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

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

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§(?232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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. ☐

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

As of ~~November 10, 2017, 19,030,915~~May 15, 2018, 22,236,579 shares of the Company’s Common Stock, $0.001 par value per share, were issued and outstanding.

	September 30,						March 31,			December 31,
	2017 (Unaudited)			December 31, 2016			2018			2017
							(unaudited)
ASSETS
Cash and cash equivalent	$	3,030,468		$	768,501
Cash							$	2,265,145		$	2,498,194
Restricted cash		9,596			9,163			10,205			9,841
Short-term investments								-			384,237
Notes receivable		279,493			107,995			15,922			147,547
Loans receivable, net of allowance for loan losses of $54,821,187 and $51,708,062 for September 30, 2017 and December 31, 2016, respectively		3,445,533			6,814,919
Investment in direct financing lease, net of allowance for direct financing lease losses of $2,615,635 and $2,441,663 for September 30, 2017 and December 31, 2016, respectively		450,795			871,159
Loans receivable, net of allowance for loan losses of $37,594,756 and $36,613,393 at March 31, 2018 and December 31, 2017, respectively								4,917,923			4,064,921
Investment in direct financing lease, net of allowance for direct financing lease losses of $2,628,176 and $2,537,008 at March 31, 2018 and December 31, 2017, respectively								-			-
Interest receivable		77,329			11,408			58,406			35,440
Due from a related party		-			469,418
Property and equipment, net		15,727			19,969			14,712			16,046
Guarantee paid on behalf of guarantee service customers, net of allowance for repayment on behalf of guarantee service customers losses of $12,089,724 and $11,543,868 for September 30, 2017 and December 31, 2016, respectively		54			98,887
Guarantee paid on behalf of a related party, net of allowance for repayment on behalf of a related party losses of $102,270 and $98,000 for September 30, 2017 and December 31, 2016, respectively		102,270			98,000
Guarantee paid on behalf of guarantee service customers, net of allowance for repayment on behalf of guarantee service customers losses of $1,974,740 and $2,073,282 at March 31, 2018 and December 31, 2017, respectively								-			-
Guarantee paid on behalf of a related party, net of allowance for repayment on behalf of a related party losses of $nil and $nil at March 31, 2018 and December 31, 2017, respectively								-			-
Other assets		302,748			301,324			27,728			9,058
Total Assets	$	7,714,013		$	9,570,743		$	7,310,041		$	7,165,284

LIABILITIES AND SHAREHOLDERS’ (DEFICIT) /EQUITY
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Liabilities
Deposits payable	$	781,379		$	748,765		$	270,670		$	261,281
Unearned income from financial guarantee services and finance lease services		1,878			20,819
Accrual for financial guarantee services		7,058,187			6,005,608			9,884,388			9,270,882
Other current liabilities		324,180			273,447			94,725			166,440
Subscription for private placements								524,974			699,974
Due to a related party								382,123			398,073
Income tax payable		240,739			169,226			341,862			330,095
Deferred tax liability		81,901			139,947
Other noncurrent liabilities								261,540			1,311,000
Total Liabilities		8,488,264			7,357,812			11,760,282			12,437,745

Shareholders' (Deficit)/ Equity
Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at September 30, 2017 and December 31, 2016, respectively; nil and nil shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively)	$	-		$	-
Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at September 30, 2017 and December 31, 2016, respectively; nil and nil shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively)		-			-
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 19,030,915 and 16,637,679 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively)		19,030			16,638
Shareholders’ Deficit
Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at March 31, 2018 and December 31, 2017, respectively; nil and nil shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively)							$	-		$	-
Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at March 31, 2018 and December 31, 2017, respectively; nil and nil shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively)								-			-
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 20,013,415 and 19,250,915 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively)								20,013			19,251
Subscription receivable		(1,062	)		(1,062	)		(1,062	)		(1,062	)
Additional paid-in capital		68,664,627			63,124,040			68,430,044			67,058,807
Statutory reserve		5,442,150			5,442,150			5,442,150			5,442,150
Due from a non-controlling shareholder		(1,051,857	)		(1,007,953	)		(1,114,525	)		(1,075,864	)
Accumulated deficit		(78,764,900	)		(70,234,656	)		(81,920,294	)		(81,534,396	)
Accumulated other comprehensive income		4,917,761			4,873,774			4,693,433			4,818,653
Total Shareholders’ (Deficit)/ Equity		(774,251	)		2,212,931
Total Liabilities and Shareholders’ (Deficit)/Equity	$	7,714,013		$	9,570,743
Total Shareholders’ Deficit								(4,450,241	)		(5,272,461	)
Total Liabilities and Shareholders’ Deficit							$	7,310,041		$	7,165,284

													For the Three Months Ended March 31,
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						2018			2017
	2017 (Unaudited)			2016 (Unaudited)			2017 (Unaudited)			2016 (Unaudited)			(unaudited)			(unaudited) (restated)
Interest income
Interests and fees on loans and direct financing lease	$	128,460		$	722,117		$	290,566		$	1,203,663		$	96,995		$	106,674
Interests on deposits with banks		4,042			263			4,728			3,526			3,777			102
Total interest and fee income		132,502			722,380			295,294			1,207,189			100,772			106,776

Interest expense
Interest expense on short-term bank loans		-			-			-			(30,057	)
Net interest income		132,502			722,380			295,294			1,177,132			100,772			106,776

Reversal of provision/(Provision) for loan losses		452,786			226,694			(2,420,698	)		133,177
(Provision)/Reversal of provision for direct financing lease losses		(18,616	)		242,180			(66,113	)		242,180
Net interest income/(loss) after provision for loan losses and financing lease losses		566,672			1,191,254			(2,191,517	)		1,552,489
Reversal of provision (Provision) for loan losses														330,282			(782,882	)
Reversal of provision for direct financing lease losses														-			36,289
Net interest income (loss) after provision for loan losses and financing lease losses														431,054			(639,817	)

Commissions and fees on financial guarantee services		-			9,117			2,843			26,308			-			2,843
(Provision)/Reversal of provision for financial guarantee services		(1,142,807	)		(599,808	)		(830,140	)		385,352
Commission and fee (loss)/income on guarantee services, net		(1,142,807	)		(590,691	)		(827,297	)		411,660
(Provision) Reversal of provision for financial guarantee services														(104,391	)		7,207
Commission and fee (loss) income on guarantee services, net														(104,391	)		10,050

Net (Loss)/Revenue		(576,135	)		600,563			(3,018,814	)		1,964,149

Non-interest income
Other non-interest income		-			-			-			48,945
Total non-interest income		-			-			-			48,945
Net Revenue (Loss)														326,663			(629,767	)

Non-interest expense
Salaries and employee surcharge		(180,461	)		(120,130	)		(707,012	)		(548,978	)		(153,792	)		(379,923	)
Rental expenses		(13,975	)		(28,132	)		(41,242	)		(64,850	)		(18,589	)		(13,641	)
Business taxes and surcharge		(1,376	)		9,617			(3,221	)		(21,798	)		-			(1,845	)
Transaction costs relating to acquisition		(1,356,285	)		-			(2,136,285	)		-
Litigation and settlement cost for the shareholders’ lawsuit		-			-			(1,838,500	)		(690,000	)
Changes in fair value of noncurrent liabilities														(147,540	)		57,000
Other operating expenses		(387,003	)		(1,086,092	)		(784,815	)		(1,893,027	)		(392,205	)		(259,806	)
Total non-interest expense		(1,939,100	)		(1,224,737	)		(5,511,075	)		(3,218,653	)		(712,126	)		(598,215	)

Foreign exchange loss		(57	)		(271	)		(355	)		(557	)
Foreign exchange (loss) gain														(435	)		(95	)

Loss Before Income Taxes		(2,515,292	)		(624,445	)		(8,530,244	)		(1,206,116	)		(385,898	)		(1,228,077	)
Income tax expense		-			-			-			-			-			-
Net Loss	$	(2,515,292	)	$	(624,445	)	$	(8,530,244	)	$	(1,206,116	)	$	(385,898	)	$	(1,228,077	)

Loss per Share- Basic and Diluted		(0.139	)		(0.039	)		(0.491	)		(0.086	)		(0.019	)		(0.074	)

Weighted Average Shares Outstanding-Basic and Diluted		18,092,369			15,889,853			17,371,183			14,026,815			19,834,665			16,697,532

Net Loss		(2,515,292	)		(624,445	)		(8,530,244	)		(1,206,116	)	$	(385,898	)	$	(1,228,077	)
Other comprehensive income
Other comprehensive loss
Foreign currency translation adjustment		14,699			260,803			43,987			205,546			(125,220	)		21,615
Comprehensive Loss	$	(2,500,593	)	$	(363,642	)	$	(8,486,257	)	$	(1,000,570	)	$	(511,118	)	$	(1,206,462	)

China Commercial Credit, Inc. (“CCC” or “the Company”) is a holding company that was incorporated under the laws of the State of Delaware on December 19, 2011.

On March 22, 2018, the Company set up HC High Summit Holding Limited (“HCHS”), a wholly owned subsidiary, in British Virgin Island (“BVI”). HCHS is authorized to issue 50,000 shares, at par value of $1.00 per share.

On September 26, 2012, the Company through its indirectly wholly owned subsidiary which was incorporated in China, Wujiang Luxiang Information Technology Consulting Co. Ltd. (“WFOE”), ), entered into a series of VIE Agreements with Wujiang Luxiang Rural Microcredit Co., Ltd (“Wujiang Luxiang”) Wujiang Luxiang and the Wujiang Luxiang Shareholders. The purpose of the VIE Agreements is solely to give WFOE the exclusive control over Wujiang Luxiang’s management and operations.

Pursuant to the Exclusive Business Cooperation Agreement between Wujiang Luxiang and WFOE, WFOE provides Wujiang Luxiang with technical support, consulting services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Wujiang Luxiang grants an irrevocable and exclusive option to WFOE to purchase from Wujiang Luxiang any or all of its assets at the lowest purchase price permitted under PRC laws. For services rendered to Wujiang Luxiang by WFOE under the Agreement, the service fee Wujiang Luxiang is obligated to pay shall be calculated based on the time of services rendered multiplied by the corresponding rate, which is approximately equal to the net income of Wujiang Luxiang.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by WFOE with 30-day prior notice. Wujiang Luxiang does not have the right to terminate the agreement unilaterally. WFOE may unilaterally extend the term of this agreement with prior written notice.

Under the Share Pledge Agreement between the Wujiang Luxiang Shareholders and WFOE, the 12 Wujiang Luxiang Shareholders pledged all of their equity interests in Wujiang Luxiang to WFOE to guarantee the performance of Wujiang Luxiang’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in the event that Wujiang Luxiang or its shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The Wujiang Luxiang Shareholders also agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws. The Wujiang Luxiang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest.

Under the Exclusive Option Agreement, the Wujiang Luxiang Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Wujiang Luxiang. The option price is equal to the capital paid in by the Wujiang Luxiang Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Under the Power of Attorney, the Wujiang Luxiang Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Wujiang Luxiang. The Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution, so long as the Wujiang Shareholder is a shareholder of the Company.

To ensure Wujiang Luxiang promptly provides all of the information that WFOE and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Wujiang Luxiang and the Company.

Under the Timely Reporting Agreement, Wujiang Luxiang agrees that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

The ~~unaudited condensed interim~~accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

The following includes conditions ~~described below raises~~give rise to substantial doubt about the Company’s ability to continue as a going concern within one year from the financial statements issuance date ~~of this filing.~~and management’s plans to mitigate these adverse conditions:

The Company had an accumulated deficit of US$~~78,764,900~~81,920,294 as of ~~September 30, 2017.~~March 31, 2018. In addition, the Company had a negative net asset of US$~~774,251~~4,450,241 as of ~~September 30, 2017.~~March 31, 2018. As of ~~September 30, 2017,~~March 31, 2018, the Company had cash ~~and cash equivalents~~ of US$~~3,030,468,~~2,265,145 and total ~~short-term borrowings~~liabilities other than accrual for financial guarantee services of ~~nil.~~$1,875,894. Caused by the limited funds, the management assessed that the Company was not able to keep the size of lending business within one year from the ~~filing of Form 10-Q.~~financial statement issuance date.

The Company is actively seeking other strategic ~~investors~~partners with experience in lending business. ~~If necessary, the shareholders of Wujiang Luxiang will contribute more capital into Wujiang Luxiang.~~

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, the Company incurred operating loss of US$~~8,530,244.~~385,898. Affected by the reduction of lending business and guarantee business, ~~and increased loss loans,~~ the management was in the opinion that recurring operating losses would be made continue within one year from the financial statements issuance ~~of the filing.~~date.

The Company continues to use its best effort to improve collection of loan receivable and interest receivable. Management engaged ~~two~~one PRC law ~~firms~~firm to represent the Company in the legal proceedings against the borrowers and their counter guarantors.

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, the Company incurred negative operating cash flow of US$~~1,248,629.~~608,646. Affected by significant balance of charged-off interest receivable, the management assessed the Company would continue to have negative operating cash flow within one year from the financial statements issuance date.

Since January 1, 2018, the Company is making efforts to introduce new businesses to improve the operating cash flow of the ~~filing.~~Company.

~~The Company continues to reduce the redundant headcount and entered into a new office lease with lower rent commitment since January 1, 2017 to improve operating cash flow.~~

Most loan customers are from textile industry which has been facing downward pressure. Additionally adversely affected by emergence of internet finance entities, the Company was facing fierce competition. Considering the high risks from both customers and competitors, management assessed the Company would further reduced the loan business without strong financial support.

~~Considering the above factors,~~The Company is actively seeking other strategic partners with experience in lending business.

The Company has been actively seeking strategic investors with experience in lending business as well as financial investors. Management had invested in the Company ~~on August 9,~~during the year ended December 31, 2017 ~~entered into Certain Share Exchange Agreement (“Exchange Agreement”) with~~and will continue to invest in the ~~parent company~~Company during the year ended December 31, 2018, if necessary.

The Company plans to continue to seek financial as well as strategic investors for additional financing.

On April 11, 2018, the Company closed a private placement to two individual investors in China for a gross proceeds of ~~Sorghum Investment Holdings Limited (“Sorghum”). Pursuant~~US$500,000 at a per share price of US$0.77. The net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose.

Although we have continued to use our best effort to improve our collection of loan receivable and interest receivable by engaging local law firms in China, it has been very difficult for us to collect from the ~~terms~~borrowers. As such, the Company has been actively seeking strategic acquisition of business or assets to improve our liquidity. Since the termination of the Exchange Agreement ~~CCCR will~~with Sorghum in last December, we have evaluated a few potential acquisition targets. As of now, the Company plans to acquire ~~100%~~certain second-hand luxury cars dealership business assets or other appropriate business deemed to be appropriate by the board of directors.

On April 28, 2018, the Company entered into certain securities purchase agreements (the “Initial SPAs”) with certain “non-U.S. Persons” (the “Purchasers”) as defined in Regulation S of the ~~outstanding~~Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company agreed to sell 1,336,314 shares ~~of Sorghum through issuance of 152,587,000~~ of its common ~~shares. This transaction~~stock (“Common Stock”), par value $0.001 per share, at a per share purchase price of $0.78. The net proceeds to the Company from the Initial SPAs Offering will be ~~accounted~~approximately $1,042,324. The Initial SPAs are part of the subscription the Company received in a private placement offering (the “Offering”) of its Common Stock at a per share purchase price of $0.78 up to an aggregate gross proceeds of three million dollars ($3,000,000) to “non-U.S. Persons” as defined in Regulation S. The Offering shall be on a rolling basis until June 30, 2018 unless the Company extends for an additional 30 days at its sole discretion. The net proceeds of the Offering shall be used by the Company in connection with the Company’s planned operation (the “Planned Business”) of certain used luxurious car leasing or other related business as approved by the board of directors of the Company. On May 10, 2018, the Company issued the 1,336,314 shares of Common Stock to the Purchasers since all the closing conditions of the Initial SPAs have been satisfied when the Company obtained required license to carry out the used luscious car leasing business.

Though management had plans to mitigate the conditions or events that raise substantial doubt, there is substantial doubt about the Company’s ability to continue as a “reverse acquisition” since, immediately following completion of the transaction, the shareholders of Sorghum immediately prior to the transaction will effectuate control of the Company, through its 87.9% ownership interest in the post-merger entity.

~~While management believes that the measures in the liquidity plan will be adequate to satisfy its liquidity and cash flow requirements for the twelve months after~~going concern within one year from the financial statements ~~are available to be issued,~~issuance date, as there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the ~~liquidity~~ plan will have a material adverse effect on the Company’s business, results of operations and financial position, and may materially adversely affect its ability to continue as a going concern.

The unaudited condensed interim consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

The unaudited condensed interim financial information as of ~~September 30, 2017~~March 31, 2018 and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~ have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, ~~2016~~2017 filed with the SEC on April ~~6, 2017.~~16, 2018.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed financial position as of ~~September 30, 2017,~~March 31, 2018, its unaudited condensed results of operations for the three ~~and nine~~ months ended ~~September 30~~March 31, 2018 and ~~2016,~~2017, and its unaudited condensed cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

All significant inter-company accounts and transactions have been eliminated in consolidation.

Adoption of ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”)

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~Effective January 1, 2018, the Company adopted Topic 606 using modified retrospective approach applied its contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are accounted for and presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with ASC Topic 605 “Revenue Recognition”.

We recognize revenue when control of the promised services is transferred to our traders and offering agents. Revenue is measured at the transaction price which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised services to our loan customers. During the three months ended March 31, 2018, the Company did not generate service fees from direct loan customers.

Pursuant to ASC606-10-15-2, the interest income generated by the Company which is in industry of national commercial bank and commission generated from financial guarantee services are scoped out of ASC606.

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days. Additionally, any previously accrued but uncollected interest is reversed. Subsequent recognition of income occurs only to the extent payment is received, subject to management’s assessment of the collectability of the remaining interest and principal. Loans are generally restored to an accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt and past due interest is recognized at that time.

~~The~~During the three months ended March 31, 2018 and 2017, no interest was reversed ~~due to~~as interests on aged loan receivables were reversed before the ~~above reason was US$2,604,172 and US$2,604,172 as of September 30, 2017 and December 31, 2016, respectively.~~presented periods.

Certain items in the financial statements of comparative period have been reclassified to conform to the financial statements for the current period.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) the allowance for loan losses; (ii) estimates of losses on unexpired loan contracts and guarantee service contracts; (iii) accrued expenses; (iv) useful lives of long-lived assets; (v) the impairment of long-lived assets; (vi) the valuation allowance of deferred tax assets; and (vii) contingencies and litigation.

The reporting currency of the Company is United States Dollars (“US$”), which is also the Company’s functional currency. The PRC subsidiaries and VIEs maintain their books and records in its local currency, the Renminbi Yuan (“RMB”), which is their functional currencies as being the primary currency of the economic environment in which these entities operate.

For financial reporting purposes, the financial statements of the Company prepared using RMB, are translated into the Company’s reporting currency, ~~United States Dollars,~~US$, at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange ~~rates.~~rates, except for the change in accumulated deficit during the year which is the result of the income statement translation process. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders’ ~~equity.~~deficit.

Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the ~~condensed~~ consolidated statements of comprehensive loss.

Financial guarantee service contracts ~~provides~~provide guarantee which protects the holder of a debt obligation against default. Pursuant to such guarantee, the Company makes payments if the obligor responsible for making payments fails to do so as scheduled.

The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represent the Company’s maximum exposure to credit loss in its guarantee business.

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. Financial instruments representing credit risk are as follows:

A provision for possible loss to be absorbed by the Company for the financial guarantee it provides is recorded as an accrued liability when the guarantees are made and recorded as “Accrual for financial guarantee services” on the ~~condensed~~ consolidated balance sheets. This liability represents probable losses and is increased or decreased by accruing a “(Provision)/ Reversal of provision for financial guarantee services” against the income of commissions and fees on guarantee services.

Based on the past experience and expected customer default status of financial guarantee services, the Company estimates the probable loss for immature financial guarantee services to be approximately 62% and 55% of contract amount as of September 30, 2017 and December 31, 2016, respectively, for possible credit risk of its guarantees. In addition, the Company accrued specific provisions for repayment on behalf of guarantee customers who defaulted on their loans. The Company reviews the provision on a quarterly basis. The allowance are detailed in following table:

	September 30, 2017 (Unaudited)		December 31, 2016		March 31, 2018		December 31, 2017
Allowance for immature financial guarantee services	$	7,058,187	$	6,005,608	$	9,884,388	$	9,270,882

Allowance for repayment on behalf of guarantee service customers losses		12,089,724		11,543,868		1,974,740		2,073,282
Allowance for repayment on behalf of a related party losses		102,270		98,000
Total allowance for repayment on behalf of guarantee customers losses	$	12,191,994	$	11,641,868	$	1,974,740	$	2,073,282

The Company recorded a provision of US$~~1,142,807~~104,391 and a reversal of provision US$~~599,808~~7,207 for the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and recorded a provision of US$830,140 and reversed a provision of US$385,352 for the nine months ended September 30, 2017 and 2016,~~ respectively. As the Company collected from guarantee customers for payments on behalf of in the amount of US$44,075 and US$1,825,730, for the nine month ended September 30, 2017 and 2016, respectively. Among the collection, US$44,075 and US$1,825,730 were accrued of 100% allowance as of pervious year end.

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the management charged off specific provision for ~~three~~31 and ~~two~~31 customers in the amount of US$~~164,220~~10,815,328 and US$~~142,966,~~10,440,156, considering remote collectability from the customers.

Non-interest expenses primarily consist of ~~salary~~changes in fair value of other noncurrent liabilities, salaries and benefits for employees, traveling cost, entertainment expenses, depreciation of equipment, office rental expenses, ~~professional service fee,~~legal and consulting expenses, office supplies, etc.

Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes ~~using~~under the asset and liability ~~approach.~~method. Under this method, deferred ~~income taxes~~tax assets and liabilities are ~~recognized for tax consequences in future years of~~determined based on differences between the ~~tax bases~~financial statement carrying amounts of existing assets and liabilities and their ~~reported amounts in the financial statements at each year-end and~~ tax ~~loss carry forwards.~~bases. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.

Comprehensive loss includes net loss and other comprehensive foreign currency ~~adjustments.~~adjustments income. Comprehensive loss is reported in the statements of operations and comprehensive loss.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

We have various share-based awards pursuant to which the employees, consultants and directors of our company are granted share-based compensations.

Share-based awards granted to the Company’s employees are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.

~~At each date~~The Company accounts for share-based compensation issued to nonemployees in accordance with the provisions of ~~measurement,~~ASC 505-50 “Equity-Based Payments to Non-Employees” which codified SFAS 123 and the ~~Company reviews internal and external sources~~Emerging Issues Task Force consensus in Issue No. 9618, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services”. Measurement of ~~information to assist in the estimation of various attributes to determine~~share based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the ~~share-based awards granted by~~goods or services received; or (b) the ~~Company, including but not limited to the~~equity instruments issued. The fair value of the ~~underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any~~share based payment transaction should be determined at the earlier of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period.performance commitment date or performance completion date.

The Company leases its principal office under a lease agreement that qualifies as an operating lease. The Company records the rental under the lease agreement in the operating expense when incurred.

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 20, “Loss Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

The following financial statement amounts and balances of the VIE were included in the ~~unaudited condensed interim~~audited consolidated financial statements as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 and for the three ~~and nine~~ months ended ~~September 30, 2017, 2017~~March 31, 2018 and ~~2016:~~2017:

Credit risk is one of the most significant risks for the Company’s business. Credit risk exposures arise principally in lending activities, finance lease and financial guarantee activities which is an off-balance sheet financial instrument.

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. To minimize credit risk, the Company requires collateral in the form of rights to cash, securities or property and equipment.

The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management.

In measuring the credit risk of lending loans to corporate customers, the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its likely future development. For individual customers, the Company uses standard approval procedures to manage credit risk for personal loans.

The off-balance sheet commitments arising from guarantee activities carry similar credit risk to loans and the Company takes a similar approach on risk management.

Off-balance sheet commitments with credit exposures are also assessed and categorized with reference to the Guideline and include additional amounts on a specific basis.

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the Company held cash ~~and cash equivalent~~ of US$~~3,030,468~~2,265,145 and US$~~768,501,~~2,498,194, respectively, that is uninsured by the government authority.

To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings.

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

No customer accounted for more than 10% of total loan balance as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016.~~2017.

The interest rates on loan issued ranged between 9.6%~ 19.44% and 9.6%~ 19.44% % for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

							March 31, 2018			December 31, 2017
	September 30, 2017 (Unaudited)			December 31, 2016			(unaudited)

Business loans	$	36,783,453		$	37,786,657		$	22,716,745		$	21,267,838
Personal loans		21,483,267			20,736,324			19,795,934			19,410,476
Total Loans receivable		58,266,720			58,522,981			42,512,679			40,678,314
Allowance for loan losses
Collectively assessed		(19,835	)		(50,481,240	)		(49,676	)		(38,731	)
Individually assessed		(54,801,352	)		(1,226,822	)		(37,545,080	)		(36,574,662	)
Allowance for loan losses		(54,821,187	)		(51,708,062	)		(37,594,756	)		(36,613,393	)
Loans receivable, net	$	3,445,533		$	6,814,919		$	4,917,923		$	4,064,921

The Company originates loans to customers located primarily in Wujiang City, Jiangsu Province. This geographic concentration of credit exposes the Company to a higher degree of risk associated with this economic region.

All loans are short-term loans that the Company has made to either business or individual customers. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the Company had 6737 and 7037 business loan customers, and 4033 and 4134 personal loan customers, respectively. Most loans are either guaranteed by a third party whose financial strength is assessed by the Company to be sufficient or secured by collateral. Allowance on loan losses are estimated loan by loan on a quarterly basis based on an assessment of specific evidence indicating doubtful collection, historical experience, loan balance aging and prevailing economic conditions. No allowance is made for loans subsequently received.

For the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ a reversal of provision of US$~~452,786~~330,282 and a provision of US$~~226,694~~782,882 were charged to the unaudited condensed consolidated statements of operation, respectively. For the nine months ended September 30, 2017 and 2016, a provision of US$2,420,698 and a reversal of provision of US$133,177 were charged to the condensed consolidated statements of operation, respectively. Write-offs of $1,579,009 against allowances have occurred for the three and nine months ended September 30, 2017. No write-offs against allowances have occurred for the three ~~and nine~~ months ended ~~September 30, 2016, respectively.~~March 31, 2018 and 2017.

The following table presents nonaccrual loans with aging over 90 days by classes of loan portfolio as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively:

					March 31, 2018		December 31, 2017
	September 30, 2017 (Unaudited)		December 31, 2016		(unaudited)

Business loans	$	34,799,952	$	35,885,947	$	17,749,146	$	17,394,729
Personal loans		21,483,267		20,693,126		19,795,934		19,410,476
	$	56,283,219	$	56,579,073	$	37,545,080	$	36,805,205

~~The following table represents the aging of loans as of September 30, 2017 by type of loan:~~

~~The following table represents the aging of loans as of December 31, 2016 by type of loan:~~

The following table represents the aging of loans as of March 31, 2018 by type of loan:

The following table represents the aging of loans as of December 31, 2017 by type of loan:

The following table summarizes the Company’s loan portfolio by credit quality indicator as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively:

The following table summarizes the Company’s loan portfolio by collateral as of ~~September 30, 2017:~~March 31, 2018:

The following table summarizes the Company’s loan portfolio by collateral as of December 31, ~~2016:~~2017:

A guaranteed loan is a loan guaranteed by a third party who is usually a corporation or high net worth individual. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, guaranteed loans make up ~~95.0%~~98.0% and ~~94.8%~~97.9% of our direct loan portfolio, respectively.

A collateral backed loan is a loan in which the borrower puts up an asset under their ownership, possession or control, as collateral for the loan. An asset usually is land use rights, inventory, equipment or buildings. The loan is secured against the collateral and we do not take physical possession of the collateral at the time the loan is made. We will verify ownership of the collateral and then register the collateral with the appropriate government agencies to complete the secured transaction. In the event that the borrower defaults, we can then take possession of the collateral asset and sell it to recover the outstanding balance owed. If the sale proceed of the collateral asset is not sufficient to pay off the debt, we will file a lawsuit against the borrower and seek payment for the remaining balance.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance is calculated at portfolio-level since our loans portfolio is typically of smaller balance homogenous loans and is collectively evaluated for impairment. Additionally, the management also reviewed the portfolio on a loan by loan basis and individually evaluated for impairment if any.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into two portfolio segments: Corporate and Personal. The allowance consists of the combination of a quantitative assessment component based on statistical models, a retrospective evaluation of actual loss information to loss forecasts, value of collaterals and could include a qualitative component based on management judgment.

In estimating the probable loss of the loan portfolio, the Company also considers qualitative factors such as current economic conditions and/or events in specific industries and geographical areas, including unemployment levels, trends in real estate values, peer comparisons, and other pertinent factors such as regulatory guidance. Finally, as appropriate, the Company also considers individual borrower circumstances and the condition and fair value of the loan collateral, if any.

While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance.

The following tables present the activity in the allowance for loan losses and related recorded investment in loans receivable by classes of the loans individually and collectively evaluated for impairment as of and for the three months ended ~~September 30, 2017~~March 31, 2018 and ~~2016:~~2017:

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)			Business Loans			Personal Loans			Total
For the three months ended September 30, 2017
										(unaudited)			(unaudited)			(unaudited)
For the three months ended March 31, 2018
Beginning balance	$	35,315,516		$	20,584,442		$	55,899,958		$	17,433,460		$	19,179,933		$	36,613,393
Charged off		(1,579,009	)		-			(1,579,009	)		-			-			-
Recoveries		(367,925	)		(113,862	)		(481,787	)		(267,371	)		(72,348	)		(339,719	)
Provisions		-			-			-			9,437			-			9,437
Foreign exchange loss		605,711			376,314			982,025			623,296			688,349			1,311,645
Ending balance		33,974,293			20,846,894			54,821,187			17,798,822			19,795,934			37,594,756
Ending balance: individually evaluated for impairment		33,954,458			20,846,894			54,801,352			17,749,146			19,795,934			37,545,080
Ending balance: collectively evaluated for impairment	$	19,835		$	-		$	19,835		$	49,676		$	-		$	49,676

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)			Business Loans			Personal Loans		Total
For the three months ended September 30, 2016
For the three months ended March 31, 2017
Beginning balance	$	34,326,727		$	20,161,476		$	54,488,203		$	32,356,953		$	19,351,109	$	51,708,062
Charge-offs											-			-		-
Recoveries		(50,612	)		(121,435	)		(172,047	)		(57,337	)		-		(57,337	)
Provisions		(360	)		-			(360	)		143,468			696,751		840,219
Foreign exchange gain		(133,237	)		(78,256	)		(211,493	)
Foreign exchange loss											251,720			150,351		402,071
Ending balance		34,142,518			19,961,785			54,104,303			32,694,804			20,198,211		52,893,015
Ending balance: individually evaluated for impairment		-			-			-			1,120,277			1,969,191		3,089,468
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303		$	31,574,527		$	18,229,020	$	49,803,547

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful and loss within the Company’s internal risk rating system as of ~~September 30, 2017:~~March 31, 2018:

													Pass		Special Mention		Substandard		Doubtful		Loss		Total
	Pass (Unaudited)		Special Mention (Unaudited)		Substandard (Unaudited)		Doubtful (Unaudited)		Loss (Unaudited)		Total (Unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)

Business loans	$	1,983,501	$	-	$	-	$	1,669,953	$	33,129,999	$	36,783,453	$	4,967,599	$	-	$	-	$	-	$	17,749,146	$	22,716,745
Personal loans		-		-		-		1,080,406		20,402,861		21,483,267		-		-		-		-		19,795,934		19,795,934
	$	1,983,501	$	-	$	-	$	2,750,359	$	53,532,860	$	58,266,720	$	4,967,599	$	-	$	-	$	-	$	37,545,080	$	42,512,679

As of ~~September 30, 2017, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, guarantee paid on behalf of guarantee service customers represents payment made by the Company to banks on behalf of ~~thirty-two~~six of its third-party guarantee service customers who defaulted on their loan repayments to the banks. ~~Guarantee paid on behalf of a related party represents payment made by the Company to banks on behalf of one and one of its related party customers.~~ Management performs an evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors.

As of March 31, 2018 and December 31, 2017, the Company charged off allowance for repayment on behalf of customers for 31 and 31 customers in the amount of US$10,815,328 and US$10,440,156, considering remote collectability from the customers. The guarantee paid on behalf of customers were impaired when, based on current information and events, it is probable that the Company would be unable to collect the outstanding balance when due according to the contractual terms of guarantee agreements. Factors considered by management in determining impairment include impairment status, payment ability and intention of counter-guarantee and the probability of collecting scheduled principal and interest payments.

On September 25, 2014, PFL entered into a finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.73 million, with a lease term of 2 years. The lease bears an interest rate of 10.36% per annum. ~~As of September 30, 2017, the fiancé lease agreement expired with an outstanding investment in finance lease of $976,724. The Company recorded an allowance of $751,326 on the outstanding investment.~~

On October 13, 2014, PFL entered into another finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.88 million, with a lease term of 3 years. The lease bears an interest rate of 11.11% per annum. ~~On October 13, 2017, the fiancé~~

Future minimum lease ~~agreement expired with an outstanding investment in~~receipts under non-cancellable finance lease ~~of $2,089,706. The Company recorded an allowance of $1,864,309 on the outstanding investment.~~arrangements are as follows:

Following is a summary of the components of the Company’s net investment in direct financing leases as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

The Company’s property and equipment used to conduct day-to-day business are recorded at cost less accumulated depreciation. Depreciation expenses are calculated using straight-line method over the estimated useful life with 5% salvage value below:

								Useful Life (years)	March 31, 2018			December 31, 2017
	Useful Life (years)	September 30, 2017 (Unaudited)			December 31, 2016				(unaudited)
Furniture and fixtures	5	$	21,715		$	20,808		5	$	23,009		$	22,210
Electronic equipment	3		137,033			131,314		3		146,964			141,866
Leasehold improvement	3		166,617			159,662
Less: accumulated depreciation			(309,638	)		(291,815	)			(155,261	)		(148,030	)
Property and equipment, net		$	15,727		$	19,969			$	14,712		$	16,046

Depreciation expense totaled US$~~1,700~~1,889 and US$~~11,053~~1,646 for the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016, respectively. Depreciation expense totaled US$4,999 and US$43,062 for the nine months ended September 30, 2017 and 2016,~~ respectively.

Deposits payable are security deposits required from customers in order to obtain loans and guarantees from the Company. The deposits are refundable to the customers when the customers fulfill their obligations under loan and guarantee contracts.

Other current liabilities as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 consisted of:

							March 31, 2018			December 31, 2017
	September 30, 2017 (Unaudited)			December 31, 2016			(unaudited)
Accrued payroll	$	40,470		$	37,575		$	65,927		$	64,402
Accrued office rental expenses		28,550			34,558			28,659			36,887
Other tax recoverable		(43,353	)		(44,007	)		(41,808	)		(35,760	)
Accrued provision for cash settlement against legal proceedings		245,000			225,000
Other payable		53,513			20,321			41,947			100,911
	$	324,180		$	273,447		$	94,725		$	166,440

On November 22, 2016, ~~we filed~~the Company entered into a ~~stipulation~~Stipulation and ~~agreement~~Agreement of Settlement (the “Stipulation”) to settle the Securities Class Action. The Stipulation resolves the claims asserted against the Company and certain of its current and former officers and directors in the Securities Class Action without any admission or concession of wrongdoing or liability by the Company or the other defendants. The Stipulation resolved the claims asserted against the Company and certain of its current and former officers and directors in the Securities Class Action without any admission or concession of wrongdoing or liability by the Company or the other defendants. The Stipulation also provides, among other things, a settlement ~~(“Stipulation”~~payment by the Company of $245,000 in cash and the issuance of 950,000 shares of its common stock (the “Settlement Shares”) ~~with~~to the plaintiff’s counsel and class members. The terms of the Stipulation were subject to approval by the Court following notice to all ~~persons~~class members. The issuance of the Settlement Shares are exempt from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. A fairness hearing was held on May 30, 2017, and ~~entities that purchased or otherwise acquired CCCR shares between August 14, 2013 and July 25, 2014 (collectively “Led Defendants”).~~ the Court approved the settlement.

On June 1, 2017, following a final fairness hearing on May 30, 2017 regarding the proposed settlement, the Court entered a final judgment and order that: (i) dismisses with prejudice the claims asserted in the Securities Class Action against all named defendants in connection with the Securities Class Action, including the Company, and releases any claims that were or could have been asserted that arise from or relate to the facts alleged in the Securities Class Action, such that every member of the settlement class will be barred from asserting such claims in the future; and (ii) approves the payment of ~~$220,000~~$245,000 in cash and the issuance of 950,000 shares of its common stock ~~(the “Settlement Shares”)~~ to members of the settlement class. ~~In addition, the Company would incur a payment of $25,000 in cash to class administrator.~~

~~The Company accounted for~~On July 28, 2017, the ~~cash payment aggregating $245,000 as an accrued liability~~Court amended the order that 1) Attorney’s Fees, Litigation Expenses, and Incentive Awards be paid out of the ~~share settlement of 950,000 shares~~Settlement Fund; and 2) Levi & Korsinsky be awarded attorney’s fees in the amount of ~~US$2,308,500 (at market value~~$55,000 in cash and 237,500 shares (Plaintiff Attorney Fee Shares). Thus, cash to be paid to the class shall be $190,000 (“Class Settlement Cash”) and shares to be issued to the class shall be 712,500 (“Class Settlement Shares”).

On December 22, 2017, the Court entered a distribution order approving the distribution of ~~$2.43 per share on June 1, 2017)~~the Settlement Stock to the class plaintiffs. The settlement has been finalized, and that thereafter there are no remaining claims outstanding as ~~an additional paid-in capital. Accordingly~~against the Company ~~recorded expenses~~with respect to this litigation.

As of ~~$1,838,500 and $690,000 for~~March 31, 2018, the ~~nine months ended September 30, 2017 and 2016, respectively, under the account of “Litigation and settlement cost for the shareholders’ lawsuit”. The~~ $245,000 cash portion of the settlement has been paid in ~~October subsequently.~~full and 712,500 Class Settlement Shares were issued.

On April 10, 2018, the 237,500 of plaintiff attorney fee shares were issued to plaintiff’s attorney’s broker account.

As of March 31, 2018, the Company accounted for the unissued share settlement of 237,500 shares in the amount of US$261,540 (at market value of $1.10 per share on March 29, 2018) as noncurrent liability. Accordingly the Company recorded expenses of $147,540 for the three months ended March 31, 2018 under the account of “Changes in fair value of noncurrent liabilities”.

Other operating expenses for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017 ~~and 2016~~ consisted of:

On ~~March 2,~~December 1, 2017, the Company ~~issued 92,875~~has entered into a securities purchase agreement with Mr. Yang Jie, a significant shareholder and ~~92,875 unrestricted shares to~~Vice President of Finance of the Company and Mr. Long Yi, the ~~Company’s~~ Chief Financial Officer ~~and Yang Jie, the Company’s VP of Finance, respectively. The shares were issued at a market value of US$1.04 per share, in the total amount of US$193,180, for the services provided.~~

On April 20, 2017, the Company issued 500,000 unregistered shares to four individuals, all of whom are citizens of P.R.C, for their services in seeking financial support for the Company. The Company compensates each of the individuals with 125,000 shares of common stock of the Company ~~as incentive. The transaction was at arm’s length. The shares were issued at a market value of US$1.44 per share, in the total amount of US$720,000, for the services provided.~~

~~On May 11, 2017~~to sell 150,000 and ~~June 21, 2017, the Company closed two private placements to two third party individual investors to issue 60,000 and 625,000~~50,000 common shares, respectively, at a per share price of US$~~1.0 and US$0.8,~~3.5, in the total amount of US$~~60,000~~525,000 and US$~~500,000,~~175,000, respectively. ~~These transactions were at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market before closing, and the net proceeds of the sale of the shares shall be used by~~On February 20, 2018, the Company ~~for working capital~~issued 50,000 shares of common stocks and ~~general corporate purpose.~~warrants to purchase 20,000 shares of common stocks at $4.20 to Mr. Long Yi. As of March 31, 2018, the 150,000 shares of common stocks and related warrants unissued to Mr. Yang Jie.

On ~~September 29, 2017,~~January 19, 2018, the Company ~~closed two private placements to two individual investors to issue 452,486 and 100,000~~issued 712,500 shares common stocks as the share settlement of 950,000 shares respectively, at a per share price of US$1.81, in the total amount of US$1,000,000. Among the two individuals, one of them is the Vice President of Finance of the Company (Note 16(2)). These transactions were at arm’s length. The net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose, payment of the transactional expenses related to the acquisition of all the outstanding issued shares of Sorghum Investment Holding Limited (“Sorghum”) from certain shareholders of Sorghum, and payments related to the securities class action and derivative actionas disclosed in Note ~~17(3).~~

During the three months ended September 30, 2017, the Company issued an aggregation of 470,000 unregistered shares to eight professional service providers for legal and consulting services provided to the Company. The common shares were issued as compensations for the services provided to the Company. The transaction was at arm’s length. The fair value of the services provided was in in the total amount of US$1,226,300~~, at a per share price at the market price of the issuance dates.~~13.

As of ~~September 30, 2017,~~March 31, 2018, there were ~~19,030,915~~20,013,415 shares of Common Stock issued and outstanding.

As of December 31, ~~2016,~~2017, the Company had outstanding warrants to purchase ~~1,123,400~~193,370 shares.

~~During the nine months ended September 30, 2017, the outstanding warrants to purchase 1,123,400 shares expired.~~

On ~~September 29, 2017,~~February 20, 2018, the Company issued warrants to purchase ~~158,370 and 35,000~~20,000 shares to ~~two investors, respectively,~~Mr. Long Yi, as part of the private placements mentioned above. The warrant has an exercise price of ~~$2.26~~$4.2 per share and is exercisable on the date of issuance and expire five years from the date of issuance. The fair value of the warrants aggregated ~~$186,268,~~$11,073, estimated by using the Black-Scholes valuation model.

As of ~~September 30, 2017,~~March 31, 2018, the Company had outstanding warrants to purchase ~~193,370~~213,370 shares.

The following table sets forth the computation of basic and diluted earnings per common share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively:

Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is the same as basic loss per share due to the lack of dilutive items in the Company for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 and ~~2016.~~2017. The number of warrants is omitted excluded from the computation as the anti-dilutive effect.

Effective January 1, 2008, the New Taxation Law of PRC stipulates that ~~domestically owned~~domestic enterprises and foreign invested enterprises (the “FIEs”) are subject to aan uniform tax rate of 25%. ~~While~~A preferential income tax rate of 12.5% is provided to micro-credit companies that are located in Jiangsu Province. Thus, the New Tax Law equalizes the tax rates for FIEs and domestically owned enterprises, preferential tax treatment may continue to be given to companies in certain encouraged sectors and to entities classified as high-technology companies, regardless of whether these are domestically-owned enterprises or FIEs. In November 2009, the Jiangsu Province Government issued Su Zheng Ban Fa [2009] No. 132 which stipulates that micro-credit companiesCompany’s loan business segment located in Jiangsu Province ~~is subject to~~benefits from the preferential enterprise income tax rate of 12.5%. ~~As a result,~~Under the ~~Company is subject~~PRC tax law, companies are required to ~~the~~make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate ~~of 12.5%~~ for ~~its loan business for the periods presented.~~their installment tax payments. The taxation practice implemented by the tax authority governing the Company is that the Company pays enterprise income taxes at rate of 25% on a quarterly basis, and upon annual tax settlement done by the Company and the tax authority in five (5) months after December 31 the tax authority will refund the Company the excess enterprise income taxes it paid beyond the rate of 12.5%. However since 2015, the excess enterprise income taxes paidoverpayment, however, will not be refunded ~~but~~and can only be used to offset ~~the~~ future ~~income~~ tax ~~payable arising from taxable income.~~liabilities.

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ the Company had no unrecognized tax benefits. ~~For the nine months ended September 30, 2017, the Company made net tax operating loss from its PRC subsidiaries and its consolidated VIE of US$3,073,360.~~ As of ~~September 30, 2017,~~March 31, 2018, the Company has ~~carry-forward tax~~carry forward net operating losses ~~from its PRC subsidiaries and its condensed consolidated VIE~~ of US$~~64,500,641,~~78,570,841, which will begin to expire ~~from the year ending~~as of December 31, ~~2019 to 2022.~~2019. The Company recognized deferred ~~income~~ tax assets of US$~~12,099,165~~14,837,696 as of ~~September 30, 2017.~~March 31, 2018. However, due to uncertainties surrounding future utilization, the Company estimates there will not be no sufficient future income to realize the deferred tax assets. The Company maintains a full valuation allowance on its net ~~income before income~~deferred tax assets as of March 31, 2018. The Company increased its valuation allowance on deferred tax assets by $ 598,051 from ~~years ending~~$14,239,645 as of December 31, 2017 to ~~2022 to realize the deferred income tax assets. The Company provided valuation allowance for deferred income tax assets of US$12,099,165~~$14,837,696 as of ~~September 30, 2017. As such, the effective tax rates for the three and nine months ended September 30, 2017 and 2016 are 0% and 0%, respectively.~~March 31, 2018.

The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.

~~Deferred~~The principal components of the Company’s deferred tax ~~liability arises from government incentive~~assets and liabilities were as follows:

The Company does not have any current and deferred tax expenses for the ~~purpose of covering the Company’s actual loan losses~~three months ended March 31, 2018 and ruled that the income tax will be imposed on the subsidy if the purpose is not fulfilled within 5 years after the Company receives the subsidy. As of September 30, 2017 and December 31, 2016, subsidy of US$1,715,510 and US$1,353,810 did not fulfill the purpose within due date and the related deferred tax liability was transferred to income tax payable. As of September 30, 2017 and December 31, 2016, the deferred tax liability amounted to US$81,901 and US$139,947, respectively.2017.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of March 31, 2018 and December 31, 2017 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

~~During the year ended~~On December 31, 2016, the Company made a loan of US$1,945,224 to Suzhou Rongshengda Investment Holding Co., Ltd., a company controlled by shareholders of Wujiang Luxiang. Due to the short-term borrowing, the Company did not charge any interest or fees. By September 30, 2017, the balance was collected.

~~On September 29,~~1, 2017, the Company ~~closed~~has entered into a ~~private placements to~~securities purchase agreement with Mr. Yang Jie and Mr. Long Yi to ~~issue 452,486~~sell 150,000 and 50,000 shares of common ~~shares,~~stocks, respectively, at a per share price of US$~~1.81,~~3.5, in the total amount of US$~~819,000. These transactions were at arm’s length.~~525,000 and US$175,000, respectively. The ~~net proceeds~~total amount was received as of March 31, 2018. As of March 31, 2018, the Company has issued 50,000 shares of common stocks to Mr. Long Yi. The shares of common stocks have not been issued to Mr. Yang Jie as of the sale of the shares shall be used by the Company for working capital and general corporate purpose, payment of the transactional expenses related to the acquisition of all the outstanding issued shares of Sorghum Investment Holding Limited (“Sorghum”) from certain shareholders of Sorghum, and payments related to the securities class action and derivative action disclosed in Note 17(3).financial statement issuance date.

As of September 30, 2017, the Company provided financial guarantee service for Chunjia Textile to guarantee loans of US$204,540. The Company accrued provision of US$102,270 on the outstanding balance as of September 30, 2017.

Huichun Qin transferred ~~$1,098,197(equivalent~~$1,098,197 (equivalent of RMB 7 million) to his personal account without proper authorization on July 2, 2014. As of ~~September 30, 2017,~~March 31, 2018, Huichun Qin has not repaid the balance. The amount was recorded as a deduction of the Company’s equity as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively.

The management is making efforts to collect the outstanding balance from Huichun Qin’s family and was in the opinion that the collection is probable.

The balance due to Wujiang Xiaocun Shengda Founding Investment Co., Ltd. represented operating expenses paid by this related party on behalf of the Company. The balance was payable on demand and free of interest.

~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~The balances due to Mr. Yang Jie and Mr. Long Yi mainly represented the amount advanced from the management for purchase of shares and warrants in the private placements closed in 2018. As of March 31, 2018, the Company has issued 50,000 shares of common stocks and 20,000 shares of warrants to Mr. Long Yi. The shares of common stocks and warrants have not been issued to Mr. Yang Jie as of the financial statement issuance date.

During the year ended December 31, 2016, the Company leased its new office under a lease agreement from January 1, 2017 to December 31, 2019. As a result, in January 2017, the Company terminated the lease agreement for its former principal office which agreement was to expire on May 31, 2021. No default penalty was paid for the earlier termination. We leased certain office space in New York, NY where we paid a monthly rent of US$3,600 during 2018. The following table sets forth the Company’s contractual obligations as of ~~September 30, 2017~~March 31, 2018 in future periods:

The guarantees will terminate upon payment and/or cancellation of the obligation; however, payments by the Company would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. Generally, the average guarantee expiration terms ranged within 12 to 24 months and the average percentage of the guarantee amount as security deposit is 10% ~ 20%. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the loan amount guaranteed by the Company was US$~~11,367,564~~12,044,836 and US$~~10,893,089,~~11,627,013, respectively, for its financial guarantee service customers.

The Company is involved in various legal actions arising from providing financial guarantee services to defaulted guarantees. As of March 31, 2018, eleven cases against the Company was finally adjudicated by the Court, in which the Company was jointly liable, together with the defaulted customers and other guarantees, to repayment the principal, interest and penalties of $6.91 million. Additionally, three cases against the Company has not been adjudicated by the Court, in which the Company was jointly liable, together with the defaulted customers and other guarantees, to repayment the principal, interest and penalties of $2.97 million.

The Company is involved in various legal actions arising in the ordinary course of its ~~business. As of September 30, 2017, the Company was involved in 109 lawsuits, among which 76 were related to its loan~~ business ~~and 32 were related to guarantee business and 1 was related to financial lease. The Company initiated legal proceedings~~ to collect delinquent balances from borrowers and guarantees. 84As of ~~these~~March 31, 2018, 4 cases with an aggregated claim of US$~~41.16 million have been adjudicated by the Court in favor of the Company and these cases are settled or in the process of enforcement. The remaining 25 cases with an aggregated claim of US$18.17~~2.3 million have not been finally adjudicated by the ~~Court as~~Court. At this stage of ~~September 30, 2017.~~the proceedings, the Company is not able to estimate the probability of success or loss.

On August 6, 2014, a purported shareholder Andrew Dennison filed a putative class action complaint in the United States District Court District of New Jersey (the “N.J. district court”) relating to a July 25, 2014 press release about the Company’s progress in recovering a significant portion of the $5.4 million the Company paid in the first quarter of 2014 on behalf of loan guarantee customers. The action, Andrew Dennison v. China Commercial Credit, Inc., et al., Case No. 2:2014-cv-04956, alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Xiangdong Xiao, and John F. Levy violated the federal securities laws by misrepresenting in prior public filings certain material facts about the risks associated with its loan guarantee business. On October 2, 2014, purported shareholders Zhang Yun and Sanjiv Mehrotra (the “Yun Group”) asserted substantially similar claims against the same defendants in a putative class action captioned Zhang Yun v. China Commercial Credit, Inc., et al., Case No. 2:14-cv-06136 (D. N.J.). Neither complaint states the amount of damages sought.

On or about October 6, 2014, Dennison, the Yun Group and another purported shareholder, Jason Stark, filed motions to consolidate the cases, be appointed as lead plaintiff and to have their respective counsel appointed as lead counsel. On October 31, 2014, the N.J. district court entered an order consolidating the cases under the caption “In re China Commercial Credit Inc. Securities Litigation” and appointing the Yun Group as lead plaintiff (“Class Plaintiff”) and the Yun Group’s counsel as lead counsel.

On November 18, 2014, the Yun Group and the Company, which at that point was the only defendant served, entered into a stipulation to transfer of the case to the Southern District of New York. On December 18, 2014, Mr. Levy, who had by then been served, joined in the stipulation. On December 29, 2014, the N.J. district court entered an order transferring the action. The transfer was effected on January 22, 2015, and assigned docket number 1:15-cv-00557-ALC (S.D.N.Y.). (the “Securities Class Action”)

Under the schedule stipulated by the parties, the Yun Group was to file an amended complaint within 60 days of the date that the transfer was effected, and the defendants’ date to answer or move was within 60 days of that filing. On April 7, 2015, the Class Plaintiff filed a Second Amended Class Action Complaint (the “CAC”). The CAC also asserts securities law claims against defendants Axiom Capital Management, Inc., Burnham Securities Inc. and ViewTrade Securities, Inc. (collectively, the “Underwriter Defendants”). The CAC alleges that the Company engaged in a fraudulent scheme by engaging in undisclosed and improper lending practices and made misleading representations regarding its underwriting policies, the loan portfolio quality, the loan loss allowance, compliance with U.S. GAAP and its internal control systems.

In accordance with the Court’s procedures, the Company and Mr. Levy and the Underwriter Defendants requested a Pre-Motion Conference in anticipation of filing a motion to dismiss the CAC, which was held on June 25, 2015. At the conference, the Court adjourned the date to answer or move in order to provide the Class Plaintiff with time to serve certain overseas defendants. After the conference, the Class Plaintiff voluntarily dismissed Jianming Yin, Jinggen Ling and Xiangdong Xiao from the action, and Long Yi agreed to waive service, which left Huichun Qin as the sole remaining defendant to serve.

On November 22, 2016, the Company entered into a Stipulation and Agreement of Settlement (the “Stipulation”) to settle the Securities Class Action. The Stipulation resolves the claims asserted against the Company and certain of its current and former officers and directors in the Securities Class Action without any admission or concession of wrongdoing or liability by the Company or the other defendants. ~~On June 1, 2017, following~~The Stipulation also provides, among other things, a ~~final fairness hearing on May 30, 2017 regarding the proposed~~ settlement the Court entered a final judgment and order that (i) dismisses with prejudice the claims asserted in the Securities Class Action against all named defendants in connection with the Securities Class Action, includingpayment by the Company ~~and releases any claims that were or could have been asserted that arise from or relate to the facts alleged in the Securities Class Action, such that every member~~ of ~~the settlement class will be barred from asserting such claims in the future; and (ii) approves the payment of $220,000~~$245,000 in cash and the issuance of 950,000 shares of its common stock (the “Settlement Shares”) to ~~members~~the plaintiff’s counsel and class members. The terms of the ~~settlement class. In addition, the Company would incur a payment of $25,000 in cash~~Stipulation were subject to ~~class administrator. At present, the Company is waiting for~~approval by the Court following notice to ~~approve the disbursement~~all class members. The issuance of the Settlement ~~Shares. Plaintiff is filing~~Shares are exempt from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. A fairness hearing was held on May 30, 2017, and the Court approved the settlement. On December 22, 2017, the Court entered a ~~motion~~distribution order approving the distribution of the Settlement Stock to ~~obtain such approval.~~the class plaintiffs. The $245,000 cash portion of the settlement has been paid in full. The ~~Company accrued settlement cost aggregating US$1,863,500 and US$690,000 during the nine months ended September, 2017 and 2016, respectively.~~

~~On July 28, 2017, the Court entered a clarifying order to specify the allocation of attorneys’ fees in accordance with the Stipulation.~~

~~The~~712,500 Class Settlement Shares ~~are exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended.~~were issued on or about January 19, 2018. The settlement ~~does not constitute any admission of fault or wrongdoing by~~has been finalized, and that thereafter there are no remaining claims outstanding as against the Company ~~or any~~with respect to this litigation. On April 10, 2018, the 237,500 of ~~the individual defendants.~~plaintiff attorney fee shares were issued to plaintiff’s attorney’s broker account.

Two of the Underwriter Defendants, Axiom Capital Management, Inc., and ViewTrade Securities, Inc., have asserted their respective rights to indemnification under the Underwriting Agreements entered into in connection with the Company’s initial public offering and secondary offering. On or about March 16, 2016, CCCR entered into an Advance Funding and Escrow Agreement (“Advance Funding Agreement”), under which the CCCR agreed to deposit shares into escrow to fund the advancement obligation, with the initial deposit to be 637,592 shares which was valued at Two Hundred Thousand Dollars ($200,000), based upon 80% of the 30 day volume weighted average ~~Trading Price (“VWAP”)~~trading price for each of the 30 consecutive trading days prior to the date of the ~~Agreement.~~agreement. As of the completion of the settlement, an aggregate of 527,078 shares are unused in the escrow account and the Underwriter Defendants acknowledged there is no additional payment of fees and expenses owed to the Underwriter Defendants and the Advance Funding Agreement shall be terminated. The Company has instructed the transfer agent to cancel the 527,078 shares and return them to authorized shares. As of the date of this Quarterly Report, the Company is working with its counsel and the escrow agent to complete such cancelation.

On February 3, 2015, a purported shareholder KiramKodali filed a putative shareholder derivative complaint in the United States District Court for the Southern District of New York, captioned KiranKodali v. Huichun Qin, et al., Case No. 15-cv-806. The action alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Chunfang Shen, John F. Levy, Xiaofang Shen and Chunjiang Yu violated their fiduciary duties, grossly mismanaged the Company and were unjustly enriched based upon the transfer that was the subject of the Internal Review and other grounds substantially similar to those asserted in the class action complaints. Kodali did not serve a demand upon the Company and alleges that demand is excused. The Company and Mr. Levy are the only defendants who have been served. An amended derivative complaint was filed on April 20, 2015.

On May 29, 2015, the Court “so ordered” a stipulation among Kodali, the Company and Mr. Levy staying all proceedings in the derivative case, except for service of process on individual defendants, until the earlier of thirty days of termination of the stipulation, dismissal of the class action with prejudice or the date any of the defendants in the class action file an answer to the CAC.

The Company ~~believes that this lawsuit is without merit and~~ intends to vigorously defend against it. At this stage of the proceedings, the Company is not able to estimate the probability of success or loss. The Court ordered CCCR to answer or otherwise move with respect to this action on or before November 13, 2017. Thereafter, CCCR and Mr. Levy submitted a pre-motion letter to the Court requesting permission to move to dismiss the derivative complaint; submission of this letter stayed the proceedings pending the Court’s review thereof. The Court held a hearing on this pre-motion letter on January 22, 2018, denying permission to file a motion to dismiss the complaint without prejudice and setting forth a schedule under which Kodali must serve the remaining defendants in the derivative litigation. The parties are due to file a joint status report on May 21, 2018. On behalf of the Company and Mr. Levy, this firm is engaged in active settlement discussions with counsel for Kodali, but the parties have not entered into a settlement agreement.

On May 18, 2015, WFOE filed a civil complaint against Huichun Qin with the Wujiang Region Suzhou City People’s Court claiming Mr. Qin’s misappropriation of RMB 7 million in July 2014. The complaint was rejected due to a procedural issue. The Company has since learned that Mr. Qin has been convicted and sentenced to a term of incarceration of approximately five years. In view of this information, the Company is evaluating its strategic options.

The Company and its directors were ~~parties~~party to a lawsuit filed on September 1, 2017, by ~~Juan C. Rojas (“Plaintiff”),~~certain a stockholder of the Company on behalf of himself and ~~all other~~ similarly situated stockholders of ~~China Commercial Credit, Inc.,~~the Company CCC in the Chancery Court of the State of Delaware (the “Delaware Chancery Court”) (Case No. 2017-0633-JTL) (the “Action”), Plaintiff stockholders which sought injunctive relief, costs, and attorney’s fees. Plaintiff’s Verified Class Action Complaint (“Complaint”) alleged that the Company’s directors breached their fiduciary duties to the Company’s stockholders by failing to disclose all necessary material information relating to the Company’s entry into an the Exchange Agreement (“Exchange Agreement”) with Sorghum Investment Holdings Limited (“Sorghum”) on August 9, 2017, and preventing the Company’s stockholders from casting a fully informed vote on the Company’s acquisition of Sorghum, and other proposals contained in the Company’s preliminary proxy statement, dated August 14, 2017 (“Preliminary Proxy Statement). Plaintiff filed a Motion to Expedite the Proceeding (“Motion to Expedite”) seeking to expedited consideration of Plaintiff’s Motion for Preliminary Injunction, which was filed simultaneously with Plaintiff’s Complaint. The Company opposed the Motion to Expedite on September 20, 2017, and the Delaware Chancery Court held a hearing on the Motion to Expedite on September 22, 2017, wherein it denied Plaintiff’s Motion to Expedite without prejudice. On September 28, 2017, the Company filed a motion to dismiss Plaintiff’s Complaint (“Motion to Dismiss”). Plaintiff has not responded to the Company’s Motion to Dismiss.

On October 10, 2017, the Company filed Amendment No. 1 to its Preliminary Proxy Statement (the “Amended Preliminary Proxy”) with the U.S. Securities and Exchange Commission (the “Commission”) in response to the Commission’s September 8, 2017 comment letter (“Comment Letter”). After reviewing the Amended Preliminary Proxy, Plaintiff determined that the Company’s Amended Preliminary Proxy rendered the claims asserted in Plaintiff’s Complaint moot and/or otherwise unsuitable for further pursuit. On October 19, 2017, the Company and Plaintiff entered into a stipulation (“Stipulation”) wherein Plaintiff agreed to voluntarily dismiss his claims against the Company, and its directors, with prejudice. The Delaware Chancery Court granted the Stipulation on October 20, 2017, and entered an Order dismissing the Action with prejudice. In accordance with the Order, the Company will advise the Delaware Chancery Court within fifteen (15) days of the earlier of (a) the stockholder vote on the Exchange Agreement relating to the proposals, or (b) the termination of the Exchange Agreement, and whether the parties to the Action have reached an agreement with respect to Plaintiff’s anticipated request for fees and expenses. Currently, no compensation in any form has passed from the Company, or its directors, to Plaintiff or Plaintiff’s attorneys in the Action, and the Company has not made a promise to give any such compensation. On or about November 6, 2017, the Company filed Amendment No. 2 to its Preliminary Proxy Statement with the Commission in further response to ~~comments~~the Comment Letter. On December 29, 2017, the Company received notice from Sorghum notifying the ~~Commission~~Company that the Exchange Agreement is terminated. The Company advised Plaintiff of the termination of the Exchange Agreement on January 9, 2018.

On ~~August 9,~~December 21, 2017, ~~China Commercial Credit, Inc.~~the Company delivered notice (“Notice”) to Sorghum notifying Sorghum that certain recent actions of Sorghum constituted breaches of Sorghum’s covenants under the ~~Company” or “CCCR”), has entered into Certain Share~~Exchange Agreement. Specifically, we believe that Sorghum is in breach of Section 6.9 (a) and Section 6.11 (b) of the Exchange Agreement ~~(“Exchange Agreement”)~~which required Sorghum to use commercially reasonable efforts and to cooperate fully with the ~~parent company of Sorghum Investment Holdings Limited (“Sorghum”). Pursuant~~other parties to consummate the transactions contemplated by the Exchange Agreement and to make its directors, officers and employees available in connection with responding in a timely manner to SEC comments. According to the terms of the Exchange Agreement, ~~CCCR will acquire 100%~~the Company is entitled to terminate the Exchange Agreement if the breach is not cured within twenty (20) days after the Notice is provided to Sorghum.

On January 25, 2018, the Company filed an arbitration demand (“Arbitration Demand”) with the American Arbitration Association (“AAA”) against Sorghum in connection with Sorghum’s breach of the ~~outstanding shares~~Exchange Agreement. On December 21, 2017, prior to filing the Arbitration Demand, the Company provided Sorghum with formal notice of its breaches to the Exchange Agreement. The AAA has forwarded the Company’s Arbitration Demand to Sorghum, and Sorghum’s response to the Arbitration Demand was due on or before February 14, 2018. Sorghum did not provide a written response to the Company’s Arbitration Demand by the deadline. However, in accordance with the Commercial Arbitration Rules of the AAA (“Rules”), Sorghum’s failure to respond is deemed as a general denial of the Company’s claims. On March 14, 2018, the AAA initially appointed a single arbitrator to the matter subject to the parties’ approval. On March 28, 2018, the AAA conducted an initial telephonic conference with Arbitrator Barbara Mentz, but neither Sorghum nor its counsel appeared for the call. On March 28, 2018, after the Company’s counsel appeared for the initial telephonic conference, Sorghum and its counsel contacted the AAA claiming that it was not in receipt of the AAA’s correspondence although the AAA forwarded its correspondence to Sorghum’s Chief Executive Officer’s active email. In response, the AAA scheduled another telephonic conference for April 9, 2018. All parties appeared at the April 9, 2018 conference, and approved Arbitrator Mentz’s appointment. On April 11, 2018, pursuant to the Rules, Sorghum filed its answer and counterclaim. The Company filed a written denial to Sorghum’s counterclaim on April 26, 2018. On May 2, 2018, the parties jointly requested an extension of time to file their respective proposals for resolution with the AAA, and Arbitrator Mentz granted the extension. In accordance with Arbitrator Mentz’s Order, the parties’ proposals are due May 31, 2018. The Company intends to prosecute its claims and defend against Sorghum’s counterclaim vigorously.

We have been advised that the Financial Industry Regulatory Authority (“FINRA”) (formerly, the NASD) is conducting a review of trading in the Company surrounding the December 27, 2017 Form 8-K filing report, that on December 21, 2017, the company notified Sorghum Investment Holdings, Ltd. that certain recent actions of Sorghum ~~through issuance~~constitute a breach of ~~152,587~~Sorghum’s covenants under the Share Exchange Agreement dated August 9, 2017 (the “corporate disclosure”). We have been responding to FINRA’s request for information and intend to continue to cooperate in the investigation. Although we cannot, at this time, assess either the duration or the likely outcome or consequences of this investigation, FINRA has the authority to impose sanctions on our Company that could adversely affect its ~~common shares. This transaction will~~effectiveness in that capacity.

During the course of preparing the 2017 consolidated financial statements, certain errors to the previously issued unaudited condensed consolidated financial statements appearing in the Quarterly Report on Form 10-Q for the three months ended March 31, 2017 filed with SEC on May 18, 2017, were discovered by management. The errors related to the accounting of the settlement shares agreed upon per the Stipulation (See Note 13). These settlement shares have not been issued until January 19, 2018 and April 10, 2018, respectively. These settlement shares should be recorded in accordance ASC 450-20,Loss Contingencies, and as a result the share settlement should be also accounted for as a ~~“reverse acquisition” since, immediately following completion~~liability measured at market value of share price rather than accounting for contracts to be settled with the Company’s own equity. After the errors have been quantified, the previously-issued financial statements have been evaluated to determine whether they are materially misstated in accordance with guidance provided in SAB Topic 99 and the Company has concluded the previously-issued 2016 consolidated financial statements are not materially misstated and the errors will be corrected prospectively. As a result, the Company made the corrections to the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2017 and condensed consolidated statements of cash flows for the three months ended March 31, 2017 contained in this Form 10-Q.

The effects of the ~~transaction,~~restatement on the ~~shareholders~~Company’s condensed consolidated statements of ~~Sorghum immediately prior~~operations and comprehensive loss and earnings per share for the three months ended March 31, 2017 are as follows:

The effects of the restatement on the Company’s condensed consolidated statements of cash flows for the three months ended March 31, 2017 are as follows:

On February 28, 2018, the company received a letter (the ” Notification Letter “) from The NASDAQ Stock Market LLC (” Nasdaq “) notifying the Company that it is not in compliance with the minimum Market Value of Listed Securities (MVLS) requirement set forth in Nasdaq Listing Rule 5550(b)(2) for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(2) requires listed securities to maintain a minimum MVLS of $35 million. Nasdaq Listing Rule 5810(c)(3)(C) provides that a failure to meet a minimum MVLS exists if the deficiency continues for a period of 30 consecutive business days. Based upon Nasdaq’s review of the Company’s MVLS for the last 30 consecutive business days, the Company no longer meets the minimum MVLS requirement. The Nasdaq staff noted the Company also does not meet the requirements under Listing Rules 5550(b)(1) and 5550(b)(3). The Notification Letter does not impact the Company’s listing on the Nasdaq Capital Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided 180 calendar days, or until August 27, 2018, to regain compliance with Nasdaq Listing Rule 5550(b)(2). The Company has been evaluating options available to regain compliance and to timely submit a plan to regain compliance. There can be no assurance that the Company’s plan will be accepted or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements.

During the period from April 1, 2018 to the ~~transaction~~date of this report, the Company assessed the charged-off loan and guarantee balances recorded as of March 31, 2018 and was of the opinion that charged off loan balance of US$22,605,017 and charged off guarantee balance of US$10,815,328 were uncollectible. In addition, the Company assessed the remaining balances of loan receivable and financial guarantee and was of the opinion that it was not necessary to charge-off these balances.

On April 10, 2018, the Company issued the remaining 237,500 shares of common stocks as the share settlement of 950,000 shares as disclosed in Note 13 to Levi & Korsinsky. Besides the Company sold 649,350 shares of newly issued common stocks to certain individual investors in exchange of $500,000.

On April 28, 2018, the Company entered into certain securities purchase agreements (the “Initial SPAs”) with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell 1,336,314 shares of its common stock, par value $0.001 per share, at a per share purchase price of $0.78. The net proceeds to the Company from the Initial SPAs Offering will ~~effectuate control~~be approximately $1,042,324.

On May 10, 2018, the Company through the WFOE, entered into a series of Agreements with Beijing Youjiao Technology Limited (“Beijing Youjiao”) and Aizhen Li, the sole shareholder of Beijing Youjiao.

On April 16, 2018, HCHS set up HC High Summit Limited (“HCHS HK”), a wholly owned subsidiary, in Hong Kong. On April 17, 2018, the Company, through its ~~87.9% ownership interest in~~subsidiary, established Tianxing Haoche Technology (Beijing) Co. Ltd. (“Beijing WFOE”). On May 17, 2018, Beijing WFOE entered into a series of agreements (“Kunlun VIE Agreements”) with Beijing Tianxing Kunlun Technology Co. Ltd. (“Kunlun”) and Shun Li and Jialin Cui, the ~~post-merger entity. For accounting purpose, Sorghum will be deemed to be the accounting acquirer and CCCR will be deemed to be the accounting acquiree in the transaction. As~~shareholders of ~~the date of this filing, the transaction is still in progress.~~Beijing Kunlun.

We are a financial services firm operating in China. Our current operations are mainly conducted through Wujiang Luxiang, a fully licensed microcredit company which we control through our subsidiaries and certain contractual arrangements, and consist of providing short-term direct loans and loan guarantees to small and medium enterprises (“SME”s) located in Wujiang City, Jiangsu Province of China. As of ~~September 30, 2017,~~March 31, 2018, we have built a US$~~58.3~~42.5 million portfolio of direct loans to ~~107~~70 borrowers and a total of US$~~11.4~~12.0 million in loan guarantees for 14 borrowers. Additionally, we accrued allowance for loan losses of $37.6 million and allowance for financial guarantee services of $9.9 million. We were established under the 2008 Guidance on the Small Loan Company Pilot of the China Banking Regulatory Commission and the ~~People's~~People’s Bank of China (“PBOC”) (No.23) (“Circular No. 23”) to extend short term loans and loan guarantees to SMEs, a class of borrowers that we believe have been underserved in the Chinese lending market. The loans that we provide bridge the gap between Chinese-state run banks that have not traditionally served the capital needs of SMEs and high interest rate “underground” lenders, and our loans provide capital at more favorable terms and sustainable interest rates.

AsDue to the fact that the rate of fees and commissions generated from the guarantee business has been decreasing, the Company has decided that the revenue does not justify the default risks ~~involved, and therefore~~involved. Therefore, the Company expects to further reduce the traditional guarantee business and hold off on pursuing the guarantee business to be provided via the Kaixindai Financing Services Jiangsu Co. Ltd (“Kaixindai”) platform as previously planned. Management may actively resume the guarantee business if economic conditions improve in the future.

On September 5, 2013, our wholly owned subsidiary, CCC International Investment Holding Ltd. (“CCC HK”), established Pride Financial Leasing (Suzhou) Co. Ltd. (“PFL”) in Jiangsu Province, China. PFL was expected to offer financial leasing of machinery and equipment, transportation vehicles, and medical devices to municipal government agencies, hospitals and SMEs in Jiangsu Province and beyond. ~~During the period from its inception to~~As of the date of this ~~quarterly~~ report, PFL entered into two financial leasing agreements for an aggregate lease receivable of US$5.61 ~~million.~~million (one with a monthly principle and interest income approximating US$81,600 for the period during November 13, 2014 to May 12, 2015, and approximating US$80,000 for the period from May 13, 2015 and thereafter. The other financial leasing agreement, with a quarterly principle and interest income approximating US$342,800, did not provide continuous financial leasing services. We do not currently have further funds to deploy in the financial leasing business. ~~As of the date of this quarterly report, both financial leasing agreements expired.~~

Our business and operating results are affected by China’s overall economic growth, local, economic condition, market interest rate and the borrowers’ repayment ability. Unfavorable changes could affect the demand for the services that we provide and could materially and adversely affect our results of operations. Our results of operations are also affected by the regulations and industry policies related to the microcredit industry in the PRC.

Our results of operations are also affected by the provision for loan losses and provision for financial guarantee loss which are noncash items and ~~represent~~represents an assessment of the risk of future loan losses. Increases in the allowance for loan losses are achieved through provision for loan losses that are charged against net interest income.

Although we have generally benefited from China’s economic growth and the policies to encourage lending to farmers and SMEs, we are also affected by the complexity, uncertainties and changes in the PRC regulations governing the micro lending industry. Due to PRC legal restrictions on foreign equity ownership of and investment in the micro lending sector in China, we rely on contractual arrangements with Wujiang Luxiang, and its shareholders to conduct most of our current business in China. We face risks associated with our control over our variable interest entity, as our control is based upon contractual arrangements rather than equity ownership.

Three Months Ended ~~September 30, 2017~~March 31, 2018 as Compared to Three Months Ended ~~September 30, 2016~~March 31, 2017

The Company’s net loss for the three months ended ~~September 30, 2017~~March 31, 2018 was US$~~2,515,292,~~385,898, representing ~~an increase~~a decrease of US$~~1,890,847~~,842,179, or ~~303%~~69%, from net loss of US$~~624,445~~1,228,077 for the three months ended ~~September 30, 2016.~~March 31, 2017. The change in net loss for the three months ended ~~September 30, 2017~~March 31, 2018 was the net effect of the changes in the following components:

The following paragraphs discuss changes in the components of net loss in greater details during the three months ended ~~September 30, 2017,~~March 31, 2018, as compared to the three months ended ~~September 30, 2016.~~March 31, 2017.

Net interest income is equal to interest income we generated less interest ~~expenses~~expense on short-term bank loans. ~~During~~The Company’s net interest income decreased by US$6,004, or 6% to US$100,772 during the three months ended ~~September 30, 2017 and 2016, the Company did not record any interest expenses on short-term bank loans. As a result, the Company’s~~March 31, 2018, as compared to net interest income ~~and~~of US$106,776 during the three months ended March 31, 2017.

The interests and fees on loans, direct financing leases and deposits with banks decreased by US$~~589,878,~~6,004, or ~~82% to~~6% from US$~~132,502 during~~106,776 for the three months ended ~~September 30,~~March 31, 2017 ~~as compared~~ to ~~net interest income of~~ US$~~722,380 during~~100,772 for the three months ended ~~September 30, 2016.~~March 31, 2018. The decrease is ~~the combined effect of: (2)~~mainly caused by the decrease in the amount of monthly interest received from long-aged loans resulting from the existing customers’ deteriorating loan ~~quality; and (2) No new loans or renewal of loans during the three months ended September 30, 2017, leading to a significant decrease in interest income.~~ quality.

~~As a traditional industry, the textile industry, which is the pillar industry in Wujiang area, as well as other industries, has been facing downward pressure. Additionally, the~~Typically, bank lenders ~~usually~~ require ~~an old~~that a prior loan to be paid in full upon maturity before they approve a new loan to the same borrower. ~~Some SMEs~~There are banks which have ~~to borrow from so-called “underground” lenders, or shadow banks to repay the loans due to the banks. Additionally, the banks~~ denied to extend new loans to some SMEs even after they made the full repayment for the loans due and satisfied other conditions. As a result, some SMEs have had to borrow from so-called “underground” lenders, or shadow banks to repay the loans due to the banks. Management is concerned that the borrowers may use the proceeds from the loans we grant to them, as a means of repayment to the other banks or even to the underground lenders, instead of using them in operations. Therefore, management decided to grant new loans in a more cautious manner. During the three months ended ~~September 30, 2017,~~March 31, 2018, we ~~did not grant new loans or renew~~renewed two existing loans. As of ~~September 30, 2017,~~March 31, 2018, we had ~~107~~106 loans with an average loan size of US$~~544,549.~~401,063. The loan balance of ~~$54,821,187~~$37.55 million was accrued of anfull allowance for ~~uncollectibilty which was equal to~~uncollectible loans. During the ~~loan balance.~~three months ended March 31, 2018, loans of $4.97 million generated interests and fees on loan.

Due to the long-term nature of our restricted deposits with third party banks, we utilized these deposits as term deposits which in turn generated interest income on deposits with banks of US$~~4,042~~3,777 during the three months ended ~~September 30, 2017~~March 31, 2018 as compared to US$~~263~~102 during the three months ended ~~September 30, 2016. Caused~~March 31, 2017. This result was caused by the contraction of our traditional guarantee business with banks, we have closed several restricted deposit accounts with banks through which we provided guarantee services to our customers. As a result, the interest income on deposits with bank was insignificant during the three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

The Company reversed a provision for loan losses of US$~~452,786~~330,282 and ~~US$226,694~~provided a provision for ~~the~~loan losses of US$782,882 for three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively. The provision for loan losses was determined by comparing the beginning and ending balance of allowance for loan losses for business and personal loans. If the ending balance of the allowance of loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of “reversal” and “provision” is presented in the ~~condensed~~ consolidated statements of operations and comprehensive loss and the components of the provision for loan losses were disclosed in Note 67 of financial statements.

~~Reversal~~Based on the management assessment over each individual loan in terms of ~~provision for~~the customers’ payment ability, and payment intention, almost all of the loan ~~losses increased by $226,092 for the three months ended September 30, 2017,~~balances were classified as ~~compared to the same period last year. This is mainly due that~~“loss” loans as of December 31, 2017. As a result, less “doubtful” loans rolled to “loss” loans during the three months ended ~~September 30, 2017~~March 31, 2018 as compared to that during the three months ended ~~September 30, 2016. As~~March 31, 2017. This has led to a reversal of ~~September 30, 2017 and~~loan losses for during the three months ended March 31, 2018 because the Company collected some loan repayments whose balances were accrued of allowance as of December 31, ~~2016, the “loss” loans accounted for 91.9% and 79.9%~~2017, as compared to an accrual of ~~total loan amount, respectively. The fact leads to more reversal of provision on~~ loan losses during the three months ended ~~September 30, 2017 as compared~~March 31, 2017.

Since the beginning of 2014, the economic conditions in the eastern part of China, especially the Yangtze River Delta region, has been challenging due to the ~~same period~~downturn of ~~2016.~~the general economic situation in China. Wujiang, which is in the heart of this region, has been significantly affected. As the local SMEs’ profitability and repayment ability deteriorates, “doubtful” and “loss” bank loans drastically increased. As such, our provision for loan losses substantially increased since 2014 and we had a significant allowance balance for loan losses as of March 31, 2018 and December 31, 2017.

~~From October 1,~~In December 2017, the Company reviewed the classification of its loan portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain loans into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the lending businesses. For customers with several loans, each having a different due date, if one of their loans was past due, the Company decided to reclassify all loans of the customer’s as past due (even the other loans that were not mature yet). For extended loans, the Company re-evaluated the customer’s repayment ability in a more cautious manner and reclassified the loans of customers without very strong financial condition into the past due category. These reclassifications affected numerous customer accounts.

During the three months ended March 31, 2018, management continued to assess the adequacy of the allowances and charges-off in a cautious manner. Management assessed the collectability of loan receivable balances on an individual basis, and concluded that the collection from certain borrowers is remote. For loans charged off as of March 31, 2018, management concluded that these borrowers had neither ability nor intention to make repayment as (1) these charged loans are guarantee backed loans which are subordinated to asset backed loans these borrowers obtained from the banks; (2) most of our borrowers or their guarantors are in the textile industry and the majority of the textile businesses are struggling due to the ~~date~~continued and worsened downturn trend in China’s macro-economic environment during the three months ended March 31, 2018. Quite a number of ~~the report,~~textile businesses went bankrupt; and (3) management was advised by local counsels representing the Company ~~assessed~~in the ~~charged-off loan balances recorded as~~collection lawsuits that the chances of ~~September 30, 2017~~collection is quite remote given the large scale defaults in both large and ~~was of the opinion that these balances were uncollectible.~~small businesses in Wujiang region.

The Company also generated net income by charging fees for financial guarantee services provided to our customers to help them obtain loans from other banks. We generally charge a one-time fee of 1.8% - 3.6% multiplied by the amount of loans being guaranteed, based on the nature of the guarantee and whether the customer is new or existing.

As of ~~September 30, 2017,~~March 31, 2018, the off-balance-sheet financial guarantee amounted to US$~~11.4~~12.0 million. The commissions and fees generated from our financial guarantee services decreased from US$~~9,117~~2,843 for the three months ended ~~September 30, 2016~~March 31, 2017 to US$nil for the three months ended ~~September 30, 2017.~~March 31, 2018. The reduction was due to the fact that the Company did not ~~increase any~~provide financial guarantee ~~business since March 31, 2016~~services as management reduced the guarantee portfolio to control the default risk.

As of ~~September 30, 2017,~~March 31, 2018, we have provided guarantees for a total of US$~~11.4~~12.0 million underlying loans to ~~approximately~~ 14 financial guarantee service customers, as compared to a total of US$~~10.9~~11.6 million as of December 31, ~~2016.~~2017.

The ~~Company provided a~~ provision for financial guarantee services changed from a reversal of ~~US$1,142,807~~provision of $7,207 for the three months ended ~~September 30,~~March 31, 2017, ~~as compared~~ to ~~US$599,808~~a provision of $104,391 for the three months ended ~~September 30, 2017,~~March 31, 2018, representing a change of ~~$542,999.~~$111,598. The ~~increase~~change was mainly attributable to accrual of provision of approximating $276,935 for interest, penalty and other expenses arising from default of repayment of loans on which the ~~increased allowance~~Company provided financial guarantee services, netting off against repayment of $172,544 from defaulted customers of which the Company accrued allowances on ~~guarantee paid~~payment on behalf of financial guarantee ~~customers who were classified as “loss customers” as of September 30, 2017.~~customers.

The methodology the Company used to estimate the liability for probable guarantee loss considers the guarantee contract amount and a variety of factors, which include, dependence on the counterparty, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the costumers or third parties offered, and other economic conditions such as the economic trend of the area and the country. The estimates are based upon currently available information. Based on the recent lawsuit results and repayment status by defaulted customers, the Company estimated approximately 100% and 50% of off-balance-sheet financial guarantee services may be subject to default and their repayment may be considered “not likely”. ~~As of September 30, 2017 and December 31, 2016, the Company accrued approximately 62% and 55% of contract amount, respectively.~~

This is done throughout the life of the guarantee, as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee loss considers the guarantee contract amount and a variety of factors, which include, dependingWe accrued specific provision on the ~~counterparty, latest financial position~~balance of repayment on behalf of defaulted customers according to “Five-Tier” principal. The specific reserve is based on the level of loss of each loan after categorizing the loan according to their risk. According to the “Five-Tier Principle” set forth in the Provision Guidance, the guarantees are categorized as “special-mention”, “substandard”, “doubtful” or “loss”. Normally, the provision rate is 2% for “special-mention”, 25% for “substandard”, 50% for “doubtful” and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the customers or third parties offered, and other economic conditions such as the economy trend of the area and the country. The estimates are based upon currently available information.100% for “loss”.

Since the beginning of 2016, People’s Bank of China injected a significant amount of liquidity to the market to encourage the development of emerging industries such as online-game, filming and virtual reality, which has made it easier than previous two years for entities ~~in such emerging industries~~ to gain access to capital. However, the bank lenders are still cautious with SMEs in traditional industries. The bank lenders usually require ~~an old~~a prior loan be paid in full upon maturity before they approve a new loan to the same borrower. Since the end of the year ended December 31, 2014, the banks denied to extend new loans to many SMEs even after they made the full repayment for the loans due and satisfied other conditions. As a result, some of the SME borrowers for which we provided the guarantees decided to default on the bank loans. Therefore the amount of repayment we made to the bank lenders substantially increased since the year ended December 31, 2014. We have brought collection actions against both the borrowers and their counter-guarantors. However, management was advised by counsel in the collection action that the chance of collection is remote given the large scale bad debt prevalent in Wujiang region. As of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the management charged off specific provision for ~~three~~31 and ~~two~~31 customers in the amount of US$~~164,220~~10,815,328 and US$~~142,966, respectively.~~

Non-interest expenses increased from US$1,224,737 for the three months ended September 30, 2016 to US$1,939,100 for the three months ended September 30, 2017, representing an increase of US$714,363 or 58%. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, depreciation of equipment, travel expenses, entertainment expenses, professional service fees, and other office supplies. The increase was mainly attributable to net effects of an increase of salaries and employee surcharge by US$60,331 or 50% and an increase in transaction cost relating to acquisition of $1,356,285 netting off against a decrease of other operating expenses by US$699,089, or 181%. The increase of salaries and employee surcharge was mainly caused by increased salary compensations made to management for the efforts in the acquisition of Sorghum Investment Holdings Limited (“Sorghum”). The increase of transaction cost relating to acquisition is primarily attributable to issuance of unregistered shares to the professional service providers for their services in the acquisition of Sorghum. The decrease of other operating expenses is mainly due to a decrease of US$782,513 in legal and consulting expenses as during the three months ended September 30, 2016, the Company issued 300,000 restricted shares at a fair value of $771,000, to a financial service provider who was involved to assist the Company to find out a new business model and increase profitability.

~~Nine Months Ended September 30, 2017 as Compared to Nine Months Ended September 30, 2016~~

The Company’s net loss for the nine months ended September 30, 2017 was US$8,530,244, representing an increase of US$7,324,128, or 607%, from net loss of US$1,206,116 for the nine months ended September 30, 2016. The change in net income for the nine months ended September 30, 2017 was the net effect of the changes in the following components:

~~The following paragraphs discuss changes in the components of net loss in greater details during the nine months ended September 30, 2017 as compared to the nine months ended September 30. 2016.~~

Net interest income is equal to interest income we generated less interest expenses on short-term bank loans. The Company’s net interest income decreased by US$881,838 or 75% to US$295,294 during the nine months ended September 30, 2017, as compared to net interest income of US$1,177,132 during the nine months ended September 30, 2016.

The interests and fees on loans, direct financing leases and deposits with banks decreased by US$911,895, or 76% to US$295,294 during the nine months ended September 30, 2017, as compared to net interest income of US$1,207,189 during the nine months ended September 30, 2016. The decrease is the combined effect of: (1) the decrease in the amount of monthly interest received from long-aged loans resulting from the existing customers’ deteriorating loan quality; and (2) No new loans or renewal of loans during the nine months ended September 30, 2017, leading to a significant decrease in interest income.

As a traditional industry, the textile industry, which is the pillar industry in Wujiang area, as well as other industries, has been facing downward pressure. Additionally, the bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Some SMEs have to borrow from so-called “underground” lenders, or shadow banks to repay the loans due to the banks. Additionally, the banks denied to extend new loans to some SMEs even after they made the full repayment for the loans due and satisfied other conditions. Management is concerned that the borrowers may use the proceeds from the loans we grant to them as a means of repayment to the other banks or even to the underground lenders, instead of using them in operations. Therefore, management decided to grant new loans in a more cautious manner. During the nine months ended September 30, 2017, we did not grant new loans or renew existing loans. As of September 30, 2017, we had 107 loans with an average loan size of US$544,549. The loan balance of $54,821,187 was accrued of an allowance for uncollectibilty which was equal to the loan balance.

Due to the long-term nature of our restricted deposits with third party banks, we utilized these deposits as term deposits which in turn generated interest income on deposits with banks of US$4,728 during the nine months ended September 30, 2017 as compared to US$3,526 during the nine months ended September 30, 2016. Caused by the contraction of our traditional guarantee business with banks, we have closed several restricted deposit accounts with banks through which we provided guarantee services to our customers. As a result, the interest income on deposits with bank was insignificant during the nine months ended September 30, 2017 and 2016, respectively.

The Company provided a provision for loan losses of US$2,420,698 and reversed a provision for loan losses of US$133,177 for the nine months ended September 30, 2017 and 2016, respectively. The provision for loan losses was determined by comparing the beginning and ending balance of allowance for loan losses for business and personal loans. If the ending balance of the allowance of loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of “reversal” and “provision” is presented in the condensed consolidated statements of operations and comprehensive loss and the components of the provision for loan losses were disclosed in Note 8 of financial statements.

Provision for loan losses increased by $2,553,875 for the nine months ended September 30, 2017, as compared to the same period last year. Based on the management assessment over each individual loan in terms the customers’ payment ability and payment intention, more “doubtful” loans rolled to “loss” loans during the nine months ended September 30, 2017 as compared to that during the nine months ended September 30, 2016. The fact leads to more accrual of provision on loan losses during the nine months ended September 30, 2017 as compared to the same period of 2016.

~~From October 1, 2017 to the date of the report, the Company assessed the charged-off loan balances recorded as of September 30, 2017 and was of the opinion that these balances were uncollectible.~~

As of September 30, 2017, the off-balance-sheet financial guarantee amounted to US$11.4 million. The commissions and fees generated from our financial guarantee services decreased from US$26,308 for the nine months ended September 30, 2016 to US$2,843 for the nine months ended September 30, 2017. The reduction was due to the fact that the Company did not increase any financial guarantee business since March 31, 2016 as management reduced the guarantee portfolio to control the default risk.

As of September 30, 2017, we have provided guarantees for a total of US$11.4 million underlying loans to approximately 14 financial guarantee service customers, as compared to a total of US$10.9 million as of December 31, 2016.

The Company provided a provision for financial guarantee services of US$830,140 for the nine months ended September 30, 2017, as compared to a reversal of provision of US$385,352 for the nine months ended September 30, 2016, representing a change of $1,215,492. The change was mainly attributable to the decrease of repayment from several financial guarantee customers who were classified as “loss customers” as of September 30, 2017.

The methodology the Company used to estimate the liability for probable guarantee loss considers the guarantee contract amount and a variety of factors, which include, dependence on the counterparty, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the costumers or third parties offered, and other economic conditions such as the economic trend of the area and the country. The estimates are based upon currently available information. Based on the recent lawsuit results and repayment status by defaulted customers, the Company estimated approximately 50% of off-balance-sheet financial guarantee services may be subject to default and their repayment may be “not likely”. As of September 30, 2017 and December 31, 2016, the Company accrued approximately 62% and 55% of contract amount, respectively.

Since the beginning of 2016, People’s Bank of China injected a significant amount of liquidity to the market to encourage the development of emerging industries such as online-game, filming and virtual reality, which has made it easier than previous two years for entities in such emerging industries to gain access to capital. However, the bank lenders are still cautious with SMEs in traditional industries. The bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Since the end of the year ended December 31, 2014, the banks denied to extend new loans to many SMEs even after they made the full repayment for the loans due and satisfied other conditions. As a result, some of the SME borrowers for which we provided the guarantees decided to default on the bank loans. Therefore the amount of repayment we made to the bank lenders substantially increased since the year ended December 31, 2014. We have brought collection actions against both the borrowers and their counter-guarantors. However, management was advised by counsel in the collection action that the chance of collection is remote given the large scale bad debt prevalent in Wujiang region. As of September 30, 2017 and December 31, 2016, the management charged off specific provision for two customers in the amount of US$164,220 and US$142,966,10,440,156, respectively.

In ~~February and March 2015,~~December 2017, the Company revisited the classification of its guarantee portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain guarantees into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the guarantee businesses. For customers with several guarantees, ~~with~~each having a different due ~~dates,~~date, if one of their guaranteed loan was past due, the Company decided to reclassify all of this ~~customer's~~customer’s guaranteed loans as past due (even the other loans that were not mature yet). These reclassifications affected numerous customer accounts. We engaged He-Partners Law Firm, one of the largest law firms in Suzhou City, to represent us in the legal proceedings against the borrowers and their counter guarantors, and expect to collect part of the outstanding balance in a period ranging from six twelve months to one and a half year upon adjudication by the court in favor of the Company. The timing of collection and ultimate amount of funds we can recover ~~depend~~depends on a few factors, including the repayment ability of the borrower and their counter-guarantors, the execution time of the court, other obligations the borrowers have and priority over the claim for the Company.

Non-interest expenses increased from US$~~3,218,653~~598,215 for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 to US$~~5,511,075~~712,126 for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, representing an increase of US$~~2,292,422,~~113,911, or ~~71%~~19%. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, changes in fair value of other noncurrent liabilities, depreciation of equipment, travel expenses, entertainment expenses, professional service fees, and other office supplies. The increase was mainly attributable to net effects of ~~an increase~~a decrease of salaries and employee surcharge by US$~~158,034,~~226, 131, or ~~29%~~60%, a decrease of rental expenses by US$4,948, or 36% against an increase in change of ~~transaction cost relating to acquisition~~fair value of ~~$2,136,285 and an increase~~other noncurrent liabilities for settlement of ~~litigation and settlement cost~~shares for the shareholders’ lawsuit ~~of $1,148,500, or 166% netting off against a decrease of~~by 204,540 and an increase in other operating expenses ~~by US$1,108,212, or 58%. The increase~~ of ~~salaries and employee surcharge was~~$132,399, which is mainly caused by increased issuance of restricted shares to management for the nine months ended September 30, 2017. The increase of transaction cost relating to acquisition is primarily attributable to issuance of unregistered shares to the professional service providers for their services in the acquisition of Sorghum. The increase of legal and settlement cost of shareholders’ lawsuit was attributable to accrual of expenses on the basis of a final fairness hearing on May 30, 2017 when the share price increased significantly as compared with initial estimation of the contingent expenses. The decrease of other operating expenses is mainly due to a decrease of US$1,262,313 in legal and consulting expenses of US$97,953 as ~~during the three months ended September 30, 2016,~~a result of increased legal proceedings the Company ~~issued 300,000 restricted shares at a fair value of $771,000, to a financial service provider who~~ was involved to ~~assist the Company to find out a new business model~~collect delinquent balances from borrowers and ~~increase profitability.~~guarantees.

One of our key objectives is to maintain a high level of loan portfolio quality. When a borrower fails to make a scheduled payment, we attempt to cure the deficiency by personally contacting the borrower. Initial contacts typically are made seven days after the date the payment iswas due, and warning letters are sent by our legal counsel approximately 90 days after the default. In most cases, deficiencies are promptly resolved. If the outstanding amount cannot be collected within 180 days after the maturity date and the parties could not reach an agreement on a specific repayment program, we ~~will~~ initiate legal proceedings.

We also ~~keep the frequency of~~ visits to our customers and observe their daily production on site from time to time to observe their operating condition and collect their financial information. Since most of our customers are in the Jiangsu area, it is also relatively easy to obtain information about our customers.

On loans where the collection of principal or interest payments is doubtful, the accrual of interest income ceases and ~~become~~the loan becomes “non-accrual” ~~loans.~~. Except for loans that are sufficiently secured and in the process of collection, it is our policy to discontinue accruing additional interest and reverse any interest accrued on any loan which is 90 days or more past due.

We account for our impaired loans in accordance with U.S. GAAP. An impaired loan is generally is one for which it is probable, based on current information, that the lender will not collect all the amounts due under the contractual terms of the loan. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment history and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for business and personal loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateralized.

We allow a one-time loan extension with time duration up to the original loan term, which is usually within twelve months. In order to qualify, the borrower must be current with its interest payments. We do not grant concession to borrowers as the principal of the loan remains the same and interest rate is fixed at the current interest rate at the time of extension.

We use a comprehensive methodology to monitor credit quality and prudently manage credit concentration within our portfolio of loans. Currently our loan portfolio concentrates in the textile industry and during the ~~nine~~three months ended ~~September 30, 2017, both~~March 31, 2018, the domestic ~~and international~~ demand for textile products have been decreasing. To maintain our loan portfolio quality, we have modified our loan policy to accept only textile companies with real estate as collateral or guaranteed by guarantee companies. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, we assessed the loan portfolio quality and ~~charged-off loan receivable balances recorded as of September 30, 2017 and were of~~was in the opinion that ~~these balances~~the loans that were charged off in previous periods were uncollectible.

In addition, we plan to minimize our risks by concentrating on smaller amount loans that are below US$~~451,000~~478,000 (or approximately RMB 3.0 million).

Currently, the banking industry encourages SMEs to apply for loans as individuals with recourse so that when it is past due, both the SME and the responsible individual are both liable for the past due amount and the individual borrower carries personal liability. As

Affected by above factors, as of ~~September 30, 2017,~~March 31, 2018, our loan balance ~~did not significant change~~experienced an increase of US$1,448,907 in ~~both~~ business ~~loans~~loan and an increase of US$385,458 in personal ~~loans~~loan, as compared to that as of December 31, ~~2016.~~2017.

The following table sets forth the classification of loans receivable as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively:

	September 30, 2017 (unaudited) Amount		Percent of Total			December 31, 2016 Amount		Percent of Total			March 31, 2018 Amount		Percent of Total			December 31, 2017 Amount		Percent of Total
											(unaudited)
Business loans	$	36,783,453		63.13	%	$	37,786,657		64.57	%	$	22,716,745		53.44	%	$	21,267,838		52.28	%
Personal loans		21,483,267		36.87	%		20,736,324		35.43	%		19,795,934		46.56	%		19,410,476		47.72	%
Total Loans receivable	$	58,266,720		100	%	$	58,522,981		100	%	$	42,512,679		100	%	$	40,678,314		100	%

Nonaccrual loans totaled US$~~56.28~~37.55 million, or ~~96.60%~~88.32% of loans receivable as of ~~September 30, 2017,~~March 31, 2018, as compared with US$~~56.58~~36.81 million, or ~~96.68%~~90.48% of loans receivable, as of December 31, ~~2016.~~2017. The allowance for loan losses was US$~~54.82~~37.59 million, representing ~~94.09%~~88.43% of loans receivable and ~~97.40%~~100.13% of non-accrual loans as of ~~September 30, 2017.~~March 31, 2018. As of December 31, ~~2016,~~2017, the allowance for loan losses was US$~~51.71~~36.61 million, representing ~~88.36%~~90.00% of loans receivable and ~~91.39%~~99.48%% of non-accrual loans.

The following table sets forth information concerning our nonaccrual loans as of ~~September 30,~~March 31, 2018 and March 31, 2017, ~~and December 31, 2016,~~ respectively:

	September 30, 2017 (unaudited)			December 31, 2016			March 31, 2018			December 31, 2017
							(unaudited)
Nonaccrual loans	$	56,283,219		$	56,579,073		$	37,545,080		$	36,805,205
Allowance for loan losses	$	54,821,187		$	51,708,062		$	37,594,756		$	36,613,393
Loans receivable	$	58,266,720		$	58,522,981		$	42,512,679		$	40,678,314
Total assets	$	7,714,013		$	9,570,743		$	7,310,041		$	7,165,284
Nonaccrual loans to loans receivable		96.60	%		96.68	%		88.32	%		90.48	%
Nonperforming assets to total assets		729.62	%		591.17	%		513.61	%		513.66	%
Allowance for loan losses to loans receivable		94.09	%		88.36	%		88.43	%		90.00	%
Allowance for loan losses to non-accrual loans		97.40	%		91.39	%		100.13	%		99.48	%

As a traditional industry ~~the textile industry,~~textiles, which is the pillar industry in Wujiang area, as well as other industries, ~~has~~have been facing downward pressure. As the local SMEs’ profitability and repayment ability deteriorates, “special mentioned”, “substandard” and “doubtful’ bank loans drastically increased. As such, our provision for loan losses remained at a high level as of ~~September 30, 2017.~~March 31, 2018.

During the three months ended March 31, 2018, we reassessed the collectability of the loans and was in the opinion that the loans that were charged off in previous periods were uncollectible. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due.

We have financed our operations primarily through shareholder contributions, cash flow from operations, and public offerings of securities. As a result of ~~our total~~ cash ~~activities,~~outflows for daily operations, net cash ~~increased~~decreased from US$~~768,501~~2,498,194 as of December 31, ~~2016~~2017 to US$~~3,030,468~~2,265,145 as of ~~September 30, 2017.~~March 31, 2018.

The following includes conditions ~~described below raises~~which give rise to substantial doubt about the Company’s ability to continue as a going concern within one year from the financial statement issuance date ~~of this filing.~~and management’s plans to mitigate these adverse conditions:

The Company had an accumulated deficit of US$~~78,734,900~~81,920,294 as of ~~September 30, 2017.~~March 31, 2018. In addition, the Company had a negative net asset of US$~~774,251~~4,450,241 as of ~~September 30, 2017.~~March 31, 2018. As of ~~September 30, 2017,~~March 31, 2018, the Company had cash ~~and cash equivalents~~ of US$~~3,030,468,~~2,265,145 and total ~~short-term borrowings~~liabilities other than accrual for financial guarantee services of ~~nil.~~$1,875,894. Caused by the limited funds, the management assessed that the Company was not able to keep the size of lending business within one year from the ~~filing of Form 10-Q.~~financial statement issuance date.

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, the Company incurred operating loss of US$~~8,530,244.~~385,898. Affected by the reduction of lending business and guarantee business and increased loss loans, ~~the~~ management was inof the opinion that recurring operating losses ~~with be made~~would continue, within one year from the financial statement issuance ~~of the filing.~~date.

The Company continues to use its best ~~effort~~efforts to improve collection of ~~loan~~loans receivable and interest receivable. Management engaged ~~two~~a PRC law firms to represent the Company in the legal proceedings against the borrowers and their counter guarantors.

Since January 1, 2018, the Company is making efforts to introduce new businesses to improve the operating cash flow of the ~~filing.~~

~~The Company continues to reduce the redundant headcount and entered into a new office lease with lower rent commitment since January 1, 2017 to improve operating cash flow.~~Company.

Most loan customers are from textile industry which has been facing downward pressure. Additionally, the Company has been facing fierce competition and has been adversely affected by emergence of internet finance ~~entities, the Company was facing fierce competition. Considering~~entities. As such, considering the high risks from both customers and competitors, management assessed the Company would further reduced the loan business without strong financial support.

The Company is actively seeking other strategic partners with experience in lending business.

The Company has been actively seeking strategic investors with experience in lending business as well as financial investors. Management also invested in the Company ~~on August 9,~~during the year ended December 31, 2017 ~~entered into Certain Share Exchange Agreement (“Exchange Agreement”) with~~and plans continue to invest in the ~~parent company~~Company during the year ended December 31, 2018, if necessary.

The Company plans to continue to seek financial as well as strategic investors for additional financing.

Although we have continued to use our best efforts to improve our collection of loan receivable and interest receivable by engaging local law firms in China, it has been very difficult for us to collect from the ~~terms~~borrowers. As such, the Company has been actively seeking strategic acquisition of business or assets to improve our liquidity. Since the termination of the Exchange Agreement ~~CCCR will~~with Sorghum in last December, we have evaluated a few potential acquisition targets. As of now, the Company plans to acquire ~~100%~~certain second-hand luxury cars dealership business assets or other appropriate business deemed to be appropriate by the board of directors. As of the ~~outstanding~~date of this Quarterly Report, the Company has not entered into any letter of intent or definitive agreement for such acquisition and there can be no assurance that we will be able to locate any target or negotiate definitive agreements.

On April 28, 2018, the Company entered into certain securities purchase agreements (the “Initial SPAs”) with certain “non-U.S. Persons” (the “Purchasers”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company agreed to sell 1,336,314 shares ~~of Sorghum through issuance of 152,587,000~~ of its common ~~shares. This transaction~~stock (“Common Stock”), par value $0.001 per share, at a per share purchase price of $0.78. The net proceeds to the Company from the Initial SPAs Offering will be ~~accounted~~approximately $1,042,324. The Initial SPAs are part of the subscription the Company received in a private placement offering (the “Offering”) of its Common Stock at a per share purchase price of $0.78 up to an aggregate gross proceeds of three million dollars ($3,000,000) to “non-U.S. Persons” as defined in Regulation S. The Offering shall be on a rolling basis until June 30, 2018 unless the Company extends for an additional 30 days at its sole discretion. The net proceeds of the Offering shall be used by the Company in connection with the Company’s planned operation (the “Planned Business”) of certain used luxurious car leasing or other related business as approved by the board of directors of the Company. On May 10, 2018, the Company issued the 1,336,314 shares of Common Stock to the Purchasers since all the closing conditions of the Initial SPAs have been satisfied when the Company obtained required license to carry out the used luscious car leasing business.

The following table sets forth a summary of our cash flows ~~for~~For the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively:

	For the nine months ended September 30,						For the three months ended March 31,
	2017			2016			2018			2017
Net cash used in operating activities	$	(1,248,629	)	$	(47,871	)
							(unaudited)			(unaudited)
										(restated)
Net cash used in by operating activities							$	(608,646	)	$	(363,081	)
Net cash provided by investing activities		1,905,807			2,499,916			332,966			674,977
Net cash provided by (used in) financing activities		1,560,000			(1,600,832	)
Net cash provided by financing activities								-			-
Effects of exchange rate changes on cash		44,789			9,747			42,631			371
Net cash inflow	$	2,261,967		$	860,960		$	233,049		$	312,267

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, we had a cash outflow from operating activities of US$~~1,248,629,~~608,646, an ~~increase~~decrease of cash outflow of US$~~1,200,798~~245,565 from a cash outflow of US$~~47,871~~363,081 for the same period of last year. We generated a net loss for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 of US$~~8,530,244, an increase~~385,898, a change of US$~~7,324,128~~842,179 from the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, during which we incurred a net loss of US$~~1,206,116.~~1,228,077. In addition to the change in profitability, the decrease in net cash used in operating activities was the result of several factors, including:

Net cash provided by investing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 was US$~~1,905,807~~332,966 as compared to net cash provided by investing activities of US$~~2,499,916~~674,977 for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2017. The cash provided by investing activities for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 was the net effect of disbursement of loans to third party customers of US$1,635,683 against collection of US$1,402,912 from third party loan customers and $172,544 from third party financial guarantee services, respectively, and collection of short-term investments from a financial institution of US$393,193. The cash provided by investing activities for the three months ended March 31, 2017 was ~~net~~combined effects of collection of principals of US$~~1,155,055~~121,931 from third party customers of direct loan business, collection of principal of US$~~227,723~~72,578 from direct financing lease customers, and collection of short-term loans from a related party of US$478,954. The cash provided by investing activities for the nine months ended September 30, 2016 was mainly collection of principals of $2,147,593 from third party customers of direct loan business, collection of $1,427,674 from third party customers of financial guarantee services, netting off against a short-term loan of US$1,945,224 advanced to a related party473,210.

~~Net cash provided by financing activities for~~During the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~was US$1,560,000 as compared to net cash used in~~the Company did not incur any significant financing activities of US$1,600,832 for the nine months ended September 30, 2016. The cash provided by financing activities for the nine months ended September 30, 2017 was mainly from private placement of 1,237,486 shares with four individuals. The cash used in financing activities for the nine months ended September 30, 2016 was mainly attributable the repayment of bank borrowing.activities.

As of ~~September 30, 2017,~~March 31, 2018, the annual amounts of future minimum payments under certain of our contractual obligations were:

	Payment due by period												Payment due by period
	Total		Less than 1 year		1-2 years		2-3 years		3-5 years		5 years and after		Total		Less than 1 year		1-2 years		2-3 years		3-5 years		5 years and after
Contractual obligations:
Operating lease (1) (2)		62,237		30,643		25,202		6,392		-		-
Operating lease (1)													$	79,699	$	58,916	$	20,783		-		-		-
	$	62,237	$	30,643	$	25,202	$	6,392	$	-	$	-	$	79,699	$	58,916	$	20,783	$	-	$	-	$	-

These financial guarantee contracts consist of providing guarantees to banks on behalf of borrowers to help them obtain loans from banks. The contract amounts reflect the extent of involvement the Company has in the guarantee business and also represents the Company’s ~~maximum~~potential exposure to credit ~~loss.~~loss in addition to any penalties and legal proceeding fees.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its borrowers. Financial instruments whose contract amounts represent credit risk are as ~~follows.~~follows:

The Company is involved in various legal actions arising from providing financial guarantee services to defaulted guarantees. As of March 31, 2018, eleven cases against the Company were finally adjudicated by the Court, in which the Company was jointly liable, together with the defaulted customers and other guarantees, to repayment the principal, interest and penalties of $6.91 million. Additionally, three cases against the Company have not been adjudicated by the Court, in which the Company is jointly liable, together with the defaulted customers and other guarantees, to repayment the principal, interest and penalties of $2.97 million.

Please refer to Note 3 of our Condensed Consolidated Financial Statements included in this Form 10Q for details of our critical accounting policies.

Please refer to Note ~~3(u)~~3(w) of our Consolidated Financial Statements included in Form 10-K filed on April 16, 2018 for details of our recently issued accounting standards.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2017 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (“SEC”) rules and forms, and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.March 31, 2018.

~~The Company’s~~on the Effectiveness of Disclosure Controls. Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting ~~is designed to provide reasonable assurance regarding the reliability of financial reporting~~will necessarily prevent all fraud and ~~the preparation of financial statements for external purposes in accordance with U.S GAAP. The Company’s~~material error. An internal ~~control over financial reporting includes those policies and procedures that:~~

Management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well ~~designed~~conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. ~~Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.~~ Because of the inherent limitations in all control systems, no evaluation of ~~internal~~ controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. ~~Also,~~The design of any ~~evaluation of the effectiveness~~system of controls also is based in part upon certain assumptions about the likelihood of future ~~periods are subject to the risk~~events, and there can be no assurance that ~~those internal controls may become inadequate because of changes~~any control design will succeed in ~~business conditions, or that the degree of compliance with the policies or procedures may deteriorate.~~achieving its stated goals under all potential future conditions.

There were no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2018 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

The Company is involved in various legal actions arising in the ordinary course of its business.

On August 6, 2014, a purported shareholder Andrew Dennison filed a putative class action complaint in the United States District Court District of New Jersey (the “N.J. district court”) relating to a July 25, 2014 press release about the Company’s progress in recovering a significant portion of the $5.4 million the Company paid in the first quarter of 2014 on behalf of loan guarantee customers. The action, Andrew Dennison v. China Commercial Credit, Inc., et al., Case No. 2:2014-cv-04956, alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Xiangdong Xiao, and John F. Levy violated the federal securities laws by misrepresenting in prior public filings certain material facts about the risks associated with its loan guarantee business. On October 2, 2014, purported shareholders Zhang Yun and ~~SanjivMehrotra~~Sanjiv Mehrotra (the “Yun Group”) asserted substantially similar claims against the same defendants in a putative class action captioned Zhang Yun v. China Commercial Credit, Inc., et al., Case No. 2:14-cv-06136 (D. N.J.). Neither complaint states the amount of damages sought.

On or about October 6, 2014, Dennison, the Yun Group and another purported shareholder, Jason Stark, filed motions to consolidate the cases, be appointed as lead plaintiff and to have their respective counsel appointed as lead counsel. On October 31, 2014, the N.J. district court entered an order consolidating the cases under the caption “In“In re China Commercial Credit Inc. Securities ~~Litigation~~”Litigation” and appointing the Yun Group as lead plaintiff (“Class Plaintiff”) and the Yun Group’s counsel as lead counsel.

On November 22, 2016, the Company entered into a Stipulation and Agreement of Settlement (the “Stipulation”) to settle the Securities Class Action. The Stipulation ~~resolves~~resolved the claims asserted against the Company and certain of its current and former officers and directors in the Securities Class Action without any admission or concession of wrongdoing or liability by the Company or the other defendants. ~~On June 1, 2017, following~~The Stipulation also provides, among other things, a ~~final fairness hearing on May 30, 2017 regarding the proposed~~ settlement the Court entered a final judgment and order that: (i) dismisses with prejudice the claims asserted in the Securities Class Action against all named defendants in connection with the Securities Class Action, includingpayment by the Company ~~and releases any claims that were or could have been asserted that arise from or relate to the facts alleged in the Securities Class Action, such that every member~~ of ~~the settlement class will be barred from asserting such claims in the future; and (ii) approves the payment of $220,000~~$245,000 in cash and the issuance of 950,000 shares of its common stock (the “Settlement Shares”) to ~~members~~the plaintiff’s counsel and class members.The terms of the ~~settlement class. In addition, the Company would incur a payment of $25,000 in cash~~Stipulation were subject to ~~class administrator. At present, the Company is waiting for~~approval by the Court following notice to ~~approve the disbursement~~all class members. The issuance of the Settlement ~~Shares. Plaintiff is filing~~Shares are exempt from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. A fairness hearing was held on May 30, 2017, and the Court approved the settlement. On December 22, 2017, the Court entered a ~~motion~~distribution order approving the distribution of the Settlement Stock to ~~obtain such approval.~~the class plaintiffs. The $245,000 cash portion of the settlement has been paid in full. The ~~Company accrued settlement cost aggregating US$1,863,500 and US$690,000 during the nine months ended September, 2017 and 2016, respectively.~~

~~On July 28, 2017, the Court entered a clarifying order to specify the allocation of attorneys’ fees in accordance with the Stipulation.~~

Two of the Underwriter Defendants, Axiom Capital Management, Inc., and ViewTrade Securities, Inc., have asserted their respective rights to indemnification under the Underwriting Agreements entered into in connection with the Company’s initial public offering and secondary offering. On or about March 16, 2016, CCCR entered into an Advance Funding and Escrow Agreement (“Advance Funding Agreement”), under which the CCCR agreed to deposit shares into escrow to fund the advancement obligation, with the initial deposit to be 637,592 shares which was valued at Two Hundred Thousand Dollars ($200,000), based upon 80% of the 30 day volume weighted average ~~Trading Price (“VWAP”)~~trading price for each of the 30 consecutive trading days prior to the date of the ~~Agreement.~~agreement. As of the completion of the settlement, an aggregate of 527,078 shares are unused in the escrow account and the Underwriter Defendants acknowledged there is no additional payment of fees and expenses owed to the Underwriter Defendants and the Advance Funding Agreement shall be terminated. The Company has instructed the transfer agent to cancel the 527,078 shares and return them to authorized shares. As of the date of this Annual Report, the Company is working with its counsel and the escrow agent to complete such cancelation.

On February 3, 2015, a purported shareholder ~~KiramKodali~~Kiran Kodali filed a putative shareholder derivative complaint in the United States District Court for the Southern District of New York, captioned ~~KiranKodali~~Kiran Kodali v. Huichun Qin, et al., Case No. 15-cv-806. The action alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Chunfang Shen, John F. Levy, Xiaofang Shen and Chunjiang Yu violated their fiduciary duties, grossly mismanaged the Company and were unjustly enriched based upon the transfer that was the subject of the Internal Review and other grounds substantially similar to those asserted in the class action complaints. Kodali did not serve a demand upon the Company and alleges that demand is excused. The Company and Mr. Levy are the only defendants who have been served. An amended derivative complaint was filed on April 20, 2015.

On May 29, 2015, the Court “so ordered” a stipulation among Kodali, the Company, and Mr. Levy staying all proceedings in the derivative case, except for service of process on individual defendants, until the earlier of thirty days of termination of the stipulation, dismissal of the class action with prejudice or the date any of the defendants in the class action file an answer to the CAC.

On October 10, 2017, the Company filed Amendment No. 1 to its Preliminary Proxy Statement (the “Amended Preliminary Proxy”) with the U.S. Securities and Exchange Commission (the “Commission”) in response to the Commission’s September 8, 2017 comment letter (“Comment Letter”). After reviewing the Amended Preliminary Proxy, Plaintiff determined that the Company’s Amended Preliminary Proxy rendered the claims asserted in Plaintiff’s Complaint moot and/or otherwise unsuitable for further pursuit. On October 19, 2017, the Company and Plaintiff entered into a stipulation (“Stipulation”) wherein Plaintiff agreed to voluntarily dismiss his claims against the Company, and its directors, with prejudice. The Delaware Chancery Court granted the Stipulation on October 20, 2017, and entered an Order dismissing the Action with prejudice. In accordance with the Order, the Company will advise the Delaware Chancery Court within fifteen (15) days of the earlier of (a) the stockholder vote on the Exchange Agreement relating to the proposals, or (b) the termination of the Exchange Agreement, and whether the parties to the Action have reached an agreement with respect to Plaintiff’s anticipated request for fees and expenses. Currently, no compensation in any form has passed from the Company, or its directors, to Plaintiff or Plaintiff’s attorneys in the Action, and the Company has not made a promise to give any such compensation. On or about November 6, 2017, the Company filed Amendment No. 2 to its Preliminary Proxy Statement with the Commission in further response to ~~comments~~the Comment Letter. On December 29, 2017, the Company received notice from Sorghum notifying the ~~Commission.~~Company that the Exchange Agreement is terminated. The Company advised Plaintiff of the termination of the Exchange Agreement on January 9, 2018.

On December 21, 2017, the Company delivered notice (“Notice”) to Sorghum notifying Sorghum that certain recent actions of Sorghum constituted breaches of Sorghum’s covenants under the Exchange Agreement. Specifically, we believe that Sorghum is in breach of Section 6.9 (a) and Section 6.11 (b) of the Exchange Agreement which required Sorghum to use commercially reasonable efforts and to cooperate fully with the other parties to consummate the transactions contemplated by the Exchange Agreement and to make its directors, officers and employees available in connection with responding in a timely manner to SEC comments. According to the terms of the Exchange Agreement, the Company is entitled to terminate the Exchange Agreement if the breach is not cured within twenty (20) days after the Notice is provided to Sorghum.

On January 25, 2018, the Company filed an arbitration demand (“Arbitration Demand”) with the American Arbitration Association (“AAA”) against Sorghum in connection with Sorghum’s breach of the Exchange Agreement. On December 21, 2017, prior to filing the Arbitration Demand, the Company provided Sorghum with formal notice of its breaches to the Exchange Agreement. The AAA has forwarded the Company’s Arbitration Demand to Sorghum, and Sorghum’s response to the Arbitration Demand was due on or before February 14, 2018. Sorghum did not provide a written response to the Company’s Arbitration Demand by the deadline. However, in accordance with the Commercial Arbitration Rules of the AAA (“Rules”), Sorghum’s failure to respond is deemed as a general denial of the Company’s claims. On March 14, 2018, the AAA initially appointed a single arbitrator to the matter subject to the parties’ approval. On March 28, 2018, the AAA conducted an initial telephonic conference with Arbitrator Barbara Mentz, but neither Sorghum nor its counsel appeared for the call. On March 28, 2018, after the Company’s counsel appeared for the initial telephonic conference, Sorghum and its counsel contacted the AAA claiming that it was not in receipt of the AAA’s correspondence although the AAA forwarded its correspondence to Sorghum’s Chief Executive Officer’s active email. In response, the AAA scheduled another telephonic conference for April 9, 2018. All parties appeared at the April 9, 2018 conference, and approved Arbitrator Mentz’s appointment. On April 11, 2018, pursuant to the Rules, Sorghum filed its answer and counterclaim. The Company filed a written denial to Sorghum’s counterclaim on April 26, 2018. On May 2, 2018, the parties jointly requested an extension of time to file their respective proposals for resolution with the AAA, and Arbitrator Mentz granted the extension. In accordance with Arbitrator Mentz’s Order, the parties’ proposals are due May 31, 2018. The Company intends to prosecute its claims and defend against Sorghum’s counterclaim vigorously.

On August 10, 2017, the Company issued 4,500 and 5,500 restricted shares to Axiom Capital Management, Inc. and Michael S. Jacobs, respectively, as compensation for the issuance of a fairness opinion. All these shares are issued pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

On ~~September 14, 2017,~~April 11, 2018 the Company ~~issued 460,000~~sold 649,350 restricted shares to certain ~~advisors and finders as compensation for their services rendered in connection with the acquisition~~non-US investors at a purchase price of ~~Sorghum Investment Holdings Limited.~~$0.77 per share. All these shares ~~are~~were issued pursuant to ~~Section 4(a)(2) of the Securities Act.~~ Regulation S.

On ~~September 27, 2017,~~May 10, 2018, the Company ~~entered into~~sold 1,336,314 restricted shares to certain non-US investors at a securities purchase Agreement (the “SPA”) with certain accredited and sophisticated investors in connection with a private placement offering (the “Offering”) of 552,486 shares (“Shares”) of common stock, par value $0.001 per share, of the Company, for gross proceeds to the Company of one million dollars. The purchase price of $0.78 per ~~share of the Offering is $1.81. In connection with the purchase of the Shares, the Purchasers received a warrant (the “Warrant”) to purchase up to the number of~~share. All these shares ~~of the Company’s common stock equal to 193,370 of the shares of common stock purchased by the Purchasers~~were issued pursuant to the SPA. The Warrant has an exercise price of $2.26 per share and is exercisable on the date of issuance and expire five years form the date of issuance. The Offering closed on September 29, 2017. The Shares issued in the Offering are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation ~~D promulgated thereunder.~~S.

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.

	For The Nine Months Ended September 30,
	2017 (Unaudited)			2016 (Unaudited)
Cash Flows from Operating Activities:
Net loss	$	(8,530,244	)	$	(1,206,116	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,999			46,455
Provision/(Reversal of provision) for loan losses		2,420,698			(133,177	)
Provision/(Reversal of provision) for direct financing lease losses		66,113			(242,180	)
Provision/(Reversal of provision) of provision for financial guarantee services		830,140			(385,352	)
Deferred tax credit		-			(40,364	)
Income from disposal of property and equipment		-			(48,945	)
Shares issued to executive officers and professional services		2,159,480			1,354,424
Provision for settlement expenses against legal proceedings		1,843,500			465,000
Changes in operating assets and liabilities:
Restricted cash		(34	)		-
Interest receivable		(63,967	)		-
Other assets		11,439			8,060
Unearned income from guarantee services and finance lease services		(19,406	)		(23,572	)
Other current liabilities		28,653			118,255
Income tax payable		-			39,641
Net Cash Used in Operating Activities		(1,248,629	)		(47,871	)

Cash Flows from Investing Activities:
Loans collection from third parties		1,155,055			2,147,593
Payment of loans on behalf of guarantees		-			(127,886	)
Collection from guarantees for loan paid on behalf of customers		44,075			1,825,730
Collection of principal of finance lease, in installments		227,723			484,361
Deposit released from banks for financial guarantee services		-			801,530
Deposit paid to banks for financial guarantee services		-			(694,403	)
Purchases of property and equipment and intangible asset		-			(48,342	)
Disposal of property and equipment		-			56,557
Short-term loan paid to a related party		-			(1,945,224	)
Short-term loan collected from a related party		478,954			-
Net Cash Provided by Investing Activities		1,905,807			2,499,916

Cash Flows From Financing Activities:
Cash raised in private placement		1,560,000			1,000,000
Repayment of short-term bank borrowings		-			(2,600,832	)
Net Cash Provided by/ (Used in) Financing Activities		1,560,000			(1,600,832	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents		44,789			9,747

Net Increase In Cash and Cash Equivalents		2,261,967			860,960
Cash and Cash Equivalents at Beginning of Period		768,501			306,401
Cash and Cash Equivalents at End of Period	$	3,030,468		$	1,167,361

Supplemental Cash Flow Information
Cash paid for interest expense	$	-		$	30,057
Cash paid for income tax	$	-		$	-

	For the Three Months Ended March 31,
	2018			2017
	(unaudited)			(unaudited) (restated)
Cash Flows from Operating Activities:
Net loss		(385,898	)		(1,228,077	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,889			1,646
(Reversal of provision) Provision for loan losses		(330,282	)		782,882
Reversal of provision for direct financing lease losses		-			(36,289	)
Provision (Reversal of provision) for financial guarantee services		104,391			(7,207	)
Shares issued to executive officers and consultants		-			193,180
Changes in fair value of noncurrent liabilities		147,540			(57,000	)
Income tax expenses		-			20,654
Deferred income tax expenses		-			(20,654	)
Interest income arising from restricted cash		(10	)		(33	)
Changes in operating assets and liabilities:
Interest receivable		(21,428	)		(20,398	)
Other assets		(18,215	)		11,272
Unearned income from guarantee services and finance lease services		-			(8,286	)
Other current liabilities		(75,178	)		5,229
Due to a related party		(31,455	)		-
Net Cash Used in Operating Activities		(608,646	)		(363,081	)

Cash Flows from Investing Activities:
Originated loans disbursement to third parties		(1,635,683	)		-
Loans collection from third parties		1,402,912			121,931
Collection from guarantees for loan paid on behalf of customers		172,544			7,258
Collection of principal of finance lease, in installments		-			72,578
Short-term loan collected from a related party		-			473,210
Short-term investments collected from financial institutions		393,193			-
Net Cash Provided by Investing Activities		332,966			674,977

Cash Flows From Financing Activities:
Net Cash Provided by Financing Activities		-			-

Effect of Exchange Rate Changes on Cash		42,631			371

Net (Decrease) Increase in Cash		(233,049	)		312,167
Cash at Beginning of Period		2,498,194			768,501
Cash at End of Period		2,265,145			1,080,768

Supplemental Cash Flow Information
Cash paid for interest expense		-			-
Cash paid for income tax		-			-

		September 30, 2017				December 31, 2016
Balance sheet items, except for equity accounts			6.6549				6.9448

		March 31, 2018				December 31, 2017
Balance sheet items, except for equity accounts			6.2807				6.5064

	September 30, 2017 (Unaudited)		December 31, 2016
Total assets	$	4,332,304	$	7,968,077
Total liabilities	$	7,725,585	$	8,012,892

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

		September 30, 2017 (Unaudited)				December 31, 2016
Guarantee		$	11,367,564			$	10,893,089

	1-89 Days Past Due		90 - 179 Days Past Due		180 - 365 Days Past Due		Over 1 year Past Due		Total Past Due		Current		Total Loans

Business loans	$	-	$	-	$	11,437,290	$	23,362,662	$	34,799,952	$	1,983,501	$	36,783,453
Personal loans		-		-		6,544,051		14,939,216		21,483,267		-		21,483,267
	$	-	$	-	$	17,981,341	$	38,301,878	$	56,283,219	$	1,983,501	$	58,266,720

	1-89 Days Past Due		90 - 179 Days Past Due		180 - 365 Days Past Due		Over 1 year Past Due		Total Past Due		Current		Total Loans
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)

Business loans	$	-	$	-	$	-	$	17,749,146	$	17,749,146	$	4,967,599	$	22,716,745
Personal loans		-		-		-		19,795,934		19,795,934		-		19,795,934
	$	-	$	-	$	-	$	37,545,080	$	37,545,080	$	4,967,599	$	42,512,679

Five Categories	March 31, 2018		%			December 31, 2017		%
	(unaudited)

Pass	$	4,967,599		11.7	%	$	3,873,110		9.5	%
Special mention		-		-			-		-
Substandard		-		-			-		-
Doubtful		-		-			-		-	%
Loss		37,545,080		88.3	%		36,805,204		90.5	%
Total	$	42,512,679		100	%	$	40,678,314		100	%

	September 30, 2017 (Unaudited)			December 31, 2016

Total minimum lease payments to be received	$	3,365,941		$	3,599,831
Less: Amounts representing estimated executory costs		-			-
Minimum lease payments receivable		3,365,941			3,599,831
Less Allowance for uncollectible		(2,615,635	)		(2,441,663	)
Net minimum lease payments receivable		750,306			1,158,168
Estimated residual value of leased property					-
Less: Unearned income		(299,511	)		(287,009	)
Net investment in direct financing lease	$	450,795		$	871,159

	For the three months ended September 30,				For the nine months ended September 30,
	2017 (Unaudited)		2016 (Unaudited)		2017 (Unaudited)		2016 (Unaudited)
Depreciation and amortization	$	1,700	$	12,168	$	4,999	$	46,455
Travel expenses		14,633		9,647		29,617		13,134
Entertainment expenses		6,148		42		10,623		11,970
Legal and consulting expenses		220,291		1,002,804		380,003		1,642,316
Car expenses		2,878		3,726		11,489		21,541
Bank charges		707		540		2,313		2,256
Audit-related expense		78,458		31,382		175,944		100,955
Other expenses		62,188		25,783		169,827		54,400
Total	$	387,003	$	1,086,092	$	784,815	$	1,893,027

	For the three months ended
	March 31,
	2018		2017
	(unaudited)		(unaudited)
Depreciation and amortization	$	1,889	$	1,646
Travel expenses		31,770		11
Entertainment expenses		2,630		1,941
Legal and consulting expenses		215,430		117,477
Car expenses		6,917		4,456
Bank charges		1,068		990
Audit-related expense		20,600		71,781
Allowance for other receivable		30,157		-
Other expenses		81,744		61,504
Total	$	392,205	$	259,806

Name		Relationship with the Company
Wujiang Chunjia Textile Trading Co., Ltd (“Chunjia Textile”)		Controlled by Huichun Qin
~~Suzhou Rongshengda~~Wujiang Xiaocun Shengda Founding Investment ~~Holding~~ Co., Ltd.		Controlled by shareholders of Wujiang Luxiang
Yang Jie		A significant shareholder and Vice President of Finance of the Company
Long Yi		Chief Finance Officer of the Company
Huichun Qin		Non-controlling shareholder and former CEO and chairman of board of directors

	September 30, 2017 (Unaudited)		December 31, 2016

Suzhou Rongshengda Investment Holding Co., Ltd.	$	-	$	469,418
Chunjia Textile		204,540		196,001
Huichun Qin	$	1,051,857	$	1,007,953

	Rental payments (Unaudited)

Year ending September 30, 2018		30,643
Year ending September 30, 2019		25,202
Year ending September 30, 2020		6,392
Total	$	62,237

	Rental payments

Year ending March 31, 2019	$	58,916
Year ending March 31, 2020		20,783
Total	$	79,699

	For The Three Months Ended March 31, 2017
	As Previously Reported			Adjustments		As Restated

Changes in fair value of other noncurrent liabilities		-			57,000		57,000
Total non-interest expense		(655,215	)		57,000		(598,215	)
Loss Before Income Taxes		(1,285,077	)		57,000		(1,228,077	)
Net Loss		(1,285,077	)		57,000		(1,228,077	)
Loss per Share- Basic and Diluted		(0.077	)		0.003		(0.074	)
Net Loss		(1,285,077	)		57,000		(1,228,077	)
Comprehensive loss	$	(1,263,462	)	$	57,000	$	(1,206,462	)

	For the Three Months Ended March 31,						Change
	2018			2017			Amount			%
	(unaudited)			(unaudited) (restated)
Interest income
Interests and fees on loans and direct financing lease	$	96,995		$	106,674			(9,679	)		-9	%
Interests on deposits with banks		3,777			102			3,675			3603	%
Total interest and fee income		100,772			106,776			(6,004	)		-6	%

Interest expense
Interest expense on short-term bank loans		-			-			-			0	%
Net interest income		100,772			106,776			(6,004	)		-6	%

Reversal of provision (Provision) for loan losses		330,282			(782,882	)		1,113,164			-142	%
Reversal of provision for direct financing lease losses		-			36,289			(36,289	)		-100	%
Net interest income (loss) after provision for loan losses and financing lease losses		431,054			(639,817	)		1,070,871			-167	%

Commissions and fees on financial guarantee services		-			2,843			(2,843	)		-100	%
(Provision) Reversal of provision for financial guarantee services		(104,391	)		7,207			(111,598	)		-1548	%
Commission and fee (loss) income on guarantee services, net		(104,391	)		10,050			(114,441	)		-1139	%

Net Revenue (Loss)		326,663			(629,767	)		956,430			-152	%

Non-interest expense
Salaries and employee surcharge		(153,792	)		(379,923	)		226,131			-60	%
Rental expenses		(18,589	)		(13,641	)		(4,948	)		36	%
Business taxes and surcharge		-			(1,845	)		1,845			-100	%
Changes in fair value of other noncurrent liabilities		(147,540	)		57,000			(204,540	)		-359	%
Other operating expenses		(392,205	)		(259,806	)		(132,399	)		51	%
Total non-interest expense		(712,126	)		(598,215	)		(113,911	)		19	%

Foreign exchange loss		(435	)		(95	)		(340	)		358	%

Loss Before Income Taxes		(385,898	)		(1,228,077	)		842,179			-69	%
Income tax expense		-			-			-			0	%
Net Loss		(385,898	)		(1,228,077	)		842,179			-69	%

Other comprehensive loss
Foreign currency translation adjustment		(125,220	)		21,615			(146,836	)		-679	%
Comprehensive Loss	$	(511,118	)	$	(1,206,462	)		695,343			-58	%


●	~~an increase~~a change in ~~reversal of~~the provision for loan losses of US$~~226,092;~~1,113,164 from a provision of US$782,882 for the three months ended March 31, 2017 to a reversal of provision of US$330,282 for the three months ended March 31, 2018;


●	~~an increase~~a decrease in the provision for direct financing lease losses of US$36,289 from US$36,289 for the three months ended March 31, 2017 to US$nil for the three months ended March 31, 2018;

●	a change in the provision for financial guarantee ~~services~~ of US$~~542,999;~~111,598 from a reversal of provision of US$7,207 for the three months ended March 31, 2017 to a provision of US$104,391 for the three months ended March 31, 2018; and


●	an increase in total non-interest expense of US$~~714,363~~ 113,911 from US$598,215 for the three months ended March 31, 2017 to US$712,126 for the three months ended March 31, 2018.

●	~~An increase~~A change of provision on loan losses of US$~~2,553,875.~~1,113,164. The Company ~~provided~~reversed a provision for loan losses of US$~~2,420,698~~330,282 for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, as compared to a ~~reversal~~provision for loan losses of ~~provision of~~ US$~~133,177 provided during~~782,882 for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2017. The ~~increase~~change of the loan provision is mainly due to the fact that the during the three months ended March 31, 2018, the Company received repayment from some defaulted customers whose loan receivable was accrued of provision as of previous periods, while the Company incurred more ~~“doubtful” loans rolling to~~ “loss” loans ~~incurred~~ during the ~~nine~~three months ended ~~September 30, 2017 as compared to the same period ended September 30, 2016;~~

●	An increase of provision on financial guarantee services of US$1,215,492. The Company provided a provision for financial guarantee services of US$830,140 for the nine months ended September 30, 2017, as compared to a reversal of provision of US$385,352 provided during the nine months ended September 30, 2016. The change was mainly attributable to the decrease of repayment from several financial guarantee customers who were classified as “loss customers” as of September 30,March 31, 2017;

●	~~An increase~~A decrease in restricted shares issued to directors and professional service providers of US$~~805,056. As an incentive~~193,180. The decrease was mainly due that no shares were issued to ~~the efforts made by the Company’s management and~~directors or professional service providers ~~in acquisition of Sorghum, the Company issued more restricted shares~~ during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018;

●	An increase in ~~provision for settlement expenses against legal proceeding~~changes in fair value of ~~US$1,378,500. As we accrued expenses for additional share settlement~~noncurrent liabilities from a decrease in change of US$57,000 to an increase in change of US$147,540. The changes in fair value of noncurrent liabilities were calculated at the ~~nine months ended September 30, 2017.~~ stock price prevailing as of each reporting date.

Exhibit No.		Description

31.1*10.1		Exclusive Business Cooperation Agreement by and between WFOE and Beijing Youjiao dated May 10, 2018(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 16, 2018)
10.2		Share Pledge Agreement by and between WFOE and Shareholder of Beijing Youjiao dated May 10, 2018 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on May 16, 2018)
10.3		Exclusive Option Agreement by and between WFOE and Shareholder of Beijing Youjiao dated May 10, 2018 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on May 16, 2018)
10.4		Power of Attorney by Shareholder of Beijing Youjiao dated May 10, 2018 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on May 16, 2018)
10.5		Timely Reporting Agreement by and between the Company and Shareholder of Beijing Youjiao dated May 10, 2018 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on May 16, 2018)
10.6		Exclusive Business Cooperation Agreement by and between Beijing WFOE and Beijing Kunlun dated May 15, 2018
10.7		Share Pledge Agreement by and betweenBeijing WFOEand Shareholder ofBeijing KunlundatedMay 15, 2018
10.8		Exclusive Option Agreement by and betweenBeijing WFOEand Shareholder ofBeijing KunlundatedMay 15, 2018
10.9		Power of Attorney by Shareholder of Beijing Kunlun dated May 15, 2018
10.10		Timely Reporting Agreement by and between the Company and Shareholder of Beijing Kunlun dated May 15, 2018
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2*31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1**32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*101.INS		XBRL Instance Document
101.SCH*101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL*101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

~~November 14, 2017~~	~~CHINA COMMERCIAL CREDIT, INC.~~

Date: May 21, 2018	By:	/s/ ~~Mingjie Zhao~~Chenguang Kang
	Name:	~~Mingjie Zhao~~Chenguang Kang
	Title:	Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Long Yi
	Name:	Long Yi
	Title:	Chief Financial Officer and Secretary
		(Principal Financial and Accounting Officer)