprise	Plantation Business		12,287		4%		18,878
		$	285,367		97%	$	18,878

		Nine months ended July 31, 2018				July 31, 2018
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	894,110		83%	$	–
Lim Joo Soon Enterprise	Plantation Business		133,715		12%		–
		$	1,027,825		95%	$	–

		Nine months ended July 31, 2017				July 31, 2017
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	803,302		88%	$	–
Lim Joo Soon Enterprise	Plantation Business		96,305		10%		18,878
		$	899,607		98%	$	18,878

All customers are located in Malaysia.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JULY 31, 2018

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

(b) Major vendors

For the three ~~and nine~~ months ended ~~July~~ January 31, 2019 ~~2018~~ and ~~2017~~2018, no vendor accounted for 10% or more of the Company’s purchases.

All vendors are located in Malaysia.

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d) Interest rate risk

The Company’s exposure to interest rate risk primarily relates to the interest expense incurred on bank borrowings. The Company has not used derivative financial instruments in its investment portfolio in order to reduce this risk. The Company has not been exposed nor does it anticipate being exposed to material risks due to changes in interest rates.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JANUARY 31, 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

(e) Exchange rate risk

The reporting currency of the Company is US$. To date the majority of the revenues and costs are denominated in MYR, and a significant portion of the assets and liabilities are denominated in MYR. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and MYR. If MYR depreciates against US$, the value of MYR revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial foreign exchange risk.

(f) Commodity price

The Company’s primary market risk exposure results from the price it receives for its palm oil product. The Company does not currently engage in any commodity hedging activities, although it may do so in the future. Realized commodity pricing for the Company’s operation is primarily driven by the prevailing worldwide price for palm oil product. Pricing for palm oil product has been volatile and unpredictable in recent years, and the Company expects this volatility to continue in the foreseeable future. The prices the Company receives for operation depend on many factors outside of its control, including volatility in the differences between product prices at sales points and the applicable commodity index price.

(g) Malaysian real estate market risk

The Company’s real estate business may be affected by market conditions and economic challenges experienced by the economy as a whole in Malaysia, conditions in the credit markets or by local economic conditions in the markets in which its properties are located. Such conditions may impact the Company’s results of operations, financial condition or ability to expand its operations.

PRIME GLOBAL CAPITAL GROUP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JULY 31, 2018

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

(h) Market risk related to marketable securities

The Company is also exposed to the risk of changes in the value of financial instruments, caused by fluctuations in equity prices related to marketable securities. Changes in these factors could cause fluctuations in earnings and cash flows.

NOTE–1312 COMMITMENTS AND CONTINGENCIES

(a) Operating lease commitment

As of ~~July~~January 31, ~~2018~~2019, the Company occupied its own building premises and has no future minimum rental payments due under various operating leases in the next twelve months.

(b) Capital commitment

As of ~~July~~January 31, ~~2018~~2019, the Company does ~~not~~ not have any significant capital commitments.

NOTE–1413 SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after ~~July~~January 31, ~~2018~~2019 up through the filing date of these condensed consolidated financial statements. During the period, the Company ~~did~~ did not have any material recognizable subsequent events.

2624

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

Forward-looking statements

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words "believes," "anticipates," "expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.

Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refer to the legal currency of the United States. References to “MYR” are to the Malaysian Ringgit, the legal currency of Malaysia. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Overview

During the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019, we operated in two business segments: (i) our oil palm and durian plantation business; and (ii) our real ~~estate~~ estate business. Our oil palm and durian plantation business is operated through Virtual Setup Sdn. Bhd., or VSSB, and our real ~~estate~~ estate business is primarily operated through PGCG Assets Holdings Sdn. Bhd., or PGCG Assets, and Dunford Corporation Sdn Bhd. Our primary assets are:

Oil palm and durian plantation in Malaysia which is operated through VSSB;

21.8921 hectares (54.10 acres) of vacant development land located in Selangor, Malaysia, which is subject to a 99-year leasehold, expiring July 30, 2100;

two parcels of undeveloped land located in Selangor, Malaysia aggregating approximately 31 acres;

15 storey commercial building located at Geran 10010, Lot 238 Section 43, Town and District of Kuala Lumpur, Wilayah Persekutuan, Kuala Lumpur, Malaysia; and

12 storey commercial building located at Megan Avenue 1, No. 189, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.

2725

The following table sets forth ~~certain~~ certain operational data for the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019:

Nine months ended July 31, 2018

Three months ended January 31, 2019

Plantation Business

Real Estate Business

Corporate

Total

Revenues from external customer

~~133~~36,~~715~~399

~~970~~415,~~741~~544

–

1451,~~104,456~~943

Inter-segment revenue

–

(206,~~165~~455

)

–

(206,~~165~~455

)

Revenues, net

~~133~~36,~~715~~399

~~950~~409,~~576~~089

–

1445,~~084,291~~488

Cost of revenues

(5821,~~811~~183

)

(~~441~~125,~~322~~742

)

–

(~~500~~146,~~133~~925

)

Gross profit

7415,~~904~~216

~~509~~283,~~254~~347

–

~~584~~298,~~158~~563

Depreciation

51,~~094~~654

~~390~~116,~~550~~336

61,~~096~~952

~~401~~119,~~740~~942

Net loss

6,716

(288,240

)

(224,897

)

(506,421

)

Net (loss) / profit

(9,564

)

16,600

(70,844

)

(63,808

)

Total assets

6,~~204~~273,~~571~~696

39,~~309~~034,~~386~~844

~~254~~199,~~032~~864

45,~~767~~508,~~989~~404

Expenditure for long-lived assets

113,~~579~~720

~~26,589~~–

–

2813,~~168~~720

Challenges From Our Oil Palm Operations; Durian Planting

The oil palm and durian business is a highly regulated industry with prices subject to wide fluctuations due to factors beyond our control such as weather conditions, competition, global demand and government policies. If we are not able to successfully respond to any of these or other factors, our business operations and financial results may be adversely affected.

We are focused on the maintenance and operation of our oil palm and durian plantation in Malaysia. We believe that the value of our oil palm and durian plantation has increased since its acquisition. While we have not pursued any discussions or received any formal offers regarding the sale of our plantation, we may consider sales offers in the future if a sale would maximize return to our investors.

We commenced ~~preparation of approximately 60 acres of our oil palm plantation land for the~~ planting premium durian, of the “Musang King” variety, in the first quarter of calendar year 2014. As of the date of this report, we have replanted approximately 180 acres of our oil palm plantation land with premium durian trees. Durian trees have one or two fruiting periods per year, although the timing may vary depending on the species, cultivars, and localities. We have planted an average of 35 trees per acre and anticipate an average production of 50 grade A fruits per tree for each of the two harvesting seasons per year.

We have used the latest planting technology in 2016, which we hope will reduce the maturity time of the durian tree from 5 years to 3 years. We expect ~~that the~~ durian trees planted onduring the first 60phase ~~acres~~to ~~will~~ begin to bear fruit by ~~end~~2019, ~~2018 at~~ the ~~latest,~~second and wethird ~~expect~~phase aby ~~slight~~2021 ~~revenue contribution~~and ~~from~~ the ~~sale~~fourth ofphase by ~~our~~2023, ~~premium~~at ~~durian in~~ the ~~first quarter of the calendar year 2019~~latest. ~~Accordingly,~~We we expect ~~revenue contribution~~to ~~from~~harvest ~~our~~and ~~durian~~received ~~orchard~~gains by ~~the last quarter of the calendar year~~ 2019.

Challenges From Our Real Estate Operations

Commercial Buildings

We generate rental income from our 12 storey and 15 storey commercial properties and anticipate generating income from the sale of developed properties. As of ~~July~~January 31, ~~2018~~2019, we occupy 2 floors of our 12 storey commercial building as our corporate headquarters, 6 floors have been leased to tenants at market rate. The balance of the 4 floors are currently vacant and we are actively attempting to lease these 4 floors.

28Our 15 story building is fully leased to Le Apple Boutique Hotel KLCC which operates a boutique hotel on the premises. The Rental Agreement has an initial term of one (1) year commencing December 1, 2018 and expiring November 30, 2019. Provided that there are no existing breaches by Le Apple, we will be required to renew the lease for additional one-year terms up to twenty-four years, for a maximum aggregate term of thirty years. The monthly rental rate shall be increased every three years at an increment rate of 5% to 10% of the current monthly rental rate, or shall be based on the prevailing market rate, whichever is lower. Our current rental rate has increased from RM400,000 to RM550,000 (approximately $131,520) from April 1, 2018.

Our 15 storey building is fully leased to Le Apple Boutique Hotel KLCC which operates a boutique hotel on the premises. The Rental Agreement had an initial term of one (1) year that commenced December 1, 2013 and expired November 30, 2014. Provided that there are no existing breaches by Le Apple Boutique Hotel KLCC, we are required to renew the lease for an additional one-year term up to twenty nine years term, for a maximum aggregate term of thirty years, and the monthly rental rate shall for every three years term, be either increased by 5% to 10% of the monthly rental rate or based on the prevailing market rate, whichever is lower. Le Apple Boutique Hotel KLLC continues to operate pursuant to a renewed annual lease under the Rental Agreement. Our current monthly rental rate is RM550,000.26

Residential Property Development

On June 10, 2015, we received approval to develop our leasehold land located in Puncak Alam. Due to challenges in the current Malaysian real property market, in November 2015, we submitted a request to convert some our planned semi-detached and bungalow home parcels into cluster semi-detached homes to improve the marketability of the development. We received approval of our revised development plan on March 4, 2016.

On July 1, 2016, PGCG Assets entered into a memorandum of understanding (“MOU”) with Yong Tai Berhad, a public listed corporation in the main market of Bursa Malaysia Berhad (“YTB”) engaged in the business of commercial and residential property development, to jointly develop our land (the “Land”) located at Puncak Alam (the “Proposed JV”). The MOU was terminated on February 15, 2017, pursuant to the terms of a Mutual Termination of Memorandum of Understanding (the “Termination MOU”). In light of the termination of the Proposed JV with YTB, we ~~amended our~~ plan to develop, market, promote and complete the construction on our own. As at the date of this report, clearing of the land for development is underway. We hope to begin construction in the ~~fourth~~ fourth calendar quarter of 2019 and complete construction by the end of calendar 2021.

We believe that we will require approximately RM5 to RM10 million in the aggregate to market, promote and complete construction of each phase of our Shah Alam 2 Eco Residential Development Project.

On September 8, 2016, the Urban Wellbeing, Housing and Local Government Ministry of Malaysia announced the introduction of an initiative that will enable property developers to provide loans to buyers at an annual interest rate between 12 and 18 percent. Developers will be able to begin applying to the ministry on September 8, 2016, for a moneylending license. It is our understanding that loans made pursuant to such license will not be restricted to first time homebuyers.

~~Depending~~We ~~upon~~are ~~the~~considering ~~guidelines,~~applying ~~we may apply~~ for such ~~moneylender~~money lender’s license to enable us to provide financing to prospective buyers of our future properties. If we apply and are successful in obtaining such license, we hope that we will be able to boost sales of our properties that we have earmarked for development.

We continue to maintain a cautious but positive outlook for the residential market based upon Malaysia’s stable employment outlook, growth in household income, formation of new households, and increased demand for affordable residential property from first time home buyers. Developers such as us are facing challenges of inconsistent supply and high cost of labour, increased costs of building materials (such as cement and steel bars) and general increased costs of doing business. Our market is also sensitive to changes in lending rates and lending requirements as many homebuyers rely on financing to make purchases. As a result, government or bank policies that result in increased interest rates and or stricter lending requirements may adversely affect the sales of our developed properties.

2927

Results of Operations

The following table sets forth certain operational data for the three months ended ~~July~~January 31, ~~2018~~2019, compared to the three months ended ~~July~~January 31, ~~2017~~ 2018:

	Three months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Revenues, net:	$	~~453~~445,~~373~~488		$	~~288~~340,~~680~~920
Plantation business		2836,~~291~~399			1262,~~287~~058
Real estate		~~425~~409,~~082~~089			~~276~~278,~~393~~862
Total cost of revenues		(~~150~~146,~~834~~925	)		(~~121~~161,~~751~~505	)
Plantation business		(1821,~~216~~183	)		(1022,~~801~~056	)
Real estate		(~~132~~125,~~618~~742	)		(~~110~~139,~~950~~449	)
Gross profit		~~302~~298,~~539~~563			~~166~~179,~~929~~415
General and administrative		(~~116~~122,~~405~~934	)		(~~180~~97,~~347~~448	)
(Loss) income from operations		~~186~~175,~~134~~629			~~(13~~81,~~418~~967	)
Other expense, net		(~~215~~189,~~659~~276	)		(28216,~~964~~751	)
Loss before income taxes		(2913,~~525~~647	)		(42134,~~382~~784	)
Income tax expense		(55,826	)		945
Income tax (expense) / benefit		(50,161	)		8,118
NET LOSS	$	(8563,~~351~~808	)	$	(41126,~~437~~666	)

Comparison of the three months ended ~~July~~January 31, ~~2018~~2019 and ~~July~~January 31, ~~2017~~2018

Net Revenue. We generated net revenue of $~~453~~445,~~373~~488 and $~~288~~340,~~680~~920 for the three months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, respectively. The increase in ~~plantation~~net revenue ~~for the quarter ended July 31, 2018,~~ is primarily attributable to the ~~increasing~~increase in ~~output~~our inreal ~~plantation business.~~estate ~~The~~revenue, ~~increase~~offset by a decrease in our ~~real~~plantation ~~estate~~ revenue. The isdecrease ~~attributable~~in toplantation revenue for the ~~increase~~quarter inended ~~rental~~January ~~income~~31, ~~from~~2019, ~~our~~is ~~fifteen~~primarily ~~story~~attributable ~~buildings and~~to the ~~decreased~~decrease ~~vacancies~~of inoil ~~our twelve story building~~palm price. The primary increase in real estate revenue is attributable to the recovery of monthly rental rate from RM400,000 to ~~RM500~~RM550,000 (approximately $~~125~~131,~~313~~520) from our tenant of fifteen story building, Le Apple Boutique Hotel KLCC, effective from April 1, 2018. The monthly rental rate on Le Apple Boutique Hotel KLCC was previously decreased from our initial rental rate of ~~RM500~~RM550,000 to RM400,000 due to unfavourable market conditions.

For the three months ended ~~July~~January 31, ~~2018~~2019, our plantation and real estate businesses accounted for approximately 68.2% and 9391.8% of our net revenue, respectively. For the three months ended ~~July~~January 31, ~~2017~~2018, our plantation and real estate businesses accounted for approximately 4 18.0% and 9682.0% of our net revenue, respectively.

Our real estate related revenues are derived from the tenants from our commercial buildings. We generally expect our real estate related revenues to gradually account for an increasing share of our net revenue in the future as we begin real estate development and sales activities.

30During the three months ended January 31, 2019, and 2018, the following customers accounted for 10% or more of our total net revenues:

During the three months ended July 31, 2018, and 2017, the following customers accounted for 10% or more of our total net revenues:

Three months ended January 31, 2019

January 31, 2019

Business segment

Revenues

Percentage
of revenues

Trade accounts
receivable

Le Apple Boutique Hotel (KLCC) Sdn. Bhd

Real estate

390,531

88%

1,198

		Three months ended July 31, 2018				July 31, 2018
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	406,642		90%	$	–
Lim Joo Soon Enterprise	Plantation Business		28,291		6%		–
		$	434,933		96%	$	–

Three months ended July 31, 2017

July 31, 2017

Three months ended January 31, 2018

January 31, 2018

Business segment

Revenues

Percentage of revenues

Trade accounts receivable

Le Apple Boutique Hotel (KLCC) Sdn. Bhd

Real estate

~~273~~261,~~080~~371

9377%

–112,846

Lim Joo Soon Enterprise

Plantation Business

1262,~~287~~058

418%

1817,~~878~~177

~~285~~323,~~367~~429

9795%

18130,~~878~~023

All of our customers are located in Malaysia.

Cost of Revenue. For the three-month period ended ~~July~~January 31, ~~2018~~2019, our cost of revenue as a percentage of net revenue was approximately 33.30% as ~~compared~~ compared to 4247.24% for the same period ended ~~July~~January 31, ~~2017~~2018. Cost of plantation and real estate as a percentage of their respective net revenue was approximately 6458.42% and 3130.27%, respectively, for the quarter ended ~~July~~January 31, ~~2018~~2019. For the three months ended January ~~July~~ 31, ~~2017~~2018, cost of plantation and real estate as a percentage of their respective net revenue was approximately 8735.95% and 40 50.10%, respectively. Cost of revenue of our oil palm consists of costs such as material supplies, subcontracting costs incurred for planting, fertilizing and harvesting the oil palm tree. Transportation and handling costs associated with the distribution of fresh fruit bunches to the customers are also included in cost of revenues. The cost of revenue of the planation business ~~decreased~~ increased due to ~~higher~~decrease in plantation sales. The cost of real estate decreased due to increase in real estate revenue.

For the three ~~months~~ months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, no vendor accounted for 10% or more of our purchases.

Gross Profit. For the three months ended ~~July~~January 31, ~~2018~~2019, we achieved gross profit of $~~302~~298,~~539~~563 as compared to $~~166~~179,~~929~~415 for the three months ~~ended~~ ~~July~~ended January 31, ~~2017~~2018. For the three months ended ~~July~~January 31, ~~2018~~2019, our plantation and real estate operations accounted for approximately 35.31% and 9694.79% of our gross profit, respectively. For the three months ended ~~July~~January 31, ~~2017~~2018, our plantation and real estate operations accounted for approximately 022.92% and 9977.18% of our gross profit, respectively.

Once we begin real estate development, we expect gross profit derived from our real estate business to gradually increase as we commence sales activities with respect to our developed properties. We also expect our plantation revenue to increase once our premium durian orchard has matured and is able to produce grade A fruits for distribution. ~~We expect the fruits to begin generating revenue sometime in 2019.~~

General and Administrative Expenses (“G&A”). We incurred G&A expenses of $~~116~~122,~~405~~934 and $~~180~~97,~~347~~448 for the three months ended ~~July~~ January 31, ~~2018~~ 2019, and ~~2017~~2018, respectively. The ~~decrease~~increase in G&A expenses is primarily attributable to increase ~~decrease~~ in professional ~~fees~~fee.

As a general matter, we expect our G&A to increase in the foreseeable future as we begin development of our real estate assets. G&A as a percentage of ~~net~~gross revenue was approximately 2527.76% and 6228.56% for the three months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, respectively.

Other Expense, net. We incurred net other expense of $189,276 for the three months ended January 31, 2019, as compared to net other expense of $216,751 for the three months ended January 31, 2018. The decrease in net other expenses is primarily attributable to decrease in interest expenses. Net other expense for the three months ended January 31, 2019 and 2018 consisted primarily of interest expense from our bank loans.

~~Other~~Income Tax Expense~~, net~~. We ~~incurred~~recorded ~~net~~income ~~other~~tax expense of $~~215~~50,~~659~~161 ~~for~~and ~~the~~income ~~three~~tax ~~months~~income ~~ended July 31, 2018, as compared to net other expense~~ of $288,~~964~~118 for the three months ended ~~July~~January 31, ~~2017.~~2019 ~~Net~~and ~~other~~2018, respectively. ~~expense~~Our ~~for~~income ~~the~~tax ~~three~~was ~~months~~primarily ~~ended~~attributable ~~July~~to ~~31,~~the ~~2018~~tax ~~and~~effect ~~2017 consisted primarily~~ of ~~interest~~non-business ~~expense~~source ~~from~~rental ~~our bank loans~~income. The increase in ~~other~~income ~~expenses~~tax expense is primarily ~~due~~attributable to inoperating ~~quarter~~profit ~~ended~~in ~~July~~real ~~31, 2017,~~estate ~~we recorded an income from forgiveness of debts of $184,435 from our payables~~business.

Income Tax Expense. We recorded income tax expense of $55,826 and income tax credit of $945 for the three months ended July 31, 2018 and 2017, respectively. Our income tax was primarily attributable to the tax effect of non-business source rental income. The increase in income tax is primarily attributable to operating profit in real estate business.29

Comparison of the nine months ended July 31, 2018 and July 31, 2017

The following table sets forth certain operational data for the nine months ended July 31, 2018, compared to the nine months ended July 31, 2017:

	Nine months ended July 31,
	2018			2017
Revenues, net:	$	1,084,291		$	914,452
Plantation business		133,715			96,305
Real estate		950,576			818,147
Total cost of revenues		(500,133	)		(428,101	)
Plantation business		(58,811	)		(42,580	)
Real estate		(441,322	)		(385,521	)
Gross profit		584,158			486,351
General and administrative		(381,979	)		(459,877	)
(Loss) income from operations		202,179			26,474
Other expense, net		(592,780	)		(468,509	)
Loss before income taxes		(390,601	)		(442,035	)
Income tax expense		(115,820	)		(55,150	)
NET LOSS	$	(506,421	)	$	(497,185	)

Net Revenue. We generated net revenue of $1,084,291 and $914,452 for the nine months ended July 31, 2018 and 2017, respectively. The increase in plantation revenue is primarily attributable to the increasing in output in plantation business. The increase in our real estate revenue is attributable to the increase in rental income from our fifteen story buildings and the decreased vacancies in our twelve story building. The primary increase in real estate revenue is attributable to the recovery of monthly rental rate from RM400,000 to RM500,000 (approximately $125,313) from our tenant of fifteen story building, Le Apple Boutique Hotel KLCC, effective from April 1, 2018. The monthly rental rate on Le Apple Boutique Hotel KLCC was previously decreased from our initial rental rate of RM500,000 to RM400,000 due to unfavourable market conditions.

For the nine months ended July 31, 2018, our plantation and real estate businesses accounted for approximately 12.3% and 87.7% of our net revenue, respectively. For the nine months ended July 31, 2017, our plantation and real estate businesses accounted for approximately 10.5% and 89.5% of our net revenue, respectively.

For the nine months ended July 31, 2018, and 2017, the following customers accounted for 10% or more of our total net revenues:

		Nine months ended July 31, 2018				July 31, 2018
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	894,110		83%	$	–
Lim Joo Soon Enterprise	Plantation Business		133,715		12%		–
		$	1,027,825		95%	$	–

		Nine months ended July 31, 2017				July 31, 2017
	Business segment	Revenues		Percentage of revenues		Trade accounts receivable
Le Apple Boutique Hotel (KLCC) Sdn. Bhd	Real estate	$	803,302		88%	$	–
Lim Joo Soon Enterprise	Plantation Business		96,305		10%		18,878
		$	899,607		98%	$	18,878

All of our customers are located in Malaysia.

Cost of Revenue. For the nine months ended July 31, 2018, our cost of revenue as a percentage of net revenue was approximately 46.1% with our plantation and real estate businesses accounting for 11.8% and 88.2% of the cost of revenue. For the nine months ended July 31, 2017, our cost of revenue as a percentage of net revenue was approximately 46.8% with our plantation and real estate businesses accounted for 9.9% and 90.1% of the cost of revenue. Cost of real estate revenue in 2018 and 2017 primarily consisted of land taxes, maintenance and depreciation of the leased properties of our real estate. Cost of plantation revenue in 2018 and 2017 consisted primarily of the costs related to the oil palm business such as material supplies, subcontracting costs and transportation costs incurred for planting, fertilizing and harvesting the oil palm tree. Shipping and handling costs associated with the distribution of fresh fruit bunches to the customers are also included in cost of revenues.

For the nine months ended July 31, 2018 and 2017, no vendor accounted for 10% or more of our purchases.

Gross Profit. For the nine months ended July 31, 2018, we achieved gross profit of $584,158 as compared to $486,351 for the same period ended July 31, 2017. As of July 31, 2018, our plantation and real estate businesses accounted for approximately 12.8% and 87.2%, respectively, of our gross profit. For the nine months ended July 31, 2017, our plantation and real estate operations accounted for approximately 11.0% and 89.0% of our gross profit, respectively. The increase in overall gross profit is primarily attributable to higher rental income on our commercial properties.

Once we begin real estate development, we expect gross profit derived from our real estate business to gradually increase as we commence sales activities with respect to our developed properties. We also expect our plantation revenue to increase once our premium durian orchard has matured and is able to produce grade A fruits for distribution. We expect the fruits to begin generating revenue sometime in 2019.

General and Administrative Expenses (“G&A”). We incurred G&A expenses of $381,979 and $459,877 for the nine months ended July 31, 2018, and 2017, respectively. The decrease in G&A expenses is primarily attributable to decrease in professional fees.

As a general matter, we expect our G&A to increase in the foreseeable future as we begin development of our real estate assets. G&A as a percentage of net revenue was approximately 35.2% and 50.3% for the nine months ended July 31, 2018 and 2017, respectively.

Other Expense, net. We incurred net other expense of $592,780 for the nine months ended July 31, 2018, as compared to net other expense of $468,509 for the nine months ended July 31, 2017. Net other expense for the nine months ended July 31, 2018 and 2017 consisted primarily of interest expense from our bank loans.

Income Tax Expense. We recorded income tax expense of $115,820 and $55,150 for the nine months ended July 31, 2018 and 2017, respectively. Our income tax was primarily attributable to the tax effect of non-business source rental income. The increase in income tax is primarily attributable to operating profit in real estate business.

Liquidity and Capital Resources

As of ~~July~~January 31, ~~2018~~2019, we had cash and cash equivalents of $~~186~~155,~~712~~845, as compared to $~~175~~293,~~504~~444 as of the same period last year. Our cash and cash equivalents decreased as a result of cash used in operation and the repayment of 59,909 to Weng Kung Wong, our Chief Executive Officer, Interim Chief Financial Officer and Interim Secretary and director.

We expect to incur significantly greater expenses in the near future, including the contractual obligations that we have assumed discussed below, to begin development activities. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, ~~and~~ add infrastructure, and incur additional costs related to being a large accelerated filer, including directors’ and officers’ insurance and increased professional fees.

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

Going Concern Uncertainties

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, capital leases and short-term and long-term debts. While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months.

	Nine months ended July 31,
	Three months ended January 31,
	2018			2017
	2019			2018
Net cash used in operating activities		(~~150~~117,~~286~~450	)		(~~538~~36,~~493~~424	)
Net cash used in investing activities		(8628,~~413~~476	)		(1512,~~597~~099	)
Net cash provided by financing activities		119,886			63,913
Net cash (used in) / provided by financing activities		(207,174	)		29,040

Net Cash Used In Operating Activities.

For the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019, net cash used in operating activities was $~~150~~117,~~286~~450, which consisted primarily of a net ~~loss~~income (excluding non-cash depreciation) of $~~104~~56,~~681~~134, ~~a decrease in income tax payable of $139,817, a decrease in accrued liabilities and other payables of $116,969,~~ offset by a decrease in ~~rental~~income ~~concession~~tax ofpayable ~~$48,246 and decrease in account receivable~~ of $~~162~~172,~~857~~789.

For the ~~nine~~three months ended ~~July~~January 31, ~~2017~~2018, net cash used in operating activities was $~~538~~36,~~493~~424, which consisted primarily of a net ~~loss~~income (excluding non-cash ~~depreciation,~~ ~~forgiveness of debts and gain on disposal of property, plant and equipment~~depreciation) of $~~202~~3,~~542~~924, a decrease in income tax payable of $~~200~~94,~~396~~664, aoffset ~~decrease~~by ~~in accrued liabilities and other payables of $51,701 and~~ a decrease in ~~accounts~~rental ~~payable~~concession of $1533,~~110,~~825 ~~offset~~and ~~by a~~ decrease in ~~rental~~account ~~concession~~receivable of $1824,~~841~~065.

We expect rental income from our real estate operations to increase as we increase the occupancy rates of our commercial buildings, which will be offset by the increased expenses associated with developing our residential projects. We expect to continue to rely on cash generated through private placements of our securities, however, to finance our operations and future acquisitions.

Net Cash Used in Investing Activities.

For the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019, net cash used in investing activities was $8628,~~413~~476, consisting of $5814,~~245~~756 of plantation development construction costs, and cost of purchase of property, plant and equipment of $2813,~~168~~720.

For the nine months ended July 31, 2017, net cash used in investing activities was $15,597, consisting of $9,043 of plantation development construction costs, $7,262 of construction in progress cost, and $3,174 of property, plant and equipment purchase, offset by $3,882 of proceeds from the disposal of property, plant and equipment.30

For the three months ended January 31, 2018, net cash used in investing activities was $12,099, consisting of $11,468 of plantation development construction costs, and cost of purchase of property, plant and equipment of $631.

We expect investing cash outflows to increase when we develop our durian plantation until the orchard matures and begins to generate revenues in 2019 at the earliest. We also expect investing cash outflows to increase due to expenditures associated with developing our residential projects.

Net Cash ~~Provided~~(Used in) / Provided by Financing Activities.

For the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019, net cash ~~provided~~used byin financing activities was $~~119~~207,~~886~~174, consisting primarily of ~~advances~~repayments of $159,~~037,234~~909 ~~from Weng~~to Weng Kung Wong, our Chief Executive Officer, Interim Chief Financial Officer and Interim Secretary and director, ~~offset~~and by repayments of $~~917~~147,~~348~~ 265 on outstanding bank loans.

For the ~~nine~~three months ended ~~July~~January 31, ~~2017~~2018, net cash provided by financing activities was $6329,~~913~~040, consisting primarily of advances of $~~660~~325,~~544~~957 from ~~Weng~~ Weng Kung Wong, our Chief Executive Officer, Interim Chief Financial Officer and Interim Secretary and director, offset by repayments of $~~593~~296,~~553~~917 on outstanding bank loans.

Off-Balance Sheet Arrangements

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Contractual Obligations and Commercial Commitments

We had the following contractual obligations and commercial commitments as of ~~July~~January 31, ~~2018~~2019:

Contractual Obligations

Total

Less than 1 Year

1-3 Years

3-5 Years

More than 5 Years

Amounts due to related parties

32,~~630~~343,~~960~~027

86,420

32,~~544~~256,~~540~~607

–

Commercial commitments

Bank loan repayment

1214,~~685~~227,~~906~~469

4620,~~404,371~~591

21,~~178~~345,~~641~~699

21,~~524~~498,~~748~~184

310,~~578~~762,~~146~~995

Total obligations

16,~~316~~570,~~866~~496

4707,~~490,791~~011

53,~~723~~602,~~181~~306

21,~~524~~498,~~748~~184

310,~~578~~762,~~146~~995

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our financial statements.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. We extend unsecured credit to our customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. We will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of our customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance-sheet credit exposure related to our customers. Based upon the aforementioned criteria, we did not write off accounts receivable on uncollectible rental receivable at ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018.

Property, plant and equipment

Categories	Location of properties	Expected useful life
Freehold plantation land and orchard	Oil palm and durian plantation in Malaysia	Indefinite, as per land titles
Leasehold land under development	Leasehold land in Puncak Alam, Malaysia	Remaining lease life of 88 years, as per land titles
Freehold land under development	Freehold land in Sungai Long, Cheras, Selangor, Malaysia	Indefinite, as per land titles
Freehold land and land improvement for rental purpose commercial building	Land portion of 15 storey buildings in Kuala Lumpur, Malaysia	Indefinite, as per property titles
Building structure and improvements	Building structure of commercial buildings in Kuala Lumpur, Malaysia, including: 12 storey building “Megan Avenue” and 15 storey building	33 years
Office furniture and equipment		3-10 years
Motor vehicle		5 years

Long-lived assets primarily include freehold plantation land, leasehold land held for development, freehold land and land improvement for rental purpose and building structure and improvements. In accordance with the provision of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, we generally conduct our annual impairment evaluation to our long-lived assets, usually in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the periods presented.

We have separately identified the portion of freehold land and building structure, in which freehold land is not subject to amortization and buildings are to be amortized over 33 years on a straight-line method, based on applicable local laws and practice.

Policy for Capitalizing Development Cost

A variety of costs are incurred in the acquisition, development and leasing of properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. We adopt the capitalization policy on development properties, which is guided by ASC Topic 835-20 “Interest – Capitalization of Interest” and ASC Topic 970 “Real Estate - General”. The costs of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, salaries and related costs and other costs incurred during the period of development. We consider a construction project as substantially completed and held available for occupancy upon the receipt of certificates of occupancy, but no later than one year from cessation of major construction activity. We cease capitalization on the portion (1) substantially completed and (2) occupied or held available for occupancy, and we capitalize only those costs associated with the portion under construction.

We capitalize leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term.

·	Revenue recognition

Revenue recognition applicable from 1 November 2018

Revenue recognition applicable until 31 October 2018

We recognize our revenue in accordance with ASC Topic 605, “Revenue Recognition”, upon the delivery of our plantation products when: (1) title and risk of loss are transferred; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable. Our sale arrangements do not contain general rights of return.

(a) Plantation sales

(b) Rental income

We generally lease the units under operating leases with terms of two years or less. For the ~~nine~~three months ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, we have recorded $~~950~~409,~~576~~089 and $~~818~~278,~~147~~862 in lease revenue, based upon our annual rental over the life of the lease under operating lease, using the straight-line method in accordance with ASC Topic 970-605, “Real Estate – General – Revenue Recognition” (“ASC Topic 970-605”).

~~As of July 31, 2018, the commercial buildings for lease are as follows:~~33

As of January 31, 2019, the commercial buildings for lease are as follows:

Name of Commercial building

Number of units

(by floor)

Footage area

(square feet)

Vacancy percentage

Megan Avenue

19,987

33%

Le Apple Boutique Hotel KLCC

(fka “Menara CMY”)

91,848

We expect to record approximately $1.765 million in annual lease revenue under the operating lease arrangements in the next twelve months through ~~July~~January 31, ~~2019~~2020.

·	Cost of revenues

Cost of revenue on plantation sales includes material supplies, subcontracting costs and transportation costs incurred for planting, fertilizing and harvesting ~~the oil palm tree~~. Transportation and handling costs associated with the distribution of fresh fruit bunches to the customers are also included in cost of revenues.

Cost related to our real estate business shown on the accompanying statements of operations include costs associated with land tax, on-site and property management personnel, repairs and maintenance, property insurance, marketing, landscaping and other on-site and related administrative costs. Utility expenses are paid directly by tenants.

·	Comprehensive income

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

·	Income taxes

We conduct major businesses in Malaysia and are subject to tax in its own jurisdiction. As a result of our business activities, we will file separate tax returns that are subject to examination by the local and foreign tax authorities.

3834

·	Foreign currencies translation

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, we maintain our books and record in a local currency, and Malaysian Ringgit (“MYR”), ~~and Hong Kong Dollars (“HK$”),~~ which is functional currency as being the primary currency of the economic environment in which the entity operates.

In general, for consolidation purposes, assets and liabilities of our subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity. The gains and losses are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective periods:

	As of and for the period ended July 31,
	As of and for the period ended January 31,
	2018		2017
	2019		2018
Period-end HK$ : US$1 exchange rate		–		7.8099
Period-end MYR : US$1 exchange rate		4.0895		3.8991
Period-average HK$ : US$1 exchange rate		–		7.7736
Period-average MYR : US$1 exchange rate		4.1546		4.0651
Period-end MYR : US$1 exchange rate		4.0559		4.2790
Period-average MYR : US$1 exchange rate		3.9900		4.3788

Related parties

Parties, which can be a corporation or individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

·	Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with our internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. During the period ended ~~July~~January 31, ~~2018~~2019 and ~~2017~~2018, we operate in two reportable operating segments in Malaysia.

·	Fair value of financial instruments

The carrying value of our financial instruments (excluding obligation under finance lease, long-term bank loans and available-for-sale marketable securities): cash and cash equivalents, accounts receivable, deposits and other receivables, amount due to a related party and other payables approximate at their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of our obligation under finance lease and long-term bank loans approximates the carrying amount.

We also follow the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

·	Level 1 : Observable inputs such as quoted prices in active markets;

·	Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

·	Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

The following table summarizes information on the fair value measurement of our financial assets as of ~~July~~January 31, ~~2018~~2019 and October 31, ~~2017~~2018, measured at fair value, grouped by the categories described above:

Quoted prices in active markets (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

As of July 31, 2018

As of January 31, 2019

Marketable securities, available-for-sale

~~223~~172,~~191~~650

–

As of October 31, 2017

As of October 31, 2018

Marketable securities, available-for-sale

~~221~~172,~~198~~532

–

As of ~~July~~January 31, ~~2018~~2019, we did not have ~~any~~ any nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did we have any assets or liabilities measured at fair value on a non-recurring basis.

~~Recent~~· Adoption of new accounting ~~pronouncements~~standards

InOn ~~May~~1 ~~2014,~~November ~~the FASB issued ASU 2014-09~~2018, ~~Revenue~~ ~~from Contracts with Customers, which requires an entity to recognize~~ the ~~amount~~company ~~of revenue to which it expects to be entitled~~adopted ~~for the transfer of promised goods or services to customers.~~ ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard. The amendments in ASU 2014-09 are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The standard permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers ~~(Topic 606), Principal versus Agent Considerations (Reporting Revenue versus Net)~~. InThe ~~April~~adoption ~~2016,~~of ~~the~~this ~~FASB issued ASU 2016-10, Revenue from Contracts with Customers (~~Topic ~~606),~~does ~~Identifying~~not ~~Performance~~have ~~Obligations~~a ~~and~~material ~~Licensing.~~impact Inon ~~May~~our ~~2016, the FASB issued ASU 2016-11, Revenue~~consolidated ~~from~~financial Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) - Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow Scope Improvements and Practical Expedientsstatements. In ~~December~~There ~~2016,~~have ~~the~~been ~~FASB~~no ~~issued~~significant ~~ASU2016-20;~~judgements ~~Technical~~or ~~Corrections~~changes ~~and~~in ~~Improvements~~judgements tomade ~~Topic~~in ~~606.~~applying ~~These ASUs clarify~~ the ~~implementation~~ guidance onin ~~a few narrow areas and adds some practical expedients to the guidance~~ this Topic ~~606~~. ~~The~~There ~~Company~~were isno ~~evaluating~~contract ~~the~~assets ~~effect the~~or ~~ASUs~~liabilities ~~will~~recognised ~~have~~at onyear ~~its consolidated financial statements and related disclosures~~end. ~~We have not yet selected a transition method nor have we determined the effect of these standards on our ongoing financial reporting.~~

InThe ~~January~~adoption ~~2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement~~ of ~~Financial Assets and Financial Liabilities.” The amendments in this update require all equity investments to be measured at fair value with changes in~~ the ~~fair value recognized through net income (~~other ~~than~~new ~~those accounted for under equity method of~~ accounting ~~or those that result in consolidation of the~~ ~~investee).~~standards ~~The~~did amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The amendments in ASU 2016-01 are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not ~~expect that the adoption will~~ have a material impact on our consolidated financial statements.

40· Recent accounting pronouncements

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We ~~are~~do ~~currently~~not ~~evaluating~~anticipate that the ~~impact~~adoption ~~that~~of ~~the~~this ~~standard~~ASU ~~will~~to have a significant impact on our consolidated financial statements ~~and related disclosures~~.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. We are currently assessing the potential impact of ASU 2016-15 on our financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 2016-16—Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2017. Early adoption is permitted. We do not anticipate that the adoption of this ASU to have a significant impact on our consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update 2016-18 (ASU 2016-18), Statement of Cash Flows: Restricted Cash. This ASU provides guidance on the classification of restricted cash in the statement of cash flows. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The amendments in the ASU should be adopted on a retrospective basis. We do not expect that adoption of this ASU to have a material effect on our consolidated financial statements.

In February 2017, FASB issued Accounting Standards Update 2017-06; Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force). The amendments in this ASU requires an employee benefit plan within the scope of Topic 960,1 962,2 or 9653 to present its interest in a master trust and the change in its interest in that master trust as single line items in the statement of net assets available for benefits and the statement of changes in net assets available for benefits, respectively. In addition, the amendments update and align the disclosure requirements for an interest in a master trust across Topics 960, 962, and 965. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The amendments in the ASU should be adopted on a retrospective basis. We do not expect that adoption of this ASU to have a material effect on our consolidated financial statements.

4136

In March 2017, FASB issued Accounting Standards Update 2017-07; Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this ASU requires sponsors of benefits plans to present service cost in the same line item or items as other current employee compensation costs and present the remaining components of net benefit cost in one or more separate line items outside of income from operations (if that subtotal is presented), and limit the components of net benefit cost eligible to be capitalized (for example, as a cost of inventory or self-constructed assets) to service cost. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. These amendments are to be applied retrospectively for the presentation of service cost and other components of net benefit costs, and prospectively for the capitalization of service cost. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In March 2017, FASB issued Accounting Standards Update 2017-08; Receivables—Non refundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this ASU shortens the amortization period for certain purchased callable debt securities held at a premium. Specifically, it requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount. The discount continues to be amortized to maturity. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In May 2017, FASB issued Accounting Standards Update 2017-09; Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards an entity is required to apply modification accounting under ASC 718. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In May 2017, FASB issued Accounting Standards Update 2017-10; Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU eliminates the current diversity in the determination of the identity of the “customer” in service concession arrangements. The customer will be the “grantor”, rather than any third-party users of the services provided by the operating entity. Further, the operating entity should expense the cost of major maintenance as incurred because the grantor’s infrastructure is not an asset of the operating entity. The amendments in this ASU is the same effective date for Topic 606 which is effective for interim and annual periods beginning after December 15, 2017. We do not expect that adoption of this ASU to have a material effect on our consolidated financial statements.

In July 2017, FASB issued Accounting Standards Update 2017-11; Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Non public Entities and Certain Mandatorily Redeemable Non controlling Interests with a Scope Exception. The guidance is intended to reduce the complexity associated with issuers’ accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, a down round feature (as defined) would no longer cause a freestanding equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2017, FASB issued Accounting Standards Update 2017-12; Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The guidance in this ASU will result in the simplification of certain accounting requirements for hedging activities, resolve hedge accounting practice issues that have arisen under the current guidance, and better align hedge accounting with an organization’s risk management activities. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early application is permitted in any interim period after issuance of the amendments for existing hedging relationships on the date of adoption. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

42In December 2017, FASB issued Accounting Standards Update 2017-15; Codification Improvements to Topic 995, U.S. Steamship Entities: Elimination of Topic 995. The amendments in this ASU affect all entities that have unrecognized deferred taxes related to statutory reserve deposits that were made on or before December 15, 1992. Entities are required to recognize the unrecognized income taxes in accordance with Topic 740. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In December 2017, FASB issued Accounting Standards Update 2017-15; Codification Improvements to Topic 995, U.S. Steamship Entities: Elimination of Topic 995. The amendments in this ASU affect all entities that have unrecognized deferred taxes related to statutory reserve deposits that were made on or before December 15, 1992. Entities are required to recognize the unrecognized income taxes in accordance with Topic 740. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the potential impact of ASU 2017-15 on our financial statements and related disclosures.

In February 2018, FASB issued Accounting Standards Update 2018-01; Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 which clarifies the application of the new leases guidance to land easements and eases adoption efforts for some land easements. This guidance in ASU 2018-01 is effective for annual periods ending after December 15, 2016, including interim period within those fiscal years and interim periods within annual periods beginning after December 15, 2016. An entity that early adopted Topic 842 should apply the amendments in this Update upon issuance. We do not expect that the adoption will have a material impact on our consolidated financial statements.

In February 2018, FASB issued Accounting Standards Update 2018-02; Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in the ASU addresses the accounting issue pertaining to the deferred tax amounts that are “stranded” in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act (the Act). We do not expect that the adoption will have a material impact on our consolidated financial statements. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. We do not expect that the adoption will have a material impact on our consolidated financial statements.

In February 2018, FASB issued Accounting Standards Update 2018-03; Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The technical corrections and improvements intended to clarify certain aspects of the guidance on recognizing and measuring financial assets and liabilities in ASU 2016-01. This includes equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities, fair value option liabilities denominated in foreign currency and transition guidance for equity securities without a readily determinable fair value. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2017. Early application is permitted in any interim period after issuance of the amendments as long as ASU 2016-01 is also adopted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In May 2018, FASB issued Accounting standards Update 2018-06; Codification Improvements to Topic 942 Financial Services – Depository and Lending which supersedes outdated guidance related to the office of the Comptroller of the Currency’s Baking Circular 202, Accounting for Net Deferred Tax Charges (Circular 202). The amendments in this update remove outdated guidance related to Circular 202 and is effective upon issuance of this update. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting which is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In July 2018, the FASB issued ASU 2018-08—Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made which clarifies and improves the scope and accounting guidance around contributions of cash and other assets received and made by not-for-profit organizations and business enterprises. The amendment is effective for fiscal years beginning after June 15, 2018 (serving as resource recipient) and December 15, 2018 (serving as resource provider), including interim periods within that fiscal year. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In July 2018, the FASB issued ASU 2018-09—Codification Improvements which clarifies, corrects errors in, and makes improvements to several Codification Topics, including to:

-	Clarify when excess tax benefits should be recognized for share-based compensation awards

-	Remove inconsistent guidance in income tax accounting for business combinations

-	Clarify the circumstances when derivatives may be offset

-	Clarify the measurement of liability or equity-classified financial instruments when an identical asset is held as an asset

-	Allow portfolios of financial instruments and nonfinancial instruments accounted for as derivatives to use the portfolio exception to valuation

In August 2018, the FASB issued ASU 2018-11—Leases (Topic 842): Targeted Improvements which simplifies transition requirements and, for lessors, provides a practical expedient for the non separation of non-lease components from lease components if certain conditions are met. For entities that have not adopted Topic 842 before the issuance of this Update, the effective date and transition requirements for the amendments in this Update related to separating components of a contract are the same as the effective date and transition requirements in Update 2016-02. The practical expedient may be elected either in the first reporting period following the issuance of this Update or at the original effective date of Topic 842 for that entity. The practical expedient may be applied either retrospectively or prospectively. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-12—Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts which improves financial reporting for insurance companies that issue long-duration contracts, such as life insurance, disability income, long-term care, and annuities. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application of the amendments is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13—Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement which improves the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. Effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14—Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans which improves disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This standard is effective for fiscal years ending after December 15, 2020, for public business entities. Early adoption is permitted for all entities. An entity should apply the amendments in this Update on a retrospective basis to all periods presented. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) which aligns the requirements for capitalizing implementation costs that are incurred in a hosting arrangement that is a service contract or incurred to develop or obtain internal-use software (and hosing arrangements that include an internal –use software license). This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities. The amendments in this Update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In October 2018, FASB issued Accounting Standards Update 2018-16, Derivaties and Hedging (Topic 805): Inclusion of the Secured Overnight Financing Rate (SOFR) Overight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The ASU amends ASC 815 to add the OIS rate based on the SOFR as a fifth US benchmark interest rate. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In October 2018, FASB issued Accounting Standards Update 2018-17: Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This standard expands the application of a specific private company accounting alternative related to VIEs and changes the guidance for determining whether a decision-making fee is a variable interest. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

Interest rate risk

Our exposure to interest rate risk primarily relates to the interest expense incurred on bank borrowings. We have not used derivative financial instruments in our investment portfolio in order to reduce this risk. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates.

Foreign exchange risk

The reporting currency of the Company is US$. To date the majority of the revenues and costs are denominated in MYR, and a significant portion of the assets and liabilities are denominated in MYR. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and MYR. If MYR depreciates against US$, the value of our MYR revenues, earnings and assets as expressed in our US$ financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

Commodity price

Our primary market risk exposure results from the price we receive for our palm oil fruit bunches. We do not currently engage in any commodity hedging activities, although we may do so in the future. Realized commodity pricing for our operation is primarily driven by the prevailing worldwide price for palm oil fruit bunches. Pricing for palm oil fruit bunches has been volatile and unpredictable in recent years, and we expect this volatility to continue in the foreseeable future. The prices we receive for operation depend on many factors outside of our control, including volatility in the differences between product prices at sales points and the applicable commodity index price.`

Malaysian real estate market risk

Our real estate business may be affected by market conditions and economic challenges experienced by the economy as a whole in Malaysia, conditions in the credit markets or by local economic conditions in the markets in which our properties are located. Such conditions may impact our results of operations, financial condition or ability to expand our operations.

Market risk related to marketable securities

We are also exposed to the risk of changes in the value of financial instruments, caused by fluctuations in equity prices related to marketable securities. Changes in these factors could cause fluctuations in earnings and cash flows.

ITEM 4 Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Interim Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Interim Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of ~~July~~January 31, ~~2018~~2019, and during the period prior to and including the ~~date~~ date of this report, were effective to ensure that all information required to be disclosed by us in the reports that we file or ~~submit~~ submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Inherent Limitations

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. 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 and procedures may deteriorate.

Changes in Internal Control over Financial Reporting

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended ~~July~~January 31, ~~2018,~~ 2019, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1 Legal Proceedings

We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

ITEM 1A Risk Factors

Not Applicable.

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.

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ITEM 6 Exhibits

Exhibit No.	Name of Exhibit
2.1	Articles of Exchange (1)
3.1	Amended and Restated Articles of Incorporation (1)
3.2	Amended and Restated Bylaws (2)
4.1	Form of common stock certificate (1)
10.1	Tenancy Agreement, dated ~~August~~October 18, 2014, by and between PGCG Assets Holdings Sdn. Bhd. and Le Apple Boutique Hotel (KLCC) Sdn. Bhd. (3)
10.2	Letter of Appointment dated July 19, 2011, by and between Union Hub Technology Sdn. Bhd. and Weng Kung Wong (4)
10.3	Offer Letter dated March 26, 2013, issued by RHB Bank Berhad with respect to four banking facilities in the aggregate principal amount of up to RM 3,452,000 (4)
10.3	Letter of Offer issued by the Bank of China (Malaysia) Berhad to PGCG Assets Holdings Sdn. Bhd. effective October 31, 2014 (5)
10.4	Offer Letter dated March 26, 2013, issued by RHB Bank Berhad with respect to two banking facilities in the aggregate principal amount of up to RM 1,680,000 (4)
10.4	Offer Letter dated March 26, 2013, issued by RHB Bank Berhad with respect to four banking facilities in the aggregate principal amount of up to RM 3,452,000 (6)
10.5	Offer Letter dated March 26, 2013, issued by RHB Bank Berhad with respect to six banking facilities in the aggregate principal amount of up to RM 4,708,000 (4)
10.5	Offer Letter dated March 26, 2013, issued by RHB Bank Berhad with respect to two banking facilities in the aggregate principal amount of up to RM 1,680,000 (6)
10.2	Letter of Offer issued by Public Islamic Bank Berhad to PGCG Assets Holdings Sdn. Bhd. effective July 10, 2018 (5)
10.6	~~Offer~~ Letter of Appointment dated ~~March~~July 2619, ~~2013~~2011, ~~issued~~ by ~~RHB~~and ~~Bank~~between ~~Berhad~~Union ~~with~~Hub ~~respect~~Technology toSdn. ~~six~~Bhd. ~~banking~~and ~~facilities~~Weng inKung ~~the~~Wong ~~aggregate principal amount of up to RM 4,708,000~~ (6)
14	Code of Business Conduct and Ethics (7)
10.7	Escrow Agreement dated July 7, 2014, by and among Chen-Drake Law Group, P.C. Prime Global Capital Group Incorporated, and Peijin Wu Hoppe (7)
21	List of Subsidiaries*
14	Code of Business Conduct and Ethics (8)
31.1	Certification of Chief Executive Officer and Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
21	List of Subsidiaries (9)
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.*
31.1	Certification of Certification of Chief Executive Officer and Interim Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
99.1	Charter to Compensation Committee (8)
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.*
99.2	Charter to Audit Committee (8)
99.1	Charter to Compensation Committee (10)
99.3	Charter to Corporate Governance Committee (8)
99.2	Charter to Audit Committee (10)
99.3	Charter to Corporate Governance Committee (10)
99.4	Audit Committee Pre-Approval Procedures (7)
101.INS	XBRL Instance Document*
101.SCH	XBRL Schema Document*
101.CAL	XBRL Calculation Linkbase Document*
101.DEF	XBRL Definition Linkbase Document*
101.LAB	XBRL Label Linkbase Document*
101.PRE	XBRL Presentation Linkbase Document*

* Filed herewith._________________________

* Filed herewith

(1)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Securities and Exchange on February 22, 2011.

(2)

Incorporated by reference from Exhibit 2 to Preliminary Information Statement on Schedule 14C filed with the Securities and Exchange Commission on December 23, 2010.

(3)

Incorporated by reference From Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange on August 18, 2014.

(4) Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on ~~July~~April 191, ~~2011~~2013.

(5) Incorporated by ~~referenced~~reference from our ~~Current~~Annual Report on Form 810-K filed with the Securities and Exchange Commission on ~~November~~January 329, ~~2014~~2019.

(6) Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on ~~April~~July 119, ~~2013~~2011.

(7) Incorporated by reference from our ~~Current~~Annual Report on Form 810-K filed with the Securities and Exchange Commission on ~~February~~January 229, ~~2012~~2016.

(8) Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on ~~April~~February 272, 2012.

46(9) Incorporated by reference from Exhibit 21.1 to the Company’s Form 10-K filed with the Securities and Exchange Commission on January 30, 2018.

(10)

Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 27, 2012.

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.

	PRIME GLOBAL CAPITAL GROUP INCORPORATED
	By:	/s/Weng Kung Wong
		Weng Kung Wong
		Chief Executive Officer
		Chief Executive Officer, Interim Chief Financial Officer and Interim Secretary
Date: September 7, 2018
Date: March 14, 2019

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